Atty.

Mohammad

WMSU LLB 2A

LAND TITLES AND DEEDS CASES

TABLE OF CONTENTS
Lee Hong Kok vs David .......................................................................................................................................................... 2
Republic vs CA and Dela Rosa ............................................................................................................................................ 5
Cario vs The Insular Government ................................................................................................................................ 10
Oh Cho vs The Director of Lands ..................................................................................................................................... 13
Republic vs CA ........................................................................................................................................................................ 29
Director of Forestry vs Villareal ...................................................................................................................................... 34
Director of Lands vs CA ....................................................................................................................................................... 40
Republic vs IAC ....................................................................................................................................................................... 43
Almeda vs CA ........................................................................................................................................................................... 49
Chavez vs PEA and AMARI ................................................................................................................................................. 52
Cruz vs Secretary of Environment and Natural Resources .................................................................................. 85
Ayog vs Cusi ............................................................................................................................................................................. 89
Ong Ching Po vs CA ............................................................................................................................................................... 94
Halili vs CA................................................................................................................................................................................ 98
PBC vs Liu She ...................................................................................................................................................................... 103
JG Summit Holdings vs CA............................................................................................................................................... 110
Roman Catholic Apostolic Administrator of Davao vs Land Registration Commission ........................ 120

1
MAS

Atty. Mohammad

WMSU LLB 2A

LEE HONG KOK VS DAVID

Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. L-30389 December 27, 1972

PEDRO LEE HONG HOK, SIMEON LEE HONG HOK, ROSITA LEE HONG HOK and LEONCIO
LEE HONG HOK,petitioners,
vs.
ANIANO DAVID, THE HON. SECRETARY OF AGRICULTURE AND NATURAL RESOURCES,
THE DIRECTOR OF LANDS and COURT OF APPEALS, respondents.
Augusto A. Pardalis for petitioners.
Luis General, Jr. for respondent Aniano David.
Office of the Solicitor General for other respondents.

FERNANDO, J.:p
Petitioners 1 in this appeal by certiorari would have us reverse a decision of respondent Court of Appeals
affirming a lower court judgment dismissing their complaint to have the Torrens Title 2 of respondent
Aniano David declared null and void. What makes the task for petitioners quite difficult is that their factual
support for their pretension to ownership of such disputed lot through accretion was rejected by
respondent Court of Appeals. Without such underpinning, they must perforce rely on a legal theory,
which, to put it mildly, is distinguished by unorthodoxy and is therefore far from persuasive. A grant by the
government through the appropriate public officials 3 exercising the competence duly vested in them by
law is not to be set at naught on the premise, unexpressed but implied, that land not otherwise passing
into private ownership may not be disposed of by the state. Such an assumption is at war with settled
principles of constitutional law. It cannot receive our assent. We affirm.

The decision of respondent Court of Appeals following that of the lower court makes clear that there
is no legal justification for nullifying the right of respondent Aniano David to the disputed lot arising
from the grant made in his favor by respondent officials. As noted in the decision under review, he
"acquired lawful title thereby pursuant to his miscellaneous sales application in accordance with
which an order of award and for issuance of a sales patent was made by the Director of Lands on
June 18, 1958, covering Lot 2892 containing an area of 226 square meters, which is a portion of Lot
2863 of the Naga Cadastre. On the basis of the order of award of the Director of Lands the
Undersecretary of Agriculture and Natural Resources issued on August 26, 1959, Miscellaneous
Sales Patent No. V-1209 pursuant to which OCT No. 510 was issued by the Register of Deeds of
Naga City to defendant-appellee Aniano David on October 21, 1959. According to the Stipulation of
Facts, since the filing of the sales application of Aniano David and during all the proceedings in
connection with said application, up to the actual issuance of the sales patent in his favor, the
plaintiffs-appellants did not put up any opposition or adverse claim thereto. This is fatal to them
because 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.... Under Section 38 of Act 496 any
question concerning the validity of the certificate of title based on fraud should be raised within one
year from the date of the issuance of the patent. Thereafter the certificate of title based thereon
becomes indefeasible.... In this case the land in question is not a private property as the Director of
Lands and the Secretary of Agriculture and Natural Resources have always sustained the public
character thereof for having been formed by reclamation.... The only remedy therefore, available to
the appellants is an action for reconveyance on the ground of fraud. In this case we do not see any
fraud committed by defendant-appellant Aniano David in applying for the purchase of the land
involved through his Miscellaneous Sales Application No. MSA-V-26747, entered in the records of

2
MAS

Atty. Mohammad

WMSU LLB 2A

the Bureau of Lands [Miscellaneous Sales] Entry No. V-9033, because everything was done in the
open. The notices regarding the auction sale of the land were published, the actual sale and award
thereof to Aniano David were not clandestine but open and public official acts of an officer of the
Government. The application was merely a renewal of his deceased wife's application, and the said
deceased occupied the land since 1938." 4
On such finding of facts, the attempt of petitioners to elicit a different conclusion is likely to be
attended with frustration. The first error assigned predicated an accretion having taken place,
notwithstanding its rejection by respondent Court of Appeals, would seek to disregard what was
accepted by respondent Court as to how the disputed lot came into being, namely by reclamation. It
does not therefore call for any further consideration. Neither of the other two errors imputed to
respondent Court, as to its holding that authoritative doctrines preclude a party other than the
government to dispute the validity of a grant and the recognition of the indefeasible character of a
public land patent after one year, is possessed of merit. Consequently, as set forth at the outset,
there is no justification for reversal.
1. More specifically, the shaft of criticism was let loose by petitioner aimed at this legal proposition
set forth in the exhaustive opinion of then Justice Salvador Esguerra of the Court of Appeals, now a
member of this Court: "There is, furthermore, a fatal defect of parties to this action. Only the
Government, represented by the Director of Lands, or the Secretary of Agriculture and Natural
Resources, can bring an action to cancel a void certificate of title issued pursuant to a void patent
(Lucas vs. Durian, 102 Phil. 1157; Director of Lands vs. Heirs of Ciriaco Carlo, G.R. No. L-12485,
July 31, 1959). This was not done by said officers but by private parties like the plaintiffs, who cannot
claim that the patent and title issued for the land involved are void since they are not the registered
owners thereof nor had they been declared as owners in the cadastral proceedings of Naga
Cadastre after claiming it as their private property. The cases cited by appellants are not in point as
they refer to private registered lands or public lands over which vested rights have been acquired but
notwithstanding such fact the Land Department subsequently granted patents to public land
applicants." 5 Petitioner ought to have known better. The above excerpt is invulnerable to attack. It is a
restatement of a principle that dates back to Maninang v. Consolacion, 6 a 1908 decision. As was there
categorically stated: "The fact that the grant was made by the government is undisputed. Whether the
grant was in conformity with the law or not is a question which the government may raise, but until it is
raised by the government and set aside, the defendant can not question it. The legality of the grant is a
question between the grantee and the government." 7The above citation was repeated ipsissimis
verbis in Salazar v. Court of Appeals. 8 Bereft as petitioners were of the right of ownership in accordance
with the findings of the Court of Appeals, they cannot, in the language of Reyes v. Rodriguez, 9"question
the [title] legally issued." 10 The second assignment of error is thus disposed of.

2. As there are overtones indicative of skepticism, if not of outright rejection, of the well-known
distinction in public law between the government authority possessed by the state which is
appropriately embraced in the concept of sovereignty, and its capacity to own or acquire property, it
is not inappropriate to pursue the matter further. The former comes under the heading
of imperium and the latter of dominium. The use of this term is appropriate with reference to lands
held by the state in its proprietary character. In such capacity, it may provide for the exploitation and
use of lands and other natural resources, including their disposition, except as limited by the
Constitution. Dean Pound did speak of the confusion that existed during the medieval era between
such two concepts, but did note the existence of res publicae as a corollary to dominium." 11 As far as
the Philippines was concerned, there was a recognition by Justice Holmes in Cario v. Insular
Government, 12 a case of Philippine origin, that "Spain in its earlier decrees embodied the universal feudal
theory that all lands were held from the Crown...." 13 That was a manifestation of the concept of jura
regalia, 14 which was adopted by the present Constitution, ownership however being vested in the state
as such rather than the head thereof. What was stated by Holmes served to confirm a much more
extensive discussion of the matter in the leading case of Valenton v. Murciano, 15 decided in 1904. One of
the royal decrees cited was incorporated in the Recopilacion de Leyes de las Indias 16 in these words:
"We having acquired full sovereignty over the Indies and all lands, territories, and possessions not
heretofore ceded away by our royal predecessors, or by us, or in our name, still pertaining to the royal
crown and patrimony, it is our will that all lands which are held without proper and true deeds of grant be
restored to us according as they belong to us, in order that after reserving before all what to us or to our
viceroys audiences, and governors may seem necessary for public squares, ways, pastures, and
commons in those places which are peopled, taking into consideration not only their present condition,
but also their future and their probable increase, and after distributing to the natives what may be
necessary for tillage and pasturage, confirming them in what they now have and giving them more if
necessary, all the rest of said lands may remain free and unencumbered for us to dispose of as we may
wish." 17

3
MAS

Atty. Mohammad

WMSU LLB 2A

It could therefore be affirmed in Montano v. Insular Government" 18 that "as to the unappropriated
public lands constituting the public domain the sole power of legislation is vested in Congress, ..." 19 They
continue to possess that character until severed therefrom by state grant. 20 Where, as in this case, it was
found by the Court of Appeals that the disputed lot was the result of reclamation, its being correctly
categorized as public land is undeniable. 21 What was held in Heirs of Datu Pendatun v. Director of
Lands 22 finds application. Thus: "There being no evidence whatever that the property in question was
ever acquired by the applicants or their ancestors either by composition title from the Spanish
Government or by possessory information title or by any other means for the acquisition of public lands,
the property must be held to be public domain." 23 For it is well-settled "that no public land can be
acquired by private persons without any grant, express or implied, from the government." 24 It is
indispensable then that there be a showing of a title from the state or any other mode of acquisition
recognized by law. 25 The most recent restatement of the doctrine, found in an opinion of Justice J.B.L.
Reyes, follows: 26 "The applicant, having failed to establish his right or title over the northern portion of Lot
No. 463 involved in the present controversy, and there being no showing that the same has been
acquired by any private person from the Government, either by purchase or by grant, the property is and
remains part of the public domain." 27 To repeat, the second assignment of error is devoid of merit.

3. The last error assigned would take issue with this portion of the opinion of Justice Esguerra:
"According to the Stipulation of Facts, since the filing of the sales application of Aniano David and
during all the proceedings in connection with said application, up to the actual issuance of the sales
patent in his favor, the
plaintiffs-appellants did not put up any opposition or adverse claim thereto. This is fatal to them
because 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 ... Under Section 38 of Act 496 any
question concerning the validity of the certificate of title based on fraud should be raised within one
year from the date of the issuance of the patent. Thereafter the certificate of title based thereon
becomes indefeasible ..." 28 Petitioners cannot reconcile themselves to the view that respondent David's
title is impressed with the quality of indefeasibility. In thus manifesting such an attitude, they railed to
accord deference to controlling precedents. As far back as 1919, in Aquino v. Director of
Lands, 29 Justice Malcolm, speaking for the Court, stated: "The proceedings under the Land Registration
Law and under the provisions of Chapter VI of the Public Land Law are the same in that both are against
the whole world, both take the nature of judicial proceedings, and for both the decree of registration
issued is conclusive and final." 30 Such a view has been followed since then. 31 The latest case in point
is Cabacug v. Lao. 32 There is this revealing excerpt appearing in that decision: "It is said, and with
reason, that a holder of a land acquired under a free patent is more favorably situated than that of an
owner of registered property. Not only does a free patent have a force and effect of a Torrens Title, but in
addition the person to whom it is granted has likewise in his favor the right to repurchase within a period
of five years." 33 It is quite apparent, therefore, that petitioners' stand is legally indefensible.

WHEREFORE, the decision of respondent Court of Appeals of January 31, 1969 and its resolution
of March 14, 1969 are affirmed. With costs against petitioners-appellants.
Concepcion, C.J., Makalintal, Zaldivar, Castro, Teehankee Barredo, Makasiar, Antonio and
Esguerra, JJ., concur.

4
MAS

Atty. Mohammad

WMSU LLB 2A

REPUBLIC VS CA AND DELA ROSA

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-43938 April 15, 1988
REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner,
vs.
HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44081 April 15, 1988
BENGUET CONSOLIDATED, INC., petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO, all
surnamed DE LA ROSA, represented by their father JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44092 April 15, 1988
ATOK-BIG WEDGE MINING COMPANY, petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO, all
surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA ROSA, respondents.

CRUZ, J.:
The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of the
earth even if the land where the discovery is made be private. 1 In the cases at bar, which have been
consolidated because they pose a common issue, this doctrine was not correctly applied.

These cases arose from the application for registration of a parcel of land filed on February 11,
1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin
and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and
covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa
and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2
The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big
Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the
Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3
In support of the application, both Balbalio and Alberto testified that they had acquired the subject
land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after
the Liberation. She testified she was born in the land, which was possessed by her parents under
claim of ownership. 4 Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who
declared that the land was planted by Jaime and his predecessors-in-interest to bananas, avocado,
nangka and camote, and was enclosed with a barbed-wire fence. She was corroborated by Felix Marcos,
67 years old at the time, who recalled the earlier possession of the land by Alberto's father. 5 Balbalio
presented her tax declaration in 1956 and the realty tax receipts from that year to 1964, 6 Alberto his tax
declaration in 1961 and the realty tax receipts from that year to 1964. 7

Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on
September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in
September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had
been in actual, continuous and exclusive possession of the land in concept of owner, as evidenced
by its construction of adits, its affidavits of annual assessment, its geological mappings, geological
samplings and trench side cuts, and its payment of taxes on the land. 8

5
MAS

Atty. Mohammad

WMSU LLB 2A

For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma
and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded
on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased
from these locators on November 2, 1931, by Atok, which has since then been in open, continuous
and exclusive possession of the said lots as evidenced by its annual assessment work on the
claims, such as the boring of tunnels, and its payment of annual taxes thereon.9
The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill of
1902 which provided that:
SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both
surveyed and unsurveyed are hereby declared to be free and open to exploration,
occupation and purchase and the land in which they are found to occupation and
purchase by the citizens of the United States, or of said islands.
The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be
registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated
February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the
Constitutions of 1935 and 1973. 10
The trial court * denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the
land sought to be registered.

11

The applicants appealed to the respondent court,

* which reversed the trial court and

12

In other words,
the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the same time
reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims.
recognized the claims of the applicant, but subject to the rights of Benguet and Atok respecting their mining claims.

Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The
Republic has filed its own petition for review and reiterates its argument that neither the private
respondents nor the two mining companies have any valid claim to the land because it is not
alienable and registerable.
It is true that the subject property was considered forest land and included in the Central Cordillera
Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time.
The Court of Appeals correctly declared that:
There is no question that the 9 lots applied for are within the June Bug mineral claims
of Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug
mineral claim of plaintiff Benguet was one of the 16 mining claims of James E. Kelly,
American and mining locator. He filed his declaration of the location of the June Bug
mineral and the same was recorded in the Mining Recorder's Office on October 14,
1909. All of the Kelly claims ha subsequently been acquired by Benguet
Consolidated, Inc. Benguet's evidence is that it had made improvements on the June
Bug mineral claim consisting of mine tunnels prior to 1935. It had submitted the
required affidavit of annual assessment. After World War II, Benguet introduced
improvements on mineral claim June Bug, and also conducted geological mappings,
geological sampling and trench side cuts. In 1948, Benguet redeclared the "June
Bug" for taxation and had religiously paid the taxes.
The Emma and Fredia claims were two of the several claims of Harrison registered in
1931, and which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots
6 to 9 are within the Emma and Fredia mineral claims of Atok Big Wedge Mining
Company.
The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of
Atok having been perfected prior to the approval of the Constitution of the Philippines
of 1935, they were removed from the public domain and had become private
properties of Benguet and Atok.
It is not disputed that the location of the mining claim under
consideration was perfected prior to November 15, 1935, when the
Government of the Commonwealth was inaugurated; and according
to the laws existing at that time, as construed and applied by this
court in McDaniel v. Apacible and Cuisia (42 Phil. 749), a valid
location of a mining claim segregated the area from the public

6
MAS

Atty. Mohammad

WMSU LLB 2A
domain. Said the court in that case: The moment the locator
discovered a valuable mineral deposit on the lands located, and
perfected his location in accordance with law, the power of the United
States Government to deprive him of the exclusive right to the
possession and enjoyment of the located claim was gone, the lands
had become mineral lands and they were exempted from lands that
could be granted to any other person. The reservations of public
lands cannot be made so as to include prior mineral perfected
locations; and, of course, if a valid mining location is made upon
public lands afterwards included in a reservation, such inclusion or
reservation does not affect the validity of the former location. By such
location and perfection, the land located is segregated from the public
domain even as against the Government. (Union Oil Co. v. Smith,
249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc. 546).
"The legal effect of a valid location of a mining claim is not only to
segregate the area from the public domain, but to grant to the locator
the beneficial ownership of the claim and the right to a patent therefor
upon compliance with the terms and conditions prescribed by law.
Where there is a valid location of a mining claim, the area becomes
segregated from the public domain and the property of the locator."
(St. Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650;
655; 43 Law ed., 320, 322.) "When a location of a mining claim is
perfected it has the effect of a grant by the United States of the right
of present and exclusive possession, with the right to the exclusive
enjoyment of all the surface ground as well as of all the minerals
within the lines of the claim, except as limited by the extralateral right
of adjoining locators; and this is the locator's right before as well as
after the issuance of the patent. While a lode locator acquires a
vested property right by virtue of his location made in compliance with
the mining laws, the fee remains in the government until patent
issues."(18 R.C.L. 1152) (Gold Creek Mining Corporation v. Hon.
Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico
Abadilla, Director of the Bureau of Mines, 66 Phil. 259, 265-266)

It is of no importance whether Benguet and Atok had secured a patent for as held in
the Gold Creek Mining Corp. Case, for all physical purposes of ownership, the owner
is not required to secure a patent as long as he complies with the provisions of the
mining laws; his possessory right, for all practical purposes of ownership, is as good
as though secured by patent.
We agree likewise with the oppositors that having complied with all the requirements
of the mining laws, the claims were removed from the public domain, and not even
the government of the Philippines can take away this right from them. The reason is
obvious. Having become the private properties of the oppositors, they cannot be
deprived thereof without due process of law. 13
Such rights were not affected either by the stricture in the Commonwealth Constitution against the
alienation of all lands of the public domain except those agricultural in nature for this was made
subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided that:
SEC. 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 Philipppines 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 60% 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 lands, shall not be alienated, and
no license, concession, or lease for the exploitation, development or utilization of any
of the natural resources shall be granted for a period exceeding 25 years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which case beneficial use may be the measure and
the limit of the grant.

7
MAS

Atty. Mohammad

WMSU LLB 2A

Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:
Any provision of existing laws, executive order, proclamation to the contrary
notwithstanding, all locations of mining claim made prior to February 8, 1935 within
lands set apart as forest reserve under Sec. 1826 of the Revised Administrative
Code which would be valid and subsisting location except to the existence of said
reserve are hereby declared to be valid and subsisting locations as of the date of
their respective locations.
The perfection of the mining claim converted the property to mineral land and under the laws then in
force removed it from the public domain. 14 By such act, the locators acquired exclusive rights over the
land, against even the government, without need of any further act such as the purchase of the land or
the obtention of a patent over it. 15 As the land had become the private property of the locators, they had
the right to transfer the same, as they did, to Benguet and Atok.

It is true, as the Court of Appeals observed, that such private property was subject to the
"vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private
respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas is
not available in the case at bar, for two reasons.
First, the trial court found that the evidence of open, continuous, adverse and exclusive possession
submitted by the applicants was insufficient to support their claim of ownership. They themselves
had acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier
alleged possession of their predecessors-in-interest. 16 The trial judge, who had the opportunity to
consider the evidence first-hand and observe the demeanor of the witnesses and test their credibility was
not convinced. We defer to his judgment in the absence of a showing that it was reached with grave
abuse of discretion or without sufficient basis. 17

Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in
possession of the subject property, their possession was not in the concept of owner of the mining
claim but of the property asagricultural land, which it was not. The property was mineral land, and
they were claiming it as agricultural land. They were not disputing the lights of the mining locators
nor were they seeking to oust them as such and to replace them in the mining of the land. In fact,
Balbalio testified that she was aware of the diggings being undertaken "down below" 18 but she did
not mind, much less protest, the same although she claimed to be the owner of the said land.

The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of
the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a wellknown principle that the owner of piece of land has rights not only to its surface but also to
everything underneath and the airspace above it up to a reasonable height. 19 Under the aforesaid
ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate
claims of title. This is also difficult to understand, especially in its practical application.

Under the theory of the respondent court, the surface owner will be planting on the land while the
mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may
interfere with the operations below and the miner cannot blast a tunnel lest he destroy the crops
above. How deep can the farmer, and how high can the miner, go without encroaching on each
other's rights? Where is the dividing line between the surface and the sub-surface rights?
The Court feels that the rights over the land are indivisible and that the land itself cannot be half
agricultural and half mineral. The classification must be categorical; the land must be either
completely mineral or completely agricultural. In the instant case, as already observed, the land
which was originally classified as forest land ceased to be so and became mineral and completely
mineral once the mining claims were perfected. 20 As long as mining operations were being
undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly
so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the
surface.

What must have misled the respondent court is Commonwealth Act No. 137, providing as follows:
Sec. 3. All mineral lands of the public domain and minerals 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 60% of the capital of
which is owned by such citizens, subject to any existing right, grant, lease or

8
MAS

Atty. Mohammad

WMSU LLB 2A

concession at the time of the inauguration of government established under the

Constitution.
SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial,
commercial, residential, or for any purpose other than mining does not include the
ownership of, nor the right to extract or utilize, the minerals which may be found on or
under the surface.
SEC. 5. The ownership of, and the right to extract and utilize, the minerals included
within all areas for which public agricultural land patents are granted are excluded
and excepted from all such patents.
SEC. 6. The ownership of, and the right to extract and utilize, the minerals included
within all areas for which Torrens titles are granted are excluded and excepted from
all such titles.
This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit
of the State, not of private persons. The rule simply reserves to the State all minerals that may be
found in public and even private land devoted to "agricultural, industrial, commercial, residential or
(for) any purpose other than mining." Thus, if a person is the owner of agricultural land in which
minerals are discovered, his ownership of such land does not give him the right to extract or utilize
the said minerals without the permission of the State to which such minerals belong.
The flaw in the reasoning of the respondent court is in supposing that the rights over the land could
be used for both mining and non-mining purposes simultaneously. The correct interpretation is that
once minerals are discovered in the land, whatever the use to which it is being devoted at the time,
such use may be discontinued by the State to enable it to extract the minerals therein in the exercise
of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any
private party, including the registered owner thereof, for any other purpose that will impede the
mining operations to be undertaken therein, For the loss sustained by such owner, he is of course
entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings. 21
Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of
their respective mining claims which they validly acquired before the Constitution of 1935 prohibited
the alienation of all lands of the public domain except agricultural lands, subject to vested rights
existing at the time of its adoption. The land was not and could not have been transferred to the
private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously
by them and the mining companies for agricultural and mineral purposes.
WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that of
the trial court dated March 11, 1969, is REINSTATED, without any pronouncement as to costs.
SO ORDERED.
Teehankee, C.J., Narvasa, Gancayco and Grio-Aquino, JJ., concur.

9
MAS

Atty. Mohammad

WMSU LLB 2A

CARIO VS THE INSULAR GOVERNMENT

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 2869

March 25, 1907

MATEO CARIO, petitioner-appellant,

vs.
THE INSULAR GOVERNMENT, respondent-appellee.
Coudert Brothers for appellant.
Office of the Solicitor-General Araneta for appellee.
ARELLANO, C.J.:
Mateo Cario, the appellant herein, on the 23d of February, 1904, filed his petition in the Court of
Land Registration praying that there be granted to him title to a parcel of land consisting of 40
hectares, 1 are, and 13 centares, and situated in the town of Baguio, Province of Benguet, together
with a house erected thereon and constructed of wood and roofed with rimo, and bounded as
follows: On the north, in lines running 1,048 metes and 20 decimeters with the lands of Sepa Cario,
H. Phelps Whitmarsh, and Calsi; on the east, in lines running 991 meters and 50 decimeters with the
land of Kuidno, Esteban Gonzales, and of the Civil Government; on the south, in lines of 115 meters
and 60 decimeters, with the lands of Talaca; and on the west, in lines running 982 meters and 20
decimeters, with the lands of Sisco Cario and Mayengmeng.
By order of the court the hearing of this petition, No. 561, and that of Antonio Rebollo and Vicente
Valpiedad filed under No. 834, were heard together for the reason that the latter petition claimed a
small portion of land included in the parcel set out in the former petition.
The Insular Government opposed the granting of these petitions, alleging that the whole parcel of
land is public property of the Government and that the same was never acquired in any manner or
through any title of egresionfrom the State.
After trial, and the hearing of documentary and oral proof, the court of Land Registration rendered its
judgment in these terms:
Therefore the court finds that Cario and his predecessors have not possessed exclusively
and adversely any part of the said property prior to the date on which Cario constructed the
house now there that is to say, for the years 1897 and 1898, and Cario held possession
for some years afterwards of but a part of the property to which he claims title. Both petitions
are dismissed and the property in question is adjudged to be public land. (Bill of exceptions,
p. 15.)
The conclusions arrived at the set forth in definite terms in the decision of the court below are the
following:
From the testimony given by Cario as well as from that of several of the witnesses for the
Government it is deduced, that in or about the year 1884 Cario erected and utilized as a
domicile a house on the property situated to the north of that property now in question,
property which, according to the plan attached toexpediente No. 561, appears to be property
belonging to Donaldson Sim; that during the year 1893 Cario sold said house to one
Cristobal Ramos, who in turn sold the same to Donaldson Sim, moving to and living on the
adjoining property, which appears on the plan aforesaid to be the property of H. Phelps
Whitmarsh, a place where the father and the grandfather of his wife, that is to say, Ortega
and Minse, had lived . . ..
In or about the years 1898 Cario abandoned the property of Whitmarsh and located on the
property described in the plan attached to expediente No. 561, having constructed a house

10
MAS

Atty. Mohammad

WMSU LLB 2A

thereon in which he now lives, and which house is situated in the center of the property, as is
indicated on the plan; and since which time he has undoubtedly occupied some portion of
the property now claimed by him. (Bill of exceptions, pp. 11 and 12.)
1. Therefore it is evident that this court can not decree the registration of all of the superficial
extension of the land described in the petition and as appears on the plan filed herein, such
extension containing 40 hectares, 1 are, and 13 centares, inasmuch as the documentary evidence
accompanying the petition is conclusive proof against the petitioners; this documentary proof
consists of a possessory information under date of March 7, 1901, and registered on the 11th day of
the same month and year; and, according to such possessory information, the land therein
described contains an extension of only 28 hectares limited by "the country road to the barrio of
Pias," a road appearing on the plan now presented and cutting the land, as might be said, in half, or
running through its center from north to south, a considerable extension of land remaining on the
other side of the said road, the west side, and which could not have been included in the possessory
information mentioned.
2. As has been shown during the trial of this case, this land, of which mention is made in said
possessory information, and upon which is situated the house now actually occupied by the
petitioner, all of which is set forth as argument as to the possession in the judgment, is "used for
pasture and sowing," and belongs to the class called public lands.
3. Under the express provisions of law, a parcel of land, being of common origin, presumptively
belonged to the State during its sovereignty, and, in order to perfect the legitimate acquisition of
such land by private persons, it was necessary that the possession of the same pass from the State.
And there is no evidence or proof of title ofegresion of this land from the domain of the Spanish
Government, nor is there any possessory information equivalent to title by composicion or under
agreement. 4, The possessory information filed herein is not the title to property authorized in
substitution for that of adjustment by the royal decree of February 13, 1894, this being the last law or
legal disposition of the former sovereignty applicable to the present subject-matter of common lands:
First, for the reason that the land referred to herein is not covered nor does it come within any one of
the three conditions required by article 19 of the said royal decree, to wit, that the land has been in
an uninterrupted state of cultivation during a period of six years last past; or that the same has been
possessed without interruption during a period of twelve years and has been in a state of cultivation
up to the date of the information and during the three years immediately preceding such information;
or that such land had been possessed openly without interruption during a period of thirty or more
years, notwithstanding the land had not been cultivated; nor is it necessary to refer to the testimony
given by the two witnesses to the possessory information for the following reason: Second, because
the possessory information authorized by said royal decree or last legal disposition of the Spanish
Government, as title or for the purpose of acquiring actual proprietary right, equivalent to that of
adjustment with the Spanish Government and required and necessary at all times until the
publication of said royal decree was limited in time to one year, in accordance with article 21, which
is as follows: " A period of one year, not to be extended, is allowed to verify the possessory
informations which are referred to in articles 19 and 20. After the expiration of this period of the right
of the cultivators and persons in possession to obtain gratuitous title thereto lapses and the land
together with full possession reverts to the state, or, as the case may be, to the community, and the
said possessors and cultivators or their assigns would simply have rights under universal or general
title of average in the event that the land is sold within a period of five years immediately following
the cancellation. The possessors not included under this chapter can only acquire by time the
ownership and title to unappropriated or royal lands in accordance with common law."
5. In accordance with the preceding provisions, the right that remained to Cario, if it be certain that
he was the true possessor of the land in question, was the right of average in case the Government
or State could have sold the same within the period of five years immediately following for example,
if the denouncement of purchase had been carried out by Felipe Zafra or any other person, as
appears from the record of the trial of the case. Aside from this right, in such event, his possession
as attested in the possessory information herein could not, in accordance with common law, go to
show any right of ownership until after the expiration of twenty years from the expiration of twenty
years from the verification and registry of the same in conformity with the provisions of article 393 of
the Mortgage Law and other conditions prescribe by this law.
6. The right of possession in accordance with common law that is to say, civil law remains at
all times subordinate to the Spanish administrative law, inasmuch as it could only be of force when
pertaining to royaltransferable or alienable lands, which condition and the determination thereof is
reversed to the government, which classified and designated the royal alienable lands for the

11
MAS

Atty. Mohammad

WMSU LLB 2A

purpose of distinguishing them from those lands strictly public, and from forestry lands which could
at no time pass to private ownership nor be acquired through time even after the said royal decree of
February 13, 1894.
7. The advent of the new sovereignty necessarily brought a new method of dealing with lands and
particularly as to the classification and manner of transfer and acquisition of royal or common lands
then appropriated, which were thenceforth merely called public lands, the alienation of which was
reserved to the Government, in accordance with section 12 and 13 of the act of Congress of July 1,
1902,1 and in conformity with other laws enacted under this act of Congress by the Philippine
Commission prescribing rules for the execution thereof, one of which is Act No. 648,2 herein
mentioned by the petitioner, in connection with Act No. 627,3 which appears to be the law upon
which the petition herein is founded.
8. Section 6 of Act No. 627 admits prescription, in accordance with the provisions contained in Act
No. 190, as a basis for obtaining the right of ownership. "The petitioners claims title under the period
of prescription of ten years established by that act, as well as by reason of his occupancy and use
thereof from time immemorial." (Allegation 1.) But said act admits such prescription for the purpose
of obtaining title and ownership to lands "not exceeding more that sixteen hectares in extent." (Sec.
6 of said act.) The land claimed by Cario is 40 hectares in extent, if we take into consideration his
petition, or an extension of 28 hectares, according to the possessory information, the only thing that
can be considered. Therefore, it follows that the judgment denying the petition herein and now
appealed from was strictly in accordance with the law invoked herein.
9. And of the 28 hectares of land as set out in the possessory information, one part of same,
according to the testimony of Cario, belongs to Vicente Valpiedad, the extent of which is not
determined. From all of which it follows that the precise extent has not been determined in the trial of
this case on which judgment might be based in the event that the judgment and title be declared in
favor of the petitioner, Mateo Cario. And we should not lose sight of the fact that, considering the
intention of Congress in granting ownership and title to 16 hectares, that Mateo Cario and his
children have already exceeded such amount in various acquirements of lands, all of which is shown
in different cases decided by the said Court of Land Registration, donations or gifts of land that could
only have been made efficacious as to the conveyance thereof with the assistance of these new
laws.
By reason of the findings set forth it is clearly seen that the court below did not err:
1. In finding that Mateo Cario and those from whom he claims his right had not possessed
and claimed as owners the lands in question since time immemorial;
2. In finding that the land in question did not belong to the petitioner, but that, on the
contrary, it was the property of the Government. (Allegation 21.)
Wherefore, the judgment appealed from is affirmed with the costs of this instance against the
appellant. After the expiration of twenty days from the notification of this decision let judgment be
entered in accordance herewith, and ten days thereafter let the case be remanded to the court from
whence it came for proper action. So ordered.
Torres, Mapa, Willard, and Tracey, JJ., concur.
Johnson, J., reserves his vote.

