SECOND DIVISION

WHEREFORE, finding that the plaintiffs have no equitable right to the possession of the land under
litigation, judgment is hereby rendered in favor of the defendants and against the plaintiff-

[G.R. No. 128750. January 18, 2001]

1) Finding the defendants to have equitable right to the possession of the land in litigation.
[1]

CARQUELO OMANDAM and ROSITO ITOM, petitioners, vs. COURT OF APPEALS, BLAS
TRABASAS and AMPARO BONILLA, respondents.

DECISION
QUISUMBING, J.:
This petition[2] for review seeks the reversal of the decision dated October 29, 1996, of the Court of
Appeals in CA-G.R. CV No. 44442, reversing and setting aside the decision of the Regional Trial Court of
Zamboanga Del Sur, Branch 23, dated November 15, 1996, and the resolution of the Court of Appeals
dated February 21, 1997, denying the petitioners motion for reconsideration.
On January 29, 1974, the Bureau of Lands in Pagadian City issued in favor of Camilo Lasola
Homestead Patent No. IX-6-40 covering Lot No. 8736, with an area of 23,985 sq. m. in Sagrada, Tambulig,
Zamboanga del Sur. On April 28, 1978, the Register of Deeds issued Original Certificate of Title (OCT) No.
P-22-690 in his name.
On April 28, 1983, respondent Blas Trabasas bought the land from a Dolores Sayson who claimed
she was the owner of said land. In 1984, Trabasas discovered that petitioners Carquelo Omandam and
Rosito Itom had occupied the land. Meanwhile, on July 19, 1987, Omandam protested Lasolas homestead
patent before the Bureau of Lands and prayed for cancellation of the OCT. Upon Saysons advice, Trabasas
repurchased the land from Lasola, who executed a deed of sale dated September 24,1987. On August
9,1989, Trabasas acquired a new transfer certificate of title.

2) Ordering the plaintiffs to reconvey the title of the land under litigation in the name of the plaintiffs to the
defendants within 30 days from the date this decision becomes final and executory, and upon their failure to
so comply, ordering the Clerk of Court to execute in behalf of the plaintiffs the necessary deed of
conveyance over the said land in favor of the defendants which deed would be considered sufficient to
authorize the Register of Deeds of Zamboanga del Sur, Pagadian City, to cause the cancellation of the
Torrens Certificate of Title in the names of the plaintiffs, and in lieu thereof, to issue another in the common
names of the defendants.
SO ORDERED.[3]
Private respondents appealed to the Court of Appeals. Pending the appeal, the Department of
Environment and Natural Resources (DENR) - Region IX dismissed Omandams protest previously filed
with the Bureau of Lands.[4] It said that Omandam failed to prove that Lasola, respondents predecessor-ininterest, committed fraud and misrepresentation in acquiring the patent, hence there is no ground for its
revocation and cancellation of its corresponding title.
On October 29,1996, the Court of Appeals reversed the trial court. It decided thus:
WHEREFORE, foregoing considered, the appealed decision is hereby REVERSED and SET ASIDE, a new
one is hereby issued ordering defendants-appellees to vacate the subject land and surrender it to plaintiff
-appellant.
Cost against defendants-appellees.
SO ORDERED.[5]

On April 16,1990, spouses Blas Trabasas and Amparo Bonilla filed a complaint against petitioners
for recovery of possession and/or ownership of the land with the Regional Trial Court of Zamboanga del
Sur. They alleged that they were the true and registered owners of the land and Omandam and Itom should
vacate it.
Petitioners answered that they purchased the land from one Godofredo Sela who had been in
possession for almost twenty years.
After the parties were duly heard, the Regional Trial Court issued its decision on November 15, 1993
declaring that neither respondents herein nor their predecessors-in-interest were ever in possession of the
land. Citing Director of Lands vs. Court of Appeals, 17 SCRA 71 (1966), Director of Lands vs. Abanilla, 124
SCRA 358 (1983) and Padre vs. Court of Appeals, 214 SCRA 446 (1992), the trial court disposed:

The Court of Appeals declared that petitioners collateral attack on the homestead title, to defeat
private respondents accion publiciana, was not sanctioned by law; that the patent and title of Camilo
Lasola, private respondents predecessor-in-interest, had already become indefeasible since April 28, 1977;
and that petitioners action for reconveyance in the nature of their protest with the Bureau of Lands and
counterclaim in their answer to the complaint for recovery of possession, already prescribed.
Petitioners filed a motion for reconsideration which was denied on February 21,1997. Hence, this
petition for review. Petitioners make the following assignment of errors, alleging that the Court of Appeals
erred in:
I. ...HOLDING THAT ONE OF THE UNDISPUTED FACTS IS THAT On April 28,1983, plaintiff bought the
subject land from Dolores Sayson who presented herself to be the true owner of the subject land;

II. ...HOLDING THAT ANOTHER UNDISPUTED FACT IS THAT ...sometime in 1984 plaintiff discovered that
defendants had entered and had occupied the subject land. Upon instructions of Dolores Sayson, plaintiff
approached Camilo Lasola and again bought the subject land, this time from Camilo Lasola;
III. ...IGNORING THE FINDINGS OF THE REGIONAL TRIAL COURT WHICH THOROUGHLY
DISCUSSED THE CIRCUMSTANCES THAT LED TO ITS CONCLUSION THAT THE PRIVATE
RESPONDENTS AND CAMILO LASOLA HAD NO EQUITABLE POSSESSION ON THE SUBJECT LAND,
WHICH LACK OF EQUITABLE POSSESION MAKES SOME OF THE RECENT DECISIONS OF THE
SUPREME COURT APPLICABLE TO THE CASE.[6]
In the first two assigned errors, petitioners apparently question findings of fact by the Court of
Appeals while disputing the claim of possession by private respondents and their predecessors-ininterest.The appellate court had stated firstly that respondent Trabasas bought the subject land from
Sayson who presented herself as the true owner, then secondly, that he bought the land from Lasola
also. The first two issues, in our view, raise questions of fact. Well-entrenched is the rule that the Courts
jurisdiction in a petition for review is limited to reviewing or revising errors of law allegedly committed by the
appellate court. Findings of fact below are generally conclusive on the Court. It is not for the Court to weigh
evidence all over again.[7] There are instances where the Court departs from this rule.[8] However, petitioners
did not show that involved here is an exceptional instance. Hence, we need not tarry on the first two
assignments.
In the third assignment of error, petitioners aver that public respondent erred in ignoring the trial
courts finding that private respondents had no equitable possession of the subject land. Again, we are
confronted with a question of fact. But petitioners claim the appellate court had disregarded or even
contradicted our holdings in the cited cases of Director of Lands , Abanilla, and Padre.
In Director of Lands vs. Court of Appeals, 17 SCRA 71(1966), we ruled that a void title may be
cancelled. A title over a disposable public land is void if its grantee failed to comply with the conditions
imposed by law. In Director of Lands vs. Abanilla, 124 SCRA 358 (1983), we held that the indefeasibility of
a Torrens Title cannot be used as a defense in an action for cancellation of title acquired through
fraud. These two cases refer to actions for cancellation of title initiated by the government, through the
Solicitor General, after a finding of fraud by the Department of Environment and Natural Resources.
InPadre vs. Court of Appeals, 214 SCRA 446 (1992) we said that in an action for quieting of title, the court
may determine incidentally the right to the possession thereof, in order to provide complete relief to the
parties. The last case refers to determination of rightful possession in possessory actions.

registration issued by the Director of Lands.[10] Only the DENR Secretary can review, on appeal, such
decree.
It will be recalled that the Bureau of Lands approved Lasolas homestead application on May 21,
1968. No appeal was made therefrom. Nineteen years after, or on July 9, 1987, Omandam filed the protest
with the Bureau of Lands. Thereafter, respondents Trabasas and Bonilla instituted the present action in the
Regional Trial Court for recovery of possession and/or ownership. As mentioned earlier, the trial court held
that petitioners were entitled to a declaration of equitable possession over the area in question. Said trial
court then ordered the cancellation of respondents title and the issuance of a new one. In effect, the courts
order reversed the award made by the Director of Lands in favor of Lasola. This reversal was in error, for
the proper administrative agency, the DENR under CA 141, had prior jurisdiction over the patent on the
subject matter, which is the contested homestead area.
DENRs jurisdiction over public lands does not negate the authority of courts of justice to resolve
questions of possession and their decisions stand in the meantime that the DENR has not settled the
respective rights of public land claimants.[11] But once the DENR has decided, particularly with the grant of
homestead patent and issuance of an OCT and then TCT later, its decision prevails.
In this case, Lasola applied for a homestead patent over the contested area in 1967. His application
was granted on May 21, 1968. The Order for the issuance of the patent was issued by the Bureau of Lands
on January 29, 1974 and the corresponding Original Certificate of Title was issued by the Register of
Deeds on April 28, 1976. From the three latter dates, no appeal was made. It was only on July 9, 1987, i.e.,
13 years from the date of the Order directing the issuance of the patent that petitioners protested the
homestead grant with the Bureau of Lands. Despite the said lapse of time, the Bureau of Lands gave due
course to the protest relying on our ruling in Director vs. Abanilla[12] that the doctrine of indefeasibility of title
does not apply when the grant is tainted with fraud and misrepresentation. From this date, Lasolas right of
possession based on his OCT and eventually that of respondents were put on issue. In their desire to get
possession of the property, respondents instituted an action for recovery of possession and/or ownership
on April 16, 1990 with the Regional Trial Court. Said court rendered its decision against respondents on
November 15, 1993. Respondents appealed to the Court of Appeals. Pending the appeal or on March 23,
1995, the DENR-Region IX dismissed petitioners protest on the ground of absence of fraud and
misrepresentation committed by respondents predecessors-in-interest.[13]On October 29, 1996, the Court of
Appeals promulgated the decision subject of this petition in favor of respondents. Petitioners then brought
the instant case to us.

Notwithstanding the formulation by the petitioners in the third assigned error, the real issue raised in
this case involves the trial courts jurisdiction vis--vis administrative agencies. What is the effect of the trial
courts decision in a possessory action on the order of Bureau of Lands regarding a homestead application
and decision of the DENR on the protest over the homestead patent?

We note that the parties did not manifest as to whether an appeal was made from the decision of the
Regional Director of DENR-IX. Further, no mention was ever made in their pleadings regarding the matter.
From the said Order of the DENR Regional Director up to the present, five years have lapsed. From this,
we can conclude that no appeal has been made and that the DENR decision dismissing the petitioners
protest and upholding respondents right on the contested area has attained finality.

Commonwealth Act 141 as amended, otherwise known as the Public Land Act, gives in its sections 3
and 4 to the Director of Lands primarily and to the Secretary of Agriculture and Natural Resources (now the
Secretary of Department of Environment and Natural Resources) ultimately the authority to dispose and
manage public lands.[9] In this regard, courts have no jurisdiction to inquire into the validity of the decree of

By now it appears indubitable that private respondents, spouses Trabasas and Bonilla, have been
duly confirmed in their right to possession of Lot No. 8736 as owners thereof. By virtue of the deed of sale
executed by OCT holder Camilo Lasola as early as September 24, 1987, in favor of Trabasas, who then
secured a transfer certificate of title in his name, private respondents clearly have superior right over the

land claimed by petitioners Omandam and Itom. The appellate court did not err in upholding the right of
private respondents, and in ordering the petitioners to vacate and surrender the land to said respondents.
WHEREFORE, the petition is DENIED, and the decision of the Court of Appeals dated October 29,
1996, and its resolution dated February 21, 1997, are AFFIRMED. Costs against petitioners.
SO ORDERED.

EN BANC
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 Manila-Cavite 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 fast-tracking 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 non-proprietary 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 on-going
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
Act No. 1654 of the Philippine Commission

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:
"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.
xxx
(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 Governor-General may by
executive order prescribe." (Emphasis supplied)
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:
"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
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, 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.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(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 GovernorGeneral, 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 non-agricultural 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.
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, 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 twenty-four 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
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;
(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.
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 nonagricultural 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."
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)
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.
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.
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)
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.
PD No. 1084 Creating the Public Estates Authority
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:
(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.
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.
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
"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.
Dispositions under the 1987 Constitution
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.'
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?
MR. VILLEGAS: I think that is the spirit of the provision.
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 'ownercultivatorship 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 750hectare 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.
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.
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."
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, noncompliance 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, subclassification, 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)
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 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 nonassessable.
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 above-mentioned 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 "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-and-transfer 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:
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 "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 "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."
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 '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 12.8hectare 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.
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.
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
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:
"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
"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 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.
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.