12
MAS

Atty. Mohammad

WMSU LLB 2A

OH CHO VS THE DIRECTOR OF LANDS

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-48321

August 31, 1946

OH CHO, applicant-appellee,
vs.
THE DIRECTOR OF LANDS, oppositor-appellant.
Office of the Solicitor General Roman Ozaeta and Assistant Solicitor General Rafael Amparo for
appellant.
Vicente Constantino for appellee.
Ferrier, Gomez and Sotelo and J. T. Chuidian as amici curiae.
PADILLA, J.:
This is an appeal from a judgment decreeing the registration of a residential lot located in the
municipality of Guinayangan, Province of Tayabas in the name of the applicant.
The opposition of the Director of Lands is based on the applicant's lack of title to the lot, and on his
disqualification, as alien, from acquiring lands of the public domain.
The applicant, who is an alien, and his predecessors in interest have been in open, continuous,
exclusive and notorious possession of the lot from 1880 to filing of the application for registration on
January 17, 1940.
The Solicitor General reiterates the second objection of the opponent and adds that the lower court,
committed an error in not declaring null and void the sale of the lot to the applicant.
The applicant invokes the Land Registration Act (Act No. 496), or should it not be applicable to the
case, then he would apply for the benefits of the Public Land Act (C.A. No. 141).
The applicant failed to show that he has title to the lot that may be confirmed under the Land
Registration Act. He failed to show that he or any of his predecessors in interest had acquired the lot
from the Government, either by purchase or by grant, under the laws, orders and decrease
promulgated by the Spanish Government in the Philippines, or by possessory information under the
Mortgaged Law (section 19, Act 496). All lands that were not acquired from the Government, either
by purchase or by grant below to the public domain. An exception to the rule would be any land that
should have been in the possession of an occupant and of his predecessors in interest since time
immemorial, for such possession would justify the presumption that the land had never been part of
the public domain or that it had been a private property even before the Spanish conquest.
(Cario vs. InsularGovernment, 212 U.S., 449; 53 Law. Ed., 594.) The applicant does not come
under the exception, for the earliest possession of the lot by his first predecessors in interest begun
in 1880.
As the applicant failed to show title to the lot, the next question is whether he is entitled to decree or
registration of the lot, because he is alien disqualified from acquiring lands of the public domain
(sections 48, 49, C.A. No. 141).
As the applicant failed to show the title to the lot, and has invoked the provisions of the Public Land
Act, it seems unnecessary to make pronouncement in this case on the nature or classifications of
the sought to be registered.
It may be argued that under the provisions of the Public Land Act the applicant immediate
predecessor in interest would have been entitled to a decree of registration of the lot had they
applied for its registration; and that he having purchased or acquired it, the right of his immediate
predecessor in interest to a decree of registration must be deemed also to have been acquired by

13
MAS

Atty. Mohammad

WMSU LLB 2A

him. The benefits provided in the Public Land Act for applicant's immediate predecessors in interest
should comply with the condition precedent for the grant of such benefits. The condition precedent is
to apply for the registration of the land of which they had been in possession at least since July 26,
1894. This the applicant's immediate predecessors in interest failed to do. They did not have any
vested right in the lot amounting to the title which was transmissible to the applicant. The only right, if
it may thus be called, is their possession of the lot which, tacked to that of their predecessors in
interest, may be availed of by a qualified person to apply for its registration but not by a person as
the applicant who is disqualified.
It is urged that the sale of the lot to the applicant should have been declared null and void. In a suit
between vendor and vendee for the annulment of the sale, such pronouncement would be
necessary, if the court were of the opinion that it is void. It is not necessary in this case where the
vendors do not even object to the application filed by the vendee.
Accordingly, judgment is reversed and the application for registration dismissed, without costs.
Moran, C.J., Feria, Pablo, Hilado and Bengzon, JJ., concur.

Separate Opinions
PERFECTO, J., concurring:
Oh Cho, a citizen of the Republic of China, purchased in 1938 from Antonio, Luis and Rafael
Lagdameo a parcel of land located in the residential district of Guinayangan, Tayabas, which has
been in the continuous, public, and adverse possession of their predecessors in interest as far back
as 1880. on June 17, 1940, Oh Cho applied for the registration of said parcel of land. The Director of
Lands opposed the application because, among other grounds, the Constitution prohibits aliens from
acquiring public or private agricultural lands.
One of the witnesses for the applicant, on cross-examination, expressly admitted that the land in
question is susceptible of cultivation and may be converted into an orchard or garden. Rodolfo
Tiquia, inspector of the Bureau of Lands, testifying as a witness for the government, stated that the
land, notwithstanding the use to which it is actually devoted, is agricultural land in accordance with
an opinion rendered in 1939 by the Secretary of Justice. The pertinent part of said opinion, penned
by Secretary Jose Abad Santos, later Chief Justice of the Supreme Court, is as follows:
1. Whether or not the "public agricultural land" in section 1, Article XII, of the Constitution
may be interpreted to include residential, commercial or industrial lots for purposes of their
disposition.
1. Section 1, Article XII of the Constitution classifies lands of the public domain in the
Philippines into agricultural, timber and mineral. This is the basic classification adopted since
the enactment of the Act of Congress of July 1, 1902, known as the Philippine Bill. At the
time of the adoption of the Constitution of the Philippines, the term "agricultural public lands"
had, therefor, acquired a technical meaning in our public laws. The Supreme Court of the
Philippines in the leading case of Mapa vs. Insular Government, 10 Phil., 175, held that the
phrase "agricultural public lands" means those public lands acquired from Spain which are
neither timber nor mineral lands. This definition has been followed by our Supreme Court in
many subsequent cases. (Montano vs. Ins. Gov't 12 Phil., 572, 574; Santiago vs. Ins. Gov't.,
12, Phil., 593; Ibaes de Aldecoa vs. Ins. Gov't., 13 Phil., 159; Ins. Gov't., vs. Aldecoa & Co.,
19 Phil., 505, 516 Mercado vs.Collector of Internal Revenue, 32 Phil., 271, 276; Molina 175,
181; Jocson vs. Director of Forestry, 39 Phil., 560, 564; and Ankron vs. Government of the
Philippines, 40 Phil., 10, 14.)
Residential, commercial or industrial lots forming part of the public domain must have to be
included in one or more of these classes. Clearly, they are neither timber nor mineral, of
necessity, therefore, they must be classified as agricultural.
Viewed from the another angle, it has been held that in determining whether lands are
agricultural or not, the character of the lands is the test (Odell vs. Durant 62 N. W., 524;

14
MAS

Atty. Mohammad

WMSU LLB 2A

Lerch vs. Missoula Brick & Tile Co., 123 p., 25). In other words, it is the susceptibility of the
land to cultivation for agricultural or not (State vs.Stewart, 190, p.,129).
Judge Pedro Magsalin, of the Court First Instance of Tayabas, rendered a decision on August 15,
1940, overruling the opposition without must explanation and decreeing the registration prayed for
the applicant. The Director of Lands appealed from the decision, and the Solicitor General appearing
for appellant, maintains that the applicant, not being a citizen of the Philippines, is disqualified to buy
or acquire the parcel of land in question and that the purchase made in question and that the
purchase made in 1938 is null and void.
This is the question squarely reversing to us for decision. The majority, although reversing the lower
court's decision and dismissing the application with we agree, abstained from the declaring null and
void the purchase made by Oh Cho in 1938 as prayed for the appellant. We deem it necessary to
state our opinion on the important question raised, it must be squarely decided.
The Solicitor General argued in his brief as follows:
I. The lower court erred decreeing the registration of the lot in question in favor of the
applicant who, according to his own voluntary admission, is a citizen of the Chinese
Republic.
(a) The phrase "agricultural land" as used in the Act of the Congress of July 1, 1902, in the
Public Land Act includes residential lots.
In this jurisdiction lands of public domain suitable for residential purposes are considered
agricultural lands under the Public Land Law. The phrase "agricultural public lands" has well
settled judicial definition. It was used for the first time in the Act of Congress of July 1, 1902,
known as the Philippine Bill. Its means those public lands acquired form Spain which are
neither mineral nor timber lands (Mapa vs. Insular Government, 12 Phil., 572; Ibaes de
Aldecoa vs. Insular Government 13 Phil., 159; Ramos vs. Director of Lands, 39 Phil., 175;
Jocson vs. Director of Forestry, 39 Phil., 560; Ankron vs. Government of the Philippine
Islands, 40 Phil., 10). In the case of Mapa vs. Insular Government, supra, the Supreme
Court, in defining the meaning and scope of that phrase from the context of the sections 13
and 15 of that Act, said:
The phrase "agricultural public lands" as defined by the Act of Congress of July 1, 1902,
which phrase is also to be found in several sections of the Public Land Act (No. 926) means
those public lands acquired from Spain which are neither mineral timber lands.
xxx

xxx

xxx

"We hold that there is to be found in the act of Congress a definition of the phrase
"agricultural public lands," and after careful consideration of the question we are
satisfied that only definition which exists in said Act is the definition adopted by the
court below. Section 13 say that the Government shall "make and rules and
regulations for the lease, sale, or other dispositions of public lands other than timber
or mineral lands," To our minds that is only definition that can be said to be given
agricultural lands. In other words, that the phrase "agricultural lands" as used in Act
No. 926 means those public lands acquired from Spain which are not timber or
mineral lands. . . ." Mapa vs. Insular Government, 10 Phil., 175, 178, 182, emphasis
added.)
"This phrase "agricultural public lands" was subsequently used in Act No. 926, which is the
first public land law of the Philippines. As therein used, the phrase was expressly given by
the Philippine Commission the same meaning intended for it by Congress as interpreted in
the case of Mapa vs. Insular Government,supra. This is a self-evident from a reading of
section 1, 10, 32, and 64 (subsection 6 of Act No. 926). Whenever the phrase "agricultural
public lands" is used in any of said sections, it is invariably by the qualification "as defined by
said Act of Congress of July first, nineteen hundred and two."
"More specially, in the case of Ibaez de Aldecoa vs. Insular Government, supra, the
Supreme Court held that a residential or building lot, forming part of the public domain, is
agricultural land, irrespective of the fact that it is not actually used for purposes of agriculture

15
MAS

Atty. Mohammad

WMSU LLB 2A

for the simple reason that it is susceptible of cultivation and may be converted into a rural
estate, and because when a land is not mineral or forestal in its nature it must necessarily be
included within the classification of a agricultural land. Because of the special applicability of
the doctrine laid down in said case, we quote at some length from the decision therein
rendered:
"The question set up in these proceedings by virtue of the appeal interposed by counsel for
Juan Ibaez de Aldecoa, is whether or not a parcel of land that is susceptible of being
cultivated, and ceasing to be agricultural land, was converted into a building lot, is subject to
the legal provisions in force regarding Government public lands which may be alienated in
favor of private individuals or corporations. . . .
xxx

xxx

xxx

"Hence, any parcel of land or building lot is susceptible of cultivation, and may
converted into a field, and planted with all kinds of vegetation ; for this reason, where
land is not mining or forestal in its nature, it must necessarily be included within the
classification of agriculture land, not because it is actually used for the purposes of
agriculture, but because it was originally agricultural and may again become so
under other circumstances; besides the Act of Congress (of July 1, 1902) contains
only three classifications, and makes no special provision with respect to building lots
or urban land that have ceased to be agricultural land. . . .
xxx

xxx

xxx

"From the language of the foregoing provisions of the law, it is deduced that, with the
exception of those comprised within the mineral and timber zone, all lands owned by
State or by the sovereign nation are public in character, and per se alienable and,
provided they are not destine to the use of public in general or reserved by the
Government in accordance with law, they may be acquired by any private or juridical
person; and considering their origin and primitive state and the general uses to which
they are accorded, they are called agricultural lands, urbans lands and building lots
being included in this classification for the purpose of distinguishing rural and urban
estates from mineral and timber lands; the transformation they may have undergone
is no obstacle to such classification as the possessors thereof may again convert
them into rural estates." (Ibaez de Aldecoa vs. Insular Government 13 Phil., 161,
163 164, 165, 166; emphasis added.).
(b) Under the Constitution and Commonwealth Act No. 141 (Public Land
Act), the phrase (Public Land Act), the phrase "public agricultural land"
includes lands of the public domain suitable for residential purposes.
"Section 1, Article XII of the Constitution, reads as follows:
"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 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 . . ."
(Emphasis added.).
"Under the above-quote provision, the disposition exploitation, development or utilization of
the natural resources, including agricultural lands of the public domain is limited to citizens of
the Philippines or to the corporations or associations therein mentioned. It also clearly
appears from said provision that natural resources, with the exception of public agricultural
land, are not subject to alienation.
"On November 7, 1936, or more than one year after the adoption of the Constitution,
Commonwealth Act No. 141, known as the Public Land Act, was approved. Under this Act
the lands of the public have been classified into three divisions: (a) alienable or disposable,
(b) timber, and (c) mineral lands. The lands designated alienable or disposable correspond

16
MAS

Atty. Mohammad

WMSU LLB 2A

to lands designated in the Constitution as public agricultural lands, because under section 1,
Article XII, public agricultural lands are the only natural resources of the country which are
the only natural resources of the country which are subject to alienation or deposition.
"Section 9 of Commonwealth Act No. 141 provide that the alienable or disposable public
lands shall be classified, according to use or purposes to which they are destined, into a
agricultural, residential, commercial, industrial, etc., lands. At first blush it would seem that
under this classification residential land is different from agricultural land. The difference
however, is more apparent than real. 'Public agricultural land ' as that phrase is used in the
Constitution means alienable lands of the public domain and therefore this phrase is
equivalent to the lands classified by the Commonwealth Act No. 141 as alienable or
disposable. The classification provided in section 9 is only for purposes administration and
disposition, according to the purposes to which said lands are especially adopted. But
notwithstanding this of all said lands are essentially agricultural public lands because only
agricultural public lands are subject to alienation or disposition under section 1, Article XII of
the Constitution. A contrary view would necessarily create a conflict between Commonwealth
Act No. 141 and section 1 of Article XII of the Constitution, and such conflict should be
avoided , if possible, and said Act construed in the light of the fundamental provisions of the
Constitution and in entire harmony therewith.
"Another universal principles applied in considering constitutional question is, that an
Act will be so construed, if possible, as to avoid conflict with the Constitution,
although such a construction may not be the most obvious or natural one. "The Court
may resort to an implication to sustain a statute, but not to destroy it." But the courts
cannot go beyond the province of legitimate construction, in order to save a statute;
and where the meaning is plain, words cannot to be read into it or out of it for that
purpose." ( 1 Sutherland, Statutory Construction, pp. 135, 136.)
"In view of the fact that more than one than one year after the adoption of the Constitution
the National Assembly revised the Public Land Law and passed Commonwealth Act No.
141, which a compilation of the laws relative to the lands of the public domain and the
amendments thereto, form to the Constitution.
"Where the legislature has revised a statute after a Constitution has been adopted,
such a revision is to be regarded as a legislative construction that the statute so
revised conforms to the Constitution." (59 C.J., 1102; emphasis added.)
"By the way of illustration, let us supposed that a piece or tract of public land has been
classified pursuant to section 9 of Commonwealth Act No. 141 as residential land. If, by
reason of this classification, it is maintained that said land has ceased to be agricultural
public land, it will no longer be subject to alienation or disposition by reason of the
constitutional provision that only agricultural lands are alienable; and yet such residential lot
is alienable under section 58, 59, and 60 of Commonwealth Act No. 141 to citizens of the
Philippines or to corporations or associations mentioned in section 1, Article XII of the
Constitution. Therefore, the classification of public agricultural lands into various subdivisions
is only for purposes of administration, alienation or disposition, but it does not destroy the
inherent nature of all such lands as a public agricultural lands.
"(c) Judicial interpretation of doubtful clause or phrase use in the law, controlling.
"The judicial interpretation given to the phrase "public agricultural land" is a sufficient
authority for giving the same interpretation to the phrase as used in subsequent legislation,
and this is especially so in view of the length of time during which this interpretation has been
maintained by the courts. On this point Sutherland has the following to say:
"When a judicial interpretation has once been put upon a clause, expressed in a
vague manner by the legislature, and difficult to be understood, that ought of itself to
be sufficient authority for adopting the same construction. Buller J., said: "We find
solemn determination of these doubtful expressions in the statute, and as that now
put another construction has since prevailed, there is no reason why we should now
put another construction of the act on account of any suppose change of
convenience." This rule of construction will hold good even if the court be opinion that
the practical erroneous; so that if the matter were res integra the court would adopt a
different construction. Lord Cairns said: "I think that with regard to statutes ... it is

17
MAS

Atty. Mohammad

WMSU LLB 2A

desirable not so much that the principle of the decision should be capable at all times
of justification, as that the law should be settled, and should, when once settled, be
maintained without any danger of vacillation or uncertainty. "Judicial usage and
practice will have weight, and when continued for a long time will be sustained
though carried beyond the pair purport of the statute."(II Lewis' Sutherland Statutory
Construction, pp. 892, 893.) .
"An important consideration affecting the weight of contemporary judicial construction
is the length of time it has continued. It is adopted, and derives great force from
being adopted, soon after the enactment of the law. It may be, and is presumed, that
the legislative sense of its policy, and of its true scope and meaning, permeates the
judiciary and controls its exposition. Having received at that time a construction
which is for the time settled, accepted, and thereafter followed or acted upon, it has
the sanction of the of the authority appointed to expound the law, just and correct
conclusions, when reached, they are, moreover, within the strongest reasons on
which founded the maxim of stare decisis. Such a construction is public given, and
the subsequent silence of the legislature is strong evidence of acquiescence, though
not conclusive. . . . (II Lewis Sutherland Statutory Construction, pp. 894, 895.)
"Furthermore, when the phrase "public agricultural land" was used in section 1 of Article XII
of the Constitution, it is presumed that it was so used with the same judicial meaning therefor
given to it and therefor the meaning of the phrase, as used in the Constitution, includes
residential lands and another lands of the public domain, but excludes mineral and timber
lands.
"Adoption of provisions previously construed ad. Previous construction by Courts.
Where a statute that has been construed by the courts of the last resort has been
reenacted in same, or substantially the same, terms, the legislature is presumed to
have been familiar with its construction, and to have adopted it is part of the law,
unless a contrary intent clearly appears, or a different construction is expressly
provided for; and the same rule applies in the construction of a statute enacted after
a similar or cognate statute has been judicially construed. So where words or
phrases employed in a new statute have been construed by the court to have been
used in a particular sense in a previous statute on the same subject, or one
analogous to it, they are presumed, in the a absence of clearly expressed intent to
the contrary, to be used in the same sense in the statute as in the previous statute."
(59 C.J., 1061-1063.).
"Legislative adoption of judicial construction. In the adoption of the code, the
legislature is presumed to have known the judicial construction which have been
placed on the former statutes; and therefore the reenactment in the code or general
revision of provisions substantially the same as those contained in the former
statutes is a legislative adoption of their known judicial constructions, unless a
contrary intent is clearly manifest. So the fact that the revisers eliminated statutory
language after it had been judicially construed shows that they had such construction
in view." (59 C. J., 1102.)
"II. The lower court erred in not declaring null and void the sale of said land to the appellant
(appellee).
"Granting that the land in question has ceased to be a part of the lands of the public domain
by reason of the long continuous,, public adverse possession of the applicant's predecessors
in interest, and that the latter had performed all the conditions essential to a Government
grant and were entitled to a certificate of title under section 48, subsection (b), of
Commonwealth Act No. 141, still the sale of said land of December 8, 1938, to the applicant
as evidenced by Exhibits B and C, was null and void for being contrary to section 5, Article
XII of the Constitution, which reads as follows:
"Save in cases of hereditary succession, no private agricultural land shall be
transferred or assignedexcept to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain of the Philippines."
"The applicant, being a Chinese citizen, is disqualified to acquire or hold lands of the public
domain (section 1, Article XII of the Constitution; section 12, 22, 23, 33, 44, 48,

18
MAS

Atty. Mohammad

WMSU LLB 2A

Commonwealth Act No. 141 ), and consequently also disqualified to buy and acquire private
agriculture land.
"In view of the well settled judicial meaning of the phrase public agricultural land,' as
hereinbefore demonstrated, the phrase 'private agricultural land,' as used in the above
quoted provision, can only mean land of private ownership, whether agricultural, residential,
commercial or industrial. And this necessarily so, because the phrase 'agricultural land used
in the Constitution and in the Public Land Law must be given the same uniform meaning to
wit, any land of the public domain or any land of private ownership, which is neither mineral
or forestal.
"A word or phrase repeated in a statute will bear the same meaning throughout the
statute, unless a different intention appears. ... Where words have being long used in
a technical sense and have been judicially construed to have a certain meaning, and
have been adopted by the legislature as having a certain meaning prior to a
particular statute in which they are used, the rule of construction requires that the
words used in such statute should be construed according to the sense may vary
from the strict literal meaning of the words." (II Sutherland, Statutory Construction., p.
758.) .
"This interpretation is in harmony with the nationalistic policy, spirit and purpose of our
Constitution and laws, to wit, `to conserve and develop the patrimony of the nation,' as
solemnly enunciated in the preamble to the Constitution.
"A narrow and literal interpretation of the phrase 'private agriculture land' would impair and
defeat the nationalistic aim and general policy of our laws and would allow a gradual, steady,
and unlimited accumulation in alien hands of a substantial portion of our patrimonial estates,
to the detriment of our national solidarity, stability, and independence. Nothing could prevent
the acquisition of a great portion or the whole of a city by subjects of a foreign power. And
yet a city or urban area is more strategical than a farm or rural land.
"The mere literal construction of section in a statute ought not to prevail if it is
opposed to the intention of the legislature apparent by the statute; and if the words
are sufficiently flexible to admit of some other construction it is to be adopted to
effectuate that intention. The intent prevails over the letter, and the letter will, if
possible be so read as to conform to the spirit of the act. While the intention of the
legislature must be ascertained from the words used to express it, the manifest
reason and the obvious purpose of the law should not be sacrificed to a liberal
interpretation of such words." (II Sutherland, Stat. Construction, pp. 721, 722.)
"We conclude, therefore, that the residential lot which the applicant seeks to register in his
name falls within the meaning of private agricultural land as this phrase is used in our
Constitution and, consequently, is not subject to acquisition by foreigners except by
hereditary succession."
The argument hold water. It expresses a correct interpretation of the Constitution and the real intent
of the Constitutional Convention.
One of our fellow members therein, Delegate Montilla, said:
The constitutional precepts that I believe will ultimately lead us to our desired goal are; (1)
the complete nationalization of our lands and natural resources; (2) the nationalization of our
commerce and industry compatible with good international practices. With the complete
nationalization of our lands and natural resources it is to be understood that our God-given
birthright should be one hundred per cent in Filipino hands. ... Lands and natural resources
are immovable and as such can be compared to the vital organs of a person's body, the lack
of possession of which may cause instant death or the shortening of life. If we do not
completely nationalize these two of our most important belongings, I am afraid that the time
will come when we shall be sorry for the time we were born. Our independence will be just a
mockery, for what kind of independence are we going to have if a part of our country is not in
our hands but in those of foreigner? (2 Aruego, The Framing of the Philippine Constitution, p.
592.).
From the same book of Delegate Aruego, we quote:

19
MAS

Atty. Mohammad

WMSU LLB 2A

The nationalization of the natural resources of the country was intended (1) to insure their
conservation for Filipino posterity; (2) to serve as an instrument of national defense, helping
prevent the extension into the country of foreign control through peaceful economic
penetration; and (3) to prevent making the Philippines a source of international conflict with
the consequent danger to its internal security and independence.
xxx

xxx

xxx

. . . In the preface to its report, the committee on nationalization and preservation of lands
and other natural resources said;
"International complications have often resulted from the existence of alien ownership of land
and natural resources in a weak country. Because of this danger, it is best that aliens should
be restricted in the acquisition of land and other natural resources. An example is afforded by
the case of Texas. This state was originally province of Mexico. In order to secure its rapid
settlements and development, the Mexican government offered free land to settlers in Texas.
Americans responded more rapidly than the Mexicans, and soon they organized a revolt
against Mexican rule, and then secured annexation to the United States. A new increase of
alien landholding in Mexico has brought about the desire a prevent a repetition of the Texas
affair. Accordingly the Mexican constitution of 1917 contains serious limitation on the right of
aliens to hold lands and mines in Mexico. The Filipinos should profit from this example."
xxx

xxx

xxx

It was primarily for these reasons that the Convention approved readily the proposed
principle of prohibiting aliens to acquire, exploit, develop, or utilize 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. For the same
reasons the Convention approved equally readily the proposed principle of prohibiting the
transfer of assignment to aliens of private agricultural land, save in the case of hereditary
succession. (2 Aruego, Framing of the Philippine Constitution, pp. 604, 605, 606.).
All the foregoing show why we, having been a member of the Constitutional Convention, agree with
Solicitor General's position and concur in the result in this case, although we would go as far as the
outright pronouncement that the purchase made by appelle is null and void.
BRIONES, M., con quien estan conformes PARAS y TUASON, MM., disidente:
El solicitante en este expediente pide el registro del solar de que se trata como terreno de propiedad
privada, y tan solo con caracter supletorio invoca las disposiciones del capitulo 8. de la Ley No.
2874 sobre terrenos publicos (Pieza de Excepciones, pag. 3.)
Por su parte el Director de Terrenos se opone a la solicitud en virtud de tres fundamentos, a saber:
(1) porque ni el solicitante ni sus predecesores en interes pueden demonstrar titulo suficiente sobre
dicha parcela de terreno, no habiendose adquirido la misma ni por titulo de composicion con el
Estado bajo la soberania de Espaa, ni por titulo de informacion posesoria bajo el Real Decreto de
13 de Febrero de 1894; (2) porque el citado solar es una porcion de los terrenos de dominio publico
pertenecientes al Commonwealth de Filipinas; (3) porque siendo el solicitante un ciudadano chino,
no esta capacitado bajo las disposiciones de la Constitucion de Filipinas para adquirir terrenos de
caracter publico o privado (idem, pags. 5 y 6).
Tanto el solicitante como el Director de Terrenos practicaron sus pruebas ante un arbitro nombrado
por el Juzgado de Primera Instancia de Tayabas. Con vista de tales pruebas, el Juez Magsalin, del
referido Juzgado, dicto sentencia a favor del solicitante, de la cual transcribimos las siguientes
porciones pertinentes:
La representacion del opositor Director de Terrenos trata de probar por medio del testimonio
del Inspector del Buro de Terrenos que, el terreno objeto de la solicitud es parte del dominio
publico y ademas el solicitante es ciudadano chino, pero dicho testigo afirmo que el terreno
objeto de la presente solicitud es un solar situado dentro de la poblacion del municipio de
Guinayanga, Tayabas, y en el mismo existe una casa de materiales fuertes y careciendo de
merito esta oposicion debe desestimarse la misma.