By-Laws having been filed with the Securities and Exchange Commission (SEC) only on March 1, 1983,
and the corresponding registration certificate - Registration No. 111139 being issued over two weeks later
on March 18, 1983.
FIRST DIVISION
PEDRO GONZALES, ELY GONZALES, BENITO CASIDSID, TANDOY
MINDORO, and BADBAD PIANA, in their respective personal capacities
and in behalf of other prior forest land occupants similarly affected by
AFFLA No. 82,
Petitioners,
- versus MADAME PILAR FARM DEVELOPMENT CORPORATION, Regional
Director BERNARDO AGALOOS, Director EDMUND CORTEZ, Bureau of
Forest Development, and Honorable RODOLFO DEL ROSARIO, Minister
of Natural Resources,
Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 115880

Present:
Promulgated:
January 23, 2007

PEDRO GONZALES and ELY GONZALES,

Petitioners,

Out of the total 2,400 hectares applied for, which included an abandoned pasture area of one Fidel del
Rosario, the MNR approved only a slightly smaller area. On June 16, 1983, then Natural Resources
Minister Teodoro O. Pea issued in favor of Pilar Farm AFFLA No. 82 for 1,800 hectares. Shortly thereafter,
it would appear that herein petitioners Pedro Gonzales and his son, Ely Gonzales (collectively,
the Gonzaleses), who were then into livestock raising, entered into and occupied a portion of the awarded
area. This encroachment and the refusal of the alleged intruders to vacate impelled then District Forester
Alfredo Sanchez to file in the MTC of San Jose, Occidental Mindoro a criminal complaint, thereat docketed
as Criminal Case No. 7852, against the Gonzaleses for Illegal Pasturing under the provisions of the
Revised Forestry Code, as amended, allegedlycommitted as follows:
That sometime in June, 1983 up to the present, at Sitio Panagsangan, [Brgy] Murtha,
San Jose, Occidental Mindoro and within the jurisdiction of this Honorable Court,
both the accused without any permit or authority from the [BFD] director did then and
there willfully, unlawfully and feloniously occupy portion of forest zone for their
livestock pasturing and is within [Pilar Farms AFFLA No. 82] [to] its damage . (Words
in bracket added)

- versus Honorable INOCENCIO JAURIGUE, Presiding Judge, MTC of San Jose,

Occidental Mindoro, MADAME PILAR FARM DEVELOPMENT
CORPORATION, District Forester ALFREDO SANCHEZ, Regional
Director BERNARDO AGALOOS, and Director EDMUND CORTEZ,
Bureau of Forest Development,
Respondents.
x--------------------------------------------------x
DECISION
GARCIA, J.:
Before us is this petition* for review on certiorari to annul and set aside the Decision[1] dated March 24,
1994 of the Court of Appeals (CA) in CA-G.R. SP No. 31159, affirming an earlier Order of the Regional Trial
Court (RTC) of San Jose, Occidental Mindoro, Branch 46, in its Civil Case Nos. 525 and 542 which directed
the Municipal Trial Court (MTC) of San Jose, Occidental Mindoro to proceed with the trial of Criminal Case
No. 7852, a prosecution for Illegal Pasturing thereat filed against the herein petitioners Pedro Gonzales
and Ely Gonzales.

To the aforesaid complaint, the Gonzaleses filed a Motion and Petition[2] therein praying the MTC to dismiss
the complaint, or, in the alternative, to suspend the criminal action on grounds of erroneous venue, violation
of the equal protection guarantee and prejudicial question, among others.
On January 21, 1985, the Gonzaleses, joined by several others also claiming to be prior occupants of
certain parcels covered by AFFLA No. 82, filed with the RTC of San Jose, Occidental Mindoro a petition for
prohibition and mandamus against the then MNR Minister, certain BFD officials and Pilar Farm. The
petition, basically to challenge the agro-forest lease award, was docketed as Civil Case No. 525.
Meanwhile, on April 25, 1985, in Criminal Case No. 7852, the MTC issued an Order denying
the Motion and Petition therein interposed by the Gonzaleses for the dismissal of said case or for the
suspension of said criminal proceedings.
In view of the above denial order, the Gonzaleses filed a second petition before the RTC, this time a special
civil action for certiorari and prohibition against MTC JudgeInocencio M. Jaurigue who issued the said order
of denial and against the BFD officials earlier impleaded as respondents in Civil Case No. 525. The RTC
docketed the second petition as Civil Case No. 542.

The facts:
The case revolves around the lease of public lands for agro-forestry farm purposes, pursuant to
Presidential Decree No. 705 or the Revised Forestry Code of the Philippines, as amended. The standard
documentation then for this public land award was a pro forma Agro-Forestry Farm Lease Agreement
(AFFLA) prepared and processed by the Ministry of Natural Resources (MNR), now the Department of
Environment and Natural Resources (DENR), thru the then Bureau of Forest Development (BFD).
On or around October 8, 1982, Pilar Alarcon Paja, for and in behalf of Madame Pilar Farm Development
Corporation, applied for an agro-forest farm lease covering parcels of land situated
in Sitio Tugtugin Caguray River, Barangay Murtha, Municipality of San Jose, Occidental Mindoro for the
purpose of raising plant crops for the Alcogas program of the government. At that time, Madame Pilar Farm
Development Corporation (hereinafter Pilar Farm) was still unregistered, its Articles of Incorporation and

On October 31, 1985, the public respondents in Civil Case No. 525 filed a motion to dismiss said
case. On December 6, 1985, the petitioners filed a motion for the consolidation of Civil Case Nos. 525 and
542.
On August 20, 1986, the RTC, on the ground of non-exhaustion of administrative remedies,
issued a Resolution dismissing the petition in Civil Case No. 525, rationalizing as follows:
The Court has not lost sight of the fact that petitioners quoted a declaration of the
B.F.D. District Officer that the award to respondent [Pilar Farm] by the B.F.D. Central
Office was made despite the B.F.D. District Certification that ----the applied area falls
within Southern Mindoro Lumber Corporation and District Forest Occupancy
Management Project wherein forest occupants were permanently settled.

Towards the close of hearing on June 4, 1986, public respondents signified that
verification of that matter would have to be conducted. This situation adds support for
the stand that the entire dispute is still within the sphere of the executive department.
Petitioners moved for reconsideration of the above resolution.
On February 11, 1987, the RTC ordered the consolidation of Civil Case Nos. 525 and 542.
On June 4, 1987, the RTC resolved to reconsider its dismissal of Civil Case No. 525 in the light of an
alleged supervening execution of an affidavit by San Jose District Forester Alfredo Sanchez who allegedly
instructed petitioner Pedro Gonzales to transfer his herd to the cancelled pasture area of Fidel del Rosario,
a portion of which had been included in AFFLA No. 82. The pertinent part of the
reinstating resolution[3] reads:
It must be mentioned the petitioners Motion For Reconsideration of the dismissal of
Case No. 525 had been pending as of the date the Order for consolidation was
issued; xxx.
The result of the succession of pleadings is that in the first case (No. 525), the Court
has to act on the Motion For Reconsideration without any pleading nor comment from
any of [the] respondents. In specifically giving a margin for the officials to interpose
the Bureau's comment, the Court gave way for that Office to manifest whether any
action had been taken by the Bureau on petitioners claim after the Resolution of
dismissal had been issued that the government was still locating an area to be
awarded to petitioners, and that the situation depicted in the District Forester's
statement would be verified.
On the other hand, petitioners now harp on the abuse-of-discretion-angle, which
shifts the jurisdiction to the judiciary.
Definitely the Court should not seek to substitute its judgment, its assessment, for
that of the administration body, the [BFD]. All that is believed now open to be inquired
into is the subject of abuse of discretion, the conduct of proceedings which led to that
award.
xxx xxx xxx
It is understood that the decision on Case No. 525 will be decisive of Case No. 542;
hence, no pleading need be filed in Case No. 542 meanwhile. (Underscoring in the
original; words in bracket added.)
On April 19, 1988, however, the RTC issued in Civil Case No. 525 a Resolution again dismissing the said
case, predicating its action basically on the same reason set forth in its earlier August 20, 1986 ruling.
Wrote the court:
The fundamental issue encountered in the beginning was want of jurisdiction for nonexhaustion of administrative remedies. Dismissal therefore was reconsidered,
because petitioners cited a basis for alleging abuse of discretion. In essence, the
abuse was the circumstance that the area to which petitioners had been previously
instructed by the District Forester to transfer his herd became a part of the area

leased to [Pilar Farm]. The impression given was that the [BFD] Central Office, which
granted [AFFLA No. 82] , disregarded the word of the District Forester, which would
have favored petitioners. Giving way to the possibility that the procedure observed
constituted an abuse of discretion, the Court set the case for trial solely on that
question.
Public respondents, moving for reconsideration , state that the sworn statement of
the District Forester (April 3, 1986) to the effect that sometime in 1981, he instructed
Pedro Gonzales to transfer his herd to the cancelled pasture area of Fidel del
Rosario, was a reversed stand of that official . It was deemed a reversal of his letter
of September 1, 1982, stating that a suitable place for Pedro Gonzales herd had not
been found. This apparently runs counter to the sworn statement aforecited.
The actuation of the District Forester was regarded by public respondents as an
encroachment into the power and authority of the Bureau Director.
The Supplemental Opposition to that Motion reiterated petitioner's reliance on the
District Forester's alleged instruction and cited the disregard thereof as abusive.
Replying to that Supplemental Opposition, the public respondents dwelt on the
factual, physical justification for the award to private respondent, that is, the finding
that during the investigation or inspection in July 1981, [the Gonzaleses] were not
occupants of subject area. Moreover, public respondents state that to petitioners
[pasture] lease agreement had expired and a Certification by the Regional Director
(February 19, 1985) states that the processing of the application for renewal was
held in abeyance pending the location of replacement site.
The determination of whether petitioners application for lease of an area was
accorded the requisite attention or given the proper action by the [BFD] falls initially
on the executive department .It may be gleaned from the papers now on file (quite
voluminous) that the internal organization, the delineation of functions according to
the set-up, the detailed instructions and regulations issued, all come into play in the
present dispute, and, at this stage, these are not for the Court to dwell upon. The
questions of confirming whether the District Forester instructed or authorized Pedro
Gonzales to transfer his herd as claimed, and, in the affirmative, whether that was
within his power or functions, so as to confer a right on Pedro Gonzales, are all
embraced within the administrative aspect - in which, judicial intervention is not
authorized.
xxx xxx xxx
In resume, since it now appears that the sworn statement relied upon by petitioners
is, after all, for the Bureau to consider, the Court is constrained to revise its ruling
embodied in the Resolution of June 4, 1987 and declare, as it hereby declares, that
the dismissal was warranted. xxx..
Therefrom, the petitioners went on appeal to the CA in CA-G.R. SP No. 15341. On October 18, 1989, the
appellate court, on the premise that the RTC erred in dismissing Civil Case No. 525 without giving the
petitioners the chance to prove that the findings of forestry officials were not supported by the evidence on
record, ordered the remand of the case for trial and decision.
Following the remand of Civil Case No. 525 and the
subsequent trial of the consolidated cases, the RTC, via an Order[4] dated December 21, 1992, dismissed

Civil Case Nos. 525 and 542, with an express directive for the MTC of San Jose, Occidental Mindoro to
proceed to try and decide Criminal Case No. 7852 against Pedro Gonzales for illegal pasturing.
Again, the petitioners went on appeal to the CA whereat their appellate recourse was docketed as CAG.R. SP No. 31159. For its part, respondent Pilar Farm also interposed an appeal which the CA dismissed
for having been filed out of time.
In the herein assailed Decision[5] dated March 24, 1994, the CA dismissed the petitioners appeal on the
strength of, inter alia, the following considerations:
1. The nature of the petition filed before the RTC basically required the
petitioners to establish grave abuse of discretion on the part of respondent MNR and
BFD officials, but petitioners failed to discharge the burden;
2. But assuming that the cases before the RTC partake of an appeal from
the MNR, the recourse would still fail owing to submitted evidence showing that:
a. AFFLA No. 82 was regularly issued;
b. all portions of the leased area applied for
under bona fide occupation or claims were excluded from the
coverage of AFFLA No. 82;
c. that the priority right of Mrs. Pilar Alarcon Paja
over the leased area was acquired ahead of other applicants;
and
d. that during the investigation and inspections on
July 1987, the Gonzaleses were not the occupants of the
subject area.
Thereafter, the petitioners filed a pleading styled Motion asking the CA to render a ruling on whether or not
the RTC violated procedural due process in not resolving their offer of rebuttal evidence which forced them
to make a proffer of proof. In a Resolution[6] dated June 15, 1994, the CA denied the motion.
Hence, petitioners present recourse submitting for our consideration the following issues:[7]
1. WHETHER OR NOT THE COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION WHEN IT DECLINED TO RULE ON WHETHER
THE LOWER COURTVIOLATED PROCEDURAL DUE PROCESS IN
REFUSING TO ADMIT PETITIONERS REBUTTAL EVIDENCES,
DESPITE A MOTION BY PETITIONERS PRAYING FOR A RULING ON
THE MATTER.
2. WHETHER OR NOT THE COURT OF APPEALS ERRED IN CONCLUDING THAT
BY THE NATURE OF THIS PETITION, PETITIONERS TOTALLY FAILED
TO ESTABLISH LACK OF JURISDICTION, GRAVE ABUSE OF
DISCRETION AND/OR THE UNLAWFUL NON-PERFORMANCE OF
DUTY IMPOSED BY LAW ON PUBLIC RESPONDENTS, DESPITE
ADMISSIONS OR PROOF TO THE CONTRARY.
3. WHETHER OR NOT THE COURT OF APPEALS ERRED IN CONCLUDING THAT
THERE NO LONGER EXIST ANY HINDRANCE TO THE PROSECUTION
OF CRIMINAL CASE NO. 7852 NOR ANY BASIS FOR AN AWARD OF

DAMAGES IN FAVOR OF THE APPELLANTS, DESPITE THE ABSENCE

OF JURISDICTION BY THE MUNICIPAL TRIAL COURT AND BASIS
FOR THE AWARD OF DAMAGES.
As we see it, all the above three (3) issues or grounds emanate from a single core argument involving the
disinclination of the RTC to consider the petitioners offer of rebuttal evidence.
The petition lacks merit.
To begin with, the rules of evidence accords trial courts considerable discretion on the matter of admission
of rebuttal evidence,[8] the rule being that, for an effective and efficient administration of justice, it is
essential that litigation must end sometime and somewhere.[9] A contrary policy could result to an absurd
situation where, after admission of rebuttal evidence, the trial court, to be fair, must allow: sur-rebuttal of the
rebuttal evidence; refutation of the sur-rebuttal of the rebuttal evidence; thereafter, a sur-refutation of the
refutation of the sur-rebuttal of the rebuttal evidence; and so on ad infinitum.
Anent the first issue, petitioners claim that during the hearings for the presentation of their rebuttal
evidence, the RTC was unusually lenient whenever respondents counsels were absent, but did not exhibit
the same behavior when petitioners counsel was absent, as exemplified when the RTC viewed the latters
absence as waiver of the right to present rebuttal evidence. Scoring the CA for not correcting a wrong
allegedly dealt them below by the RTC, petitioners now lament:
And now comes the decision of respondent [appellate] court which refused to review
the most crucial assigned error raised by petitioners. From pages one to twelve
thereof, the decision never discussed the issue on whether the trial court committed
obvious errors in its ruling during the trial, showed unusual leniency to respondents
and practically ignored the offer of rebuttal evidences, which constrained appellants
to submit the pending incidents for resolution without further arguments and to make
proffer of proof. Then on page [13] thereof, respondent court finally concluded that
[w]ith the foregoing disquisition, the Court sees little or no reason to go into minute
detail in discussing the appellants remaining assignments to error. Hence, the
decision of respondent court also ignored the rebuttal exhibits of herein petitioners.
[10]
(Bracketed words added)
We find no grave abuse of discretion on the part of the CA for not striking down the RTCs refusal to admit
petitioners rebuttal evidence.
For one, the most appropriate time and forum for the petitioners to present their evidence, be they
evidence-in-chief or rebuttal, is during the trial of Criminal Case No. 7852 before the MTC. Petitioners have
only themselves to blame for disrupting the proceedings in Criminal Case No. 7852. They cannot plausibly
deny having commenced Civil Case Nos. 525 and 542 hoping that the outcome in either case would thwart
efforts towards continuing with Criminal Case No. 7852 in the MTC. Else, why attack as sham the steps
and proceedings taken by the BFD leading to the issuance of AFFLA No. 82, question the regularity of the
final lease award and seek its nullification before the courts when, as correctly held by the CA and the RTC,
these are matters immediately cognizable and better addressed by the MNR?
For another, even at the RTC level, we can readily observe not only the voluminous evidence coming from
both the petitioners and the respondents, but also the painstaking evaluation of evidentiary details in the
RTCs single space 20-paged Order[11] of December 21, 1992. There is, therefore, no compelling reason for
us to disturb the CAs findings, in its challenged decision, affirmatory of that of the RTC, that

Over and above the foregoing considerations, the record is replete with documentary
evidence showing the regularity of the award of AFFLA No. 82 in favor of [ Pilar
Farm]. xxx.
xxx xxx xxx
Absent such stronger countervailing proof as would disprove the evident showing of
the foregoing documents, the [CA] is not inclined to disturb the lower courts
affirmance of the Ministry of Natural Resources award of AFFLA No. 82 as well as the
findings made in relation thereto.
Among the pieces of rebuttal evidence which the petitioners are raising all the way up to this Court concern
alterations and/or intercalation allegedly committed by the respondents, acts which petitioners insist as
being punishable under Article 171 of the Revised Penal Code. Thus, according to the petitioners:
Respondent court failed to consider that AFFLA No. 82 was purportedly executed
on October 8, 1982 between the government and respondent corporation at Quezon
City but notarized by a notary public commissioned at the City of Manila. Yet,
respondent corporation was incorporated only
on March 18, 1983! It appears what was notarized on October 8,
1982 was anotherdocument, entered as Doc. No. 258, Page 19, Book No. 53, Series
of 1982, in the notarial registry of Atty. Armando Cortez. The lease agreement
appears to be falsified. Unwittingly, public respondents admitted under paragraph 3,
page 19 of its (sic) Comment to an alteration or intercalation in a genuine document
which changes its meaning and punishable under Article 171 of the Revised Penal
Code. (Underscoring in the original.)
For reference we quote paragraph 3, page 19 of the public respondents Comment[12] to this petition:
3. The records of this case also show that AFFLA No. 82 was originally applied for
under the name of Mrs. Pilar Alarcon Paja, and that the same was changed and put
under the name of private respondent corporation after the latter was organized in
1983. Evidently, this explains the discrepancy between the dates of the Contract of
Lease of AFFLA No. 82, and the incorporation of private respondent corporation in
March 1983.
Analyzing the text of the AFFLA, we find no provision therein requiring that the lessee must first be a
corporation before it may plant and raise crops necessary for the Alcogasprogram of the
government. Regardless of whether the lessee is a single proprietor, a partnership, a corporation or a
cooperative, what matters here is the lessees accomplishment of the undertaking to plant and raise said
crops.
This brings us to the matter of notarial jurisdiction. It must be stressed right off that Pilar Alarcon Paja
signed the necessary lease contract documents. When she affixed her signature on and acknowledged
executing the AFFLA before a Notary Public for the City of Manila on October 8, 1982, her act did not
necessarily amount to an alteration or intercalation of a genuine document because the address of her
principal, Pilar Farm, at that time was 1160 Tayuman, Tondo, Metro Manila.[13] While the issuing office of the
ready-made AFFLA is in Quezon City, the Court perceives no compelling legal reason why the same cannot
be signed and acknowledged by the proposed lessees agent somewhere else. It would of course be

different if the integrity of the accomplished application is otherwise compromised, which does not appear
so in this case.
It cannot be over emphasized that when Mrs. Paja signed the AFFLA ready-made form on October 8, 1982,
her act was nothing more than an offer to lease, the kind of offer contemplated under the first paragraph of
Article 1319 of the Civil Code as a prelude to contract perfection. Until accepted with the issuance of a final
lease award, following a BFD investigation of the applicants qualification, among other tedious processing
tasks, the offer confers no enforceable contractual right. To be precise, the first paragraph of Article 1319 of
the Civil Code reads:
Article 1319. Consent is manifested by the meeting of the offer and the acceptance
upon the thing and the cause which are to constitute the contract. The offer must be
certain and the acceptance absolute. A qualified acceptance constitutes a counteroffer.
It may be that Pilar Farm was issued its SEC registration certificate only on March 18, 1983. It should be
stressed, however, that what Mrs. Paja submitted shortly before that date in behalf of what, for the nonce,
may rightly be regarded as an unregistered association in the process of incorporation, was still an
offer. The meeting of the offer and acceptanceoccured only on June 16, 1983 when then
Minister Teodoro O. Pea signed AFFLA No. 82. At that defining time, Pilar Farm had already been duly
registered and had acquired a judicial personality.
In any event, the MNR, following its rules and exercising its administrative discretion, did not find the
situation thus depicted sufficient ground to reject the application altogether. To borrow from National
Power Corporation v. Philipp Brothers Oceanic, Inc.,[14] the exercise of discretion is usually a policy decision
that necessitates inquiry and deliberation on the wisdom and practicalities of a given course of action, in
this case approving or denying the lease application. The role of courts is to ascertain whether a branch or
instrumentality of government has transgressed its constitutional boundaries. Courts will not interfere with
executive or legislative discretion exercised within those boundaries. Otherwise, they stray into the
forbidden realm of policy decision-making.[15]
And until the MNR or the DENR cancels AFFLA No. 82, Pilar Farm shall continue to enjoy the rights
accruing therefrom to the exclusion of petitioners Gonzaleses, et al.
Turning now to the second issue, petitioners bemoan the fact that the RTC, in refusing to consider their
rebuttal evidence, arrived at a conclusion based on pure speculation, surmises and or conjectures, which
calls for the judicial reexamination of this Court. Pressing the point, the petitioners state:
This is where respondent court erred the most. By refusing to consider the rebuttal
exhibits of petitioners, it relied upon respondents documentary evidences that were
hearsay and self-serving.xxx .
We are not impressed.
Doubtless, the second issue thus raised pivots on the factual findings of the CA respecting the
right of respondent Pilar Farm to its leased area and the petitioners lack of right to enter and occupy a
portion thereof. Needless to stress, such issue is beyond the province of the Court to review, just as it is
improper to raise the same in a petition for review under Rule 45 of the Rules of Court.[16] The Court is not
a trier of facts; it is not its function to examine, analyze, winnow or weigh anew the evidence or premises
supportive of such factual determination. This rule all the more assumes an imperative dimension where,

as here, the CA affirms the findings of the lower court. Stated differently, substantiated findings of the CA
are binding on the Court and they carry even more weight when the said court affirms the factual findings of
the trial court.[17] As it were, the RTCs Order [18] of December 21, 1992 directs the MTC to exercise its
jurisdiction over and to proceed with the trial and decide Criminal Case No. 7852. If at all, the petitioners
may hope to pursue their call for judicial reexamination in the MTC.
The last issue in the petitioners memorandum involves three (3) sub-issues. In the first, the petitioners
argue that the MTC may not proceed with Criminal Case No. 7852 since the issue, particularly in Civil Case
No. 525, respecting their entitlement to those parcels of Pilar Farms leased area occupied by them,
constitutes a prejudicial question, such that there would no longer be any basis for their prosecution for
illegal pasturing if they are adjudged as so entitled. The second would question a Forest Officers authority
to conduct a preliminary investigation for violation of the Forestry Code, as amended. In the third,
petitioners call for a clinical analysis of the criminal complaint in question.
The prejudicial question angle is now moot and academic owing to the RTCs Order [19] of December 21,
1992, as affirmed in toto by the CA, making short shrift of petitionerschallenge against the validity and the
regularity of the issuance of AFFLA No. 82 and their outlandish claim of having a vested right on a portion
of respondent Pilar Farms leased area. In net effect, the issues in Civil Case Nos. 525 and 542, without
more, no longer pose as impediment to the continuance of Criminal Case No. 7852.
The sub-issue about whether or not a Forest Officer has authority to
conduct preliminary investigation is misleading, assuming as it does that District Forester Alfredo Sanchez
conducted a preliminary investigation. What is more, this sub-issue is really a non-issue because District
Forester Alfredo Sanchez did not conduct a preliminary investigation.With the view we take of this matter
because the record is unclear, the investigation Mr. Sanchez conducted was not a preliminary investigation
under the rules on criminal procedure, but rather an administrative investigation authorized under Section
89 of the Forestry Code, as amended, which reads:
Section 89. Arrest; Institution of criminal actions. A forest
officer or employee of the Bureau or any personnel of the Philippine
Constabulary/Philippine National Police shall arrest even without warrant
any person who has committed or is committing in his presence any of the offenses
defined in this Chapter. He shall also seize and confiscate, in
favor of the Government, the tools and equipment used in committing the offense
xxx. The arresting forest officer or employee shall thereafter deliver within six (6)
hours from the time of arrest and seizure, the
offenderand the confiscated forest products, tools and equipment to,
and file the proper complaint with, the appropriate official designated by law to
conduct preliminary investigation and file information in court.
Lastly, the sub-issue that calls for a clinical analysis of the criminal complaint, or, to a specific point, a
determination of whether or not the scene of the crime is situated in thebarangay mentioned in the
complaint, need not detain us any longer. For, at bottom, this sub-issue involves factual matters that should
properly be addressed by the MTC, pursuant to the principle of hierarchy of courts.
WHEREFORE, the instant petition is DISMISSED.
No pronouncement as to costs.
SO ORDERED.

their own circumscriptions in addressing the phenomenon. Still, the duty on our part is primarily to decide
cases before us in accord with the Constitution and the legal principles that have developed our public land
law, though our social obligations dissuade us from casting a blind eye on the endemic problems.