20
MAS

Atty. Mohammad

WMSU LLB 2A

Por tanto, previa desestimacion de la oposicion del Director de Terrenos, se adjudica con
sus mejoras la parcela de terreno objeto de la presente solicitud descrito en el plano Psu109117, a favor del solicitante Oh Cho, ciudadano chino, mayor de edad, casado con Yee
Shi, y residente en el municipio de Guinayanga, Tayabas, Islas Filipinas. (Decision, pag. 8,
Record on Appeal.)
De lo transcrito se infiere de una manera forzosa lo siguiente: (a) que el tribunal inferior desestimo
de plano la oposicion del Director de Terrenos fundada en el supuesto de que el solar
cuestionado es parte del dominio publico; (b) que el mismo tribunal rechazo el otro fundamento de
la oposicion, esto es, que siendo el solicitante ciudadano chino esta incapacitado bajo nuestra
Constitucion para adquirir terreno, ya publico, ya privado, aunque sea un solar de caracter urbano;
(c) que, segun el fallo del Juez a quo, no siendo publico el terreno cuestionado, es
necesariamente terreno privado.
El Director de Terrenos, no estando conforme con la sentencia, apelo de ella para ante el Tribunal
de Apelacion y hace en su alegato dos sealamientos de error, ninguno de los cuales pone en tela
de juicio la calidad de privado del terreno cuestionado. El apelante no plantea ninguna cuestion de
hecho; plantea solo una cuestion de derecho. Por eso que en la reconstitucion de este expediente
el original se quemo durante la guerra no ha habido necesidad de incluir las notas
taquigraficas ni las pruebas documentales, y de hecho hemos considerado y decidido este asunto
sin dichas notas y pruebas. El abogado Constantino, del apelado, en la audiencia para la
reconstitucion de los autos, hizo esta manifestacion; "In view also of the fact that the questions
involved here are only questions of law, this representation waives the right to present the evidence
presented in the trial court . . . ." Por su parte, el Procurador General, al explanar el caso en
representacion del apelante Director de Terrenos, principia su alegato con la siguiente declaracion:
This appeal is a test case. There are now several cases of exactly the same nature pending
in the trial courts.
Whether or not an alien can acquire a residential lot and register it in his name is
the only question raised in this appeal from a decision of the Court of First Instance of
Tayabas which sustained the affirmance and decreed the registration of the said property in
favor of the applicant who, by his own voluntary admission, is a citizen of the Chinese
Republic. This question is raised in connection with the constitutional provision that no
private agricultural land shall be transferred or assigned to foreigners except in cases of
hereditary succession. (Pags. 1, 2, alegato del apelante.)
Habiendose apelado de la sentencia para ante el Tribunal de Apelacion por que se elevo este
asunto al Tribunal Supremo, ante el cual ya estaba pendiente aun antes de la guerra, y sin
resolverse durante la ocupacion japonesa? La razon no consta especificamente en autos, pero
como no se trata de una alzada del Tribunal de Apelacaion a la Corte Suprema, la unica explicacion
que cabe es que aquel, la percatarse de que en la apelacion no se planteaba mas que una cuestion
de derecho, ordeno, como era de rigor, el traslado del asunto a esta Corte por ser de su jurisdiccion
y competencia.
Hemos estimado necesario sentar las anteriores premisas porque las mismas sirven de base a la
argumentacion que a seguida vamos a desenvolver para fundamentar esta disidencia.
I. De lo expuesto resulta evidente que el Director de Terrenos se ha opuesto al registro solicitado,
entre otros fundamentos, porque el terreno es publico; que el tribunal inferior ha desestimado este
fundamento por "carecer de merito," fallando que el terreno es privado; que el Director de Terrenos,
en su apelacion ante nosotros, no cuestiona esta conclusion del Juez a quo, sino que dando por
admitido que el terreno es de propiedad privada, arguye, sin embargo, que bajo la seccion 5,
Articulo XII de la Constitucion de Filipinas el solicitante, por ser extranjero, no puede adquirir terreno
agricula privado, estando incluido en este concepto un solar urbano como el de que se trata en este
expediente. Planteado el asunto en tales terminos puede esta Corte considerar y resolver un punto
no contendido entre las partes un punto que esta firme y definitivamente resuelto y no es objeto
de apelacion? Dicho de otra manera: puede esta Corte, como hace la mayoria en su opinion,
revocar una conclusion del tribunal-inferior que no esta discutida en el alegato del apelante?
Podemos, en buena ley procesal, declarar publico el terreno en cuestion por nuestra propia
iniciativa, cuando el mismo Procurador General, que representa al Estado, admite en su alegato el
caracter privado del solar, y solo suscita una cuestion, de derecho, a saber: que bajo nuestra
Constitucion ningun acto traslativo de dominio a favor de un extranjero es valido, asi se trata de
predio urbano, porque la frase "terreno agricola privado" qe se contiene en la Constitucion abarca

21
MAS

Atty. Mohammad

WMSU LLB 2A

no solo las fincas rusticas sino tambien las urbanas? Y, sobre todo, podemos, en equidad y
justicia, considerar y revisar un punto que no solo no esta discutido por las partes, pues lo dan por
admitido y establecido, sino que es de derecho y de hecho al propio tiempo? Que base tenemos
para hacerlo cuando no tenemos delante las pruebas tanto testificales como documentales?
Nuestra contestacion es, en absoluto, negativo.
La competencia de esta Corte para revisar las sentencias de los tribunales inferiores, de las cuales
se ha interpuesto apelacion, se basa en el principio de que dicha competencia, en su ejercicio, tiene
que limitarse a las cuestiones controvertidas, y esto se determina mediante el sealamiento de
errores que el apelante hace en su alegato. El articulo 19 del antiguo reglamento de los
procedimientos en este Tribunal Supremo decia en su primer parrafo lo siguiente:
Anexo al alegato del apelante y en pliego separado, se acompaara una relacion de los
errores de derecho que han de discutirse. La especificacion de cada uno de estos errores se
hara por parrafos separados, con toda claridad, de una manera concisa, y sin incurrir en
repeticiones, y seran numerados por orden correlativo.
El articulo 20 del mismo reglamento preceptuaba:
Ningun error de derecho fuera del relativo a competencia sobre la materia de un litigio, sera
tomado en consideracion como no se halle puntualizado en la relacion de los errores y
presentado como uno de los fundamentos en el alegato.
Interpretando estas disposiciones reglamentarias, la Corte hizo en el asunto de Santiago contra
Felix (24 Jur. Fil., 391), los siguientes pronunciamientos doctrinales:
1. APELACION; EFECTO DE DEJAR DE PRESENTAR RELACION DE ERRORES; REGLA
FIRMEMENTE ESTABLECIDA. Es regla establecida por la jurisprudencia de los
Tribunales de estas Islas, en virtud de repetidas y uniformes sentencias de esta Corte, la de
que si en una apelacione el recurrente dejare de hacer sealamiento de los errores en que
haya incurrido el Tribunal inferior, y se limitare a discutir cuestiones de hecho en general, no
es posible que este Tribunal pueda considerar ni revisar la resolucion adversa a la parte
apelante, por el motivo de haberse dictado contra la ley y el peso de las pruebas, sino que
es necesario que se seale y se especifique el error o errores que determinaron la decision
apelada que el apelante califica de ilegal e injusta.
2. Id.; Id.; Regla Igual a la Adoptada por los Tribunales de los Estados Unidos. Igual
doctrina legal se halla en observancia en los Tribunales de los Estados Unidos de America
del Norte, toda vez que una manifestacion general de que el Juzgado erro en dictar
sentencia a favor de una de las partes, no es suficiente como base para que la Corte pueda
revisar la sentencia apelada, pues que a no ser que la apreciacion hecha por un Juez de los
hechos alegados y probados en juicio sea manifestamente contraria al resultado y peso de
las pruebas, el Tribunal de alzada suela aceptar el juicio y criterio del Juez sobre las
cuestiones de hecho, y no procede revocar sin motivo fundado la sentencia apelada.
(Enriquez contraEnriquez, 8 Jur. Fil., 574; Capellania de Tambobong contra Antonio, 8 Jur.
Fil., 693; Paterno contra la Ciudad de Manila, 17 Jur. Fil., 26)" (Santiago contra Felix, 24 Jur.
Fil., 391.)
Esta doctrina se reitero posteriormente en los siguientes asuntos: Tan Me Nio contra Administrador
de Aduanas, 34 Jur. Fil., 995, 996; Hernaez contra Montelibano, 34 Jur. Fil., 1011.
La regla 53, seccion 6, del actual reglamento de los tribunales, dispone lo siguiente:
SEC. 5. Questions that may be decided. No error which does not affect the jurisdiction
over the subject matter will be considered unless stated in the assignment of errors and
properly argued in the brief, save as the court, at its option, may notice plain errors not
specified, and also clerical errors.
No se dira que la cuestion de si el terreno cuestionado es publico o privado, considerada y resuelta
por la mayoria en su decision sin previo sealamiento de error ni apropiada argumentacion en el
alegato del Procurador General, esta comprendida entre las salvedades de que habla la regla arriba
transcrita porque ni afecta a la jurisdiccion sobre la materia del litigio, ni es un "plain error," o
"clerical error."

22
MAS

Atty. Mohammad

WMSU LLB 2A

Se notara que en el antiguo reglamento no habia eso de "plain errors not specified" (errores
patentes o manifiestos no especificados en el alegato). Pero cabe invocar esta reserva en el caso
que nos ocupa Indudablemente que no, por las siguientes razones: (a) los autos no demuestran que
el Juez a quo cometio un error patente y manifiesto al declarar en su sentencia que el terreno no es
publico sino privado; no tenemos mas remedio que aceptar en su faz la conclusion del Juez
sentenciador sobre este respecto por la sencilla razon de que no tenemos ante nosotros las
pruebas ni testificales ni documentales, y, por tanto, no hay base para revisar, mucho menos para
revocar dicha conclusion, habiendose interpretado esta reserva en el sentido de que solo se puede
tomar "conocimiento judicial del error palpable con vista de los autos y procedimientos"; (b) aun
admitiendo por un momento, a los efectos de la argumentacion, que Su Seoria el Juez padecio
error palpable al sentar dicha conclusion, como quiera que el Procurador General no suscita la
cuestion en su alegato debe entenderse que ha renunciado a su derecho de hacerlo, optando por
fundamentar su caso en otros motivos y razones; por tanto, no estamos facultados para
considerar motu proprio el supuesto error, pues evidentemente no se trata de un descuido
u oversight del representante del Estado, sino de una renuncia deliberada, y la jurisprudencia sobre
el particular nos dice que "el proposito subyacente, fundamental de la reserva en la regla es el de
prevenir el extravio de la justicia en virtud de un descuido." He aqui algunas autoridades pertinentes:
Purpose of exception as to plain errors. The proviso in the rule requiring assignments of
error, permitting the court, at its option, to notice a plain error not assigned, "was and in
intended, in the interest of justice, to reserve to the appellate court the right, resting in public
duty, to take cognizance of palpable error on theface of the record and proceedings,
especially such as clearly demonstrate that the suitor has no cause of action."
Santaella vs. Otto F. Lange Co. (155 Fed., 719, 724; 84 C. C. A., 145).
The rules does not intend that we are to sift the record and deal with questions which are of
small importance, but only to notice errors which are obvious upon inspection and of a
controlling character. The underlying purpose of this reservation in the rule is to prevent the
miscarriage of justice from oversight. Mastvs. Superior Drill Co. (154 Fed., 45, 51; 83 C. C.
A. 157).
II. Hasta aqui hemos desarrollado nuestra argumentacion bajo el supuesto de que la calidad de
privado del terreno litigioso no es controversia justiciable en esta instancia por no estar suscitada la
cuestion en el alegato del Procurador General ni ser materia de disputa entre las partes en la
apelacion pendiente ante nosotros; por lo que, consiguientemente, no estamos facultados para
revisar, mucho menos revocar motu proprio la conclusion del tribunal a quo sobre el particular.
Ahora vamos a laborar bajo otro supuesto el de que el Procurador General haya hecho el
correspondiente sealamiento de error y la cuestion este, por tanto, propiamente planteada ante
esta Corte Suprema para los efectos de la revision. La pregunta naturalmente en orden es la
siguiente: cometio error el Juez a quo al declarar y conceptuar como privado el terreno en
cuestion, o es, por el contrario, acertada su conclusion a este respecto? Somos de opinion que el
Juez no cometio error, que el terreno de que se trata reune las condiciones juridicas necesarias
para calificarlo como privado y diferenciarlo de una propiedad de dominio publico, y que, por tanto,
el solicitante tiene sobre la propiedad un titulo confirmable bajo las disposiciones de la Ley de
Registro de Terrenos No. 496.
Afirmase en la decision de la mayoria que el solicitante no ha podido demostrar que el o cualquiera
de sus causantes en derecho adquirio el lote del Estado mediante compra o concesion bajo las
leyes, ordenanzas y decretos promulgados por el Gobierno Espaol en Filipinas, o en virtud de los
tramites relativos a informacion posesoria bajo la ley hipotecaria en tiempo de Espaa. De esto la
mayoria saca la conclusion de que el terreno cuestionado no es privado porque, segun su criterio,
"todos los terrenos que no fueron adquiridos del Gobierno (Gobierno Espaol, se quiere decir), ya
mediante compra, ya por concesion, pertenecen al dominio publico"; y citando como autoridad el
asunto clasico de Cario contra el Gobierno Insular la ponencia no admite mas excepcion a la regla
que el caso en que un terreno ha estado en la posesion del ocupante y de sus predecesores en
interes desde tiempo inmemorial, pues semejante posesion justificaria la presuncion de que el
terreno nunca habia sido parte del dominio publico, o que habia sido propiedad privada aun antes
de la conquista espaola."
Lo que, en primer lugar, no parece correcto es la seguridad con que en la ponencia se afirma que el
terreno no se adquirio bajo la soberania espaola en virtud de cualquiera de los modos conocidos
en la legislacion de entonces, pues como no tenemos delante las pruebas, no hay naturalmente
manera de comprobar la certeza de la proposicion. Si se tiene en cuenta que el Director deTerrenos
se opuso a la solicitud de registro por el fundamento de que el terreno es de dominio publico, y que

23
MAS

Atty. Mohammad

WMSU LLB 2A

el tribunal inferior desestimo este fundamento, la presuncion es que la calidad de privado del terreno
se probo satisfactoriamente, presuncion que queda robustecida si se considera que el Procurador
General, al sostener la apelacion del Gobierno, no discute ni cuestiona en su alegato la conclusion
de que el referido terreno es de propiedad particular.
Por otro lado, la mayoria parece dar un caracter demasiado absoluto y rigido a la proposicion de
que "todos los terrenos que no fueron adquiridos del Gobierno (en tiempo de Espaa), mediante
compra o por concesion, pertenecen al dominio publico." Interpretando estrictamente la ley, esta
Corte Suprema denego el registro solicitado en el celebre asunto de Cario contra el Gobierno
Insular que cita la mayoria en su opinion, por eso mismo que se acentua en la ponencia por el
fundamento de que Cario no pudo demostrar titulo de compra, concesion o informacion posesoria
expedido por el Gobierno en tiempo de Espaa, siendo por consiguiente el terreno parte del dominio
publico. Pero al elevarse el asunto en grado de apelacion a la Corte Suprema de los Estados
Unidos, la misma revoco la sentencia de esta Corte, declarando el terreno como propiedad privada
y decretando su registro a nombre del solicitante. En la luminosa ponencia del Magistrado Holmes
se sientan conclusiones que proclama el espiritu liberal de aquel gran jurista y reafirman con vigor
democratico los derechos de propiedad de los nativos de estas Islas sobre sus predios en contra del
concepto y teoria feudales de que la Corona de Espaa era la duea absoluta hasta del ultimo
palmo de tierra y de que ningun habitante podia ser dueo de nada, a menos que tuviese en sus
manos un titulo o papel expedido por aquel Gobierno. He aqui lo que dice el Magistrado Holmes:
We come, then, to the question on which the case was decided below namely, whether
the plaintiff owns the land. The position of government, shortly stated, is that Spain assumed,
asserted, and had title to all the land in the Philippines except so far it saw fit to permit
private titles to be acquired; that there was no prescripcion against the Crown, and that, if
there was, a decree of June 25, 1880, required registration within a limited time to make the
title good; that the plaintiff's land was not registered, and therefore became, if it was not
always, public land; that the United States succeeded to the title of Spain, and so that the
plaintiff has no rights that the Philippine Government is bound to respect.
If we suppose for the moment that the government's contention is so far correct that the
Crown of Spain in form asserted a title to this land at the date of the treaty of Paris, to which
the United States succeeded, it is not to be assumed without argument that the plaintiff's
case is at an end. It is true that Spain, in its earlier decrees,"embodied the universal feudal
theory that all lands were held from the Crown, and perhaps the general attitude of
conquering nations toward people not recognized as entitled to the treatment accorded to
those in the same zone of civilization with themselves. It is true, also that, in legal theory,
sovereignty is absolute, and that, as against foreign nations, the United States may assert,
as Spain asserted, absolute power. But it does not follow that, as against the inhabitants of
the Philippines, the United States asserts that Spain had such power. When theory is left on
one side, sovereignty is a question of strength, and may vary in degree. How far a new
sovereign shall insist upon the theoretical relation of the subjects to the head in the past, and
how far it shall recognize actual facts, are matters for it to decide. (U. S. Supreme Court
Reports, Vol. 212, p. 596.)
Mas adelante se dice lo siguiente en la citada sentencia de la Corte Suprema Federal:
It is true that, by section 14, the Government of the Philippines is empowered to enact rules
and prescribe terms for perfecting titles to public lands were some, but not all, spanish
conditions has been fulfilled, and to issue patents to natives for not more than 16 hectares of
public lands actually occupied by the native or his ancestors before August 13, 1898. But this
section perhaps might be satisfied if confined to cases where the occupation was of land
admitted to be public land, and had not continued for such a length of time and under such
circumstances as to give rise to the understanding that the occupants were owners at that
date.We hesitate to suppose that it was intended to declare every native who had not a
paper title a trespasser, and to set the claims of all the wilder tribes afloat.
xxx

xxx

xxx

If the applicant's case is to be tried by the law of Spain, we do not discover such clear proof
that it was bas by that law as to satisfy us that he does not own the land. To begin with, the
older decrees and laws cited by the counsel for the plaintiff in error seem to indicate pretty
clearly that the natives were recognized as owning some lands, irrespective of any royal
grant. In other words, Spain did not assume to convert all the native inhabitants of the

24
MAS

Atty. Mohammad

WMSU LLB 2A

Philippines into trespassers or even into tenants at will. For instance, Book 4, title 12, Law 14
of the Recopilacion de Leyes de las Indias, cited for a contrary conclusion in
Valenton vs.Murciano (3 Phil., 537), while it commands viceroys and others, when it seems
proper, to call for the exhibition of grants, directs them to confirm those who hold by good
grants or justa prescripcion. It is true that it begins by the characteristic assertion of feudal
overlordship and the origin of all titles in the King or his predecessors. That was theory and
discourse. The fact was that titles were admitted to exist that owed nothing to the powers of
Spain beyond this recognition in their books.
Prescription is mentioned again in the royal cedula of October 15, 1754, cited in (3 Phil.,
546): "Where such possessors shall not be able to produce title deeds, it shall be sufficient if
they shall show that ancient possession, as a valid title by prescription." It may be that this
means possession from before 1700; but, at all events, the principle is admitted. As
prescription, even against Crown lands, was recognized by the laws of Spain, we see no
sufficient reason for hesitating to admit that it was recognized in the Philippines in regard to
lands over which Spain had only a paper sovereignty.
It is true that the language of articles 4 and 5 attributes title to those "who may prove"
possession for the necessary time, and we do not overlook the argument that this means
may prove in registration proceedings. It may be that an English conveyancer would have
recommended an application under the foregoing decree, but certainly it was not calculated
to convey to the mind of an Igorot chief the notion that ancient family possessions were in
danger, if he had read every word of it. The words "may prove" (acrediten), as well, or better,
in view of the other provisions, might be taken to mean when called upon to do so in any
litigation. There are indications that registration was expected from all, but none sufficient to
show that, for want of it, ownership actually gained would be lost. The effect of the proof,
wherever made, as not to confer title, but simply to establish it, as already conferred by the
decree, if not by earlier law. The royal decree of February 13, 1894, declaring forfeited titles
that were capable of adjustment under the decree of 1880, for which adjustment had not
been sought, should not be construed as a confiscation, but as the withdrawal of a privilege.
As a matter of fact, the applicant never was disturbed. This same decree is quoted by the
court of land registration for another recognition of the common-law prescription of thirty
years as still running against alienable Crown land.
xxx

xxx

xxx

. . . Upon a consideration of the whole case we are of opinion that law and justice require
that the applicant should be granted what he seeks, and should not be deprived of what, by
the practice and belief of those among whom he lived, was his property, through a refined
interpretation of an almost forgotten law of Spain. (U. S. Supreme Court Reports, Vol. 212,
pp. 597-599.)
Resulta evidente de la jurisprudencia sentada en el citado asunto de Cario contra el Gobierno
Insular que cualquiera que fuese la teoria acerca del superdominio feudal que la Corona de Espaa
asumia sobre todos los terrenos en Filipinas, en la practica y en la realidad se reconocia que el
mero lapso de tiempo en la posesion (20 o 30 aos, segun el caso) podia establecer y de hecho
establecia derechos privados de propiedad por justaprescripcion, y el titulo presuntivo asi adquirido
era para todos los efectos equivalente a una concesion expresa o un titulo escrito expedido por el
Gobierno. Pero de todas maneras parafraseando lo dicho por el Magistrado Holmes aun
suponiendo que Espaa tenia semejante soberania o superdominio feudal sobre todas las tierras en
este archipielago, y que contra otras naciones los Estados Unidos, al suceder a Espaa, afirmaria
dicha suberania, de ello no se sigue que contra los habitantes de Filipinas el Gobierno americano
(ahora la Republica filipina) tomaria la posicion de que Espaa tenia tal poder absoluto.
Historicamente se sabe que el cambio de soberania tuvo el efecto de liquidar muchas instituciones y
leyes espaolas que vinieron a ser obsoletas, arcaicas en el nuevo estado de cosas, e
incompatibles con el espiritu del nuevo regimen. No habia ninguna razon para que este cambio no
produjese tambien sus saludables efectos en las normas juridicas del regimen de la propiedad
sobre la tierra. Parafraseando otra vez al Magistrado Holmes, y aplicando la doctrina al presente
caso, no hay razon por que, medinate "una refinada interpretacion de una casi olvidada ley de
Espaa," se considere como terreno publico lo que evidentemente, bajo todos los conceptos y
normas, es un terreno privado.
La jurisprudencia sentada en el asunto de Cario contra el Gobierno Insular ha venido a establecer
la norma, la autoridad basica en los asuntos de registro ante nuestros tribunales. Al socaire de su

25
MAS

Atty. Mohammad

WMSU LLB 2A

sentido y tendencia genuinamente liberal se han registrado bajo el sistema Torrens infinidad de
terrenos privados. En casos mucho menos meritorios que el que nos ocupa se ha reconocido por
nuestros tribunales el caracter o condicion de propiedad privada de los terrenos sobre que versaban
las solicitudes, aplicandose no las habilitadoras y supletorias clausulas de las leyes sobre terrenos
publicos primeramente la Ley No. 926, despues la No. 2874, y finalmente la No. 141 del
Commonwealth sino las disposiciones mas estrictas de la Ley No. 496 sobre registro de terrenos
privados, bajo el sistema Torrens. No existe motivo para que esa tendencia liberal y progresiva
sufra una desviacion en el presente caso.
Pero aun bajo la legislacion espaola interpretada estrictamente, creemos que el terreno en
cuestion es tan privado como el terreno en el asunto de Cario, si no mas. Segun la sentencia del
inferior el unido dato para este examen, pues ya se ha dicho repetidas veces que no tenemos
delante las pruebas "el terreno objeto de la presente solicitud era primitivamente de Capitana
Gina y que esta estuvo en posesion desde el ao 1880, despues paso a ser de Francisco
Reformado hasta el ao 1885, mas tarde o sea en 1886 fue de Claro Lagdameo, a la muerte de
este le sucedio en la posesion su viuda Fortunata Olega de Lagdameo, esta en 1929 lo vendio a
sus tres hijos Antonio, Luis y Rafael appellidados Lagdameo, segun los Exhibitos F y G, y estos
ultimos a su vez lo vendieron en 1938 al solicitante Oh Cho, segun los Exhibitos B 1-y C-1." " ...
Este terreno es un solar residencial dentro de la poblacion del municipio de Guinayangan, Tayabas,
y en el mismo existe una casa de materiales fuertes que ocupa casi todo el terreno ..." (Pieza de
Excepciones, pag. 8).
Como se ve, por lo menos desde 1880 habia un conocido propietario y poseedor del terreno la
Capitana Gina. Ahora bien, coincide que el 25 de Junio de aquel ao que precisamente cuando se
expidio el Decreto "para el ajuste y adjudicacion de los terrenos realengos ocupados indebidamente
por individuos particulares en las Islas Filipinas." Si bien es cierto que el objeto del Decreto o ley era
el ordenar que se cumpliesen y practicasen los procedimientos de ajuste y registro descritos en el
mismo, y en tal sentido el requirir que cada cual obtuviese un documento de titulo o, en su defecto,
perder su propiedad. Tambien es cierto que en el Decreto se expresaban ciertas salvedades que
paracian denotar que estos tramites formanes no eran de rigurosa aplicacion a todo el mundo. Una
de dicha salvedades, por ejemplo, proveia (articulo 5) que, para todos los efectos legales, "todos
aquellos que han estado en posesion por ciento periodo de tiempo serian considerados como
dueos para terreno cultivado, 20 20 aos sin interrupcion, es suficiente, y para terreno no
cultivado, 30 aos." Y el articulo 6 dispone que "las partes interesadas no incluidas en los dos
articulos anteriores (los articulos que reconocen la prescripcion de 20 y 30 aos) podran legalizar su
posesion, y consiguientemente adquirir pleno dominio sobre dichos terrenos, mediante
procedimientos de ajuste y adjudicacion tramitados de la siguiente manera." Esta ultima disposicion
parece indicar, por sus terminos, que no es aplicable a aquellos que ya han sido declarados dueos
en virtud del simple transcurso de cierto lapso de tiempo (Vease Cario contra Gobierno
Insular, supra, 598).
No consta en la sentencia del inferior que Capitana Gina se haya acogido a las disposiciones del
referido Decreto de 25 de Junio de 1880, obteniendo un documento de titulo para legalizar su
posesion, pero tampoco consta positivamente lo contrario, pues no tenemos ante nosotros las
pruebas. Pero aun suponiendo que no se hayan cumplido los tramites formales prescritos en el
Decreto, de ello no se sigue que el terreno no era ya privado entonces, pues la presuncion es que
no hubo menester de semejante formalidad porque la Capitana Gina o sus causantes en derecho ya
habian sido declarados dueos del predio por el mero transcurso de un lapso de tiempo, a tenor de
las salvedades de que se ha hecho mencion. Esta presuncion es tanto mas logica cuanto que el
articulo 8 del Decreto proveia para el caso de partes que no solicitaban dentro del plazo de un ao
el ajuste y adjudicacion de terrenos de cuya posesion disfrutaban indebidamente, y conminaba que
el Tesoro "reasumira el dominio del Estado sobre los terrenos" y vendera en subasta la parte que no
se reserva para si; y no solo no consta en autos que la posesion de Capitata Gina o de sus
causahabientes en derecho se haya considerado jamas como ilegal o que el Estao y sus agentes
hayan adoptado y practicado contra ellos las diligencias y procedimientos de que trata el cittado
articulo 8 del Decreto, sino que, por el contrario, consta en la sentencia que desde Capitana Gina en
1880 hubo sucesivas transmisiones de derechos primeramente a Francisco Reformado en 1885 y
despues a Claro Lagdameo en 1886, y a la muerte de este ultimo a su viuda Fortunata Olega de
Lagdameo, de quien pase el titulo en virtud de compraventa a sus hijos Antonio, Luis y Rafael
apellidados Lagdameo, y la ultima transaccion sobre el solar tuvo lugar en fecha bastante reciente,
en 1938, cuando los ultimamente nombrados lo vendieron a Oh Cho el solicitante en el presente
expediente de registro. De todo lo cual se deduce que el solar en cuestion fue considerado siempre
como propiedad privada por lomenos alli donde la memoria alcanza desde 1880 hasta que
fenecio la soberania americana en Filipinas, y que ni el Estado ni sus agentes se entrometieron
jamas en el hecho de su posesion exclusiva, continua y publica a titulo de dueo por diferentes