EN BANC
HEIRS OF MARIO MALABANAN, G.R. No. 179987
Petitioner
- versus - ,
LEONARDO DE CASTRO,
BRION,
REPUBLIC OF THE PHILIPPINES, PERALTA, and
Respondent.

I.
On 20 February 1998, Mario Malabanan filed an application for land registration covering a parcel of land
identified as Lot 9864-A, Cad-452-D, Silang Cadastre,[2] situated in Barangay Tibig, Silang Cavite, and
consisting of 71,324 square meters. Malabanan claimed that he had purchased the property from Eduardo
Velazco,[3] and that he and his predecessors-in-interest had been in open, notorious, and continuous
adverse and peaceful possession of the land for more than thirty (30) years.

Promulgated:
April 29, 2009

DECISION
TINGA, J.:
One main reason why the informal sector has not become formal is that
from Indonesia to Brazil, 90 percent of the informal lands are not titled and registered.
This is a generalized phenomenon in the so-called Third World. And it has many
consequences.
The question is: How is it that so many governments, from Suharto's
in Indonesia to Fujimori's in Peru, have wanted to title these people and have not been
able to do so effectively? One reason is that none of the state systems in Asia or Latin
America can gather proof of informal titles. In Peru, the informals have means of
proving property ownership to each other which are not the same means developed by
the Spanish legal system. The informals have their own papers, their own forms of
agreements, and their own systems of registration, all of which are very clearly stated
in the maps which they use for their own informal business transactions.
If you take a walk through the countryside, from Indonesia to Peru, and you
walk by field after field--in each field a different dog is going to bark at you. Even dogs
know what private property is all about. The only one who does not know it is the
government. The issue is that there exists a "common law" and an "informal law" which
the Latin American formal legal system does not know how to recognize.
- Hernando De Soto[1]

The application was raffled to the Regional Trial Court of (RTC) Cavite-Tagaytay City, Branch 18. The Office
of the Solicitor General (OSG) duly designated the Assistant Provincial Prosecutor of Cavite, Jose Velazco,
Jr., to appear on behalf of the State.[4] Apart from presenting documentary evidence, Malabanan himself
and his witness, Aristedes Velazco, testified at the hearing. Velazco testified that the property was originally
belonged to a twenty-two hectare property owned by his great-grandfather, Lino Velazco. Lino had four
sons Benedicto, Gregorio, Eduardo and Estebanthe fourth being Aristedess grandfather. Upon Linos death,
his four sons inherited the property and divided it among themselves. But by 1966, Estebans
wife, Magdalena, had become the administrator of all the properties inherited by the Velazco sons from
their father, Lino. After the death of Esteban and Magdalena, their son Virgilio succeeded them in
administering the properties, including Lot 9864-A, which originally belonged to his uncle, Eduardo Velazco.
It was this property that was sold by Eduardo Velazco to Malabanan.[5]
Assistant Provincial Prosecutor Jose Velazco, Jr. did not cross-examine Aristedes Velazco. He
further manifested that he also [knew] the property and I affirm the truth of the testimony given by Mr.
Velazco.[6] The Republic of the Philippines likewise did not present any evidence to controvert the
application.
Among the evidence presented by Malabanan during trial was a Certification dated 11 June
2001, issued by the Community Environment & Natural Resources Office, Department of Environment and
Natural Resources (CENRO-DENR), which stated that the subject property was verified to be within the
Alienable or Disposable land per Land Classification Map No. 3013 established under Project No. 20-A and
approved as such under FAO 4-1656 on March 15, 1982.[7]
On 3 December 2002, the RTC rendered judgment in favor of Malabanan, the dispositive portion
of which reads:
WHEREFORE, this Court hereby approves this application for registration
and thus places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise
known as Property Registration Law, the lands described in Plan Csd-04-0173123-D,
Lot 9864-A and containing an area of Seventy One Thousand Three Hundred Twenty
Four (71,324) Square Meters, as supported by its technical description now forming
part of the record of this case, in addition to other proofs adduced in the name of
MARIO MALABANAN, who is of legal age, Filipino, widower, and with residence at
Munting Ilog, Silang, Cavite.
Once this Decision becomes final and executory, the corresponding decree
of registration shall forthwith issue.

This decision inevitably affects all untitled lands currently in possession of persons and entities
other than the Philippine government. The petition, while unremarkable as to the facts, was accepted by the
Court en banc in order to provide definitive clarity to the applicability and scope of original registration
proceedings under Sections 14(1) and 14(2) of the Property Registration Decree. In doing so, the Court
confronts not only the relevant provisions of the Public Land Act and the Civil Code, but also the reality on
the ground. The countrywide phenomenon of untitled lands, as well as the problem of informal settlement it
has spawned, has unfortunately been treated with benign neglect. Yet our current laws are hemmed in by

SO ORDERED.
The Republic interposed an appeal to the Court of Appeals, arguing that Malabanan had failed
to prove that the property belonged to the alienable and disposable land of the public domain, and that the
RTC had erred in finding that he had been in possession of the property in the manner and for the length of
time required by law for confirmation of imperfect title.

On 23 February 2007, the Court of Appeals rendered a Decision[8] reversing the RTC and
dismissing the application of Malabanan. The appellate court held that under Section 14(1) of the Property
Registration Decree any period of possession prior to the classification of the lots as alienable and
disposable was inconsequential and should be excluded from the computation of the period of possession.
Thus, the appellate court noted that since the CENRO-DENR certification had verified that the property was
declared alienable and disposable only on 15 March 1982, the Velazcos possession prior to that date could
not be factored in the computation of the period of possession. This interpretation of the Court of Appeals of
Section 14(1) of the Property Registration Decree was based on the Courts ruling in Republic v. Herbieto.[9]
Malabanan died while the case was pending with the Court of Appeals;[10] hence, it was his heirs
who appealed the decision of the appellate court. Petitioners, before this Court, rely on our ruling
in Republic v. Naguit,[11] which was handed down just four months prior to Herbieto. Petitioners suggest that
the discussion in Herbieto cited by the Court of Appeals is actually obiter dictum since the Metropolitan Trial
Court therein which had directed the registration of the property had no jurisdiction in the first place since
the requisite notice of hearing was published only after the hearing had already begun. Naguit, petitioners
argue, remains the controlling doctrine, especially when the property in question is agricultural land.
Therefore, with respect to agricultural lands, any possession prior to the declaration of the alienable
property as disposable may be counted in reckoning the period of possession to perfect title under the
Public Land Act and the Property Registration Decree.
The petition was referred to the Court en banc,[12] and on 11 November 2008, the case was
heard on oral arguments. The Court formulated the principal issues for the oral arguments, to wit:
1. In order that an alienable and disposable land of the public domain may be
registered under Section 14(1) of Presidential Decree No. 1529, otherwise known as
the Property Registration Decree, should the land be classified as alienable and
disposable as of June 12, 1945 or is it sufficient that such classification occur at any
time prior to the filing of the applicant for registration provided that it is established that
the applicant has been in open, continuous, exclusive and notorious possession of the
land under a bona fide claim of ownership since June 12, 1945 or earlier?
2. For purposes of Section 14(2) of the Property Registration Decree may a parcel of
land classified as alienable and disposable be deemed private land and therefore
susceptible to acquisition by prescription in accordance with the Civil Code?
3. May a parcel of land established as agricultural in character either because of its
use or because its slope is below that of forest lands be registrable under Section
14(2) of the Property Registration Decree in relation to the provisions of the Civil Code
on acquisitive prescription?
4. Are petitioners entitled to the registration of the subject land in their names under
Section 14(1) or Section 14(2) of the Property Registration Decree or both?[13]
Based on these issues, the parties formulated their respective positions.
With respect to Section 14(1), petitioners reiterate that the analysis of the Court in Naguit is the
correct interpretation of the provision. The seemingly contradictory pronouncement in Herbieto, it is
submitted, should be considered obiter dictum, since the land registration proceedings therein was void ab
initio due to lack of publication of the notice of initial hearing. Petitioners further point out that in Republic v.
Bibonia,[14] promulgated in June of 2007, the Court applied Naguit and adopted the same observation that
the preferred interpretation by the OSG of Section 14(1) was patently absurd. For its part, the OSG remains
insistent that for Section 14(1) to apply, the land should have been classified as alienable and disposable

as of 12 June 1945. Apart from Herbieto, the OSG also cites the subsequent rulings in Buenaventura v.
Republic,[15] Fieldman Agricultural Trading v. Republic[16] and Republic v. Imperial Credit Corporation,[17] as
well as the earlier case of Director of Lands v. Court of Appeals.[18]
With respect to Section 14(2), petitioners submit that open, continuous, exclusive and notorious
possession of an alienable land of the public domain for more than 30 yearsipso jure converts the land into
private property, thus placing it under the coverage of Section 14(2). According to them, it would not matter
whether the land sought to be registered was previously classified as agricultural land of the public domain
so long as, at the time of the application, the property had already been converted into private property
through prescription. To bolster their argument, petitioners cite extensively from our 2008 ruling in Republic
v. T.A.N. Properties.[19]
The arguments submitted by the OSG with respect to Section 14(2) are more extensive. The
OSG notes that under Article 1113 of the Civil Code, the acquisitive prescription of properties of the State
refers to patrimonial property, while Section 14(2) speaks of private lands. It observes that the Court has
yet to decide a case that presented Section 14(2) as a ground for application for registration, and that the
30-year possession period refers to the period of possession under Section 48(b) of the Public Land Act,
and not the concept of prescription under the Civil Code. The OSG further submits that, assuming that the
30-year prescriptive period can run against public lands, said period should be reckoned from the time the
public land was declared alienable and disposable.
Both sides likewise offer special arguments with respect to the particular factual circumstances
surrounding the subject property and the ownership thereof.
II.
First, we discuss Section 14(1) of the Property Registration Decree. For a full understanding of the
provision, reference has to be made to the Public Land Act.
A.
Commonwealth Act No. 141, also known as the Public Land Act, has, since its enactment,
governed the classification and disposition of lands of the public domain. The President is authorized, from
time to time, to classify the lands of the public domain into alienable and disposable, timber, or mineral
lands.[20] Alienable and disposable lands of the public domain are further classified according to their uses
into (a) agricultural; (b) residential, commercial, industrial, or for similar productive purposes; (c)
educational, charitable, or other similar purposes; or (d) reservations for town sites and for public and
quasi-public uses.[21]
May a private person validly seek the registration in his/her name of alienable and disposable
lands of the public domain? Section 11 of the Public Land Act acknowledges that public lands suitable for
agricultural purposes may be disposed of by confirmation of imperfect or incomplete titles through judicial
legalization.[22] Section 48(b) of the Public Land Act, as amended by P.D. No. 1073, supplies the details and
unmistakably grants that right, subject to the requisites stated therein:
Sec. 48. The following described citizens of the Philippines, occupying
lands of the public domain or claiming to own any such land or an interest therein,
but whose titles have not been perfected or completed, may apply to the Court of
First Instance of the province where the land is located for confirmation of their
claims and the issuance of a certificate of title therefor, under the Land Registration
Act, to wit:
(b) Those who by themselves or through their predecessors in interest
have been in open, continuous, exclusive, and notorious possession and
occupation of alienable and disposable lands of the public domain, under a bona
fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately

preceding the filing of the application for confirmation of title except when prevented
by war or force majeure. These shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.
Section 48(b) of Com. Act No. 141 received its present wording in 1977 when the law was amended by P.D.
No. 1073. Two significant amendments were introduced by P.D. No. 1073. First, the term agricultural lands
was changed to alienable and disposable lands of the public domain. The OSG submits that this
amendment restricted the scope of the lands that may be registered.[23] This is not actually the case. Under
Section 9 of the Public Land Act, agricultural lands are a mere subset of lands of the public domain
alienable or open to disposition. Evidently, alienable and disposable lands of the public domain are a larger
class than only agricultural lands.
Second, the length of the requisite possession was changed from possession for thirty (30) years
immediately preceding the filing of the application to possession since June 12, 1945 or earlier. The Court
in Naguit explained:
When the Public Land Act was first promulgated in 1936, the period of
possession deemed necessary to vest the right to register their title to agricultural
lands of the public domain commenced from July 26, 1894. However, this period was
amended by R.A. No. 1942, which provided that the bona fide claim of ownership must
have been for at least thirty (30) years. Then in 1977, Section 48(b) of the Public Land
Act was again amended, this time by P.D. No. 1073, which pegged the reckoning date
at June 12, 1945. xxx
It bears further observation that Section 48(b) of Com. Act No, 141 is virtually the same as Section 14(1) of
the Property Registration Decree. Said Decree codified the various laws relative to the registration of
property, including lands of the public domain. It is Section 14(1) that operationalizes the registration of such
lands of the public domain. The provision reads:

SECTION 14. Who may apply. The following persons may file in the
proper Court of First Instance an application for registration of title to land, whether
personally or through their duly authorized representatives:

(1)

those who by themselves or through their predecessorsin-interest have been in open, continuous, exclusive and
notorious possession and occupation of alienable and
disposable lands of the public domain under a bona
fide claim of ownership since June 12, 1945, or earlier.

Notwithstanding the passage of the Property Registration Decree and the inclusion of Section
14(1) therein, the Public Land Act has remained in effect. Both laws commonly refer to persons or their
predecessors-in-interest who have been in open, continuous, exclusive and notorious possession and

occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership
since June 12, 1945, or earlier. That circumstance may have led to the impression that one or the other is a
redundancy, or that Section 48(b) of the Public Land Act has somehow been repealed or mooted. That is
not the case.
The opening clauses of Section 48 of the Public Land Act and Section 14 of the Property
Registration Decree warrant comparison:
Sec. 48 [of the Public Land Act]. The following described citizens of the
Philippines, occupying lands of the public domain or claiming to own any such land
or an interest therein, but whose titles have not been perfected or completed, may
apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor, under
the Land Registration Act, to wit:
Sec. 14 [of the Property Registration Decree]. Who may apply. The
following persons may file in the proper Court of First Instance an application for
registration of title to land, whether personally or through their duly authorized
representatives:
It is clear that Section 48 of the Public Land Act is more descriptive of the nature of the right
enjoyed by the possessor than Section 14 of the Property Registration Decree, which seems to presume the
pre-existence of the right, rather than establishing the right itself for the first time. It is proper to assert that it
is the Public Land Act, as amended by P.D. No. 1073 effective 25 January 1977, that has primarily
established the right of a Filipino citizen who has been in open, continuous, exclusive, and notorious
possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim
of acquisition of ownership, since June 12, 1945 to perfect or complete his title by applying with the proper
court for the confirmation of his ownership claim and the issuance of the corresponding certificate of title.
Section 48 can be viewed in conjunction with the afore-quoted Section 11 of the Public Land Act,
which provides that public lands suitable for agricultural purposes may be disposed of by confirmation of
imperfect or incomplete titles, and given the notion that both provisions declare that it is indeed the Public
Land Act that primarily establishes the substantive ownership of the possessor who has been in possession
of the property since 12 June 1945. In turn, Section 14(a) of the Property Registration Decree recognizes
the substantive right granted under Section 48(b) of the Public Land Act, as well provides the corresponding
original registration procedure for the judicial confirmation of an imperfect or incomplete title.
There is another limitation to the right granted under Section 48(b). Section 47 of the Public Land Act limits
the period within which one may exercise the right to seek registration under Section 48. The provision has
been amended several times, most recently by Rep. Act No. 9176 in 2002. It currently reads thus:
Section 47. The persons specified in the next following section are hereby
granted time, not to extend beyond December 31, 2020 within which to avail of the
benefits of this Chapter: Provided, That this period shall apply only where the area
applied for does not exceed twelve (12) hectares: Provided, further, That the several
periods of time designated by the President in accordance with Section Forty-Five of
this Act shall apply also to the lands comprised in the provisions of this Chapter, but
this Section shall not be construed as prohibiting any said persons from acting under
this Chapter at any time prior to the period fixed by the President.[24]

Accordingly under the current state of the law, the substantive right granted under Section 48(b) may be
availed of only until 31 December 2020.
B.
Despite the clear text of Section 48(b) of the Public Land Act, as amended and Section 14(a) of
the Property Registration Decree, the OSG has adopted the position that for one to acquire the right to seek
registration of an alienable and disposable land of the public domain, it is not enough that the applicant and
his/her predecessors-in-interest be in possession under a bona fide claim of ownership since 12 June 1945;
the alienable and disposable character of the property must have been declared also as of 12 June 1945.
Following the OSGs approach, all lands certified as alienable and disposable after 12 June 1945 cannot be
registered either under Section 14(1) of the Property Registration Decree or Section 48(b) of the Public
Land Act as amended. The absurdity of such an implication was discussed in Naguit.
Petitioner suggests an interpretation that the alienable and disposable
character of the land should have already been established since June 12, 1945 or
earlier. This is not borne out by the plain meaning of Section 14(1). Since June 12,
1945, as used in the provision, qualifies its antecedent phrase under a bonafide claim
of ownership. Generally speaking, qualifying words restrict or modify only the words or
phrases to which they are immediately associated, and not those distantly or remotely
located.[25] Ad proximum antecedents fiat relation nisi impediatur sentencia.
Besides, we are mindful of the absurdity that would result if we adopt petitioners
position. Absent a legislative amendment, the rule would be, adopting the OSGs view,
that all lands of the public domain which were not declared alienable or disposable
before June 12, 1945 would not be susceptible to original registration, no matter the
length of unchallenged possession by the occupant. Such interpretation renders
paragraph (1) of Section 14 virtually inoperative and even precludes the government
from giving it effect even as it decides to reclassify public agricultural lands as
alienable and disposable. The unreasonableness of the situation would even be
aggravated considering that before June 12, 1945, the Philippines was not yet even
considered an independent state.
Accordingly, the Court in Naguit explained:
[T]he more reasonable interpretation of Section 14(1) is that it merely
requires the property sought to be registered as already alienable and disposable at
the time the application for registration of title is filed. If the State, at the time the
application is made, has not yet deemed it proper to release the property for alienation
or disposition, the presumption is that the government is still reserving the right to
utilize the property; hence, the need to preserve its ownership in the State irrespective
of the length of adverse possession even if in good faith. However, if the property has
already been classified as alienable and disposable, as it is in this case, then there is
already an intention on the part of the State to abdicate its exclusive prerogative over
the property.
The Court declares that the correct interpretation of Section 14(1) is that which was adopted
in Naguit. The contrary pronouncement in Herbieto, as pointed out in Naguit, absurdly limits the application
of the provision to the point of virtual inutility since it would only cover lands actually declared alienable and
disposable prior to 12 June 1945, even if the current possessor is able to establish open, continuous,
exclusive and notorious possession under a bona fide claim of ownership long before that date.
Moreover, the Naguit interpretation allows more possessors under a bona fide claim of
ownership to avail of judicial confirmation of their imperfect titles than what would be feasible

under Herbieto. This balancing fact is significant, especially considering our forthcoming discussion on the
scope and reach of Section 14(2) of the Property Registration Decree.
Petitioners make the salient observation that the contradictory passages
from Herbieto are obiter dicta since the land registration proceedings therein is void ab initio in the first
place due to lack of the requisite publication of the notice of initial hearing. There is no need to explicitly
overturn Herbieto, as it suffices that the Courts acknowledgment that the particular line of argument used
therein concerning Section 14(1) is indeed obiter.
It may be noted that in the subsequent case of Buenaventura,[26] the Court, citing Herbieto, again
stated that [a]ny period of possession prior to the date when the [s]ubject [property was] classified as
alienable and disposable is inconsequential and should be excluded from the computation of the period of
possession That statement, in the context of Section 14(1), is certainly erroneous. Nonetheless, the
passage as cited in Buenaventura should again be considered as obiter. The application therein was
ultimately granted, citing Section 14(2). The evidence submitted by petitioners therein did not establish any
mode of possession on their part prior to 1948, thereby precluding the application of Section 14(1). It is not
even apparent from the decision whether petitioners therein had claimed entitlement to original registration
following Section 14(1), their position being that they had been in exclusive possession under a bona fide
claim of ownership for over fifty (50) years, but not before 12 June 1945.
Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any precedental value
with respect to Section 14(1). On the other hand, the ratio of Naguit is embedded in Section 14(1), since it
precisely involved situation wherein the applicant had been in exclusive possession under a bona fide claim
of ownership prior to 12 June 1945. The Courts interpretation of Section 14(1) therein was decisive to the
resolution of the case. Any doubt as to which between Naguit or Herbieto provides the final word of the
Court on Section 14(1) is now settled in favor of Naguit.
We noted in Naguit that it should be distinguished from Bracewell v. Court of Appeals[27] since in the latter,
the application for registration had been filed before the land was declared alienable or disposable. The
dissent though pronounces Bracewell as the better rule between the two. Yet two years after Bracewell,
its ponente, the esteemed Justice Consuelo Ynares-Santiago, penned the ruling in Republic v. Ceniza,
[28]
which involved a claim of possession that extended back to 1927 over a public domain land that was
declared alienable and disposable only in 1980. Ceniza cited Bracewell, quoted extensively from it, and
following the mindset of the dissent, the attempt at registration in Cenizashould have failed. Not so.
To prove that the land subject of an application for registration is alienable,
an 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.
In this case, private respondents presented a certification dated
November 25, 1994, issued by Eduardo M. Inting, the Community Environment and
Natural Resources Officer in the Department of Environment and Natural Resources
Office in Cebu City, stating that the lots involved were "found to be within the
alienable and disposable (sic) Block-I, Land Classification Project No. 32-A, per map
2962 4-I555 dated December 9, 1980." This is sufficient evidence to show the real
character of the land subject of private respondents application. Further, the
certification enjoys a presumption of regularity in the absence of contradictory
evidence, which is true in this case. Worth noting also was the observation of the
Court of Appeals stating that:

[n]o opposition was filed by the Bureaus of Lands

and Forestry to contest the application of appellees on the
ground that the property still forms part of the public domain.
Nor is there any showing that the lots in question are forestal
land....

The Court in Naguit offered the following discussion concerning Section 14(2), which we did
even then recognize, and still do, to be an obiter dictum, but we nonetheless refer to it as material for further
discussion, thus:
Did the enactment of the Property Registration Decree and the amendatory
P.D. No. 1073 preclude the application for registration of alienable lands of the public
domain, possession over which commenced only after June 12, 1945? It did not,
considering Section 14(2) of the Property Registration Decree, which governs and
authorizes the application of those who have acquired ownership of private lands by
prescription under the provisions of existing laws.

Thus, while the Court of Appeals erred in ruling that mere possession of
public land for the period required by law would entitle its occupant to a confirmation
of imperfect title, it did not err in ruling in favor of private respondents as far as the
first requirement in Section 48(b) of the Public Land Act is concerned, for they were
able to overcome the burden of proving the alienability of the land subject of their
application.

Prescription is one of the modes of acquiring ownership under the Civil

Code.[[30]] There is a consistent jurisprudential rule that properties classified as
alienable public land may be converted into private property by reason of open,
continuous and exclusive possession of at least thirty (30) years.[[31]] With such
conversion, such property may now fall within the contemplation of private lands under
Section 14(2), and thus susceptible to registration by those who have acquired
ownership through prescription. Thus, even if possession of the alienable public land
commenced on a date later than June 12, 1945, and such possession being been
open, continuous and exclusive, then the possessor may have the right to register the
land by virtue of Section 14(2) of the Property Registration Decree.