26
MAS

Atty. Mohammad

WMSU LLB 2A

personas no solo bajo el Decreto de 25 de Junio de 1880 tantas veces mencionado, sino aun bajo el
Decreto de 13 de Febrero de 1894 (informacion posesoria) que fue practicamente el ultimo decreto
expedido en las postrimerias de la soberania espaola en relacion con el ajuste y adjudicacion de
terrenos realengos o publicos. Y no se diga que ello habria sido por inadvertencia de las
autoridades, particularmente del Fisco, porque tratandose de un solar situado en la misma
poblacion de Guinayangan, uno de los pueblos mas antiguos de la provincia de Tayabas, es
indudable que si no reuniera las condiciones y requisitos para ser conceptuado como propiedad
privada y la posesion de sus ocupantes sucesivos fuese indebida e ilegal, ya los agentes del Fisco y
Tesoro lo hubiesen prestamente confiscado a tenor del articulo 8 ya citado del Decreto de 25 de
Junio de 1880 (Vease Cario contra Gobierno Insular, ut supra 598.) El que nada de esto haya
acontecido es la mejor prueba de que en tiempo de Espaa los diferentes y sucesivos ocupantes de
este solar ya tenian titulo dominical perfecto, y es sencillamente absurdo, ridiculo que ahora, al cabo
de 66 aos, se declare publico el terreno; y todo por que y para que para rendir sometimiento,
repitiendo de nuevo la sutil ironia del Magistrado Homles, a la "refinada interpretacion de una casi
olvidada ley de Espana." Y resulta mas la futilidad de este tardio tributo a un anacronismo, a una
momia juridica de un pasado cada vez mas remoto, si se considera que cuando el Magistrado
Homes pronuncio su sentencia a todas luces libera y progresiva (23 de Enero de 1909) estabamos
tan solo a escasamente 10 aos desde la caida de la soberania espaola en Filipinas mientras que
ahora que se intenta una radical desviacion del surco trazado por la solida reja de dicha sentencia
estamos ya casi a medio siglo de distancia, con pleno dominio republicano sobre el territorio
nacional. Esto no debiera preocuparnos si no fuese porque esta decision de ahora puede ser
interpretada como una abrogacion de tantos precedentes moldeados en la turquesa de la doctrina
holmesiana, y al propio tiempo como la demarcacion del punto de partida de una nueva ruta en
nuestra jurisprudencia sobre registro de terrenos.
Sin embargo, en la opinion de la mayoria se dice que el solicitante no puede alegar con exito que su
lote es terreno privado porque la posesion de su primer predecessor (Capitana Gina) comenzo solo
en 1880, mientras que en el asunto de Cario contra El gobierno Insular, es exige como requisito la
posesion desde tiempo inmemorial, posesion que, segun la mayoria. "justificaria la presuncion de
que el terreno nunca habia sido parte del dominio publico, o que habia sido propiedad privada aun
antes de la conquista espaola." No parece sino que se quiere sealar una fecha, un ao, como
norma para determinar la inmemorialidad del comienzo posesorio. Pero que fecha, que ao seria
este? 1870, '60, '50? No seria suficiente v. gr. 1875, '65, o '55? En el asunto de Cario la fecha
conocida y recordada de la posesion inicial podia fijarse alrededor de la mitad del siglo pasado, o
sea 1849, pues segun las pruebas, Cario y sus antecesores habian poseido el terreno algo mas de
50 aos hasta el tratado de Paris Abril 11, 1899. En el presente caso, desde Capitana Gina hasta
que el solicitante presento su solicitud de registro el 17 de Enero, 1940, habian transcurrido
60 aos; de suerte que en cuanto al tiempo de la posesion ambos casos son identicos. Con una
ventaja a favor del presente caso, a saber: mientras en el asunto de Cario las tierras objeto de la
solicitud eran pasto, en gran parte, y solo cultivadas unas cuantas porciones, en el que nos ocupa el
lote es urbano, sino en uno de los pueblos mas antiguos de Filipinas, con una casa de materiales
fuertes enclavada en el. Es innegabl que la posesion de un solar urbano es mas concreta, mas
terminante y mas adversa a todo el mundo, sin excluir el Estado.
Pero aun limitandonos a la posesion bajo la soberania espaola para los efectos de la calificacion
del terreno como propiedad privada, todavia se puede sosener que el presente caso es tan bueno si
no mejor que el de Cario. En el asunto de Cario el punto de partida conocido es alrededor de
1849; en el nuestro, 1880, en que comenzo la posesion de Capitana Gina, segun la sentencia
apelada. Pero esto no quiere decir que antes de Capitana Gina el solar no fuese ya finca urbana,
habida por algun otro como propiedad particular. Hay que tener en cuenta que se trata de un solar
ubicado en la poblacion de Guinayangan, uno de los mas antiguos en Tayabas. No tenemos delante
la fecha exacta de la fundacion de dicho pueblo, y no tenemos tiempo ahora para hacer
investigacion historica. Pero afortunadamente hemos logrado salvar de la devastacion causada por
la reciente guerra una parte sustancial de nuestra biblioteca privada, y uno de los libros salvados es
el celebrado Diccionario Geografico, Estadistico e Historico de las Islas Filipinas publicado en
Madrid por Fr. Manuel Buzeta y Fr. Felipe Bravo en 1950, segun el pie de imprenta, de dos
volumenes. En el 2. tomo, pp. 70 y 71, se da una descripcion del pueblo de Guinayanga, con
buena copia de datos historicos, geograficos, sociales y economicos. Comienza la descripcion de
esta manera: "Pueblo con cura y gobernadorcillo, en la Isla de Luzon, provincia de Tayabas, dioc,
de Nueva caceres"; . . "tiene como unas 1,500 casas, en general de sencilla construccion,
distinguiendose como de mejor fabrica la casa parroquial y la llamada tribunal de justicia, donde
esta la carcel. ." Considerando que podemos tomas conocimiento judicial de que en tiempo de
Espaa el municipio y la parroquia eran la culminacion de un lento y largo proceso de civilizacion y
cristianizacion, podemos, por tanto, presumir que mucho antes de 1850 50, 70 o 100 aos el
pueblo de Guinayangan ya era una unidad geografiva, civil y espiritual, en toda regla, y con

27
MAS

Atty. Mohammad

WMSU LLB 2A

caracteres definitivos de viabilidad urbana. Tambien cabe perfectamente presumir que sus
habitantes poseian sus respectivos solares a titulo de dueos, al igual que lo que ocurria en otros
municipios debidamente organizados. No cabe presumir que el Estado les permitiera ocupar
indebidamente sus solares, sin que tomase contra ellos la accion de que habla el articulo 8 del
referido Decreto de 25 de Junio de 1880; y ya hemos visto que no consta en autos que el solar en
cuestion haya sido jamas confiscado por los agentes del Fisco o Tesoro, o declarada ilegal la
posesion sobre el mismo, a tenor de lo ordenado en el mencionado Decreto. Asi que desde
cualquier angulo que se vea el presente asunto, cae perfectamente bajo las normas de posesion
inmemorial establecidas en el asunto de Cario.
III. Demostrado ya que el terreno en cuestion es privado, resulta forzosa la conclusion de que el
solicitante tiene derecho a que se confirme su titulo bajo las disposiciones de la Ley de Registro de
Terrenos No. 496, de acuerdo con el sistema Torrens. Es doctrina firmemente establecida en esta
jurisdiccion que un extranjero tiene perfecto derecho a que se registre a su nombre un terreno
privado, bajo el sistema Torrens, y que las disposiciones de la ley de terrenos publicos son
inaplicables a terrenos privados (veanse Agari contra Gobierno de las Islas Filipinas, 42 Jur. Fil.,
150; Tan Yungquip contra Director de Terrenos, 42 Jur. Fil., 134; Central Capiz contra Ramirez, 40
Jur. Fil., 926). En el primer asunto citado el solicitante era un japones llamado Ichisuke Agari y la
solicitud se estimo por tratarse de un terreno privado, adquirido en tiempo de Espaa mediant
composicion con el estado. En el segundo asunto el solicitante era un chino y se estimo la solicitud
por la misma razon, habiendose probado una posesion conocida y recordada de 30 a 40 aos con
anteriorida a la presentacion de la solicitud, es decir, un tiempo mas corto que el del presente caso.
Lo propio sucedio en el tercer asunto citado, siendo espaoles los dueos de la finca. Confirmese,
por tanto, la sentencia apelada.

28
MAS

Atty. Mohammad

WMSU LLB 2A

REPUBLIC VS CA
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 122269 September 30, 1999

REPUBLIC OF THE PHILIPPINES, represented by the SECRETARY OF
AGRICULTURE, petitioner,
vs.
THE HON. COURT OF APPEALS, HON. VIVENCIO A. BANTUGAN, Presiding Judge of the
Regional Trial Court, Branch 55, Alaminos, Pangasinan, and HEIRS OF ZENAIDA BUSTRIATIGNO, represented by CAMILO TIGNO, respondents.

MENDOZA, J.:
For review is the decision 1 of the Court of Appeals, dated October 4, 1995, in CA-G.R. SP No. 34013,
dismissing a petition filed by the Republic of the Philippines for the annulment of the decision of the
Regional Trial Court of Alaminos, Pangasinan, which declared private respondents to be the absolute
owners of a piece of land in Barangay Malacapas, Dasol, Pangasinan. The government, as petitioner,
prays that the aforesaid decision of the trial court, rendered in Civil Case No. A-1759, be annulled.
1wphi 1.nt

The facts are stated in the following portion of the decision of the Court of Appeals:
Sometime in 1957, one Matias Bustamante filed with the then CFI of Pangasinan an
application for registration under Act No. 496, as amended, of a tract of land
containing an area of 880,000 square meters, more or less, situated in Barangay
Malacapas, Dasol, Pangasinan.
Both the Director of Forestry and the Director of Fisheries filed oppositions to the
aforecited application, alleging among others, that "said parcel of land, with the
exception of 97,525 square meters, is a part of the Timber Land Block "A" Land
Classification Project 44, which is converted into fish ponds." Isidro Bustria [private
respondents' predecessor-in-interest] and Julian Bustria, also opposed the said
application for land registration, alleging that they "have in the year 1943 occupied in
good faith their respective portions having a total area of fifty (50) hectares, more or
less . . . converted their respective portions into fish ponds . . . and actually
possessed and occupied their respective portions . . . exclusively against all persons,
except the Director of Forestry & Director of Fishery." After trial, the lower court
rendered a Decision in favor of applicant Bustamante.
On appeal to this Honorable Court, docketed as CA-G.R. No. 30058-R, it was found
that 783,275 square meters of the land applied for were accretions added to
applicant Bustamante's riceland of 9.7525 hectares, and that said accretion was
caused by the sea on the southward portion of said riceland. This Honorable Court
then ruled:
This being so, the said accretion belongs not to the riparian owner
but the State. All lands thrown up by the sea and formed upon the
shores, belong to the national domain and are for public use, in
accordance with the provisions of the Law on Waters of August 3,
1866 (Insular Government vs. Aldecoa, 19 Phil. 505) (p. 20, Decision,
November 16, 1967).

29
MAS

Atty. Mohammad

WMSU LLB 2A

Thus, modifying the judgment of the lower court, this Honorable Court rendered a
Decision on November 16, 1967, disposing:
IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby
modified so that only 9.7525 of the land applied for is hereby
adjudicated and ordered to be registered in the name of the applicant,
the remaining area being hereby declared land of the public domain
belonging to the Republic of the Philippines, without prejudice to
whatever rights oppositors Isidro Bustria and Julian Bustria may have
acquired over portions of the area thus declared as land of the public
domain, with costs against applicant.
SO ORDERED.
When brought up on certiorari to the Supreme Court, the foregoing Judgment was
affirmed in toto in the Resolution in G.R. No. L-18605 dated February 29, 1968.
It is relevant to state at this point that the parcel of land that is presently the subject
of the dispute in the instant case, Lot No. 7764, CAD 624-D (Portion) [Psu-155696,
Lot 3 (Portion)], forms part of the above-mentioned parcel of land declared by this
Honorable Court as belonging to the public domain, classified/zonified land available
for fishpond development, per L.C. Map No. 3175, approved on June 24, 1984,
under administrative Order No. 4-1829 (Annex "D", Petition). The subject lot contains
an area of 49,999 square meters, more or less. This lot has been leased to Mr.
Porfirio Morado by the [Republic of the Philippines], represented by the Secretary of
Agriculture, for a period of twenty-five (25) years, or up to December 31, 2013, under
Fishpond Lease Agreement No. 5132, dated August 17, 1989 (Annex "E", Petition).
On July 6, 1988, however, the late Zenaida Bustria [daughter of Isidro Bustria] filed a
complaint against Porfirio Morado in the Regional Trial Court of Alaminos,
Pangasinan, Branch 55, for ownership and possession over the lot in question
[docketed as Civil Case No. A-1759]. Herein petitioner, the Republic of the
Philippines, was not made a party to that suit.
In her complaint, Zenaida Bustria claimed absolute ownership and quiet and peaceful
possession of several lots under PSU-155696 surveyed in the name of her father,
Isidro Bustria. She further asserted that said Porfirio Morado maliciously applied for a
fishpond permit with the Bureau of Fisheries and Aquatic Resources over Lot 3
thereof (the subject lot), well-knowing that said lot had always been occupied,
possessed and worked by her and her predecessors-in-interest.
Porfirio Morado denied the allegations in the complaint, claiming that the lot in
question is part of the public domain which he developed and converted into a
fishpond. Due, however, to Porfirio Morado's and his counsel's failure to appear at
the pre-trial and subsequent court hearings, the trial court subsequently declared
Porfirio Morado "as in default."
On December 17, 1991, respondent Judge rendered a decision, the dispositive
portion of which reads:
WHEREFORE, judgment is hereby rendered:
(a) Declaring the plaintiff as the exclusive and
absolute owner of the land in question stated in
paragraph 4 of the Complaint and entitled to the
exclusive and quiet possession of the said land; and
(b) Ordering the defendant to pay the plaintiff the
amount of P15,000.00 as attorney's fees and the sum
of P500.00 per day of hearing of the counsel; plus
costs.
(Annex "A", Petition)

30
MAS

Atty. Mohammad

WMSU LLB 2A

On January 23, 1992, Porfirio Morado filed a Petition for Relief from Judgment which
was denied on July 21, 1992 for lack of merit.
On July 8, 1992, a writ of execution was issued, and it was implemented by Sheriffs
Manuel O. de Asis and Sheriff Cesar A. Gines. Spouses Porfirio Morado and Juliana
Morado thereafter filed with this Honorable Court a Petition for Certiorari with Writ of
Preliminary Injunction, docketed as CA-G.R. No. 28932. In a Resolution dated
December 11, 1992, the Petition was denied for lack of merit. The related Motion for
Reconsideration was denied in the Resolution dated February 18, 1993. (Rollo, pp.
107-112) (emphasis omitted) 2
On April 19, 1994, petitioner, invoking 9 of B.P. Blg. 129, 3 filed with the Court of Appeals a petition
for the annulment of the trial court's decision, dated December 17, 1991. Petitioner alleged that the land
in question is within the classified/zonified alienable and disposable lend for fishpond development, per
L.C. Map No. 3175 approved on June 24, 1984, under Administrative Order No. 4-1829 and that since the
land formed part of the public domain, the Bureau of Fisheries and Aquatic Resources (BFAR) has
jurisdiction over its disposition in accordance with P.D. No 704, 4.

On October 4, 1995 the, Court of Appeals rendered a decision dismissing the petition. 4
Hence, this petition for review.
The judgment rendered in a case may be annulled on any of the following grounds: (a) the judgment
is void for want of jurisdiction or for lack of due process of law; or (b) it was obtained through
extrinsic fraud. 5 The question in this case is whether the decision of the Regional Trial Court is void on
any of these grounds. The preliminary question, however, is whether the government can bring such
action even though it was not a party to the action in which the decision sought to be annulled was
rendered.

We shall deal with these questions in inverse order.

First, is the question whether petitioner has personality to bring the action below. To begin with, an
action to recover a parcel of land is in personam. As such, it is binding only between the parties
thereto, as this Court explained in Ching v. Court of Appeals, 6 viz:
An action to redeem, or to recover title to or possession of, real property is not an
action in rem or an action against the whole world, like a land registration proceeding
or the probate of a will; it is an action in personam, so much so that a judgment
therein is binding only upon the parties properly impleaded and duly heard or given
an opportunity to be heard. Actions in personam and actions in rem differ in that the
former are directed against specific persons and seek personal judgments, while the
latter are directed against the thing or property or status of a person and seek
judgments with respect thereto as against the whole world. An action to recover a
parcel of land is a real action but it is an action in personam, for it binds a particular
individual only although it concerns the right to a tangible thing.
The appellate court, holding that the proceedings before the trial court were in personam, ruled that
since petitioner was not a party to Civil Case No. A-1759, it is not a real party-in-interest and,
therefore, has no personality to bring the action for annulment of the judgment rendered in that case.
The appellate court said:
Private respondents are correct. Civil Case No. A-1759 was purely for "Ownership
and Possession". The decision sought to be annulled is solely "between the private
respondents [the Bustrias] and Porfirio Morado" (Rollo, p. 142). Petitioner Republic
was not a party in the case and is not bound by the judgment rendered therein.
It is settled, a real party-in-interest is one who stands to be benefited or injured by the
judgment in the suit (Salonga vs. Warner Barnes & Co., Ltd., 88 Phil. 128; University
of the Philippines Board of Regents vs. Ligot-Telan, 227 SCRA 342; Tampingco vs.
Intermediate Appellate Court, 207 SCRA 652; Republic vs. Sandiganbayan, 203
SCRA 310; Travelwide Associated Sales, Inc. vs. Court of Appeals, 199 SCRA 205).
Petitioner Republic not being a party, and the judgment not being in rem, it does not
stand to be benefited or injured by the judgment sought. Petitioner Republic can on

31
MAS

Atty. Mohammad

WMSU LLB 2A

its own, and even without resorting to this petition for annulment of judgment,
institute the proper action to assert its claim that the "subject lot is a land forming part
of the public domain'' (Rollo, p. 145). It need not seek the annulment of the subject
judgment, in Civil Case No. A-1759 in which it was not a party and involves merely a
question of ownership; and possession between plaintiffs Zenaida B. Bustria and
defendant Porfirio Morado and which decision is not binding on it, to be able to assert
its claim or interest in the property. It is clear for this reason that petitioner is not a
real party-in-interest (Section 2, Rule 3, Revised Rules of Court). 7
The appellate court is in error. In Islamic Da'wah Council of the Phils. v. Court of Appeals, 8 this Court
held that a party claiming ownership of a parcel of land which is the subject of foreclosure proceedings
has a sufficient interest to bring an action for annulment of the judgment rendered in the foreclosure
proceedings even though it was not in the party in such proceedings. It was held:

[A] person need not be a party to the judgment sought to be annulled. What is
essential is that he can prove his allegation that the judgment was obtained by the
use of fraud and collusion and he would be adversely affected thereby.
In this present case it is true that the heirs of Araneta are not parties to the
foreclosure case. Neither are they principally nor secondarily bound by the judgment
rendered therein. However, in their petition filed with the Court of Appeals they
alleged fraud and connivance perpetuated by and between the Da Silvas and the
Council as would adversely affect them. This allegation, if fully substantiated by
preponderance of evidence, could be the basis for the annulment of Civil Case No. 443476. 9
This ruling was reiterated in Top Management Programs Corp. v. Court of Appeals. 10
The next question is whether the Regional Trial Court had jurisdiction to declare the land in question
to belong to private respondent. The government asserts that the lot is within the "classified/zonified
alienable and disposable land for fishpond development," hence, it is part of the public
domain; 11 that under P.D. No. 704, 4, jurisdiction over its disposition is vested in the BFAR; that unlike
agricultural land, public lands which are declared suitable for fishpond purposes may only be disposed of
by way of license, concession, or lease; and that possession thereof, no matter how long, cannot ripen
into private ownership. 12

On the other hand, private respondents do not deny that Isidro Bustria, to whom they trace their
ownership, previously filed a fishpond application with the BFAR over the disputed land. 13 Neither do
they deny that the disputed land formed part of the public domain. They insist, however, that P.D. No. 704
applies only to "lands suitable for fishpond purposes" while the land in dispute is already a "fully
developed fishpond." They assert ownership of the subject lot through open and continuous possession
of their predecessor-in-interest since the Second World War. 14

We agree with petitioner. The State clearly stands to be adversely affected by the trial court's
disposition of in alienable public land.
The land involved in this case was classified as public land suitable for fishpond development. 15 In
controversies involving the disposition of public land, the burden of overcoming, the presumption of state
ownership of lands of the public domain lies upon the private claimant. 16 Private respondents have not
discharged this burden.

The fact that the land in dispute was transformed into a "fully developed fishpond" does not mean
that it has lost its character as one declared "suitable for fishpond purposes" under the decree. By
applying for a fishpond permit with the BFAR, Isidro Bautista admitted the character of the land as
one suitable for fishpond development since the disposition of such lands is vested in the BFAR.
Consequently, private respondents, as his successors-in-interest, are estopped from claiming
otherwise.
It is settled under the Public Land Law 17 that alienable public land held by a possessor, personally or
through his predecessor-in-interest, openly, continuously, and exclusively for 30 years is ipso
jure converted to private property by the mere lapse of time. 18 However, only public lands classified as
agricultural 19 are alienable. Lands declared for fishery purposes are not alienable 20 and their possession,
no matter how long continued, cannot ripen into ownership.

32
MAS

Atty. Mohammad

WMSU LLB 2A

Since the disposition of lands declared suitable for fishpond purposes fall within the jurisdiction of the
BFAR, in accordance with P.D. No 704, 4, 21 the trial court's decision, dated December 17, 1991, is
null and void. The trial court has no jurisdiction to make a disposition of inalienable public land. If, as
claimed, Porfirio Morado secured a fishpond permit through fraud and misrepresentation, private
respondents' sole recourse, if any, is to secure the annulment of the same before the BFAR and apply for
a new one in their favor, provided that they are qualified therefor. What they did, however, was not only to
bring their action in the wrong forum but to ask to be declared owners of the land in dispute.

WHEREFORE, the petition is GRANTED and the decision of the Court of Appeals, Ninth Division, in
CA-G.R. SP No. 34013, dated October 4, 1995, is REVERSED AND SET ASIDE. The decision of
Regional Trial Court of Alaminos, Pangasinan, Branch 55, in Civil Case No. A-1759 is hereby
declared NULL AND VOID.
1wphi 1.nt

SO ORDERED.

33
MAS

Atty. Mohammad

WMSU LLB 2A

DIRECTOR OF FORESTRY VS VILLAREAL

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-32266 February 27, 1989
THE DIRECTOR OF FORESTRY, petitioner
vs.
RUPERTO A. VILLAREAL, respondent.
The Solicitor General for petitioner.
Quasha, Asperilla, Ancheta, Valmonte, Pena & Marcos for respondents.

CRUZ, J.:
The basic question before the Court is the legal classification of mangrove swamps, or manglares,
as they are commonly known. If they are part of our public forest lands, they are not alienable under
the Constitution. If they are considered public agricultural lands, they may be acquired under private
ownership. The private respondent's claim to the land in question must be judged by these criteria.
The said land consists of 178,113 square meters of mangrove swamps located in the municipality of
Sapian, Capiz. Ruperto Villareal applied for its registration on January 25, 1949, alleging that he and
his predecessors-in-interest had been in possession of the land for more than forty years. He was
opposed by several persons, including the petitioner on behalf of the Republic of the Philippines.
After trial, the application was approved by the Court of First Instance. of Capiz. 1 The decision was
affirmed by the Court of Appeals. 2 The Director of Forestry then came to this Court in a petition for review
on certiorari claiming that the land in dispute was forestal in nature and not subject to private
appropriation. He asks that the registration be reversed.

It should be stressed at the outset that both the petitioner and the private respondent agree that the
land is mangrove land. There is no dispute as to this. The bone of contention between the parties is
the legal nature of mangrove swamps or manglares. The petitioner claims, it is forestal and therefore
not disposable and the private respondent insists it is alienable as agricultural land. The issue before
us is legal, not factual.
For a proper background of this case, we have to go back to the Philippine Bill of 1902, one of the
earlier American organic acts in the country. By this law, lands of the public domain in the Philippine
Islands were classified into three grand divisions, to wit, agricultural, mineral and timber or forest
lands. This classification was maintained in the Constitution of the Commonwealth, promulgated in
1935, until it was superseded by the Constitution of 1973. That new charter expanded the
classification of public lands to include industrial or commercial, residential, resettlement, and
grazing lands and even permitted the legislature to provide for other categories. 3 This provision has
been reproduced, but with substantial modifications, in the present Constitution.

Under the Commonwealth Constitution, which was the charter in force when this case arose, only
agricultural lands were allowed to be alienated. 5 Their disposition was provided for under C.A. No. 141.
Mineral and timber or forest lands were not subject to private ownership unless they were first reclassified
as agricultural lands and so released for alienation.

In the leading case of Montano v. Insular Government, 6 promulgated in 1909, mangrove swamps
or manglares were defined by the Court as:

... mud flats, alternately washed and exposed by the tide, in which grows various
kindred plants which will not live except when watered by the sea, extending their
roots deep into the mud and casting their seeds, which also germinate there. These

34
MAS

Atty. Mohammad

WMSU LLB 2A

constitute the mangrove flats of the tropics, which exist naturally, but which are also,
to some extent cultivated by man for the sake of the combustible wood of the
mangrove and like trees as well as for the useful nipa palm propagated thereon.
Although these flats are literally tidal lands, yet we are of the opinion that they cannot
be so regarded in the sense in which that term is used in the cases cited or in
general American jurisprudence. The waters flowing over them are not available for
purpose of navigation, and they may be disposed of without impairment of the public
interest in what remains.
xxx
Under this uncertain and somewhat unsatisfactory condition of the law, the custom
had grown of converting manglares and nipa lands into fisheries which became a
common feature of settlement along the coast and at the same time of the change of
sovereignty constituted one of the most productive industries of the Islands, the
abrogation of which would destroy vested interests and prove a public disaster.
Mangrove swamps were thus considered agricultural lands and so susceptible of private ownership.
Subsequently, the Philippine Legislature categorically declared, despite the above-cited case, that
mangrove swamps form part of the public forests of this country. This it did in the Administrative
Code of 1917, which became effective on October 1 of that year, thus:
Section 1820. Words and phrase defined. - For the purpose of this chapter 'public
forest' includes, except as otherwise specially indicated, all unreserved public land,
including nipa and mangrove swamps, and all forest reserves of whatever character.
It is noteworthy, though, that notwithstanding this definition, the Court maintained the doctrine in the
Montano case when two years later it held in the case of Jocson v. Director of Forestry: 7
...the words timber land are always translated in the Spanish translation of that Act
(Act of Congress) as terrenos forestales. We think there is an error in this translation
and that a better translation would be 'terrenos madereros.' Lumber land in English
means land with trees growing on it. The mangler plant would never be called a tree
in English but a bush, and land which has only bushes, shrubs or aquatic plants
growing on it cannot be called 'timber land.
xxx xxx xxx
The fact that there are a few trees growing in a manglare or nipa swamps does not
change the general character of the land from manglare to timber land.
More to the point, addressing itself directly to above-quoted Section 1820, the Court declared:
'In the case of Mapa vs. Insular Government (10 Phil. Rep., 175), this Court said that
the phrase agricultural lands as used in Act No. 926 means those public lands
acquired from Spain which are not timber or mineral lands.
Whatever may have been the meaning of the term 'forestry' under the Spanish law,
the Act of Congress of July 1st 1902, classifies the public lands in the Philippine
Islands as timber, mineral or agricultural lands, and all public lands that are not
timber or mineral lands are necessarily agricultural public lands, whether they are
used as nipa swamps, manglares, fisheries or ordinary farm lands.
The definition of forestry as including manglares found in the Administrative Code of
1917 cannot affect rights which vested prior to its enactment.
These lands being neither timber nor mineral lands, the trial court should have
considered them agricultural lands. If they are agricultural lands, then the rights of
appellants are fully established by Act No. 926.

35
MAS

Atty. Mohammad

WMSU LLB 2A

The doctrine was reiterated still later in Garchitorena Vda. de Centenera v. Obias, 8 promulgated on
March 4, 1933, more than fifteen years after the effectivity of the Administrative Code of 1917. Justice
Ostrand declared for a unanimous Court:

The opposition rests mainly upon the proposition that the land covered by the
application there are mangrove lands as shown in his opponent's Exh. 1, but we think
this opposition of the Director of Forestry is untenable, inasmuch as it has been
definitely decided that mangrove lands are not forest lands in the sense in which this
phrase is used in the Act of Congress.
No elaboration was made on this conclusion which was merely based on the cases of Montano and
Jocson. And in 1977, the above ruling was reaffirmed in Tongson v. Director of Forestry, 9 with
Justice Fernando declaring that the mangrove lands in litis were agricultural in nature. The decision even
quoted with approval the statement of the trial court that:

... Mangrove swamps where only trees of mangrove species grow, where the trees
are small and sparse, fit only for firewood purposes and the trees growing are not of
commercial value as lumber do not convert the land into public land. Such lands are
not forest in character. They do not form part of the public domain.
Only last year, in Republic v. De Porkan, 10 the Court, citing Krivenko v. Register of Deeds, 11 reiterated
the ruling in the Mapa case that "all public lands that are not timber or mineral lands are necessarily
agricultural public lands, whether they are used as nipa swamps, manglares, fisheries or ordinary farm
lands.

But the problem is not all that simple. As it happens, there is also a line of decisions holding the
contrary view.
In Yngson v. Secretary of Agriculture and Natural Resources, 12 promulgated in 1983, the Court ruled
"that the Bureau of Fisheries has no jurisdiction to dispose of swamp lands or mangrove lands forming
part of the public domain while such lands are still classified as forest lands.