As correctly found by the Court of Appeals, private respondents were able

to prove their open, continuous, exclusive and notorious possession of the subject
land even before the year 1927. As a rule, we are bound by the factual findings of the
Court of Appeals. Although there are exceptions, petitioner did not show that this is
one of them.[29]
Why did the Court in Ceniza, through the same eminent member who authored Bracewell, sanction the
registration under Section 48(b) of public domain lands declared alienable or disposable thirty-five (35)
years and 180 days after 12 June 1945? The telling difference is that in Ceniza, the application for
registration was filed nearly six (6) years after the land had been declared alienable or disposable, while
in Bracewell, the application was filed nine (9) years before the land was declared alienable or
disposable. That crucial difference was also stressed in Naguit to contradistinguish it from Bracewell, a
difference which the dissent seeks to belittle.

Naguit did not involve the application of Section 14(2), unlike in this case where petitioners have based
their registration bid primarily on that provision, and where the evidence definitively establishes their claim
of possession only as far back as 1948. It is in this case that we can properly appreciate the nuances of the
provision.

III.

A.

We next ascertain the correct framework of analysis with respect to Section 14(2). The provision reads:

The obiter in Naguit cited the Civil Code provisions on prescription as the possible basis for application for
original registration under Section 14(2). Specifically, it is Article 1113 which provides legal foundation for
the application. It reads:

SECTION 14. Who may apply. The following persons may file in the
proper Court of First Instance an application for registration of title to land, whether
personally or through their duly authorized representatives:

It is clear under the Civil Code that where lands of the public domain are patrimonial in character, they are
susceptible to acquisitive prescription. On the other hand, among the public domain lands that are not
susceptible to acquisitive prescription are timber lands and mineral lands. The Constitution itself proscribes
private ownership of timber or mineral lands.

xxx

(2)

All things which are within the commerce of men are susceptible of
prescription, unless otherwise provided. Property of the State or any of its subdivisions
not patrimonial in character shall not be the object of prescription.

Those who have acquired ownership over private lands

by prescription under the provisions of existing laws.

There are in fact several provisions in the Civil Code concerning the acquisition of real property
through prescription. Ownership of real property may be acquired by ordinary prescription of ten (10) years,
[32]
or through extraordinary prescription of thirty (30) years.[33] Ordinary acquisitive prescription requires
possession in good faith,[34]as well as just title.[35]

When Section 14(2) of the Property Registration Decree explicitly provides that persons who
have acquired ownership over private lands by prescription under the provisions of existing laws, it
unmistakably refers to the Civil Code as a valid basis for the registration of lands. The Civil Code is the only
existing law that specifically allows the acquisition by prescription of private lands, including patrimonial
property belonging to the State. Thus, the critical question that needs affirmation is whether Section 14(2)
does encompass original registration proceedings over patrimonial property of the State, which a private
person has acquired through prescription.

Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1942, did not refer to or call
into application the Civil Code provisions on prescription. It merely set forth a requisite thirty-year
possession period immediately preceding the application for confirmation of title, without any qualification as
to whether the property should be declared alienable at the beginning of, and continue as such, throughout
the entire thirty-(30) years. There is neither statutory nor jurisprudential basis to assert Rep. Act No. 1942
had mandated such a requirement,[38] similar to our earlier finding with respect to the present language of
Section 48(b), which now sets 12 June 1945 as the point of reference.

The Naguit obiter had adverted to a frequently reiterated jurisprudence holding that properties
classified as alienable public land may be converted into private property by reason of open, continuous and
exclusive possession of at least thirty (30) years.[36] Yet if we ascertain the source of the thirty-year period,
additional complexities relating to Section 14(2) and to how exactly it operates would emerge. For there are
in fact two distinct origins of the thirty (30)-year rule.

Then, with the repeal of Rep. Act No. 1942, the thirty-year possession period as basis for original
registration became Section 14(2) of the Property Registration Decree, which entitled those who have
acquired ownership over private lands by prescription under the provisions of existing laws to apply for
original registration. Again, the thirty-year period is derived from the rule on extraordinary prescription under
Article 1137 of the Civil Code. At the same time, Section 14(2) puts into operation the entire regime of
prescription under the Civil Code, a fact which does not hold true with respect to Section 14(1).

The first source is Rep. Act No. 1942, enacted in 1957, which amended Section 48(b) of the
Public Land Act by granting the right to seek original registration of alienable public lands through
possession in the concept of an owner for at least thirty years.
The following-described citizens of the Philippines, occupying lands of
the public domain or claiming to own any such lands or an interest therein, but
whose titles have not been perfected or completed, may apply to the Court of First
Instance of the province where the land is located for confirmation of their claims
and the issuance of a certificate of title therefor, under the Land Registration Act, to
wit:
xxx

xxx

B.
Unlike Section 14(1), Section 14(2) explicitly refers to the principles on prescription under
existing laws. Accordingly, we are impelled to apply the civil law concept of prescription, as set forth in the
Civil Code, in our interpretation of Section 14(2). There is no similar demand on our part in the case of
Section 14(1).
The critical qualification under Article 1113 of the Civil Code is thus: [p]roperty of the State or any
of its subdivisions not patrimonial in character shall not be the object of prescription. The identification what
consists of patrimonial property is provided by Articles 420 and 421, which we quote in full:

xxx
Art. 420. The following things are property of public dominion:

(b) Those who by themselves or through their predecessors in interest

have been in open, continuous, exclusive and notorious possession and occupation
of agricultural lands of the public domain, under a bona fide claim of acquisition of
ownership, for at least thirty years immediately preceding the filing of the
application for confirmation of title, except when prevented by war or force
majeure. These shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title under
the provisions of this Chapter. (emphasis supplied)[37]
This provision was repealed in 1977 with the enactment of P.D. 1073, which made the date 12
June 1945 the reckoning point for the first time. Nonetheless, applications for registration filed prior to 1977
could have invoked the 30-year rule introduced by Rep. Act No. 1942.
The second source is Section 14(2) of P.D. 1529 itself, at least by implication, as it applies the
rules on prescription under the Civil Code, particularly Article 1113 in relation to Article 1137. Note that there
are two kinds of prescription under the Civil Codeordinary acquisitive prescription and extraordinary
acquisitive prescription, which, under Article 1137, is completed through uninterrupted adverse possession
for thirty years, without need of title or of good faith.
Obviously, the first source of the thirty (30)-year period rule, Rep. Act No. 1942, became
unavailable after 1977. At present, the only legal basis for the thirty (30)-year period is the law on
prescription under the Civil Code, as mandated under Section 14(2). However, there is a material difference
between how the thirty (30)-year rule operated under Rep. Act No. 1942 and how it did under the Civil Code.

(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
It is clear that property of public dominion, which generally includes property belonging to the State, cannot
be the object of prescription or, indeed, be subject of the commerce of man.[39] Lands of the public domain,
whether declared alienable and disposable or not, are property of public dominion and thus insusceptible to
acquisition by prescription.
Let us now explore the effects under the Civil Code of a declaration by the President or any duly authorized
government officer of alienability and disposability of lands of the public domain. Would such lands so
declared alienable and disposable be converted, under the Civil Code, from property of the public dominion
into patrimonial property? After all, by connotative definition, alienable and disposable lands may be the
object of the commerce of man; Article 1113 provides that all things within the commerce of man are
susceptible to prescription; and the same provision further provides that patrimonial property of the State
may be acquired by prescription.

Nonetheless, Article 422 of the Civil Code states that [p]roperty of public dominion, when no
longer intended for public use or for public service, shall form part of the patrimonial property of the State. It
is this provision that controls how public dominion property may be converted into patrimonial property
susceptible to acquisition by prescription. After all, Article 420 (2) makes clear that those property 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 are public dominion property. For as long as the property belongs to the
State, although already classified as alienable or disposable, it remains property of the public dominion if
when it is intended for some public service or for the development of the national wealth.
Accordingly, there must be an express declaration by the State that the public dominion
property is no longer intended for public service or the development of the national wealth or that
the property has been converted into patrimonial. Without such express declaration, the property,
even if classified as alienable or disposable, remains property of the public dominion, pursuant to
Article 420(2), and thus incapable of acquisition by prescription. It is only when such alienable and
disposable lands are expressly declared by the State to be no longer intended for public service or
for the development of the national wealth that the period of acquisitive prescription can begin to
run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential
Proclamation in cases where the President is duly authorized by law.
It is comprehensible with ease that this reading of Section 14(2) of the Property Registration
Decree limits its scope and reach and thus affects the registrability even of lands already declared alienable
and disposable to the detriment of the bona fide possessors or occupants claiming title to the lands. Yet this
interpretation is in accord with the Regalian doctrine and its concomitant assumption that all lands owned
by the State, although declared alienable or disposable, remain as such and ought to be used only by the
Government.
Recourse does not lie with this Court in the matter. The duty of the Court is to apply the
Constitution and the laws in accordance with their language and intent. The remedy is to change the law,
which is the province of the legislative branch. Congress can very well be entreated to amend Section 14(2)
of the Property Registration Decree and pertinent provisions of the Civil Code to liberalize the requirements
for judicial confirmation of imperfect or incomplete titles.
The operation of the foregoing interpretation can be illustrated by an actual example. Republic
Act No. 7227, entitled An Act Accelerating The Conversion Of Military Reservations Into Other Productive
Uses, etc., is more commonly known as the BCDA law. Section 2 of the law authorizes the sale of certain
military reservations and portions of military camps in Metro Manila, including Fort Bonifacio and Villamor
Air Base. For purposes of effecting the sale of the military camps, the law mandates the President to
transfer such military lands to the Bases Conversion Development Authority (BCDA)[40] which in turn is
authorized to own, hold and/or administer them.[41] The President is authorized to sell portions of the military
camps, in whole or in part.[42] Accordingly, the BCDA law itself declares that the military lands subject
thereof are alienable and disposable pursuant to the provisions of existing laws and regulations governing
sales of government properties.[43]
From the moment the BCDA law was enacted the subject military lands have become alienable
and disposable. However, said lands did not become patrimonial, as the BCDA law itself expressly makes
the reservation that these lands are to be sold in order to raise funds for the conversion of the former
American bases at Clark and Subic.[44]Such purpose can be tied to either public service or the development
of national wealth under Article 420(2). Thus, at that time, the lands remained property of the public
dominion under Article 420(2), notwithstanding their status as alienable and disposable. It is upon their sale
as authorized under the BCDA law to a private person or entity that such lands become private property
and cease to be property of the public dominion.
C.