Four months later, in Heirs of Amunategui v. Director of Forestry, 13 the Court was more positive when
it held, again through Justice Gutierrez:

The Heirs of Jose Amunategui maintain that Lot No. 885 cannot be classified as
forest land because it is not thickly forested but is a 'mangrove swamps.' Although
conceding that 'mangrove swamp' is included in the classification of forest land in
accordance with Section 1820 of the Revised Administrative Code, the petitioners
argue that no big trees classified in Section 1821 of the said Code as first, second
and third groups are found on the land in question. Furthermore, they contend that
Lot 885, even if it is a mangrove swamp, is still subject to land registration
proceedings because the property had been in actual possession of private persons
for many years, and therefore, said land was already 'private land' better adapted
and more valuable for agricultural than for forest purposes and not required by the
public interests to be kept under forest classification.
The petition is without merit.
A forested area classified as forest land of the public domain does not lose such
classification simply because loggers or settlers may have stripped it of its forest
cover. Parcels of land classified as forest land may actually be covered with grass or
planted to crops by kaingin cultivators or other farmers. 'Forested lands' do not have
to be on mountains or in out-of-the-way places. Swampy areas covered by mangrove
trees, nipa palms, and other trees growing in brackish or sea water may also be
classified as forest land. The classification is descriptive of its legal nature or status
and does not have to be descriptive of what the land actually looks like. Unless and
until the land classsified as 'forest' is released in an official proclamation to that effect
so that it may form part of the disposable agricultural lands of the public domain, the
rules on confirmation of imperfect titles do not apply.'
The view was maintained in Vallarta v. Intermediate Appellate Court, 14 where this Court agreed with
the Solicitor General's submission that the land in dispute, which he described as "swamp mangrove or

36
MAS

Atty. Mohammad

WMSU LLB 2A

forestal land," were not private properties and so not registerable. This case was decided only twelve
days after the De Porkan case.

Faced with these apparent contradictions, the Court feels there is a need for a categorical
pronouncement that should resolve once and for all the question of whether mangrove swamps are
agricultural lands or forest lands.
The determination of this question is a function initially belonging to the legislature, which has the
authority to implement the constitutional provision classifying the lands of the public domain (and is
now even permitted to provide for more categories of public lands). The legislature having made
such implementation, the executive officials may then, in the discharge of their own role, administer
our public lands pursuant to their constitutional duty " to ensure that the laws be faithfully executed'
and in accordance with the policy prescribed. For their part, the courts will step into the picture if the
rules laid down by the legislature are challenged or, assuming they are valid, it is claimed that they
are not being correctly observed by the executive. Thus do the three departments, coordinating with
each other, pursue and achieve the objectives of the Constitution in the conservation and utilization
of our natural resources.
In C.A. No. 141, the National Assembly delegated to the President of the Philippines the function of
making periodic classifications of public lands, thus:
Sec. 6. The President, 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) Lumber, and
(c) Mineral lands,
and may at any time and in a like manner transfer such lands from one class to
another, for the purposes of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or
disposable lands, the President, 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.
With particular regard to alienable public lands, Section 9 of the same law provides:
For the purpose of their administration and disposition, the lands of the public domain
alienable or open to disposition shall be classified, according to the use or purposes
to which such lands are destined, as follows:
(a) Agricultural;
(b) Residential, commercial, industrial, or for similar productive purposes;
(c) Educational, charitable, or other similar purposes; and
(d) Reservations for townsites and for public and quasi-public uses.
The President, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall from time to time make the classifications provided for in this
section, and may, at any time and in a similar manner, transfer lands from one class
to another.
As for timber or forest lands, the Revised Administrative Code states as follows:
Sec. 1826. Regulation setting apart forest reserves- Revocation of same. - Upon
there commendation of the Director of Forestry, with the approval of the Department

37
MAS

Atty. Mohammad

WMSU LLB 2A

Head, the President of the Philippines may set apart forest reserves from the public
lands and he shall by proclamation declare the establishment of such reserves and
the boundaries thereof, and thereafter such forest reserves shall not be entered,
sold, or otherwise disposed of, but shall remain as such for forest uses, and shall be
administered in the same manner as public forest.
The President of the Philippines may in like manner by proclamation alter or modify
the boundaries of any forest reserve from time to time, or revoke any such
proclamation, and upon such revocation such forest reserve shall be and become
part of the public lands as though such proclamation had never been made.
Sec. 1827. Assignment of forest land for agricultural purposes. - Lands in public
forest, not including forest reserves, upon the certification of the Director of Forestry
that said lands are better adapted and more valuable for agricultural than for forest
purposes and not required by the public interests to be kept under forest, shall be
declared by the Department Head to be agricultural lands.
With these principles in mind, we reach the following conclusion:
Mangrove swamps or manglares should be understood as comprised within the public forests of the
Philippines as defined in the aforecited Section 1820 of the Administrative Code of 1917. The
legislature having so determined, we have no authority to ignore or modify its decision, and in effect
veto it, in the exercise of our own discretion. The statutory definition remains unchanged to date and,
no less noteworthy, is accepted and invoked by the executive department. More importantly, the said
provision has not been challenged as arbitrary or unrealistic or unconstitutional assuming the
requisite conditions, to justify our judicial intervention and scrutiny. The law is thus presumed valid
and so must be respected. We repeat our statement in the Amunategui case that the classification of
mangrove swamps as forest lands is descriptive of its legal nature or status and does not have to be
descriptive of what the land actually looks like. That determination having been made and no cogent
argument having been raised to annul it, we have no duty as judges but to apply it. And so we shall.
Our previous description of the term in question as pertaining to our agricultural lands should be
understood as covering only those lands over which ownership had already vested before the
Administrative Code of 1917 became effective. Such lands could not be retroactively legislated as
forest lands because this would be violative of a duly acquired property right protected by the due
process clause. So we ruled again only two months ago in Republic of the Philippines vs. Court of
Appeals, 15 where the possession of the land in dispute commenced as early as 1909, before it was much
later classified as timberland.

It follows from all this that the land under contention being admittedly a part of the mangrove
swamps of Sapian, and for which a minor forest license had in fact been issued by the Bureau of
Forestry from 1920 to 1950, it must be considered forest land. It could therefore not be the subject of
the adverse possession and consequent ownership claimed by the private respondent in support of
his application for registration. To be so, it had first to be released as forest land and reclassified as
agricultural land pursuant to the certification the Director of Forestry may issue under Section 1827
of the Revised Administrative Code.
The private respondent invokes the survey plan of the mangrove swamps approved by the Director
of Lands, 16 to prove that the land is registerable. It should be plain, however, that the mere existence of
such a plan would not have the effect of converting the mangrove swamps, as forest land, into agricultural
land. Such approval is ineffectual because it is clearly in officious. The Director of Lands was not
authorized to act in the premises. Under the aforecited law, it is the Director of Forestry who has the
authority to determine whether forest land is more valuable for agricultural rather than forestry uses, as a
basis for its declaration as agricultural land and release for private ownership.

Thus we held in the Yngson case:

It is elementary in the law governing the disposition of lands of the public domain that
until timber or forest lands are released as disposable and alienable neither the
Bureau of Lands nor the Bureau of Fisheries has authority to lease, grant, sell or
otherwise dispose of these lands for homesteads, sales patents, leases for grazing
or other purposes, fishpond leases and other modes of utilization.

38
MAS

Atty. Mohammad

WMSU LLB 2A

The Bureau of Fisheries has no jurisdiction to administer and dispose of swamp

lands or mangrove lands forming part of the public domain while such lands are still
classified as forest land or timber land and not released for fishery or other purposes.
The same rule was echoed in the Vallarta case, thus:
It is elementary in the law governing natural resources that forest land cannot be
owned by private persons. It is not registerable. The adverse possession which can
be the basis of a grant of title in confirmation of imperfect title cases cannot
commence until after the forest land has been declared alienable and disposable.
Possession of forest land, no matter bow long cannot convert it into private property.'
We find in fact that even if the land in dispute were agricultural in nature, the proof the private
respondent offers of prescriptive possession thereof is remarkably meager and of dubious
persuasiveness. The record contains no convincing evidence of the existence of
the informacion posesoria allegedly obtained by the original transferor of the property, let alone the
fact that the conditions for acquiring title thereunder have been satisfied. Nowhere has it been shown
that the informacion posesoria has been inscribed or registered in the registry of property and that
the land has been under the actual and adverse possession of the private respondent for twenty
years as required by the Spanish Mortgage Law. 17 These matters are not presumed but must be
established with definite proof, which is lacking in this case.

Significantly, the tax declarations made by the private respondent were practically the only basis
used by the appellate court in sustaining his claim of possession over the land in question. Tax
declarations are, of course, not sufficient to prove possession and much less vest ownership in favor
of the declarant, as we have held in countless cases. 18
We hold, in sum, that the private respondent has not established his right to the registration of the
subject land in his name. Accordingly, the petition must be granted.
It is reiterated for emphasis that, conformably to the legislative definition embodied in Section 1820
of the Revised Administrative Code of 1917, which remains unamended up to now, mangrove
swamps or manglares form part of the public forests of the Philippines. As such, they are not
alienable under the Constitution and may not be the subject of private ownership until and unless
they are first released as forest land and classified as alienable agricultural land.
WHEREFORE, the decision of the Court of Appeals is SET ASIDE and the application for
registration of title of private respondent is DISMISSED, with cost against him. This decision is
immediately executory.
SO ORDERED.

39
MAS

Atty. Mohammad

WMSU LLB 2A

DIRECTOR OF LANDS VS CA
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 83609 October 26, 1989
DIRECTOR OF LANDS, petitioner,
vs.
COURT OF APPEALS, IBARRA BISNAR and AMELIA BISNAR, respondents.
Ibarra L. Bisnar for himself and for and in behalf of co-private respondent Amelia Bisnar.

GRIO-AQUINO, J.:
Petitioner Director of Lands, through the Solicitor General, seeks a review of the decision dated May
27, 1988, of the Court of Appeals in CA-G.R. CV No. 66426, entitled "Ibarra Bisnar, et al. vs. Director
of Lands," affirming in toto the decision of the Court of First Instance of Capiz, granting the private
respondents' application for confirmation and registration of their title to two (2) parcels of land in
LRC Cad. Rec. 1256.
In their joint application for registration of title to two (2) parcels of land filed on July 20,1976, the
applicants Ibarra and Amelia Bisnar claimed to be the owners in fee simple of Lots 866 and 870 of
the Pilar Cadastre Plan AP-06-000869, respectively containing an area of 28 hectares (284,424 sq.
m.) and 34 hectares (345,385 sq. m.) situated in barrio Gen. Hizon, Municipality of President Roxas,
Province of Capiz (p. 14, Rollo). The applicants alleged that they inherited those parcels of land (p.
41, Rollo) and they had been paying the taxes thereon (p. 40, Rollo).
On December 16,1976, the Director of Lands and the Director of the Bureau of Forest Development,
opposed the application on the grounds that:
1. Neither the applicants nor their predecessors-in-interest possess sufficient title to
acquire ownership in fee simple of the land or lots applied for, the same not having
been acquired by any of the various types of title issued by the Spanish Government,
such as, (1) 'titulo real' or royal grant, (2) the 'concession especial' or special grant,
(3) the 'composicion con el estado titulo' or adjustment title, (4) the 'titulo de
compra 'or title by purchase, and (5) the 'informacion possessoria' or possessory
information under the Royal Decree of 13 February 1894, or any other recognized
mode of acquisition of title over realty under pertinent applicable laws.
2. Neither the applicants nor their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of the land in
question for at least thirty (30) years immediately preceding the filing of the
application.
3. The properties in question are a portion of the public domain belonging to the
Republic of the Philippines, not subject to private appropriation, (pp. 17-19, Record
on Appeal). (pp. 14-15, Rollo.)
On February 24,1977, the applicants filed an amended application, which was approved on March
14, 1977, and included the following allegation:
Should the Land Registration Act invoked be not applicable to the case, they hereby
apply for the benefits of Chapter 8, Commonwealth Act 141, as amended, as they
and their predecessors-in-interest have been in possession of the land as owners for
more than fifty (50) years. (p. 16, Rollo.)

40
MAS

Atty. Mohammad

WMSU LLB 2A

After hearing, the trial court ordered the registration of the title of the lots in the names of the
applicants, herein private respondents. It found that applicants and their predecessors- in-interest
have been in open, public, continuous, peaceful and adverse possession of the subject parcels of
land under bona fide claims of ownership for more than eighty (80) years (not only 30) prior to the
filing of the application for registration, introduced improvements on the lands by planting coconuts,
bamboos and other plants, and converted a part of the land into productive fishponds (p. 68, Rollo).
On appeal, the Appellate Court affirmed the trial court's decision. It held that the classification of the
lots as timberland by the Director of Forestry cannot prevail in the absence of proof that the said lots
are indeed more valuable as forest land than as agricultural land, citing as authority the case
of Ankron vs. Government of the Philippine Islands (40 Phil. 10). In this petition, the government
alleges that:
1. the classification or reclassification of public lands into alienable or disposable
agricultural land, mineral land or forest land is a prerogative of the Executive
Department of the government and not of the courts;
2. that possession of forest lands, no matter how long, cannot ripen into private
ownership; and
3. that an applicant for registration of title has the burden of proving that he meets the
requirements of Section 48 of Com. Act No. 141, as amended. (p. 19, Rollo.)
The principal issue in this appeal is whether the lots in question may be registered under Section 48
(b) of CA 141, as amended.
The petition is impressed with merit.
In the case of Bureau of Forestry vs. Court of Appeals, 153 SCRA 351, we ruled:
As provided for under Section 6 of Commonwealth Act 141, which was lifted from Act
2874, the classification or reclassification of public lands into alienable or disposable,
mineral or forest lands is now a prerogative of the Executive Department of the
government and not the courts. With these rules, there should be no more room for
doubt that it is not the court which determines the classification of lands of the public
domain into agricultural, forest or mineral but the Executive Branchof the
government, through the Office of the President. Hence, it was grave error and/or
abuse of discretion for respondent court to ignore the uncontroverted facts that (1)
the disputed area is within a timberland block, and (2) as certified to by the then
Director of Forestry, the area is needed for forest purposes. (pp. 21-22, Rollo.)
It bears emphasizing that a positive act of the government is needed to declassify land which is
classified as forest and to convert it into alienable or disposable land for agricultural or other
purposes (Republic vs. Animas, 56 SCRA 499). Unless and until the land classified as forest is
released in an official proclamation to that effect so that it may form part of the disposable
agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply
(Amunategui vs. Director of Forestry, 126 SCRA 69; Director of Lands vs. Court of Appeals, 129
SCRA 689; Director of Lands vs. Court of Appeals, 133 SCRA 701; Republic vs. Court of Appeals,
148 SCRA 480; Vallarta vs. Intermediate Appellate Court, 151 SCRA 679).
Thus, possession of forest lands, however long, cannot ripen into private ownership (Vano vs.
Government, 41 Phil. 161 [1920]; Adorable vs. Director of Forestry, 107 Phil. 401 [1960]). A parcel of
forest land is within the exclusive jurisdiction of the Bureau of Forestry and beyond the power and
jurisdiction of the cadastral court to register under the Torrens System (Republic vs. Court of
Appeals, 89 SCRA 648; Republic vs. Vera, 120 SCRA 210 [1983]; Director of Lands vs. Court of
Appeals, 129 SCRA 689 [1984]).
Section 48 (b) of Commonwealth Act No. 141, as amended, applies exclusively to public agricultural
land. Forest lands or areas covered with forests are excluded (p. 26, Rollo). We reiterate our ruling
in Amunategui that:
In confirmation of imperfect title cases, the applicant shoulders the burden of proving
that he meets the requirements of Section 48, Commonwealth Act No. 141, as

41
MAS

Atty. Mohammad

WMSU LLB 2A

amended by Republic Act 1942. He must overcome the presumption that the land he
is applying for is part of the public domain but that he has an interest therein
sufficient to warrant registration in his name because of an imperfect title such as
those derived from old Spanish grants or that he has had continuous, open and
notorious possession and occupation of agricultural lands of the public domain under
a bona fide claim of acquisition of ownership for at least thirty (30) years preceding
the filing of his application. (Heirs of Amunategui vs. Director of Forestry, 126 SCRA
69.)
WHEREFORE, the appealed decision is reversed and set aside. The application for registration in
LRC Cad. Rec. 1256 of the former Court of First Instance, is hereby dismissed without costs.
SO ORDERED.

42
MAS

Atty. Mohammad

WMSU LLB 2A

REPUBLIC VS IAC
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 75042 November 29, 1988
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, ROMAN CATHOLIC BISHOP OF LUCENA, represented
by Msgr. Jose T. Sanchez, and REGIONAL TRIAL COURT, BRANCH LIII, LUCENA
CITY, respondents.
The Solicitor General for petitioner.
Gilbert D. Camaligan for private respondent.

BIDIN, J.:
This is an appeal from the 1) decision * of the FIRST CIVIL CASES DIVISION of the then Intermediate Appellate Court dated
May 13, 1986, in AC G.R. No. 01410 entitled the ROMAN CATHOLIC BISHOP OF Lucena, represented by Msgr. Jose T. Sanchez,
applicant-appellee vs. Republic of the Philippines, et al., Oppositors-appellants, affirming the decision ** of the then Court of FIRST
INSTANCE of Quezon, 9th Judicial District, Branch 1, dated November 4, 1980 in Land Registration Case No. N-1106 entitled the ROMAN
CATHOLIC BISHOP of Lucena, represented by Msgr. Jose T. Sanchez, applicant vs. the Director of Lands and the Director, Bureau of
Forest Development, oppositors, ordering the registration of title to the parcel of land designated, as lots 1, 2 and 3 of plan PSD-65686 and
its technical descriptions, and the parcel of land described in plan PSU-112592 and its technical description, together with whatever
improvements existing thereon, in the name of the ROMAN CATHOLIC BISHOP of Lucena and 2) its resolution Dated June 19,1986,
denying appellant's "Motion for Reconsideration for lack of merit."

The factual background of the case as found by the Intermediate Appellate Court are as follows:
On February 2, 1979, the ROMAN CATHOLIC BISHOP of Lucena, represented by
Msgr. Jose T. Sanchez, filed an application for confirmation of title to four (4) parcels
of land. Three of said parcels, denominated as Lots 1, 2 and 3, respectively, of plan
PSU-65686 are situated in Barrio Masin, Municipality of Candelaria, Quezon
Province. The fourth parcels under plan PSU-112592 is located in Barrio Bucal
(Taguan), same municipality and province. As basis for the application, the applicant
claimed title to the various properties through either purchase or donation dating as
far back as 1928.
The legal requirements of publication and posting were duly complied with, as was
the service of copies of notice of initial hearing on the proper government officials.
In behalf of the Director of Lands and the Director of the Bureau of Forest
Development, the Solicitor General filed an Opposition on April 20, 1979, alleging
therein among others, that the applicant did not have an imperfect title or title in fee
simple to the parcel of land being applied for.
At the initial hearing held on November 13, 1979, only the Provincial Fiscal in
representation of the Solicitor General appeared to interpose personal objection to
the application. Hence, an Order of General Default against the whole world was
issued by the Court a quo except for the Director of Lands and the Director of the
Bureau of Forest Development.
The preliminaries dispensed with, the applicant then introduced its proofs in support
of the petition, summed up by the lower court as follows:
With respect to Lots 1, 2, and 3, plan PSU-65686.

43
MAS

Atty. Mohammad

WMSU LLB 2A
Lots 1, 2 and 3 of plan PSU-65686 respectively containing an area of
18,977, 6,910 and 16,221 square meters, are adjoining lots & are
situated in the Barrio of Masin, Municipality of Candelaria, Province of
Quezon (formerly Tayabas) (Exhibits F, F-1, F-2 and F-3). Said lots
were surveyed for the Roman Catholic Church on November 3, 1928
(Exhibit P-5) and the survey plan approved on October 20, 1929
(Exhibit F-6).
Lot 1 was acquired by the Roman Catholic Church thru Rev. Father
Raymundo Esquenet by purchase from the spouses Atanacio Yranso
and Maria Coronado on October 20, 1928 (Exhibits G, G-1), portion
of Lot 2 also by purchase thru Rev. Father Raymundo Esquenet from
the spouses Benito Maramot and Venancia Descaller on May 22,
1969 (Exhibits M, N-1), while the remaining portion of Lot 2 and Lot 3
were already owned and possessed by the Roman Catholic Church
even prior to the survey of the said three lots in 1928.
Records of burial of the Roman Catholic Church of Candelaria,
Quezon showed that even as early as November 1918, Lot 3 has
already been utilized by the Roman Catholic Church as its cemetery
in Candelaria, Quezon (Exhibit N, N-1 to N-5).
<re||an 1w>

These three lots presently constituted the Roman Catholic Church

cemetery in Candelaria, Quezon.
Lots 1, 2 and 3 are declared for taxation purposes in the name of the
Roman Catholic Church under Tax Declaration Nos. 22-19-02-079,
22-19-02-077 and 22-19-02-082 as 'cemetery site' (Exhibit S, V and
T).
With respect to the parcel of land described in plan PSU-112592:
This parcel of land situated in the barrio of Bucal (Taguan),
Municipality of Candelaria, Province of Quezon (formerly Tayabas)
and more particularly described in plan PSU-1 12592 and its
technical description with an area of 3,221 square meters (Exhibit 1)
was formerly owned and possessed by the spouses Paulo G.
Macasaet, and Gabriela V. de Macasaet. Said spouses, on February
26, 1941, donated this lot to the Roman Catholic Church represented
by Reverend Father Raymundo Esquenet (Exhibit J, J-1 to J-4). It
was surveyed for the Roman Catholic Church on Aug. 16, 1940 as
church site and the corresponding survey plan approved on Jan. 15,
1941 (Exhibits I-1, I-2, 1-3).
Previously erected on this Lot was an old chapel which was
demolished and new chapel now stands in its place on the same site.
For his part, the Fiscal in a Manifestation dated July 22, 1980, said 'the State will not
adduce evidence in support of its opposition and will submit the instant case for
decision.'
Evaluating the applicant's submitted proofs, the court a quo concluded, on the basis
of acquisitive prescription at the very least, that the former had adequately shown
title to the parcels of land being claimed.
Since the acquisition of these four (4) lots by the applicant, it has
been in continuous possession and enjoyment thereof, and such
possession, together with its predecessors-in interest, covering a
period of more than 52 years (at least from the date of the survey in
1928) with respect to lots 1 and 2, about 62 years with respect to lot
3, all of plan PSU- 65686; and more than 39 years with respect to the
fourth parcel described in plan PSU-112592 (at least from the date of
the survey in 1940) have been open, public, continuous, peaceful,
adverse against the whole world, and in the concept of owner.

44
MAS

Atty. Mohammad

WMSU LLB 2A

Accordingly, the court ordered the registration of the four parcels together with the
improvements thereon "in the name of the ROMAN CATHOLIC BISHOP OF
LUCENA, INC., a religious corporation sole duly registered and existing under the
laws of the Republic of the Philippines."
Against this decision, the Solicitor General filed a Motion for reconsideration on the
following grounds:
1. Article XIV, Section 11 of the New Constitution(1973) disqualifies a private
corporation from acquiring alienable lands for the public domain.
2. In the case at bar the application was filed after the effectivity on the New
Constitution on January 17, 1973.
which was denied by the lower court for lack of merit.
Still insisting of the alleged unconstitutionality of the registration (a point which,
incidentally, the appellant never raised in the lower court prior to its Motion for
Reconsideration), the Republic elevated this appeal. (Rollo, pp. 25-28)
On May 13, 1986, the first Civil Cases Division of the Intermediate Appellate Court rendered its
Decision the dispositive part of which reads:
WHEREFORE, finding the judgment a quo to be supported by law and the evidence
on record, the same is hereby AFFIRMED. No pronouncement as to costs.
SO ORDERED. (Rollo p. 30)
A reconsideration of the aforequoted Decision was sought by Appellant Republic of the Philippines,
but for lack of merit, its motion for reconsideration was denied on June 19, 1986, by Resolution of
the First Civil Case Division, Intermediate Appellate Court which resolution reads in full:
Considering appellant Republic of the Philippines "Motion for reconsideration" filed
on June 4, 1986; the Court RESOLVED to DENY the Motion for Reconsideration for
lack of merit, grounds raised therein having all been considered in the decision.
(Rollo, p. 31)
Hence, this petition.
The following are the assigned errors raised by the petitioner in its petition:
1. The decision and the resolution in question are contrary to law and decisions of
this honorable Court in Meralco vs. Castro-Bartolome and Republic, 114 SCRA 799
(prom. June 29,1982); Republic vs. Judge Villanueva and Iglesia ni Cristo, 114
SCRA 875, June 29, 1982); and Republic vs. Judge Gonong and Iglesia ni Cristo,
118 SCRA 729-733 (November 25,1982); Director of Lands vs. Hermanos y
Hermanas, Inc. 141 SCRA 21-25 (Jan. 7,1986).
2. The lands applied for registration were the subject of a previous registration case
where a decree of registration was already issued.
3. Respondent corporation failed to establish the indentity of the lands applied for.
(Rollo, pp. 14-15)
The issue raised in this case involves the question of whether the Roman Catholic Bishop of Lucena,
as a corporation sole is qualified to apply for confirmation of its title to the four (4) parcels of land
subject of this case.
Corollary thereto is the question of whether or not a corporation sole should be treated as an
ordinary private corporation, for purpose of the application of Art. XIV, Sec. 11 of the 1973
Constitution.

45
MAS

Atty. Mohammad

WMSU LLB 2A

Article XIV, Sec. 11 of the 1973 Constitution, in part provides:

Sec. 11. .... 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....
Sec. 48 of the Public Land Act, in part, provides:
Sec. 48. The following described citizens of the Philippines occupying lands of the
public domain or claiming to own any such lands or an interest therein, but whose
titles have not been perfected or completed, may apply to the Court of First Instance
of the province where the land is located for confirmation of their claims and the
issuance of a Certificate of title therefor, under the Land Registration Act, to wit:
(a) ...
(b) Those who by themselves or through their predecessor-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.
(c) ...
In its Motion for Reconsideration, petitioner contends that the Roman Catholic Bishop of Lucena
(private respondent herein) which is admittedly a corporation sole is disqualified to own and register
its title over the parcels of land involved herein. (Rollo, p. 41)
In its petition it likewise argued that being a juridical entity, private respondent cannot avail of the
benefits of Sec. 48(b) of the public land law which applies to FILIPINO citizens or NATURAL
persons. On the other hand, private respondent in its MEMORANDUM espoused the contrary view.
There is no merit in this petition.
The parties herein do not dispute that since the acquisition of the four (4) lots by the applicant, it has
been in continuous possession and enjoyment thereof, and such possession, together with its
predecessors-in-interest, covering a period of more than 52 years (at least from the date of survey in
1928) with respect to lots 1 and 2, about 62 years with respect to lot 3, all of plan PSU-65686; and
more than 39 years with respect to the fourth parcel described in plan PSU-11 2592 (at least from
the date of the survey in 1940) have been open, public, continuous, peaceful, adverse against the
whole world, and in the concept of owner.
Being disputed before this Court is the matter of the applicability of Art. XIV Sec. 11 of the 1973
Constitution to the case at bar.
Petitioner argues that considering such constitutional prohibition, private respondent is disqualified to
own and register its title to the lots in question. Further, it argues that since the application for
registration was filed only on February 2, 1979, long after the 1973 Constitution took effect on
January 17, 1973, the application for registration and confirmation of title is ineffectual because at
the time it was filed, private corporation had been declared ineligible to acquire alienable lands of the
public domain pursuant to Art. XIV, Sec. 11 of the said constitution. (Rollo, p. 41)
The questioned posed before this Court has been settled in the case of DIRECTOR OF LANDS vs.
Intermediate Appellate Court (146 SCRA 509 [1986]) which reversed the ruling first enunciated in
the 1982 case of Manila Electric Co. vs. CASTRO BARTOLOME, (114 SCRA 789 [1982]) imposing
the constitutional ban on public land acquisition by private corporations which ruling was declared
emphatically as res judicata on January 7, 1986 inDirector of Lands vs. Hermanos y Hermanas de
Sta. Cruz de Mayo, Inc., (141 SCRA 21 [1986]). In said case, (Director of Lands v. IAC, supra), this
Court stated that a determination of the character of the lands at the time of institution of the
<re|| an1w>

46
MAS

Atty. Mohammad

WMSU LLB 2A

registration proceedings must be made. If they were then still part of the public domain, it must be
answered in the negative.
If, on the other hand, they were already private lands, the constitutional prohibition against their
acquisition by private corporation or association obviously does not apply. In affirming the Decision
of the Intermediate Appellate Court in said case, this Court adopted the vigorous dissent of the then
Justice, later Chief Justice Claudio Teehankee, tracing the line of cases beginning with CARINO, 1 in
1909, thru SUSI, 2 in 1925, down to HERICO, 3 in 1980, which developed, affirmed and reaffirmed the
doctrine 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 periodipso jure and
without the need of judicial or other sanction, ceases to be public land and becomes' private property.
(DIRECTOR OF LANDS vs. IAC, supra, p. 518).

Nothing can more clearly demonstrate the logical inevitability of considering possession of public
land which is of the character and duration prescribed by statute as the equivalent of an express
grant from the state than the dictim of the statute itself; 4 that the possessor "... shall be conclusively
presumed to have performed all the conditions essential to a government grant and shall be entitled to a
certificate of title ..." No proof being admissable to overcome a conclusive presumption, confirmation
proceedings would, in truth be little more than a formality, at the most limited to ascertaining whether the
possession claimed is of the required character and length of time, and registration thereunder would not
confer title, but simply recognize a title already vested. The proceedings would not ORIGINALLY convert
the land from public to private land, but only confirm such a conversion already effected by operation of
law from the moment the required period of possession became complete. As was so well put in Carino,
"... There are indications that registration was expected from all, but none sufficient to show that, for want
of it, ownership actually gained would be lost. The effect of the proof, wherever made, was not to confer
title, but simply to establish it, as already conferred by the decree, if not by earlier law. (DIRECTOR OF
LANDS vs. IAC, supra, p. 520).

The open, continuous and exclusive possession of the four lots by private respondent can clearly be
gleaned from the following facts on record: Lot 1 and portion of Lot 2 was acquired by purchase in
1928 and 1929, respectively. The remaining portion of lots 2 and 3 was already owned and
possessed by private respondent even prior to the survey of said lots in 1928. In fact, records of
burial of the Roman Catholic Church of Candelaria, Quezon showed that as early as 1919, Lot 3 has
already been utilized by the Roman Catholic Church as its cemetery. That at present, said three lots
are utilized as the Roman Catholic Church of Candelaria, Quezon. That said lots are declared for
taxation purposes in the name of the Roman Catholic Church. The fourth parcel of land was
acquired by donation in 1941 and same lot is utilized as church site.
It must be emphasized that the Court is not here saying that a corporation sole should be treated like
an ordinary private corporation.
In Roman Catholic Apostolic Administration of Davao, Inc. vs. Land Registration Commission, et al.
(L-8451, December 20,1957,102 Phil. 596). We articulated:
In solving the problem thus submitted to our consideration, We can say the following:
A corporation sole is a special form of corporation usually associated with the clergy.
Conceived and introduced into the common law by sheer necessity, this legal
creation which was referred to as "that unhappy freak of English Law" was designed
to facilitate the exercise of the functions of ownership carried on by the clerics for and
on behalf of the church which was regarded as the property owner (See 1 Bouvier's
Law Dictionary, p. 682-683).
A corporation sole consists of one person only, and his successors (who will always
be one at a time), in some particular station, who are incorporated by law in order to
give them some legal capacities and advantages, particulary that of perpetuity, which
in their natural persons they could not have had. In this sense, the King is a sole
corporation; so is a bishop, or deans distinct from their several chapters (Reid vs.
Barry, 93 fla. 849, 112 So. 846).
Pertinent to this case is the provision of Sec. 113 Batas Pambansa Blg. 68 which reads as follows:
Sec. 113. Acquisition and alienation of property. Any corporation sole may
purchase and hold real estate and personal property for its church, charitable,
benevolent or educational purposes, and may receive bequests or gifts for such

47
MAS

Atty. Mohammad

WMSU LLB 2A

purposes. Such corporation may mortgage or sell real property held by it upon
obtaining an order for that purpose from the Court of First Instance of the province
where the property is situated; but before the order is issued, proof must be made to
the satisfaction of the Court that notice of the application for leave to mortgage or sell
has been given by publication or otherwise in such manner and for such time as said
court may have directed, and that it is to the interest of the corporation that leave to
mortgage or sell should be granted. The application for leave to mortgage or sell
must be made by petition, duly verified by the chief archbishop, bishop, priest,
minister, rabbi or presiding elder acting as corporation sole, and may be opposed by
any member of the religious denomination, sect or church represented by the
corporation sole: Provided, That in cases where the rules, regulations and discipline
of the religious denomination, sect or church religious society or order concerned
represented by such corporation sole regulate the method of acquiring, holding,
selling and mortgaging real estate and personal property, such rules, regulations and
discipline shall control and the intervention of the courts shall not be necessary.
There is no doubt that a corporation sole by the nature of its Incorporation is vested with the right to
purchase and hold real estate and personal property. It need not therefore be treated as an ordinary
private corporation because whether or not it be so treated as such, the Constitutional provision
involved will, nevertheless, be not applicable.
In the light of the facts obtaining in this case and the ruling of this Court in Director of Lands vs. IAC,
(supra, 513), the lands subject of this petition were already private property at the time the
application for confirmation of title was filed in 1979. There is therefore no cogent reason to disturb
the findings of the appellate court.
WHEREFORE, the petition is dismissed for lack of merit and the appealed decision and Resolution
of the Intermediate Appellate Court is hereby AFFIRMED.
SO ORDERED.

48
MAS

Atty. Mohammad

WMSU LLB 2A

ALMEDA VS CA
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 85322 April 30, 1991

ALFREDO M. ALMEDA, LEONARDO M. ALMEDA and ERNESTO M. ALMEDA, petitioners,
vs.
HON. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, representative represented
by THE DIRECTOR OF LANDS, respondents.
Leonardo M. Almeda for petitioners.

GRIO-AQUINO, J.:p
This petition for review assails the Court of Appeals' decision dated May 9, 1988 in CA-G.R. No.
09309-CV reversing the judgment dated January 6, 1986 of the Regional Trial Court in LRC Case
No. N-10771 entitled, "Alfredo M. Almeda, Leonardo M. Almeda and Ernesto M. Almeda, Applicants
versus Republic of the Philippines, represented by the Director of Lands, Oppositor."
The case involves a parcel of land with an area of 1,208 square meters located in Barrio Pampangin
Pateros, Rizal, and described in Survey Plan Psu-128539. It was originally owned and possessed by
Emiliano Almeda, father of the petitioners, by virtue of an "Escritura de Particion Extrajudicial" (Exh.
G) executed on June 15, 1935, between him and his brother Adriano wherein they attested the fact
that the land in question was inherited from their parents, Vedasto Almeda and Josefa C.
Concepcion, who had inherited the same from their own parents (great-grandparents of herein
petitioners).
After Emiliano's death on May 1, 1948 at the age of 67, his wife, Ana Menguito and their children
received the produce of the land and rented out to third persons portions of the property where
Emiliano had three houses built. Upon Ana's death on April 3, 1950, her children with Emiliano
inherited the property and the lessees moved out. On June 9, 1980, the brothers Alfredo, Leonardo
and Ernesto executed an extrajudicial partition adjudicating the land to themselves (Exh. J).
On September 12, 1984, the Almeda brothers applied for the registration of the land in the Regional
Trial Court of Pasig, Branch CLVI, where the case was docketed as LRC Case No. N-10771, LRC
Record No. N-58761 entitled, "Alfredo M. Almeda, Leonardo M. Almeda and Ernesto M. Almeda,
Applicants." Their application was set for hearing on December 20, 1984. The notice of hearing
dated October 10, 1984 was duly published in the Official Gazette and posted by the deputy sheriff.
On the date of the hearing, no one appeared to oppose the application except the Director of Lands,
through the Solicitor General, who had earlier filed a formal opposition. An order of general default
was issued against the whole world, except the aforementioned oppositor, and the case was set for
hearing.
The report of the Bureau of Lands stated that the land is not included in any military area or naval
reservation nor is it covered by any land patent or public land application. The Land Registration
Commission Report also stated that Plan Psu-128539, when plotted in the Municipal Index map,
does not overlap with any previously plotted titled properties under Act 496 as amended by PD
1525, and that the survey books do not show that the subject lot had been applied for except in this
case.
The Director of Lands, through the Office of the Solicitor General, presented Corazon Calamno
senior forester of the Bureau of Forest Development, who stated that she prepared the inspection

49
MAS

Atty. Mohammad

WMSU LLB 2A

report on November 26, 1984; that the land fags within the alienable and disposable land under
Project No. 29 of Pateros, Metro Manila, as per BFD Map LC 2623, certified and declared as such
on January 23, 1968.
The Court found that the applicants' possession of the parcel of land sought to be registered,
together with that of their predecessors-in-interest, has been public, peaceful, continuous, adverse to
the whole world and in the concept of an owner for a period of more than thirty (30) years, and, that
the land is not located within any forest reservation nor mortgaged or encumbered in favor of any
person or lending institution.
In a decision dated January 18, 1986, the trial court affirmed the order of general default and
confirmed the title of the applicants to the parcel of land covered by the plan, Psu-128539, and
ordered its registration in the names of Alfredo, Leonardo and Ernesto Almeda pro-indiviso (pp. 4245, Rollo).
From that decision, the Republic of the Philippines, represented by the Solicitor General, appealed
to the Court of Appeals in CA-G.R. CV No. 09309, alleging that the applicants-appellees have not
met the statutory requirements on possession under Section 48(b) of CA 141, mainly because the
land applied for was inalienable forest land before its release as alienable and disposable land on
January 3, 1968. The applicants' possession thereof prior to January 3, 1968 was invalid for
purposes of a grant under Section 48(b) of the Public Land Act.
The Court of Appeals, in a decision dated May 9, 1988, reversed the lower court and denied the
application for registration. It held that private respondents had not qualified for a grant under
Section 48(b) of Commonwealth Act 141 which requires public, peaceful, continuous, adverse
possession by the applicants in the concept of an owner, for a period of at least 30 years. They have
to their credit only seventeen (17) years possession and occupation of the land, counted from
January 23, 1968, when it was declared alienable and disposable, up to September 12, 1984, when
their application for registration was filed.
After their motion for reconsideration was denied by the Court of Appeals, the applicants filed this
petition for review under Rule 45 of the Rules of Court.
Petitioners allege that the Court of Appeals erred:
1. in not holding that the land, classification made by the Director of Forestry (Bureau of Forest
Development) could not affect the vested rights of the applicants and their predecessors-in-interest
who had continuously occupied and profited from the land since 1918 or very much earlier, as in this
case; and
2. in denying the motion for reconsideration despite the ruling in "The Director of Lands vs. The
Honorable Court of Appeals and Iglesia ni Cristo," 158 SCRA 568 promulgated on March 14, 1988,
which allowed registration even when the land applied for was within the proposed alienable or
disposable block of a proposed LC project.
There is no merit in the petition.
The Court of Appeals correctly ruled that the private respondents had not qualified for a grant under
Section 48(b) of the Public Land Act because their possession of the land while it was still
inalienable forest land, or before it was declared alienable and disposable land of the public domain
on January 13, 1968, could not ripen into private ownership, and should be excluded from the
computation of the 30-year open and continuous possession in concept of owner required under
Section 48(b) of Com. Act 141. It accords with our ruling in Director of Lands vs.Court of Appeals,
Ibarra Bishar et al., 178 SCRA 708, that:
Unless and until the land classified as forest is released in an official proclamation to
that effect so that it may form part of the disposable agricultural lands of the public
domain, the rules on confirmation of imperfect title do not apply Amunategai vs.
Director of Forestry, 126 SCRA 69; Director of Lands vs. Court of Appeals, 129
SCRA 689; Director of Lands vs. Court of Appeals, 133 SCRA 701; Republic vs.
Court of Appeals, 148 SCRA 480; Vallarta vs. Intermediate Appellate Court, 151
SCRA 679).

50
MAS

Atty. Mohammad

WMSU LLB 2A

Thus, possession of forest lands, however long, cannot ripen into private
ownership (Vamo vs. Government, 41 Phil. 161 [1920]; Adorable vs. Director of
Forestry, 107 Phil. 401 [1960]). A parcel of forest land is within the exclusive
jurisdiction of the Bureau of Forestry and beyond the power and jurisdiction of the
cadastral court to register under the Torrens System (Republic vs. Court of Appeals,
89 SCRA 648; Republic vs. Vera, 120 SCRA 210 [19831; Director of Lands vs. Court
of Appeals, 129 SCRA 689 [1984]).
The petitioners have erroneously cited our decisions in Director of Forestry vs. Villareal, 170 SCRA
598 andRepublic vs. Court of Appeals, Miguel Marcelo, et al., 168 SCRA 77, in support of their
position in this case. In those cases, the applicants' possession of the land antedated its
classification as forest land. We held that such lands could not be retroactively legislated or
classified as forest lands because it would violate previously acquired property lights protected by
the due process clause of the Constitution.
The situation of the land in this case is the reverse of the Villareal and Marcelo cases. The land here
was already forest land when occupied by the petitioners but it was later released on January 23,
1968 from its forest classification. In other words, the petitioners here occupied forest land before it
was released as alienable and disposable, while the applicants in the Villareal and Marcelo cases
possessed parcels of land long before they were reserved as forest land. The subsequent
reservation did not prejudice their vested rights therein.
Petitioner's recourse to the decision of this Court in Director of Lands vs. Court of appeals and
Iglesia Ni Cristo,158 SCRA 568, is inappropriate. That case did not involve forest land, but
agricultural land of the public domain within the proposed alienable or disposable block.
WHEREFORE, the petition for review is denied for lack of merit. Costs against the petitioners.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

51
MAS

Atty. Mohammad

WMSU LLB 2A

CHAVEZ VS PEA AND AMARI

Republic of the Philippines
SUPREME COURT
Manila
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

52
MAS

Atty. Mohammad

WMSU LLB 2A

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 ongoing 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.

53
MAS

Atty. Mohammad

WMSU LLB 2A

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

54
MAS

Atty. Mohammad

WMSU LLB 2A

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 entirereclaimed 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

55
MAS

Atty. Mohammad

WMSU LLB 2A

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

56
MAS

Atty. Mohammad

WMSU LLB 2A

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 ongoing 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 inValmonte v. Belmonte, Jr.30

57
MAS

Atty. Mohammad

WMSU LLB 2A

"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

58
MAS

Atty. Mohammad

WMSU LLB 2A

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.
1w phi 1.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 coequal 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.39 This is not
the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information on ongoing negotiations before a final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting national security and public
order.40 Congress has also prescribed other limitations on the right to information in several
legislations.41
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands,
reclaimed or to be reclaimed, violate the Constitution.

59
MAS

Atty. Mohammad

WMSU LLB 2A

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.42 The 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

60
MAS

Atty. Mohammad

WMSU LLB 2A

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,

61
MAS

Atty. Mohammad

WMSU LLB 2A

(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
Governor-General, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall declare that the same are not necessary for the public service and
are open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act." (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain
into x x x alienable or disposable"47 lands. Section 7 of the Act empowered the Governor-General to
"declare what lands are open to disposition or concession." Section 8 of the Act limited alienable or
disposable lands only to those lands which have been "officially delimited and classified."
Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands,
however, must be suitable for residential, commercial, industrial or other productive nonagricultural purposes. These provisions vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable lands of the public domain. These provisions
also empowered the Governor-General to classify further such disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well as other nonagricultural 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.

62
MAS

Atty. Mohammad

WMSU LLB 2A

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.

63
MAS

Atty. Mohammad

WMSU LLB 2A

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.

64
MAS

Atty. Mohammad

WMSU LLB 2A

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

65
MAS

Atty. Mohammad

WMSU LLB 2A

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 nonagricultural 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, the reclaimed 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;

66
MAS

Atty. Mohammad

WMSU LLB 2A

(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)

67
MAS

Atty. Mohammad

WMSU LLB 2A

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

68
MAS

Atty. Mohammad

WMSU LLB 2A

"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.

69
MAS

Atty. Mohammad

WMSU LLB 2A

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

70
MAS

Atty. Mohammad

WMSU LLB 2A

PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further
reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim
another 350 hectares x x x."66
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the
750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's
"actual cost" in partially reclaiming the Freedom Islands. AMARI will also complete, at its own
expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation
costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will
share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is
defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common
areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be issued in the
name of AMARI. Section 5.2 (c) of the Amended JVA provides that
"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's Land share based on the Land Allocation
Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and
delivery of the proper certificates of title covering AMARI's Land Share in the name of
AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at any
given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the
titles pertaining to AMARI, until such time when a corresponding proportionate area of
additional land pertaining to PEA has been titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5
hectares of reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture
PEA's statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila
Bay. Section 3.2.a of the Amended JVA states that
"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right, authority and privilege to undertake the
Project in accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its
supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of
Sections 2 and 3, Article XII of the 1987 Constitution which state that:
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural
lands. Private corporations or associations may not hold such alienable lands of the
public domain except by lease, x x x."(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its Memorandum,67 PEA admits that

71
MAS

Atty. Mohammad

WMSU LLB 2A

"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

72
MAS

Atty. Mohammad

WMSU LLB 2A

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.

73
MAS

Atty. Mohammad

WMSU LLB 2A

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.
1wphi 1.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

74
MAS

Atty. Mohammad

WMSU LLB 2A

xxx
(4) Exercise supervision and control over forest lands, alienable and disposable public
lands, mineral resources and, in the process of exercising such control, impose appropriate
taxes, fees, charges, rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses,
permits, concessions, lease agreements and such other privileges concerning the
development, exploration and utilization of the country's marine, freshwater, and
brackish water and over all aquatic resources of the country and shall continue to
oversee, supervise and police our natural resources; cancel or cause to cancel such
privileges upon failure, non-compliance or violations of any regulation, order, and for all other
causes which are in furtherance of the conservation of natural resources and supportive of
the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all lands of
the public domain and serve as the sole agency responsible for classification, 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

75
MAS

Atty. Mohammad

WMSU LLB 2A

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
non-assessable.
The Secretary of Public Highways and the General Manager of the Public Estates Authority
shall execute such contracts or agreements, including appropriate agreements with the
Construction and Development Corporation of the Philippines, as may be necessary to
implement the above.
Special land patent/patents shall be issued by the Secretary of Natural Resources in
favor of the Public Estates Authority without prejudice to the subsequent transfer to
the contractor or his assignees of such portion or portions of the land reclaimed or to
be reclaimed as provided for in the 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

76
MAS

Atty. Mohammad

WMSU LLB 2A

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 its patrimonial 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."

77
MAS

Atty. Mohammad

WMSU LLB 2A

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.92No 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 nonagricultural lands, may be conveyed to him in ownership in view of the legislative authority allowing

78
MAS

Atty. Mohammad

WMSU LLB 2A

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 12.8-hectare public land granted by the National Government to Mindanao
Medical Center, a government unit under the Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a public service. The Court affirmed the
registration of the 12.8-hectare public land in the name of Mindanao Medical Center under Section

79
MAS

Atty. Mohammad

WMSU LLB 2A

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.104Alienable 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;

80
MAS

Atty. Mohammad

WMSU LLB 2A

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

81
MAS

Atty. Mohammad

WMSU LLB 2A

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

82
MAS

Atty. Mohammad

WMSU LLB 2A

"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.

83
MAS

Atty. Mohammad

WMSU LLB 2A

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.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, YnaresSantiago, Sandoval-Gutierrez, Austria-Martinez, and Corona, JJ., concur.

84
MAS

Atty. Mohammad

WMSU LLB 2A

CRUZ VS SECRETARY OF ENVIRONMENT AND NATU RAL

RESOURCES
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 135385

December 6, 2000

ISAGANI CRUZ and CESAR EUROPA, petitioners,

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

85
MAS

Atty. Mohammad

WMSU LLB 2A

(NCIP), the government agency created under the IPRA to implement its provisions, filed on October
13, 1998 their Comment to the Petition, in which they defend the constitutionality of the IPRA and
pray that the petition be dismissed for lack of merit.
On October 19, 1998, respondents Secretary of the Department of Environment and Natural
Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed
through the Solicitor General a consolidated Comment. The Solicitor General is of the view that the
IPRA is partly unconstitutional on the ground that it grants ownership over natural resources to
indigenous peoples and prays that the petition be granted in part.
On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the authors
of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission, and the
leaders and members of 112 groups of indigenous peoples (Flavier, et. al), filed their Motion for
Leave to Intervene. They join the NCIP in defending the constitutionality of IPRA and praying for the
dismissal of the petition.
On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to Intervene
and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of the principle of
parens patriae and that the State has the responsibility to protect and guarantee the rights of those
who are at a serious disadvantage like indigenous peoples. For this reason it prays that the petition
be dismissed.
On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the Haribon
Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a motion to
Intervene with attached Comment-in-Intervention. They agree with the NCIP and Flavier, et al. that
IPRA is consistent with the Constitution and pray that the petition for prohibition and mandamus be
dismissed.
The motions for intervention of the aforesaid groups and organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their
respective memoranda in which they reiterate the arguments adduced in their earlier pleadings and
during the hearing.
Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing
Rules on the ground that they amount to an unlawful deprivation of the States ownership over lands
of the public domain as well as minerals and other natural resources therein, in violation of the
regalian doctrine embodied in Section 2, Article XII of the Constitution:
"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b)
which, in turn, defines ancestral lands;
"(2) Section 5, in relation to section 3(a), which provides that ancestral domains including inalienable
public lands, bodies of water, mineral and other resources found within ancestral domains are
private but community property of the indigenous peoples;
"(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral domains
and ancestral lands;
"(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral domains;
(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral lands;
"(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting,
extraction, development or exploration of minerals and other natural resources within the areas
claimed to be their ancestral domains, and the right to enter into agreements with nonindigenous
peoples for the development and utilization of natural resources therein for a period not exceeding
25 years, renewable for not more than 25 years; and
"(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, protect
and conserve the ancestral domains and portions thereof which are found to be necessary for critical

86
MAS

Atty. Mohammad

WMSU LLB 2A

watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover or

reforestation."2
Petitioners also content that, by providing for an all-encompassing definition of "ancestral domains"
and "ancestral lands" which might even include private lands found within said areas, Sections 3(a)
and 3(b) violate the rights of private landowners.3
In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of the
NCIP and making customary law applicable to the settlement of disputes involving ancestral
domains and ancestral lands on the ground that these provisions violate the due process clause of
the Constitution.4
These provisions are:
"(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of
ancestral domains and which vest on the NCIP the sole authority to delineate ancestral
domains and ancestral lands;
"(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is
an ancestral domain and upon notification to the following officials, namely, the Secretary of
Environment and Natural Resources, Secretary of Interior and Local Governments,
Secretary of Justice and Commissioner of the National Development Corporation, the
jurisdiction of said officials over said area terminates;
"(3) Section 63 which provides the customary law, traditions and practices of indigenous
peoples shall be applied first with respect to property rights, claims of ownership, hereditary
succession and settlement of land disputes, and that any doubt or ambiguity in the
interpretation thereof shall be resolved in favor of the indigenous peoples;
"(4) Section 65 which states that customary laws and practices shall be used to resolve
disputes involving indigenous peoples; and
"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes
involving rights of the indigenous peoples."5
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative Order
No. 1, series of 1998, which provides that "the administrative relationship of the NCIP to the Office of
the President is characterized as a lateral but autonomous relationship for purposes of policy and
program coordination." They contend that said Rule infringes upon the Presidents power of control
over executive departments under Section 17, Article VII of the Constitution.6
Petitioners pray for the following:
"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related
provisions of R.A. 8371 are unconstitutional and invalid;
"(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the
NCIP to cease and desist from implementing the assailed provisions of R.A. 8371 and its
Implementing Rules;
"(3) The issuance of a writ of prohibition directing the Secretary of the Department of
Environment and Natural Resources to cease and desist from implementing Department of
Environment and Natural Resources Circular No. 2, series of 1998;
"(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management
to cease and desist from disbursing public funds for the implementation of the assailed
provisions of R.A. 8371; and
"(5) The issuance of a writ of mandamus commanding the Secretary of Environment and
Natural Resources to comply with his duty of carrying out the States constitutional mandate
to control and supervise the exploration, development, utilization and conservation of
Philippine natural resources."7

87
MAS

Atty. Mohammad

WMSU LLB 2A

After due deliberation on the petition, the members of the Court voted as follows:
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice
and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged
provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged
provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative Order
No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57 of the
IPRA which he contends should be interpreted as dealing with the large-scale exploitation of natural
resources and should be read in conjunction with Section 2, Article XII of the 1987 Constitution. On
the other hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not
raise a justiciable controversy and petitioners do not have standing to question the constitutionality
of R.A. 8371.
Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a
separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions
of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of Sections 58, 59,
65, and 66 of the law, which he believes must await the filing of specific cases by those whose rights
may have been violated by the IPRA. Justice Vitug also filed a separate opinion expressing the view
that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena,
Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban and Vitug.
As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case
was redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly,
pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.
Attached hereto and made integral parts thereof are the separate opinions of Justices Puno, Vitug,
Kapunan, Mendoza, and Panganiban.
SO ORDERED.

88
MAS

Atty. Mohammad

WMSU LLB 2A

AYOG VS CUSI
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-46729 November 19, 1982
LAUSAN AYOG, BENITO AYOG, DAMASO AYOG, JULIO AYOG, SEGUNDA AYOG, VICENTE
ABAQUETA, BERNARDINO ADORMEO, VIDAL ALBANO, FELICIANO ARIAS, ANTONIO
BALDOS, MAXIMO BALDOS, ROMERO BINGZON, EMILIO CADAYDAY, FRUCTUOSO CHUA,
SR., HERACLEO CHUA, GUILLERMO DAGOY, ABDON DEIMOS, NICASIO DE LEON, JULIANA
VDA. DE DIANNA, DEMOCRITO DEVERO, ALFREDO DIVINAGRACIA, ESTEBAN
DIVINAGRACIA, LEODEGARDIO DIVINAGRACIA, NELLO DIVINAGRACIA, MERQUIADES
EMBERADOR, JESUS EMPERADO, PORFERIO ENOC, SOFRONIO ENOC, RAFAEL GAETOS,
NICOLAS GARLET, TRINIDAD GARLET, FORTUNATA GEONZON, NICOLADA NAQUILA,
TORIBIO NAQUILA, EFREN OKAY, ELPIDIO OKAY, SR., DIEGO ONGRIA, ERNESTO
PANARES, VICENTE PATULOT, IGNACIA RIBAO, JUANO RICO, JESUS ROSALITA,
ARMANDO TANTE and ANSELMO VALMORES, petitioners,
vs.
JUDGE VICENTE N. CUSI, JR., Court of First Instance of Davao, Branch I, PROVINCIAL
SHERIFF OF DAVAO, and BINAN DEVELOPMENT CO., INC., respondents. MINISTER OF
NATURAL RESOURCES and DIRECTOR OF LANDS, intervenors.
AQUINO, J.:
This case is about the application of section 11, Article XIV of the 1973 Constitution (disqualifying a
private corporation from purchasing public lands) to a 1953 sales award made by the Bureau of
Lands, for which a sales patent and Torrens title were issued in 1975, and to the 1964 decision of
the trial court, ejecting some of the petitioners from the land purchased, which decision was affirmed
in 1975 by the Court of Appeals. That legal question arises under the following facts:
On January 21, 1953, the Director of Lands, after a bidding, awarded to Bian Development Co.,
Inc. on the basis of its 1951 Sales Application No. V-6834 Cadastral Lot No. 281 located at Barrio
Tamugan, Guianga (Baguio District), Davao City with an area of about two hundred fifty hectares.
Some occupants of the lot protested against the sale. The Director of Lands in his decision of August
30, 1957 dismissed the protests and ordered the occupants to vacate the lot and remove their
improvements. No appeal was made from that decision.
The Director found that the protestants (defendants in the 1961 ejectment suit, some of whom are
now petitioners herein) entered the land only after it was awarded to the corporation and, therefore,
they could not be regarded as bona fide occupants thereof. The Director characterized them as
squatters. He found that some claimants were fictitious persons (p. 30, Rollo of L-43505, Okay vs.
CA). He issued a writ of execution but the protestants defied the writ and refused to vacate the land
(p. 28, Rollo of L-43505, Okay vs. CA). **
Because the alleged occupants refused to vacate the land, the corporation filed against them on
February 27, 1961 in the Court of First Instance of Davao, Civil Case No. 3711, an ejectment suit
(accion publiciana). The forty defendants were Identified as follows:
1. Vicente Abaqueta 21. Eniego Garlic
2. Candido Abella 22. Nicolas Garlic
3. Julio Ayog 23. Rufo Garlic
4. Arcadio Ayong 24. Alfonso Ibales
5. Generoso Bangonan 25. Julian Locacia
6. Lomayong Cabao 26. Filomeno Labantaban

89
MAS

Atty. Mohammad

WMSU LLB 2A

7. Jose Catibring 27. Arcadio Lumantas

8. Teodolfo Chua 28. Santos Militante
9. Guillermo Dagoy 29. Toribio Naquila
10. Anastacia Vda. de Didal 30. Elpidio Okay
11. Alfredo Divinagracia 31. Guillermo Omac
12. Silverio Divinagracia 32. Emilio Padayday
13. Galina Edsa 33. Marcosa Vda. de Rejoy
14. Jesus Emperado 34. Lorenzo Rutsa
15. Porfirio Enoc 35. Ramon Samsa
16. Benito Ente 36. Rebecca Samsa
17. German Flores 37. Alfeao Sante
18. Ciriaco Fuentes 38. Meliton Sante
19. Pulong Gabao 39. Amil Sidaani
20. Constancio Garlic 40. Cosme Villegas
That ejectment suit delayed the issuance of the patent. The trial court found that the protests of
twenty of the abovenamed defendants were among those that were dismissed by the Director of
Lands in his 1957 decision already mentioned.
On July 18, 1961 the purchase price of ten thousand pesos was fully paid by Binan Development
Co., Inc. OnNovember 10, 1961, an official of the Bureau of Lands submitted a final investigation
report wherein it was stated that the corporation had complied with the cultivation and other
requirements under the Public Land Law and had paid the purchase price of the land (p. 248, Rollo).
It was only more than thirteen years later or on August 14, 1975 when Sales Patent No. 5681 was
issued to the corporation for that lot with a reduced area of 175.3 hectares. The patent was
registered. Original Certificate of Title No. P-5176 was issued to the patentee.
The Director of Lands in his memorandum dated June 29, 1974 for the Secretary of Natural
Resources, recommending approval of the sales patent, pointed out that the purchaser corporation
had complied with the said requirements long before the effectivity of the Constitution, that the land
in question was free from claims and conflicts and that the issuance of the patent was in conformity
with the guidelines prescribed in Opinion No. 64, series of 1973, of Secretary of Justice Vicente
Abad Santos and was an exception to the prohibition in section 11, Article XIV of the Constitution (p.
258, Rollo).
Secretary of Natural Resources Jose J. Leido, Jr., in approving the patent on August 14, 1975, noted
that the applicant had acquired a nested right to its issuance (p. 259, Rollo).
Before that patent was issued, there was a trial in the ejectment suit. Fifteen defendants (out of
forty), namely, Julio Ayog, Guillermo Bagoy, Generoso Bangonan, Jose Catibring, Porfirio Enoc,
Jose Emperado, Arcadio Lomanto, Toribio Naquila, Elpidio Okay, Alfeo Sante, Meliton Sante,
Ramon Samsa, Rebecca Samsa, Arcadio Sarumines and Felix Tahantahan, testified that they
entered the disputed land long before 1951 and that they planted it to coconuts, coffee, jackfruit and
other fruit trees. (p. 28, Record on Appeal).
The trial court did not give credence to their testimonies. It believed the report of an official of the
Bureau of Lands that in 1953 the land was free from private claims and conflicts and it gave much

90
MAS

Atty. Mohammad

WMSU LLB 2A

weight to the decision of the Director of Lands dismissing the protests of the defendants against the
sales award (p. 30, Record on Appeal).
Furthermore, the trial court during its ocular inspection of the land on November 8, 1964 found that
the plantings on the land could not be more than ten years old, meaning that they were not existing
in 1953 when the sales award was made. Hence, the trial court ordered the defendants to vacate the
land and to restore the possession thereof to tile company. The Court of Appeals affirmed that
judgment on December 5, 1975 in its decision in Binan Development Co., Inc. vs, Sante, CA-G.R.
No. 37142- R. The review of the decision was denied by this Court on May 17, 1976 in Elpidio Okay
vs. Court of Appeals, L-43505.
After the record was remanded to the trial court, the corporation filed a motion for execution. The
defendants, some of whom are now petitioners herein, opposed the motion. They contended that the
adoption of the Constitution, which took effect on January 17, 1973, was a supervening fact which
rendered it legally impossible to execute the lower court's judgment. They invoked the constitutional
prohibition, already mentioned, that "no private corporation or association may hold alienable lands
of the public domain except by lease not to exceed one thousand hectares in area."
The lower court suspended action on the motion for execution because of the manifestation of the
defendants that they would file a petition for prohibition in this Court. On August 24, 1977, the instant
prohibition action was filed. Some of the petitioners were not defendants in the ejectment case.
We hold that the said constitutional prohibition has no retroactive application to the sales application
of Bian Development Co., Inc. because it had already acquired a vested right to the land applied for
at the time the 1973 Constitution took effect.
That vested right has to be respected. lt could not be abrogated by the new Constitution. Section 2,
Article XIII of the 1935 Constitution allows private corporations to purchase public agricultural lands
not exceeding one thousand and twenty-four hectares. Petitioners' prohibition action is barred by the
doctrine of vested rights in constitutional law.
"A right is vested when the right to enjoyment has become the property of some particular person or
persons as a present interest" (16 C.J.S. 1173). It is "the privilege to enjoy property legally vested, to
enforce contracts, and enjoy the rights of property conferred by the existing law" (12 C.J. 955, Note
46, No. 6) or "some right or interest in property which has become fixed and established and is no
longer open to doubt or controversy" (Downs vs. Blount 170 Fed. 15, 20, cited in Balboa vs.
Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights. "A state may not impair vested
rights by legislative enactment, by the enactment or by the subsequent repeal of a municipal
ordinance, or by a change in the constitution of the State, except in a legitimate exercise of the
police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses the concept of present fixed
interest, which in right reason and natural justice should be protected against arbitrary State action,
or an innately just and imperative right which an enlightened free society, sensitive to inherent and
irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania
Greyhound Lines, Inc. vs. Rosenthal, 192 Atl. 2nd 587).
Secretary of Justice Abad Santos in his 1973 opinion ruled that where the applicant, before the
Constitution took effect, had fully complied with all his obligations under the Public Land Act in order
to entitle him to a sales patent, there would seem to be no legal or equitable justification for refusing
to issue or release the sales patent (p. 254, Rollo).
In Opinion No. 140, series of 1974, he held that as soon as the applicant had fulfilled the
construction or cultivation requirements and has fully paid the purchase price, he should be deemed
to have acquired by purchase the particular tract of land and to him the area limitation in the new
Constitution would not apply.
In Opinion No. 185, series of 1976, Secretary Abad Santos held that where the cultivation
requirements were fulfilled before the new Constitution took effect but the full payment of the price
was completed after January 17, 1973, the applicant was, nevertheless, entitled to a sales patent (p.
256, Rollo).