Should public domain lands become patrimonial because they are declared as such in a duly
enacted law or duly promulgated proclamation that they are no longer intended for public service or for the
development of the national wealth, would the period of possession prior to the conversion of such public
dominion into patrimonial be reckoned in counting the prescriptive period in favor of the possessors? We
rule in the negative.
The limitation imposed by Article 1113 dissuades us from ruling that the period of possession before the
public domain land becomes patrimonial may be counted for the purpose of completing the prescriptive
period. Possession of public dominion property before it becomes patrimonial cannot be the object of
prescription according to the Civil Code. As the application for registration under Section 14(2) falls wholly
within the framework of prescription under the Civil Code, there is no way that possession during the time
that the land was still classified as public dominion property can be counted to meet the requisites of
acquisitive prescription and justify registration.
Are we being inconsistent in applying divergent rules for Section 14(1) and Section 14(2)? There
is no inconsistency. Section 14(1) mandates registration on the basis ofpossession, while Section
14(2) entitles registration on the basis of prescription. Registration under Section 14(1) is extended
under the aegis of the Property Registration Decree and the Public Land Act while registration
under Section 14(2) is made available both by the Property Registration Decree and the Civil Code.
In the same manner, we can distinguish between the thirty-year period under Section 48(b) of the Public
Land Act, as amended by Rep. Act No. 1472, and the thirty-year period available through Section 14(2) of
the Property Registration Decree in relation to Article 1137 of the Civil Code. The period under the former
speaks of a thirty-year period of possession, while the period under the latter concerns a thirty-year
period of extraordinary prescription. Registration under Section 48(b) of the Public Land Act as
amended by Rep. Act No. 1472 is based on thirty years of possession alone without regard to the
Civil Code, while the registration under Section 14(2) of the Property Registration Decree is founded
on extraordinary prescription under the Civil Code.
It may be asked why the principles of prescription under the Civil Code should not apply as well to Section
14(1). Notwithstanding the vaunted status of the Civil Code, it ultimately is just one of numerous statutes,
neither superior nor inferior to other statutes such as the Property Registration Decree. The legislative
branch is not bound to adhere to the framework set forth by the Civil Code when it enacts subsequent
legislation. Section 14(2) manifests a clear intent to interrelate the registration allowed under that provision
with the Civil Code, but no such intent exists with respect to Section 14(1).
IV.
One of the keys to understanding the framework we set forth today is seeing how our land registration
procedures correlate with our law on prescription, which, under the Civil Code, is one of the modes for
acquiring ownership over property.
The Civil Code makes it clear that patrimonial property of the State may be acquired by private persons
through prescription. This is brought about by Article 1113, which states that [a]ll things which are within the
commerce of man are susceptible to prescription, and that [p]roperty of the State or any of its subdivisions
not patrimonial in character shall not be the object of prescription.
There are two modes of prescription through which immovables may be acquired under the Civil Code. The
first is ordinary acquisitive prescription, which, under Article 1117, requires possession in good faith and
with just title; and, under Article 1134, is completed through possession of ten (10) years. There is nothing
in the Civil Code that bars a person from acquiring patrimonial property of the State through ordinary
acquisitive prescription, nor is there any apparent reason to impose such a rule. At the same time, there are

indispensable requisitesgood faith and just title. The ascertainment of good faith involves the application of
Articles 526, 527, and 528, as well as Article 1127 of the Civil Code,[45] provisions that more or less speak
for themselves.
On the other hand, the concept of just title requires some clarification. Under Article 1129, there
is just title for the purposes of prescription when the adverse claimant came into possession of the property
through one of the modes recognized by law for the acquisition of ownership or other real rights, but the
grantor was not the owner or could not transmit any right. Dr. Tolentino explains:
Just title is an act which has for its purpose the transmission of ownership,
and which would have actually transferred ownership if the grantor had been the
owner. This vice or defect is the one cured by prescription. Examples: sale with
delivery, exchange, donation, succession, and dacion in payment.[46]
The OSG submits that the requirement of just title necessarily precludes the applicability of ordinary
acquisitive prescription to patrimonial property. The major premise for the argument is that the State, as the
owner and grantor, could not transmit ownership to the possessor before the completion of the required
period of possession.[47] It is evident that the OSG erred when it assumed that the grantor referred to in
Article 1129 is the State. The grantor is the one from whom the person invoking ordinary acquisitive
prescription derived the title, whether by sale, exchange, donation, succession or any other mode of the
acquisition of ownership or other real rights.
Earlier, we made it clear that, whether under ordinary prescription or extraordinary prescription,
the period of possession preceding the classification of public dominion lands as patrimonial cannot be
counted for the purpose of computing prescription. But after the property has been become patrimonial, the
period of prescription begins to run in favor of the possessor. Once the requisite period has been
completed, two legal events ensue: (1) the patrimonial property is ipso jure converted into private land; and
(2) the person in possession for the periods prescribed under the Civil Code acquires ownership of the
property by operation of the Civil Code.

(1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) of the Public Land
Act recognizes and confirms that those who by themselves or through their predecessors in interest have
been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable
lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945 have
acquired ownership of, and registrable title to, such lands based on the length and quality of their
possession.
(a) Since Section 48(b) merely requires possession since 12 June 1945 and does not
require that the lands should have been alienable and disposable during the entire period of
possession, the possessor is entitled to secure judicial confirmation of his title thereto as soon as
it is declared alienable and disposable, subject to the timeframe imposed by Section 47 of the
Public Land Act.[51]
(b) The right to register granted under Section 48(b) of the Public Land Act is further
confirmed by Section 14(1) of the Property Registration Decree.
(2) In complying with Section 14(2) of the Property Registration Decree, consider that under the Civil Code,
prescription is recognized as a mode of acquiring ownership of patrimonial property. However, public
domain lands become only patrimonial property not only with a declaration that these are alienable or
disposable. There must also be an express government manifestation that the property is already
patrimonial or no longer retained for public service or the development of national wealth, under Article 422
of the Civil Code. And only when the property has become patrimonial can the prescriptive period for the
acquisition of property of the public dominion begin to run.
(a) Patrimonial property is private property of the government. The person acquires
ownership of patrimonial property by prescription under the Civil Code is entitled to secure
registration thereof under Section 14(2) of the Property Registration Decree.

It is evident that once the possessor automatically becomes the owner of the converted
patrimonial property, the ideal next step is the registration of the property under theTorrens system. It
should be remembered that registration of property is not a mode of acquisition of ownership, but merely a
mode of confirmation of ownership.[48]
Looking back at the registration regime prior to the adoption of the Property Registration Decree
in 1977, it is apparent that the registration system then did not fully accommodate the acquisition of
ownership of patrimonial property under the Civil Code. What the system accommodated was the
confirmation of imperfect title brought about by the completion of a period of possession ordained under the
Public Land Act (either 30 years following Rep. Act No. 1942, or since 12 June 1945 following P.D. No.
1073).
The Land Registration Act[49] was noticeably silent on the requisites for alienable public lands
acquired through ordinary prescription under the Civil Code, though it arguably did not preclude such
registration.[50] Still, the gap was lamentable, considering that the Civil Code, by itself, establishes
ownership over the patrimonial property of persons who have completed the prescriptive periods ordained
therein. The gap was finally closed with the adoption of the Property Registration Decree in 1977, with
Section 14(2) thereof expressly authorizing original registration in favor of persons who have acquired
ownership over private lands by prescription under the provisions of existing laws, that is, the Civil Code as
of now.
V.
We synthesize the doctrines laid down in this case, as follows:

(b) There are two kinds of prescription by which patrimonial property may be
acquired, one ordinary and other extraordinary. Under ordinary acquisitive prescription, a person
acquires ownership of a patrimonial property through possession for at least ten (10) years, in
good faith and with just title. Under extraordinary acquisitive prescription, a persons
uninterrupted adverse possession of patrimonial property for at least thirty (30) years, regardless
of good faith or just title, ripens into ownership.
B.
We now apply the above-stated doctrines to the case at bar.
It is clear that the evidence of petitioners is insufficient to establish that Malabanan has acquired ownership
over the subject property under Section 48(b) of the Public Land Act. There is no substantive evidence to
establish that Malabanan or petitioners as his predecessors-in-interest have been in possession of the
property since 12 June 1945 or earlier. The earliest that petitioners can date back their possession,
according to their own evidencethe Tax Declarations they presented in particularis to the year 1948. Thus,
they cannot avail themselves of registration under Section 14(1) of the Property Registration Decree.
Neither can petitioners properly invoke Section 14(2) as basis for registration. While the subject property
was declared as alienable or disposable in 1982, there is no competent evidence that is no longer intended
for public use service or for the development of the national evidence, conformably with Article 422 of the
Civil Code. The classification of the subject property as alienable and disposable land of the public domain

does not change its status as property of the public dominion under Article 420(2) of the Civil Code.Thus, it
is insusceptible to acquisition by prescription.
VI.
A final word. The Court is comfortable with the correctness of the legal doctrines established in
this decision. Nonetheless, discomfiture over the implications of todays ruling cannot be discounted. For,
every untitled property that is occupied in the country will be affected by this ruling. The social implications
cannot be dismissed lightly, and the Court would be abdicating its social responsibility to the Filipino people
if we simply levied the law without comment.
The informal settlement of public lands, whether declared alienable or not, is a phenomenon tied to longstanding habit and cultural acquiescence, and is common among the so-called Third World countries. This
paradigm powerfully evokes the disconnect between a legal system and the reality on the ground. The law
so far has been unable to bridge that gap. Alternative means of acquisition of these
public domain lands, such as through homestead or free patent, have proven unattractive due to limitations
imposed on the grantee in the encumbrance or alienation of said properties.[52] Judicial confirmation of
imperfect title has emerged as the most viable, if not the most attractive means to regularize the informal
settlement of alienable or disposable lands of the public domain, yet even that system, as revealed in this
decision, has considerable limits.
There are millions upon millions of Filipinos who have individually or exclusively held residential lands on
which they have lived and raised their families. Many more have tilled and made productive idle lands of
the State with their hands. They have been regarded for generation by their families and their communities
as common law owners. There is much to be said about the virtues of according them legitimate states. Yet
such virtues are not for the Court to translate into positive law, as the law itself considered such lands as
property of the public dominion. It could only be up to Congress to set forth a new phase of land reform to
sensibly regularize and formalize the settlement of such lands which in legal theory are lands of the public
domain before the problem becomes insoluble. This could be accomplished, to cite two examples, by
liberalizing the standards for judicial confirmation of imperfect title, or amending the Civil Code itself to ease
the requisites for the conversion of public dominion property into patrimonial.
Ones sense of security over land rights infuses into every aspect of well-being not only of that
individual, but also to the persons family. Once that sense of security is deprived, life and livelihood are put
on stasis. It is for the political branches to bring welcome closure to the long pestering problem.
WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 23 February 2007 and
Resolution dated 2 October 2007 are AFFIRMED. No pronouncement as to costs.
SO ORDERED.

FIRST DIVISION
[G.R. No. 127060. November 19, 2002]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, FLORENTINO CENIZA,
SANTIAGO CENIZA, ESTANISLAO CENIZA, ROMEO SIMBAJON, PABLO RAMOS,
ATILANO BONGO, EDGAR ADOLFO, EMMA ADOLFO, JERRY ADOLFO, GLENN ADOLFO,
GINA ADOLFO, LORNA ADOLFO, CHONA ADOLFO, EVELYN ADOLFO, in her own behalf
and as guardian of the minors HUBERT and AMIEL ADOLFO, and ELNITA ADOLFO in her
own behalf and as guardian of minors DAVID and PRESTINE MAY ADOLFO, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari of the decision[1] dated September 28, 1994, of the Court of
Appeals in CA-G.R. CV No. 31728, affirming the decision[2] in LRC Case No. N-46 of the Regional Trial
Court in Mandaue City, Branch XXVIII, which declared private respondents as the owners entitled to the
registration of the lots in question.
The antecedent facts of the case are as follows:

Apolinar Ceniza was the declared owner in 1948 of Lot No. 1104, located at Cabancalan, Mandaue
City, under Tax Declaration No. 01686. When he died, his heirs took possession of the property and in 1960
partitioned the same through a deed of extrajudicial partition. Apolinars children, namely, Santiago,
Estanislao, Florencia, Manuela, Mercedes and Florentino, all surnamed Ceniza, each got 1/8 share of the
property. His grandchildren, namely, the siblings Remedios Adolfo, Melecio Ceniza, and Constancia
Zanoria, each got 1/24 share, while Apolinars other grandchildren, namely, the siblings Concepcion Suico,
Benjamin Ceniza, Lilia Ceniza and Delfin Ceniza, each got 1/32 share.

title do/es not appear to be genuine and the tax declaration/s and/or tax payment receipts indicate
pretended possession of applicants to be of recent vintage.

Private respondent Florentino Ceniza purchased the shares of his sisters Manuela and Mercedes
and the share pertaining to the siblings Jesusa,[3] Benjamin and Delfin. Together with his share, Florentino
became the owner of Lot Nos. 1104-A&C and had them tax declared in his name.

4. That the parcel/s applied for is/are portions of the public domain belonging to the Republic of the
Philippines not subject to private appropriation.