91
MAS

Atty. Mohammad

WMSU LLB 2A

Such a contemporaneous construction of the constitutional prohibition by a high executive official

carries great weight and should be accorded much respect. It is a correct interpretation of section 11
of Article XIV.
In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the right of
the corporation to purchase the land in question had become fixed and established and was no
longer open to doubt or controversy.
Its compliance with the requirements of the Public Land Law for the issuance of a patent had the
effect of segregating the said land from the public domain. The corporation's right to obtain a patent
for that land is protected by law. It cannot be deprived of that right without due process (Director of
Lands vs. CA, 123 Phil. 919).
As we cannot review the factual findings of the trial court and the Court of Appeals, we cannot
entertain petitioners' contention that many of them by themselves and through their predecessors-ininterest have possessed portions of land even before the war. They should have filed homestead or
free patent applications.
Our jurisdiction is limited to the resolution of the legal issue as to whether the 1973 Constitution is an
obstacle to the implementation of the trial court's 1964 final and executory judgment ejecting the
petitioners. On that issue, we have no choice but to sustain its enforceability.
Nevertheless, in the interest of social justice, to avoid agrarian unrest and to dispel the notion that
the law grinds the faces of the poor, the administrative authorities should find ways and means of
accommodating some of the petitioners if they are landless and are really tillers of the soil who in the
words of President Magsaysay deserve a little more food in their stomachs, a little more shelter over
their heads and a little more clothing on their backs. The State should endeavor to help the poor who
find it difficult to make both ends meet and who suffer privations in the universal struggle for
existence.
A tiller of the soil is entitled to enjoy basic human rights, particularly freedom from want. The
common man should be assisted in possessing and cultivating a piece of land for his sustenance, to
give him social security and to enable him to achieve a dignified existence and become an
independent, self-reliant and responsible citizen in our democratic society.
To guarantee him that right is to discourage him from becoming a subversive or from rebelling
against a social order where, as the architect of the French Revolution observed, the rich are
choking with the superfluities of life but the famished multitude lack the barest necessities.
Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by
private corporations is to equitably diffuse land ownership or to encourage "owner-cultivatorship and
the economic family- size farm" and to prevent a recurrence of cases like the instant case. Huge
landholdings by corporations or private persons had owned social unrest.
Petitioners' counsel claims that Bian Development Co., Inc. seeks to execute the judgment in Civil
Case No. 3711, the ejectment suit from which this prohibition case arose, against some of
the petitioners who were not defendants in that suit (p. 126, Rollo).
Those petitioners are not successors-in-interest of the defendants in the ejectment suit. Nor do they
derive their right of possession from the said defendants. Those petitioners occupy portions of the
disputed land distinct and separate from the portions occupied by the said defendants.
We hold that judgment cannot be enforced against the said petitioners who were not defendants in
that litigation or who were not summoned and heard in that case. Generally, "it is an axiom of the law
that no man shall be affected by proceedings to which he is a stranger" (Ed. A. Keller & Co. vs
Ellerman & Bucknall Steamship Co., 38 Phil. 514, 520).
To enforce the judgment against those who were not parties to the case and who occupy portions of
the disputed land distinct and separate from the portions occupied by the defendants in the
ejectment suit, would be violative of due process of law, the law which, according to Daniel Webster
in his argument in the Dartmouth College case, is the law of the land, a law which hears before it
condemns, which proceeds upon inquiry and renders judgment only after trial. "The meaning is, that
every citizen shall hold his life, liberty, property, and immunities, under the protection of the general

92
MAS

Atty. Mohammad

WMSU LLB 2A

rules which govern society." (Cited in Lopez vs. Director of Lands, 47 Phil. 23, 32. See Gatchalian
vs. Arlegui, L-35615 and Tang Tee vs. Arlegui, L-41360, February 17, 1977, 75 SCRA 234 and
Berses vs. Villanueva, 25 Phil. 473.)
Contempt incident.-During the pendency of this case, or at about four o'clock in the morning of
December 12, 1978, Ciriaco Tebayan, Domingo Nevasca, Rogelio Duterte and Sofronio Etac,
employees of the Crown Fruits and Cannery Corporation, plowed or bulldozed with their tractors a
portion of the disputed land which was occupied by Melquiades Emberador, one of the petitioners
herein. The disputed land was leased by Bian Development Co., Inc. to the canning corporation.
The four tractor drivers destroyed the improvements thereon worth about five thousand pesos
consisting of coffee, coconut and banana plants. Emberador was in the hospital at the time the
alleged destruction of the improvements occurred. However, it should be noted that Emberador was
not expressly named as a defendant in the ejectment suit. Apparently, he is not included in the trial
court's decision although he was joined as a co-petitioner in this prohibition case.
The petitioners in their motion of January 11, 1979 asked that the four tractor drivers and Honesto
Garcia, the manager of Bian Development Co., Inc., be declared in contempt of court for having
disregarded the restraining order issued by this Court on August 29, 1977, enjoining specifically
Judge Vicente N. Cusi and the provincial sheriff from enforcing the decision in the ejectment suit,
Civil Case No. 3711 (pp. 46-47, 138- 141, Rollo).
Garcia and the four drivers answered the motion. The incident was assigned for hearing to Judge
Antonio M. Martinez of the Court of First Instance of Davao. Judge Martinez found that the plowing
was made at the instance of Garcia who told the barrio captain, petitioner Lausan Ayog, a Bagobo,
that he (Garcia) could not wait anymore for the termination of this case.
The record shows that on April 30, 1979 or four months after the said incident, Emberador, in
consideration of P3,500, as the value of the improvements on his land, executed a quitclaim in favor
of the Crown Fruits and Cannery Corporation (Exh. 1, 2 and 3).
We hold that no contempt was committed. The temporary restraining order was not directed to Bian
Development Co., Inc. its officers, agents or privies. Emberador was not named specifically in the
trial court's judgment as one of the occupants to be ejected.
For the redress of whatever wrong or delict was committed against Emberador by reason of the
destruction of his improvements, his remedy is not in a contempt proceeding but in some appropriate
civil and criminal actions against the destroyer of the improvements.
In resume, we find that there is no merit in the instant prohibition action. The constitutional
prohibition relied upon by the petitioners as a ground to stop the execution of the judgment in the
ejectment suit has no retroactive application to that case and does not divest the trial court of
jurisdiction to enforce that judgment.
WHEREFORE, the petition is dismissed for lack of merit but with the clarification that the said
judgment cannot be enforced against those petitioners herein who were not defendants in the
ejectment case, Civil Case No. 3711, and over whom the lower court did not acquire jurisdiction. The
contempt proceeding is also dismissed. No costs.
SO ORDERED.
Concepcion, Jr., Guerrero, Abad Santos, Relova and Gutierrez, Jr., JJ., concur.
Escolin, J., took no part.

93
MAS

Atty. Mohammad

WMSU LLB 2A

ONG CHING PO VS CA
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. Nos. 113472-73 December 20, 1994

ONG CHING PO, YU SIOK LIAN DAVID ONG and JIMMY ONG, petitioners,
vs.
COURT OF APPEALS and SOLEDAD PARIAN, respondents.
Bautista, Salva, Arrieta, Salva for petitioner.
Arthem Maceda Potian for private respondent.

QUIASON, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court of the Decision
of the Court of Appeals dated July 15, 1993, which dismissed the petition for certiorari in CA-G.R.
CV Nos. 28391-92.
I
On July 23, 1947, Ong Joi Jong sold a parcel of land located at Fundidor Street, San Nicolas to
private respondent Soledad Parian, the wife of Ong Yee. The latter, the brother of petitioner Ong
Ching Po, died in January 1983; while petitioner Ong Ching Po died in October 1986. The said sale
was evidenced by a notarized Deed of Sale written in English. Subsequently, the document was
registered with the Register of Deeds of Manila, which issued Transfer Certificate of Title No. 9260
dated September 2, 1947 in the name of private respondent.
According to private respondent, she entrusted the administration of the lot and building to petitioner
Ong Ching Po when she and her husband settled in Iloilo. When her husband died, she demanded
that the lot be vacated because she was going to sell it. Unfortunately, petitioners refused to vacate
the said premises.
On March 19, 1984, private respondent filed a case for unlawful detainer against petitioner Ong
Ching Po before the Metropolitan Trial Court of Manila, Branch 26. The inferior court dismissed her
case. The dismissal was affirmed by the Regional Trial Court, Branch 10, Manila. The decision of the
Regional Trial Court was, in turn, affirmed by the Court of Appeals, which dismissed the petition. The
decision of the Court of Appeals became final and executory.
Petitioners, on the other hand, claimed that on July 23, 1946, petitioner Ong Ching Po bought the
said parcel of land from Ong Joi Jong. The sale was evidenced by a photo copy of a Deed of Sale
written in Chinese with the letter head "Sincere Trading Co." (Exh. "B"). An English translation of
said document (Exh. "C") read as follows:
Deed of Sale
I, Ong Joi Jong, a party to this Deed of Sale hereby sell in absolutely (sic) manner a
lot located on No. 4 Fundidor Street, San Nicolas an (sic) area consisting 213 square
meters including a one-story house erected thereon unto Mr. Ong Ching Po for the
sum of P6,000.00 the receipt of which is hereby acknowledged by me and
consequently I have executed and signed the government registered title (sic) the
said lot inclusive of the house erected thereon, now belong (sic) to Mr. Ong Ching Po

94
MAS

Atty. Mohammad

WMSU LLB 2A

unequivocally. And the purpose of this document is to precisely serve as proof of the
sale.
Addendum: I have acceded to the request of Mr. Ong Ching Po into signing another
document in favor of Soledad Parian (She is the Filipino wife of Ong Yee, brother of
Ong Ching Po) for the purpose of facilitating the issuance of the new title by the City
Register of Deeds and for the reason that he is not yet a Filipino. I certify to the
truthfulness of this fact.
Lot
Seller:
Ong
Joi
Jong
(Exhibits for the plaintiff, p. 4)
On December 6, 1983, petitioner Ong Ching Po executed a Deed of Absolute Sale conveying to his
children, petitioners Jimmy and David Ong, the same property sold by Ong Joi Jong to private
respondent in 1947. On December 12 1985, petitioners Ong Ching Po, Jimmy Ong and David Ong
filed an action for reconveyance and damages against private respondent in the Regional Trial
Court, Branch 53, Manila, docketed as Case No. 85-33962.
On July 26, 1986, private respondent filed an action for quieting of title against petitioners Ong Ching
Po and his wife, petitioner Yu Siok Lian, in the Regional Trial Court, Branch 58, Manila, docketed as
Civil Case No.
86-36818. Upon her motion, the case was consolidated with Civil Case No.
85-33962. On May 30 1990, the trial court rendered a decision in favor of private respondent. On
appeal by petitioners to the Court of Appeals, the said court affirmed the decision of the Regional
Trial Court.
Hence, this petition.
II
According to petitioners, the Court of Appeals erred:
(1) When it gave full faith and credit to the Deed of Sale (Exh. "A") in favor of private
respondent, instead of the Deed of Sale (Exh. "B" and its translation, Exh. "C") in
favor of petitioner Ong Ching Po.
(2) When it concluded that the acts of petitioners were not acts of ownership; and
(3) When it ruled that no express nor implied trust existed between petitioners and
private respondent (Rollo, pp. 17-18).
As stated by petitioners themselves, what is in dispute ". . . is not so much as to which between
Exhibit "A" and "Exhibit "B" is more weighty, but whether this document is what it purports to be (i.e.,
a deed of conveyance in favor of Soledad Parian [private respondent] or it was only resorted to or
executed as a subterfuge because the real buyer (Ong Ching Po) was an alien and it was agreed
upon between Ong Ching Po and his brother (Ong Yee, Soledad Parian's husband) that the land be
registered in the name of Soledad Parian in order to avoid legal complications and to facilitate
registration and transfer and that the said title would be transferred by Soledad to Ong Ching Po or
his successors-in-interest and that she would be holding the title in trust for him" (Rollo, pp. 19-20).
We cannot go along with the claim that petitioner Ong Ching Po merely used private respondent as
a dummy to have the title over the parcel of land registered in her name because being an alien he
was disqualified to own real property in the Philippines. To sustain such an outrageous contention
would be giving a high premium to a violation of our nationalization laws.
Assuming that Exhibit "B" is in existence and that it was duly executed, still petitioners cannot claim
ownership of the disputed lot by virtue thereof.

95
MAS

Atty. Mohammad

WMSU LLB 2A

Section 5, Article XIII of the 1935 Constitution provides, as follows:

Save in cases of hereditary succession, no private agricultural land shall be
transferred or assigned except to individuals, corporations, or associations qualified
to acquire or hold lands of the public domain in the Philippines.
Section 14, Article XIV of the 1973 Constitution provides, as follows:
Save in cases of hereditary succession, no private land shall be transferred or
conveyed except to individuals, corporations, or associations qualified to acquire or
hold lands in the public domain.
Section 7, Article XII of the 1987 Constitution provides:
Save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations, or associations qualified to acquire or
hold lands in the public domain.
The capacity to acquire private land is made dependent upon the capacity to acquire or hold lands of
the public domain. Private land may be transferred or conveyed only to individuals or entities
"qualified to acquire lands of the public domain" (II Bernas, The Constitution of the Philippines 439440 [1988 ed.]).
The 1935 Constitution reserved the right to participate in the "disposition, exploitation, development
and utilization" of all "lands of the public domain and other natural resources of the Philippines" for
Filipino citizens or corporations at least sixty percent of the capital of which was owned by Filipinos.
Aliens, whether individuals or corporations, have been disqualified from acquiring public lands;
hence, they have also been disqualified from acquiring private lands.
Petitioner Ong Ching Po was a Chinese citizen; therefore, he was disqualified from acquiring and
owning real property. Assuming that the genuineness and due execution of Exhibit "B" has been
established, the same is null and void, it being contrary to law.
On the other end of the legal spectrum, the deed of sale executed by Ong Joi Jong in favor of private
respondent (Exh. "A") is a notarized document.
To remove the mantle of validity bestowed by law on said document, petitioners claim that private
respondent admitted that she did not pay anything as consideration for the purported sale in her
favor. In the same breath, petitioners said that private respondent implied in her deposition that it
was her husband who paid for the property. It appears, therefore, that the sale was financed out of
conjugal funds and that it was her husband who handled the transaction for the purchase of the
property. Such transaction is a common practice in Filipino-family affairs.
It is not correct to say that private respondent never took possession of the property. Under the law,
possession is transferred to the vendee by virtue of the notarized deed of conveyance. Under Article
1498 of the Civil Code of the Philippines, "when the sale is made through a public instrument, the
execution thereof shall be equivalent to the delivery of the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred." If what petitioners meant was that private
respondent never lived in the building constructed on said land, it was because her family had
settled in Iloilo.
There is no document showing the establishment of an express trust by petitioner Ong Ching Po as
trustor and private respondent as trustee. Not even Exhibit "B" can be considered as such a
document because private respondent, the registered owner of the property subject of said "deed of
sale," was not a party thereto. The oral testimony to prove the existence of the express trust will not
suffice. Under Article 1443 of the Civil Code of the Philippines, "No express trust concerning an
immovable or any interest therein may be proved by parole evidence."
Undaunted, petitioners argue that if they cannot prove an express trust in writing, they can prove an
implied trust orally. While an implied trust may be proved orally (Civil Code of the Philippines, Art.
1457), the evidence must be trustworthy and received by the courts with extreme caution, because
such kind of evidence may be easily fabricated (Salao v. Salao, 70 SCRA 65 [1976]). It cannot be
made to rest on vague and uncertain evidence or on loose, equivocal or indefinite declarations (Cf.

96
MAS

Atty. Mohammad

WMSU LLB 2A

De Leon v. Molo-Peckson, et al., 116 Phil. 1267 [1962]). Petitioners do not claim that Ong Yee was
not in a financial position to acquire the land and to introduce the improvements thereon. On the
other hand, Yu Siok Lian, the wife of petitioner Ong Ching Po, admitted in her testimony in court that
Ong Yee was a stockholder of Lam Sing Corporation and was engaged in business.
The Court of Appeals did not give any credence to Exhibit "B" and its translation, Exhibit "C",
because these documents had not been properly authenticated.
Under Section 4, Rule 130 of the Revised Rules of Court:
Secondary Evidence when Original is lost or destroyed. When the original writing has
been lost or destroyed, or cannot be produced in court, upon proof of its execution
and lost or destruction, or unavailability, its contents may be proved by a copy, or by
a recital of its contents in some authentic document, or by the recollection of the
witnesses.
Secondary evidence is admissible when the original documents were actually lost or destroyed. But
prior to the introduction of such secondary evidence, the proponent must establish the former
existence of the document. The correct order of proof is as follows: existence; execution; loss;
contents. This order may be changed if necessary in the discretion of the court (De Vera v. Aguilar,
218 SCRA 602 [1993]).
Petitioners failed to adduce evidence as to the genuineness and due execution of the deed of sale,
Exhibit "B".
The due execution of the document may be established by the person or persons who executed it;
by the person before whom its execution was acknowledged; or by any person who was present and
saw it executed or who after its execution, saw it and recognized the signatures; or by a person to
whom the parties to the instrument had previously confessed the execution thereof (De Vera v.
Aguilar, supra).
Petitioner Yu Siok Lian testified that she was present when said document was executed, but the
trial court rejected her claim and held:
If it is true that she was present, why did she not sign said document, even merely as
a witness? Her oral testimony is easy to concoct or fabricate. Furthermore, she was
married only on September 6, 1946 to the plaintiff, Ong Ching Po, in Baguio City
where she apparently resided, or after the deed of sale was executed. The Court
does not believe that she was present during the execution and signing of the deed
of sale involved therein, notwithstanding her pretensions to the contrary (Decision p.
6, Records p. 414).
As to the contention of petitioners that all the tax receipts, tax declaration, rental receipts, deed of
sale (Exh. "B") and transfer certificate of title were in their possession, private respondent explained
that she and her husband entrusted said lot and building to petitioners when they moved to Iloilo.
As observed by the Court of Appeals:
We find, however, that these acts, even if true, are not necessarily reflective of
dominion, as even a mere administrator or manager may lawfully perform them
pursuant to his appointment or employment (Rollo,
p. 10).
It is markworthy that all the tax receipts were in the name of private respondent and her husband.
The rental receipts were also in the name of her husband.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.

97
MAS

Atty. Mohammad

WMSU LLB 2A

HALILI VS CA
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 113539 March 12, 1998

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

PANGANIBAN, J.:
The factual findings of a trial court, when affirmed by the Court of Appeals, may no longer be
reviewed and reversed by this Court in a petition for review under Rule 45 of the Rules of Court. The
transfer of an interest in a piece of land to an alien may no longer be assailed on constitutional
grounds after the entire parcel has been sold to a qualified citizen.
The Case
These familiar and long-settled doctrines are applied by this Court in denying this petition under Rule
45 to set aside the Decision 1 of the Court of Appeals 2 in CA-GR CV No. 37829 promulgated on
September 14, 1993, the dispositive portion of which states: 3

WHEREFORE, and upon all the foregoing, the Decision of the court below dated
March 10, 1992 dismissing the complaint for lack of merit is AFFIRMED without
pronouncement as to costs.
The Facts
The factual antecedents, as narrated by Respondent Court, are not disputed by the parties. We
reproduce them in part, as follows:
Simeon de Guzman, an American citizen, died sometime in 1968, leaving real
properties in the Philippines. His forced heirs were his widow, defendant appellee
[herein private respondent] Helen Meyers Guzman, and his son, defendant appellee
[also herein private respondent] David Rey Guzman, both of whom are also
American citizens. On August 9, 1989, Helen executed a deed of quitclaim (Annex AComplaint), assigning [,] transferring and conveying to David Rey all her rights, titles
and interests in and over six parcels of land which the two of them inherited from
Simeon.
Among the said parcels of land is that now in litigation, . . . situated in Bagbaguin,
Sta. Maria, Bulacan, containing an area of 6,695 square meters, covered by Transfer
Certificate of Title No. T-170514 of the Registry of Deeds of Bulacan. The quitclaim
having been registered, TCT No. T-170514 was cancelled and TCT No. T-120259
was issued in the name of appellee David Rey Guzman.
On February 5, 1991, David Rey Guzman sold said parcel of land to defendantappellee [also herein private respondent] Emiliano Cataniag, upon which TCT No. T120259 was cancelled and TCT No. T-130721(M) was issued in the latter's name. 4
Petitioners, who are owners of the adjoining lot, filed a complaint before the Regional Trial Court of
Malolos, Bulacan, questioning the constitutionality and validity of the two conveyances between

98
MAS

Atty. Mohammad

WMSU LLB 2A

Helen Guzman and David Rey Guzman, and between the latter and Emiliano Cataniag and
claiming ownership thereto based on their right of legal redemption under Art. 1621 5 of the Civil
Code.

In its decision 6 dated March 10, 1992, 7 the trial court dismissed the complaint. It ruled that Helen
Guzman's waiver of her inheritance in favor of her son was not contrary to the constitutional prohibition
against the sale of land to an alien, since the purpose of the waiver was simply authorize David Rey
Guzman to dispose of their properties in accordance with the Constitution and the laws of the Philippines,
and not to subvert them. On the second issue, it held that the subject land was urban; hence, petitioners
had no reason to invoke their right of redemption under Art. 1621 of the Civil Code.

The Halilis sought a reversal from the Court of Appeals which, however, denied their appeal.
Respondent Court affirmed the factual finding of the trial court that the subject land was urban.
Citing Tejido vs. Zamacoma, 8 and Yap vs. Grageda, 9 it further held that, although the transfer of the
land to David Rey may have been invalid for being contrary to the Constitution, there was no more point
in allowing herein petitioners to recover the property, since it has passed on to and was thus already
owned by a qualified person.

Hence, this petition. 10

Issues
The petition submits the following assignment of errors:
. . . the Honorable Court of Appeals
1. Erred in affirming the conclusion of the trial court that the land in question is urban,
not rural
2. Erred in denying petitioners' right of redemption under Art. 1621 of the Civil Code
3. Having considered the conveyance from Helen Meyers Guzman to her son David
Rey Guzman illegal, erred in not declaring the same null and void[.] 11
The Court's Ruling
The petition has no merit.
First Issue: The Land Is Urban;
Thus, No Right of Redemption
The first two errors assigned by petitioners being interrelated the determination of the first being a
prerequisite to the resolution of the second shall be discussed together
Subject Land Is Urban
Whether the land in dispute is rural or urban is a factual question which, as a rule, is not reviewable
by this Court.12 Basic and long-settled is the doctrine that findings of fact of a trial judge, when affirmed
by the Court of Appeals, are binding upon the Supreme Court. This admits of only a few exceptions, such
as when the findings are grounded entirely on speculation, surmises or conjectures; when an inference
made by the appellate court from its factual findings is manifestly mistaken, absurd or impossible; when
there is grave abuse of discretion in the appreciation of facts; when the findings of the appellate court go
beyond the issues of the case, run contrary to the admissions of the parties to the case or fail to notice
certain relevant facts which, if properly considered, will justify a different conclusion; when there is a
misappreciation of facts; when the findings of fact are conclusions without mention of the specific
evidence on which they are based, are premised on the absence of evidence or are contradicted by
evidence on record. 13

The instant case does not fall within any of the aforecited exceptions. In fact, the conclusion of the
trial court that the subject property is urban land is based on clear and convincing evidence, as
shown in its decision which disposed thus:

99
MAS

Atty. Mohammad

WMSU LLB 2A

. . . As observed by the court, almost all the roadsides along the national ghighway
[sic] of Bagbaguin, Sta. Maria, Bulacan, are lined up with residential, commercial or
industrial establishments. Lined up along the Bagbaguin Road are factories of feeds,
woodcrafts [sic] and garments, commercial stores for tires, upholstery materials,
feeds supply and spare parts. Located therein likewise were the Pepsi-Cola
Warehouse, the Cruz Hospital, three gasoline stations, apartment buildings for
commercial purposes and construction firms. There is no doubt, therefore, that the
community is a commercial area thriving in business activities. Only a short portion of
said road [is] vacant. It is to be noted that in the Tax Declaration in the name of
Helen Meyers Guzman[,] the subject land is termed agricultural[,] while in the letter
addressed to defendant Emiliano Cataniag, dated October 3, 1991, the Land
Regulatory Board attested that the subject property is commercial and the trend of
development along the road is commercial. The Board's classification is based on the
present condition of the property and the community thereat. Said classification is far
more later [sic] than the tax declaration.14
No Ground to Invoke
Right of Redemption
In view of the finding that the subject land is urban in character, petitioners have indeed no right to
invoke Art. 1621 of the Civil Code, which presupposes that the land sought to be redeemed is rural.
The provision is clearly worded and admits of no ambiguity in construction:
Art. 1621. The owners of adjoining lands shall also have the right of redemption
when a piece of rural land, the area of which does not exceed one hectare, is
alienated, unless the grantee does not own any rural land.
xxx xxx xxx
Under this article, both lands that sought to be redeemed and the adjacent lot belonging to the
person exercising the right of redemption must be rural. If one or both are urban, the right cannot
be invoked. 15 The purpose of this provision, which is limited in scope to rural lands not exceeding one
hectare, is to favor agricultural development. 16 The subject land not being rural and, therefore, not
agricultural, this purpose would not be served if petitioners are granted the right of redemption under Art.
1621. Plainly, under the circumstances, they cannot invoke it.