Florencias share, a portion of Lot No. 1104-B, was purchased by Mercedes who in turn bartered the
same with the share acquired by Santiago, another private respondent in this case.
A portion of Santiagos property was bought by his daughter, Asuncion Ceniza, married to private
respondent Atillano Bongo and who successfully obtained a tax declaration therefor.
From the portion purchased by Asuncion Ceniza, another private respondent, Romeo Simbajon,
purchased an area of 270 square meters. Romeo also acquired a tax declaration in his name. He was the
husband of Felicitas Ceniza, another daughter of Santiago.
The share acquired by Estanislao, another child of Apolinar, was also a portion of Lot No. 1104-B. He
also caused the tax declaration pertaining to the said lot transferred in his name.
The siblings Remedios Adolfo and Constancia Zanoria, married to private respondent Pablo Ramos,
bought the share of their brother, Melecio Ceniza. Remedios share, in turn, was transferred to her heirs,
private respondents Edgar, Emma, Jerry, Glenn, Gina, Lorna, Chona, Evelyn, Hubert, Amiel, all surnamed
Adolfo, and the heirs of their brother Leoncio Adolfo, namely, his wife Elenita Adolfo, and children David
and Prestine May Adolfo.
On November 4, 1986, private respondents applied for registration of their respective titles over the
property they inherited from Apolinar Ceniza, with the Regional Trial Court of Mandaue City, Branch 28.
Petitioner Republic of the Philippines, represented by the Office of the Solicitor General opposed the
application on the following grounds:
1. That neither the applicant/s nor their precedessors-in-interest have been in open continuous exclusive
and notorious possession and occupation of the land in question since June 12, 1945 or prior thereto (Sec.
48 [b], C.A. 141, as amended by P.D. 1073).
2. That the muniment/s or title and/or the tax declaration/s and tax payment/s receipt/s of applicant/s if any,
attached to or alleged in the application, do/es not constitute competent and sufficient evidence of a bona
fide acquisition of the lands applied for or of their open, continuous, exclusive and notorious possession
and occupation thereof in the concept of owner, since June 12, 1945, or prior thereto. Said muniment/s of

3. That the claim of ownership in fee simple on the basis of Spanish title or grant can no longer be availed
of by the applicants who have failed to file an appropriate application for registration within the period of six
(6) months from February 16, 1976 as required by Presidential Decree No. 892. From the records, it
appears that the instant application was filed on October 25, 1996.

In a decision dated February 28, 1990, the Regional Trial Court of Mandaue City granted the
application.[4] It held that since the applicants possession of the land for more than thirty (30) years was
continuous, peaceful, adverse, public and to the exclusion of everybody, the same was in the concept of
owners. Since the land was neither encumbered nor subject to any other application for registration, the
trial court ordered that, upon the finality of its decision, the decrees of registration should be issued in favor
of the applicants.
The Solicitor General interposed an appeal for petitioner Republic of the Philippines before the Court
of Appeals.
In a decision dated September 28, 1994, the Court of Appeals affirmed the decision of the trial
court. It held that the ruling in Director of Lands v. Court of Appeals,[5] that before public land could be
registered in the name of a private individual, it must first be established that the land had been classified
alienable and disposable, refers to public lands and not to those which have acquired the nature of a
private property in view of the continuous possession thereof by its claimants. The Court of Appeals held:
In this case, it was sufficiently established by appellees that they have been in open, continuous, exclusive
and notorious possession of the subject lots even before the year 1927, or fifty nine (59) years before the
application was filed (TSN, April 13, 1989, pp. 3-4; February 6, 1989, p. 7-11; June 2, 1988, pp. 3, 89). This period more than sufficiently satisfies the 30 years requirement of the Public Land Act for property
to be considered as private land. Significantly, Section 4, Presidential Decree No. 1073 provides:
Sec. 4. The provisions of Section 48(b) and Section 4(c), Chapter VIII, of the Public Land Act are hereby
amended in the sense that these provisions shall apply only to alienable and disposable lands of the public
domain which have been in open, continuous, exclusive and notorious possession and occupation by the
applicant himself or thru his predecessor-in-interest, under a bonafide claim of ownership, since June 12,
1945.
Appellant was thus no longer required to prove that the property in question is classified as alienable and
disposable land of the public domain. Clearly, the property no longer forms part of the public domain. The
long and continuous possession thereof by appellees converted said property to a private one. This finds
support in the ruling in Director of Lands vs. Bengzon, 152 SCRA 369, to wit:

x x x alienable public land held by a possessor, personally or through his predecessor-in-interest, openly,
continuously and exclusively for the prescribed statutory period (30) years under the Public Land Act, as
amended is converted to private property by the mere lapse or completion of said period, ipso jure. The
above is a reaffirmation of the principle established in the earlier cases of Cario v. Insular Government, Suzi
v. Razon, and Herico v. Dar, that open exclusive and undisputed possession of alienable public land for the
period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to be public land and becomes
private property. x x x In interpreting the provisions of Section 48 (b) of Commonwealth Act No. 141, this
Court said in Herico v. Dar, x x x when the conditions as specified in the foregoing provision are complied
with, the possessor is deemed to have acquired, by operation of law, a right to a grant, a government grant,
without the necessity of a certificate of title being issued.The land, therefore, ceases to be of the public
domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is
a mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by
the patent and the torrens title to be issued upon the strength of the patent.
The Court of Appeals then cited Director of Lands v. Intermediate Appellate Court.[6] In that case, this
Court ruled that alienable public land held by a possessor, personally or through his predecessors-ininterest, openly, continuously and exclusively for the prescribed statutory period (30 years under the Public
Land Act, as amended) is converted to private property by the mere lapse or completion of said
period, ipso jure. Moreover, appellant Republics claim that the property in question remains to be public
land under the Constitution, is refuted by this Courts pronouncement in Director of Lands v. Intermediate
Appellate Court that the Constitution cannot impair vested rights.
The Court of Appeals concluded its decision with the following observations:
Finally, we note that no opposition was filed by the Bureaus of Lands and Forestry to contest the
application of appellees on the ground that the property still forms part of the public domain. Nor is there
any showing that the lots in question are forestal land, unlike the case of Director of Lands vs. Court of
Appeals, 133 SCRA 701, wherein the Director of Lands questioned the petition for registration filed by the
applicant therein on the claim that the property applied for registration in his favor was classified and
proven to be forestal land.
Petitioner filed a motion for reconsideration, which was denied in a resolution dated October 29,
1996. Traversing petitioners argument that under Section 2, Article XII of the Constitution, all lands of the
public domain are owned by the State, the Court of Appeals stated that said provision further states that
agricultural lands are excluded from those lands that may not be alienated. It further ruled:
In the instant case, among the documents presented by appellees are Real Estate tax receipts that
sufficiently show that the subject land is mainly utilized for agricultural purposes devoted to the planting of
coconut, corn x x x and sugar cane x x x aside from using the same for residential purposes x x x.
It is noticeable that appellant failed to present any proof to establish its claim that the land in question is not
alienable. Although on July 10, 1989, the court a quo issued an order directing the Bureau of Forest
Development [BFD] to submit xx within thirty (30) days from its receipt of [said order] a report on the status
of the land xx to determine whether said land or any portion thereof is within the forest zone xxx (Record, p.

63), the BFD failed to comply. Moreover, appellant never contested appellees application nor did it may
(sic) any manifestation that the land in question is not alienable. Likewise, the prosecutor representing the
Republic of the Philippines during the trial did not even contest the classification of the land as stated in the
evidence of appellees. Their belated objection should therefore not prejudice appellees who openly and in
good faith presented all the documents pertinent to their claims.
Presidential Decree No. 1073 extended the period within which a qualified person may apply for
confirmation of an imperfect or incomplete title by judicial legalization to December 31, 1987. The filing of
this case in October, 1986 was therefore seasonable. Under the decree, this right is available to a person
who has been in open, continuous, exclusive and notorious possession and occupation, by himself and
through his predecessors-in-interest, under a bona fide claim of acquisition of ownership since June 12,
1945. We reiterate that appellees have proven themselves to have been in possession of the subject land
even prior to June 12, 1945.
Hence, this petition for review, alleging that the Court of Appeals erred in: (1) holding that private
respondents have registerable title to the lots in question, and (2) ordering the registration thereof in their
names.[7]
The issues raised before us are: (a) whether there is a need for private respondents to establish that
the land subject of their application was alienable and disposable despite proofs showing their possession
thereof for more than 30 years; and (b) whether private respondents were able to meet the period required
by the Public Land Act, as amended.
Petitioner contends that before a public land can be registered in the name of a private individual, it
must be shown first that (a) the land has been classified alienable and disposable, and (b) the applicant, by
himself or through his predecessors-in-interest, has been in continuous, exclusive and notorious
possession and occupation of the same under a bona fide claim of ownership since June 12, 1945 or prior
thereto.
Petitioner claims that private respondents failed to meet the said requirements. They did not cite any
official proclamation or presented the land classification map covering the subject parcels of land to prove
that they are alienable and disposable public lands. Neither did private respondents adduce evidence to
show that they had been in possession of the land since June 12, 1945. Although they were able to show
possession by Apolinar, their predecessor-in-interest, since 1948, and private respondents actual
possession beginning in 1960, no proof was presented to show possession prior to 1948. Consequently,
private respondents are not entitled to have the subject parcels of land registered in their names.
In their comment, private respondents cite Section 48(b),[8] before it was amended by PD No. 1073,
and Section (50)[9] of the Public Land Act as the applicable law in this case. They maintain that the land
subject of their application is an agricultural land devoted to corn and other root crops. Further, they have
been in possession of the land since 1927. Estanislao Ceniza, one of the children of Apolinar and who was
already ten years old at that time, testified that his father was the one in possession of the land,
appropriating its fruits and paying its realty taxes. When their father died in 1947, Apolinars chidren took
possession of the land. They also appropriated the fruits and paid realty taxes therefor. In 1960, Apolinars

heirs partitioned the property, declared their respective shares in their names for tax purposes and paid the
realty taxes.

executive order;[13] an administrative action;[14] investigation reports of Bureau of Lands investigators;[15] and
a legislative act or a statute.[16]

Apart from this, private respondents claim that the land in question has long been a private one, it
being a part of Hacienda de Mandaue de Cebu, which in turn was recognized as a private land by the Court
of First Instance of Cebu in several decisions dated February 27, 1934, March 27, 1935, May 6, 1937 and
August 6, 1937.

In this case, private respondents presented a certification dated November 25, 1994, issued by
Eduardo M. Inting, the Community Environment and Natural Resources Officer in the Department of
Environment and Natural Resources Office in Cebu City, stating that the lots involved were found to be
within the alienable and disposable (sic) Block-I, Land Classification Project No. 32-A, per map 2962 4-I555
dated December 9, 1980.[17] This is sufficient evidence to show the real character of the land subject of
private respondents application.[18] Further, the certification enjoys a presumption of regularity in the
absence of contradictory evidence,[19] which is true in this case. Worth noting also was the observation of
the Court of Appeals stating that:

Indeed, before one can be granted a confirmation of title to lands of the public domain, the Public
Land Act requires that the applicant must prove (a) that the land is alienable public land and (b) that his
open, continuous, exclusive and notorious possession and occupation of the same must either be since
time immemorial or for the period prescribed in the Public Land Act. Only when these conditions are met
may the possessor of the land acquire, by operation of law, a right to a grant, a government grant, without
the necessity of a certificate of title being issued.[10]
Conclusively, the Court of Appeals erred when it held that mere adverse possession in accordance
with law for a period likewise provided for by law would automatically entitle the possessor to the right to
register public land in his name. The applicant has to establish first the disposable and alienable character
of the public land. Otherwise, all public lands, regardless of their classification, can be subject of
registration of private titles, as long as the applicant shows that he meets the required years of possession.
Worth noting is the case of Bracewell v. Court of Appeals,[11] where the applicant had been in possession of
the property since 1908 but it was conclusively shown by the government that the land was classified as
alienable or disposable only on 27 March 1972. The Court said:
x x x. Thus, even granting that petitioner and his predecessors-in-interest had occupied the same since
1908, he still cannot claim title thereto by virtue of such possession since the subject parcels of land were
not yet alienable land at that time nor capable of private appropriation. The adverse possession which may
be the basis of a grant of title or confirmation of an imperfect title refers only to alienable or disposable
portions of the public domain.[12] (Italics supplied)
To prove that the land subject of an application for registration is alienable, an applicant must
establish the existence of a positive act of the government such as a presidential proclamation or an

no opposition was filed by the Bureaus of Lands and Forestry to contest the application of appellees on the
ground that the property still forms part of the public domain. Nor is there any showing that the lots in
question are forestal land....[20]
Thus, while the Court of Appeals erred in ruling that mere possession of public land for the period
required by law would entitle its occupant to a confirmation of imperfect title, it did not err in ruling in favor of
private respondents as far as the first requirement in Section 48(b) of the Public Land Act is concerned, for
they were able to overcome the burden of proving the alienability of the land subject of their application.
As correctly found by the Court of Appeals, private respondents were able to prove their open,
continuous, exclusive and notorious possession of the subject land even before the year 1927. As a rule,
we are bound by the factual findings of the Court of Appeals.[21] Although there are exceptions, petitioner
did not show that this is one of them.[22]
WHEREFORE, the petition for review on certiorari is DENIED and the decision, as well as the
resolution, of the Court of Appeals in CA-G.R. CV No. 31728 are AFFIRMED.
SO ORDERED.