Second Issue: Sale to Cataniag Valid

Neither do we find any reversible error in the appellate court's holding that the sale of the subject
land to Private Respondent Cataniag renders moot any question on the constitutionally of the prior
transfer made by Helen Guzman to her son David Rey.
True, Helen Guzman's deed of quitclaim in which she assigned, transferred and conveyed to
David Rey all her rights, titles and interests over the property she had inherited from her husband
collided with the Constitution, Article XII, Section 7 of which provides:
Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred
or conveyed except to individuals, corporations, or associations qualified to acquire
or hold lands of the public domain.
The landmark case of Krivenko vs. Register of Deeds 17 settled the issue as to who are qualified (and
disqualified) to own public as well as private lands in the Philippines. Following a long discourse
maintaining that the "public agricultural lands" mentioned in Section 1, Article XIII of the 1935
Constitution, include residential, commercial and industrial lands, the Court then stated:

Under section 1 of Article XIII [now Sec. 2, Art. XII] of the Constitution, "natural
resources, with the exception of public agricultural land, shall not be alienated," and
with respect to public agricultural lands, their alienation is limited to Filipino citizens.
But this constitutional purpose conserving agricultural resources in the hands of
Filipino citizens may easily be defeated by the Filipino citizens themselves who may
alienate their agricultural lands in favor of aliens. It is partly to prevent this result that
section 5 is included in Article XIII, and it reads as follows:

100
MAS

Atty. Mohammad

WMSU LLB 2A

Sec. 5. Save in cases of hereditary succession, no private agricultural land will be

transferred or assigned except to individuals, corporations or associations qualified to
acquire or hold lands of the public domain in the Philippines.
This constitutional provision closes the only remaining avenue through which
agricultural resources may leak into aliens' hands. It would certainly be futile to
prohibit the alienation of public agricultural lands to aliens if, after all, they may be
freely so alienated upon their becoming private agricultural lands in the hands of
Filipino citizens. Undoubtedly, as above indicated, section 5 [now Sec. 7] is intended
to insure the policy of nationalization contained in section 1 [now Sec. 2]. Both
sections must, therefore, be read together for they have the same purpose and the
same subject matter. It must be noticed that the persons against whom the
prohibition is directed in section 5 [now Sec. 7] are the very same persons who under
section 1 [now Sec. 2] are disqualified "to acquire or hold lands of the public domain
in the Philippines." And the subject matter of both sections is the same, namely, the
non transferability of "agricultural land" to aliens . . . . 18
The Krivenko rule was recently reiterated in Ong Ching Po vs. Court of Appeals, 19 which involves a
sale of land to a Chinese citizen. The Court sad:

The capacity to acquire private land is made dependent upon the capacity to acquire
or hold lands of the public domain. Private land may be transferred or conveyed only
to individuals or entities "qualified to acquire lands of the public domain" (II Bernas,
The Constitution of the Philippines 439-440 [1988 ed.]).
The 1935 Constitution reserved the right to participate in the "disposition,
exploitation, development and utilization" of all "lands of the public domain and other
natural resources of the Philippines" for Filipino citizens or corporations at least sixty
percent of the capital of which was owned by Filipinos. Aliens, whether individuals or
corporations, have been disqualified from acquiring public lands; hence, they have
also been disqualified from acquiring private lands. 20
In fine, non-Filipinos cannot acquire or hold title to private lands or to lands of the public domain,
except only by way of legal succession. 21
But what is the effect of a subsequent sale by the disqualified alien vendee to a qualified Filipino
citizen? This is not a novel question. Jurisprudence is consistent that "if land is invalidly transferred
to an alien who subsequently becomes a citizen or transfers it to a citizen, the flaw in the original
transaction is considered cured and the title of the transferee is rendered valid." 22
Thus, in United Church Board of Word Ministries vs. Sebastian, 23 in which an alien resident who
owned properties in the Philippines devised to an American non-stock corporation part of his shares of
stock in a Filipino corporation that owned a tract of land in Davao del Norte, the Court sustained the
invalidity of such legacy. However, upon proof that ownership of the American corporation has passed on
to a 100 percent Filipino corporation, the Court ruled that the defect in the will was "rectified by the
subsequent transfer of the property."

The present case is similar to De Castro vs. Tan. 24 In that case, a residential lot was sold to a Chinese.
Upon his death, his widow and children executed an extrajudicial settlement, whereby said lot was
allotted to one of his sons who became a naturalized Filipino. The Court did not allow the original vendor
to have the sale annulled and to recover the property, for the reason that the land has since become the
property of a naturalized Filipino citizen who is constitutionally qualified to own land.

Likewise, in the cases of Sarsosa vs. Cuenco, 25 Godinez vs. Pak Luen, 26 Vasquez vs. Li Seng
Giap 27 and Herrera vs. Luy Kim Guan, 28 which similarly involved the sale of land to an alien who
thereafter sold the same to a Filipino citizen, the Court again applied the rule that the subsequent sale
can no longer be impugned on the basis of the invalidity of the initial transfer.

The rationale of this principle was explained in Vasquez vs. Li Seng Giap thus:
. . . [I]f the ban on aliens from acquiring not only agricultural but also urban lands, as
construed by this Court in the Krivenko case, is to preserve the nation's lands for
future generations of Filipinos, that aim or purpose would not be thwarted but

101
MAS

Atty. Mohammad

WMSU LLB 2A

achieved by making lawful the acquisition of real estate by aliens who became
Filipino citizens by naturalization. 29
Accordingly, since the disputed land is now owned by Private Respondent Cataniag, a Filipino
citizen, the prior invalid transfer can no longer be assailed. The objective of the constitutional
provision to keep our land in Filipino hands has been served.
WHEREFORE, the petition is hereby DENIED. The challenged Decision is AFFIRMED. Costs
against petitioner.
SO ORDERED.

102
MAS

Atty. Mohammad

WMSU LLB 2A

PBC VS LIU SHE

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17587

September 12, 1967

PHILIPPINE BANKING CORPORATION, representing the estate of JUSTINA SANTOS Y

CANON FAUSTINO, deceased, plaintiff-appellant,
vs.
LUI SHE in her own behalf and as administratrix of the intestate estate of Wong Heng,
deceased,defendant-appellant.
Nicanor S. Sison for plaintiff-appellant.
Ozaeta, Gibbs & Ozaeta for defendant-appellant.

CASTRO, J.:
Justina Santos y Canon Faustino and her sister Lorenzo were the owners in common of a piece of
land in Manila. This parcel, with an area of 2,582.30 square meters, is located on Rizal Avenue and
opens into Florentino Torres street at the back and Katubusan street on one side. In it are two
residential houses with entrance on Florentino Torres street and the Hen Wah Restaurant with
entrance on Rizal Avenue. The sisters lived in one of the houses, while Wong Heng, a Chinese,
lived with his family in the restaurant. Wong had been a long-time lessee of a portion of the property,
paying a monthly rental of P2,620.
On September 22, 1957 Justina Santos became the owner of the entire property as her sister died
with no other heir. Then already well advanced in years, being at the time 90 years old, blind,
crippled and an invalid, she was left with no other relative to live with. Her only companions in the
house were her 17 dogs and 8 maids. Her otherwise dreary existence was brightened now and then
by the visits of Wong's four children who had become the joy of her life. Wong himself was the
trusted man to whom she delivered various amounts for safekeeping, including rentals from her
property at the corner of Ongpin and Salazar streets and the rentals which Wong himself paid as
lessee of a part of the Rizal Avenue property. Wong also took care of the payment; in her behalf, of
taxes, lawyers' fees, funeral expenses, masses, salaries of maids and security guard, and her
household expenses.
"In grateful acknowledgment of the personal services of the lessee to her," Justina Santos executed
on November 15, 1957 a contract of lease (Plff Exh. 3) in favor of Wong, covering the portion then
already leased to him and another portion fronting Florentino Torres street. The lease was for 50
years, although the lessee was given the right to withdraw at any time from the agreement; the
monthly rental was P3,120. The contract covered an area of 1,124 square meters. Ten days later
(November 25), the contract was amended (Plff Exh. 4) so as to make it cover the entire property,
including the portion on which the house of Justina Santos stood, at an additional monthly rental of
P360. For his part Wong undertook to pay, out of the rental due from him, an amount not exceeding
P1,000 a month for the food of her dogs and the salaries of her maids.
On December 21 she executed another contract (Plff Exh. 7) giving Wong the option to buy the
leased premises for P120,000, payable within ten years at a monthly installment of P1,000. The
option, written in Tagalog, imposed on him the obligation to pay for the food of the dogs and the
salaries of the maids in her household, the charge not to exceed P1,800 a month. The option was
conditioned on his obtaining Philippine citizenship, a petition for which was then pending in the Court
of First Instance of Rizal. It appears, however, that this application for naturalization was withdrawn
when it was discovered that he was not a resident of Rizal. On October 28, 1958 she filed a petition
to adopt him and his children on the erroneous belief that adoption would confer on them Philippine
citizenship. The error was discovered and the proceedings were abandoned.

103
MAS

Atty. Mohammad

WMSU LLB 2A

On November 18, 1958 she executed two other contracts, one (Plff Exh. 5) extending the term of the
lease to 99 years, and another (Plff Exh. 6) fixing the term of the option of 50 years. Both contracts
are written in Tagalog.
In two wills executed on August 24 and 29, 1959 (Def Exhs. 285 & 279), she bade her legatees to
respect the contracts she had entered into with Wong, but in a codicil (Plff Exh. 17) of a later date
(November 4, 1959) she appears to have a change of heart. Claiming that the various contracts
were made by her because of machinations and inducements practiced by him, she now directed
her executor to secure the annulment of the contracts.
On November 18 the present action was filed in the Court of First Instance of Manila. The complaint
alleged that the contracts were obtained by Wong "through fraud, misrepresentation, inequitable
conduct, undue influence and abuse of confidence and trust of and (by) taking advantage of the
helplessness of the plaintiff and were made to circumvent the constitutional provision prohibiting
aliens from acquiring lands in the Philippines and also of the Philippine Naturalization Laws." The
court was asked to direct the Register of Deeds of Manila to cancel the registration of the contracts
and to order Wong to pay Justina Santos the additional rent of P3,120 a month from November 15,
1957 on the allegation that the reasonable rental of the leased premises was P6,240 a month.
In his answer, Wong admitted that he enjoyed her trust and confidence as proof of which he
volunteered the information that, in addition to the sum of P3,000 which he said she had delivered to
him for safekeeping, another sum of P22,000 had been deposited in a joint account which he had
with one of her maids. But he denied having taken advantage of her trust in order to secure the
execution of the contracts in question. As counterclaim he sought the recovery of P9,210.49 which
he said she owed him for advances.
Wong's admission of the receipt of P22,000 and P3,000 was the cue for the filing of an amended
complaint. Thus on June 9, 1960, aside from the nullity of the contracts, the collection of various
amounts allegedly delivered on different occasions was sought. These amounts and the dates of
their delivery are P33,724.27 (Nov. 4, 1957); P7,344.42 (Dec. 1, 1957); P10,000 (Dec. 6, 1957);
P22,000 and P3,000 (as admitted in his answer). An accounting of the rentals from the Ongpin and
Rizal Avenue properties was also demanded.
In the meantime as a result of a petition for guardianship filed in the Juvenile and Domestic
Relations Court, the Security Bank & Trust Co. was appointed guardian of the properties of Justina
Santos, while Ephraim G. Gochangco was appointed guardian of her person.
In his answer, Wong insisted that the various contracts were freely and voluntarily entered into by
the parties. He likewise disclaimed knowledge of the sum of P33,724.27, admitted receipt of
P7,344.42 and P10,000, but contended that these amounts had been spent in accordance with the
instructions of Justina Santos; he expressed readiness to comply with any order that the court might
make with respect to the sums of P22,000 in the bank and P3,000 in his possession.
The case was heard, after which the lower court rendered judgment as follows:
[A]ll the documents mentioned in the first cause of action, with the exception of the first which
is the lease contract of 15 November 1957, are declared null and void; Wong Heng is
condemned to pay unto plaintiff thru guardian of her property the sum of P55,554.25 with
legal interest from the date of the filing of the amended complaint; he is also ordered to pay
the sum of P3,120.00 for every month of his occupation as lessee under the document of
lease herein sustained, from 15 November 1959, and the moneys he has consigned since
then shall be imputed to that; costs against Wong Heng.
From this judgment both parties appealed directly to this Court. After the case was submitted for
decision, both parties died, Wong Heng on October 21, 1962 and Justina Santos on December 28,
1964. Wong was substituted by his wife, Lui She, the other defendant in this case, while Justina
Santos was substituted by the Philippine Banking Corporation.
Justina Santos maintained now reiterated by the Philippine Banking Corporation that the lease
contract (Plff Exh. 3) should have been annulled along with the four other contracts (Plff Exhs. 4-7)
because it lacks mutuality; because it included a portion which, at the time, was in custodia legis;
because the contract was obtained in violation of the fiduciary relations of the parties; because her
consent was obtained through undue influence, fraud and misrepresentation; and because the lease
contract, like the rest of the contracts, is absolutely simulated.

104
MAS

Atty. Mohammad

WMSU LLB 2A

Paragraph 5 of the lease contract states that "The lessee may at any time withdraw from this
agreement." It is claimed that this stipulation offends article 1308 of the Civil Code which provides
that "the contract must bind both contracting parties; its validity or compliance cannot be left to the
will of one of them."
We have had occasion to delineate the scope and application of article 1308 in the early case
of Taylor v. Uy Tieng Piao.1 We said in that case:
Article 1256 [now art. 1308] of the Civil Code in our opinion creates no impediment to the
insertion in a contract for personal service of a resolutory condition permitting the
cancellation of the contract by one of the parties. Such a stipulation, as can be readily seen,
does not make either the validity or the fulfillment of the contract dependent upon the will of
the party to whom is conceded the privilege of cancellation; for where the contracting parties
have agreed that such option shall exist, the exercise of the option is as much in the
fulfillment of the contract as any other act which may have been the subject of agreement.
Indeed, the cancellation of a contract in accordance with conditions agreed upon beforehand
is fulfillment.2
And so it was held in Melencio v. Dy Tiao Lay 3 that a "provision in a lease contract that the lessee,
at any time before he erected any building on the land, might rescind the lease, can hardly be
regarded as a violation of article 1256 [now art. 1308] of the Civil Code."
The case of Singson Encarnacion v. Baldomar 4 cannot be cited in support of the claim of want of
mutuality, because of a difference in factual setting. In that case, the lessees argued that they could
occupy the premises as long as they paid the rent. This is of course untenable, for as this Court said,
"If this defense were to be allowed, so long as defendants elected to continue the lease by
continuing the payment of the rentals, the owner would never be able to discontinue it; conversely,
although the owner should desire the lease to continue the lessees could effectively thwart his
purpose if they should prefer to terminate the contract by the simple expedient of stopping payment
of the rentals." Here, in contrast, the right of the lessee to continue the lease or to terminate it is so
circumscribed by the term of the contract that it cannot be said that the continuance of the lease
depends upon his will. At any rate, even if no term had been fixed in the agreement, this case would
at most justify the fixing of a period5 but not the annulment of the contract.
Nor is there merit in the claim that as the portion of the property formerly owned by the sister of
Justina Santos was still in the process of settlement in the probate court at the time it was leased,
the lease is invalid as to such portion. Justina Santos became the owner of the entire property upon
the death of her sister Lorenzo on September 22, 1957 by force of article 777 of the Civil Code.
Hence, when she leased the property on November 15, she did so already as owner thereof. As this
Court explained in upholding the sale made by an heir of a property under judicial administration:
That the land could not ordinarily be levied upon while in custodia legis does not mean that
one of the heirs may not sell the right, interest or participation which he has or might have in
the lands under administration. The ordinary execution of property in custodia legis is
prohibited in order to avoid interference with the possession by the court. But the sale made
by an heir of his share in an inheritance, subject to the result of the pending administration, in
no wise stands in the way of such administration.6
It is next contended that the lease contract was obtained by Wong in violation of his fiduciary
relationship with Justina Santos, contrary to article 1646, in relation to article 1941 of the Civil Code,
which disqualifies "agents (from leasing) the property whose administration or sale may have been
entrusted to them." But Wong was never an agent of Justina Santos. The relationship of the parties,
although admittedly close and confidential, did not amount to an agency so as to bring the case
within the prohibition of the law.
Just the same, it is argued that Wong so completely dominated her life and affairs that the contracts
express not her will but only his. Counsel for Justina Santos cites the testimony of Atty. Tomas S.
Yumol who said that he prepared the lease contract on the basis of data given to him by Wong and
that she told him that "whatever Mr. Wong wants must be followed."7
The testimony of Atty. Yumol cannot be read out of context in order to warrant a finding that Wong
practically dictated the terms of the contract. What this witness said was:

105
MAS

Atty. Mohammad

WMSU LLB 2A

Q Did you explain carefully to your client, Doa Justina, the contents of this document before
she signed it?
A I explained to her each and every one of these conditions and I also told her these
conditions were quite onerous for her, I don't really know if I have expressed my opinion, but
I told her that we would rather not execute any contract anymore, but to hold it as it was
before, on a verbal month to month contract of lease.
Q But, she did not follow your advice, and she went with the contract just the same?
A She agreed first . . .
Q Agreed what?
A Agreed with my objectives that it is really onerous and that I was really right, but after that,
I was called again by her and she told me to follow the wishes of Mr. Wong Heng.
xxx

xxx

xxx

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

xxx

xxx

A Your Honor, if I have to express my personal opinion, I would say she is not, because, as I
said before, she told me "Whatever Mr. Wong wants must be followed."8
Wong might indeed have supplied the data which Atty. Yumol embodied in the lease contract, but to
say this is not to detract from the binding force of the contract. For the contract was fully explained to
Justina Santos by her own lawyer. One incident, related by the same witness, makes clear that she
voluntarily consented to the lease contract. This witness said that the original term fixed for the lease
was 99 years but that as he doubted the validity of a lease to an alien for that length of time, he tried
to persuade her to enter instead into a lease on a month-to-month basis. She was, however, firm
and unyielding. Instead of heeding the advice of the lawyer, she ordered him, "Just follow Mr. Wong
Heng."9 Recounting the incident, Atty. Yumol declared on cross examination:
Considering her age, ninety (90) years old at the time and her condition, she is a wealthy
woman, it is just natural when she said "This is what I want and this will be done." In
particular reference to this contract of lease, when I said "This is not proper," she said
"You just go ahead, you prepare that, I am the owner, and if there is any illegality, I am the
only one that can question the illegality."10
Atty. Yumol further testified that she signed the lease contract in the presence of her close friend,
Hermenegilda Lao, and her maid, Natividad Luna, who was constantly by her side.11 Any of them
could have testified on the undue influence that Wong supposedly wielded over Justina Santos, but
neither of them was presented as a witness. The truth is that even after giving his client time to think
the matter over, the lawyer could not make her change her mind. This persuaded the lower court to
uphold the validity of the lease contract against the claim that it was procured through undue
influence.
Indeed, the charge of undue influence in this case rests on a mere inference12 drawn from the fact
that Justina Santos could not read (as she was blind) and did not understand the English language
in which the contract is written, but that inference has been overcome by her own evidence.
Nor is there merit in the claim that her consent to the lease contract, as well as to the rest of the
contracts in question, was given out of a mistaken sense of gratitude to Wong who, she was made to
believe, had saved her and her sister from a fire that destroyed their house during the liberation of
Manila. For while a witness claimed that the sisters were saved by other persons (the brothers
Edilberto and Mariano Sta. Ana)13 it was Justina Santos herself who, according to her own witness,
Benjamin C. Alonzo, said "very emphatically" that she and her sister would have perished in the fire
had it not been for Wong.14 Hence the recital in the deed of conditional option (Plff Exh. 7) that
"[I]tong si Wong Heng ang siyang nagligtas sa aming dalawang magkapatid sa halos ay tiyak na
kamatayan", and the equally emphatic avowal of gratitude in the lease contract (Plff Exh. 3).

106
MAS

Atty. Mohammad

WMSU LLB 2A

As it was with the lease contract (Plff Exh. 3), so it was with the rest of the contracts (Plff Exhs. 4-7)
the consent of Justina Santos was given freely and voluntarily. As Atty. Alonzo, testifying for her,
said:
[I]n nearly all documents, it was either Mr. Wong Heng or Judge Torres and/or both. When
we had conferences, they used to tell me what the documents should contain. But, as I said,
I would always ask the old woman about them and invariably the old woman used to tell me:
"That's okay. It's all right."15
But the lower court set aside all the contracts, with the exception of the lease contract of November
15, 1957, on the ground that they are contrary to the expressed wish of Justina Santos and that their
considerations are fictitious. Wong stated in his deposition that he did not pay P360 a month for the
additional premises leased to him, because she did not want him to, but the trial court did not believe
him. Neither did it believe his statement that he paid P1,000 as consideration for each of the
contracts (namely, the option to buy the leased premises, the extension of the lease to 99 years, and
the fixing of the term of the option at 50 years), but that the amount was returned to him by her for
safekeeping. Instead, the court relied on the testimony of Atty. Alonzo in reaching the conclusion that
the contracts are void for want of consideration.
Atty. Alonzo declared that he saw no money paid at the time of the execution of the documents, but
his negative testimony does not rule out the possibility that the considerations were paid at some
other time as the contracts in fact recite. What is more, the consideration need not pass from one
party to the other at the time a contract is executed because the promise of one is the consideration
for the other.16
With respect to the lower court's finding that in all probability Justina Santos could not have intended
to part with her property while she was alive nor even to lease it in its entirety as her house was built
on it, suffice it to quote the testimony of her own witness and lawyer who prepared the contracts (Plff
Exhs. 4-7) in question, Atty. Alonzo:
The ambition of the old woman, before her death, according to her revelation to me, was to
see to it that these properties be enjoyed, even to own them, by Wong Heng because Doa
Justina told me that she did not have any relatives, near or far, and she considered Wong
Heng as a son and his children her grandchildren; especially her consolation in life was when
she would hear the children reciting prayers in Tagalog.17
She was very emphatic in the care of the seventeen (17) dogs and of the maids who helped
her much, and she told me to see to it that no one could disturb Wong Heng from those
properties. That is why we thought of the ninety-nine (99) years lease; we thought of
adoption, believing that thru adoption Wong Heng might acquire Filipino citizenship; being
the adopted child of a Filipino citizen.18
This is not to say, however, that the contracts (Plff Exhs. 3-7) are valid. For the testimony just
quoted, while dispelling doubt as to the intention of Justina Santos, at the same time gives the clue
to what we view as a scheme to circumvent the Constitutional prohibition against the transfer of
lands to aliens. "The illicit purpose then becomes the illegal causa"19 rendering the contracts void.
Taken singly, the contracts show nothing that is necessarily illegal, but considered collectively, they
reveal an insidious pattern to subvert by indirection what the Constitution directly prohibits. To be
sure, a lease to an alien for a reasonable period is valid. So is an option giving an alien the right to
buy real property on condition that he is granted Philippine citizenship. As this Court said in Krivenko
v. Register of Deeds:20
[A]liens are not completely excluded by the Constitution from the use of lands for residential
purposes. Since their residence in the Philippines is temporary, they may be
granted temporary rights such as a lease contract which is not forbidden by the Constitution.
Should they desire to remain here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire.
But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue of
which the Filipino owner cannot sell or otherwise dispose of his property,21 this to last for 50 years,
then it becomes clear that the arrangement is a virtual transfer of ownership whereby the owner
divests himself in stages not only of the right to enjoy the land ( jus possidendi, jus utendi, jus
fruendi and jus abutendi) but also of the right to dispose of it ( jus disponendi) rights the sum total

107
MAS

Atty. Mohammad

WMSU LLB 2A

of which make up ownership. It is just as if today the possession is transferred, tomorrow, the use,
the next day, the disposition, and so on, until ultimately all the rights of which ownership is made up
are consolidated in an alien. And yet this is just exactly what the parties in this case did within the
space of one year, with the result that Justina Santos' ownership of her property was reduced to a
hollow concept. If this can be done, then the Constitutional ban against alien landholding in the
Philippines, as announced in Krivenko v. Register of Deeds,22 is indeed in grave peril.
It does not follow from what has been said, however, that because the parties are in pari delicto they
will be left where they are, without relief. For one thing, the original parties who were guilty of a
violation of the fundamental charter have died and have since been substituted by their
administrators to whom it would be unjust to impute their guilt.23 For another thing, and this is not
only cogent but also important, article 1416 of the Civil Code provides, as an exception to the rule
on pari delicto, that "When the agreement is not illegal per se but is merely prohibited, and the
prohibition by law is designed for the protection of the plaintiff, he may, if public policy is thereby
enhanced, recover what he has paid or delivered." The Constitutional provision that "Save in cases
of hereditary succession, no private agricultural land shall be transferred or assigned except to
individuals, corporations, or associations qualified to acquire or hold lands of the public domain in
the Philippines"24 is an expression of public policy to conserve lands for the Filipinos. As this Court
said in Krivenko:
It is well to note at this juncture that in the present case we have no choice. We are
construing the Constitution as it is and not as we may desire it to be. Perhaps the effect of
our construction is to preclude aliens admitted freely into the Philippines from owning sites
where they may build their homes. But if this is the solemn mandate of the Constitution, we
will not attempt to compromise it even in the name of amity or equity . . . .
For all the foregoing, we hold that under the Constitution aliens may not acquire private or
public agricultural lands, including residential lands, and, accordingly, judgment is affirmed,
without costs.25
That policy would be defeated and its continued violation sanctioned if, instead of setting the
contracts aside and ordering the restoration of the land to the estate of the deceased Justina Santos,
this Court should apply the general rule of pari delicto. To the extent that our ruling in this case
conflicts with that laid down in Rellosa v. Gaw Chee Hun 26 and subsequent similar cases, the latter
must be considered as pro tanto qualified.
The claim for increased rentals and attorney's fees, made in behalf of Justina Santos, must be
denied for lack of merit.
And what of the various amounts which Wong received in trust from her? It appears that he kept two
classes of accounts, one pertaining to amount which she entrusted to him from time to time, and
another pertaining to rentals from the Ongpin property and from the Rizal Avenue property, which he
himself was leasing.
With respect to the first account, the evidence shows that he received P33,724.27 on November 8,
1957 (Plff Exh. 16); P7,354.42 on December 1, 1957 (Plff Exh. 13); P10,000 on December 6, 1957
(Plff Exh. 14) ; and P18,928.50 on August 26, 1959 (Def. Exh. 246), or a total of P70,007.19. He
claims, however, that he settled his accounts and that the last amount of P18,928.50 was in fact
payment to him of what in the liquidation was found to be due to him.
He made disbursements from this account to discharge Justina Santos' obligations for taxes,
attorneys' fees, funeral services and security guard services, but the checks (Def Exhs. 247-278)
drawn by him for this purpose amount to only P38,442.84.27 Besides, if he had really settled his
accounts with her on August 26, 1959, we cannot understand why he still had P22,000 in the bank
and P3,000 in his possession, or a total of P25,000. In his answer, he offered to pay this amount if
the court so directed him. On these two grounds, therefore, his claim of liquidation and settlement of
accounts must be rejected.
After subtracting P38,442.84 (expenditures) from P70,007.19 (receipts), there is a difference of
P31,564 which, added to the amount of P25,000, leaves a balance of P56,564.3528 in favor of
Justina Santos.
As to the second account, the evidence shows that the monthly income from the Ongpin property
until its sale in Rizal Avenue July, 1959 was P1,000, and that from the Rizal Avenue property, of

108
MAS

Atty. Mohammad

WMSU LLB 2A

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

109
MAS

Atty. Mohammad

WMSU LLB 2A

JG SUMMIT HOLDINGS VS CA
Republic of the Philippines
SUPREME COURT
Manila
SPECIAL FIRST DIVISION
G.R. No. 124293

January 31, 2005

J.G. SUMMIT HOLDINGS, INC., petitioner,

vs.
COURT OF APPEALS; COMMITTEE ON PRIVATIZATION, its Chairman and Members; ASSET
PRIVATIZATION TRUST; and PHILYARDS HOLDINGS, INC., respondents.
RESOLUTION
PUNO, J.:
For resolution before this Court are two motions filed by the petitioner, J.G. Summit Holdings, Inc. for
reconsideration of our Resolution dated September 24, 2003 and to elevate this case to the
Court En Banc. The petitioner questions the Resolution which reversed our Decision of November
20, 2000, which in turn reversed and set aside a Decision of the Court of Appeals promulgated on
July 18, 1995.
I. Facts
The undisputed facts of the case, as set forth in our Resolution of September 24, 2003, are as
follows:
On January 27, 1997, the National Investment and Development Corporation (NIDC), a government
corporation, entered into a Joint Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. of
Kobe, Japan (KAWASAKI) for the construction, operation and management of the Subic National
Shipyard, Inc. (SNS) which subsequently became the Philippine Shipyard and Engineering
Corporation (PHILSECO). Under the JVA, the NIDC and KAWASAKI will contribute P330 million for
the capitalization of PHILSECO in the proportion of 60%-40% respectively. One of its salient
features is the grant to the parties of the right of first refusal should either of them decide to sell,
assign or transfer its interest in the joint venture, viz:
1.4 Neither party shall sell, transfer or assign all or any part of its interest in SNS [PHILSECO] to any
third party without giving the other under the same terms the right of first refusal. This provision shall
not apply if the transferee is a corporation owned or controlled by the GOVERNMENT or by a
KAWASAKI affiliate.
On November 25, 1986, NIDC transferred all its rights, title and interest in PHILSECO to the
Philippine National Bank (PNB). Such interests were subsequently transferred to the National
Government pursuant to Administrative Order No. 14. On December 8, 1986, President Corazon C.
Aquino issued Proclamation No. 50 establishing the Committee on Privatization (COP) and the
Asset Privatization Trust (APT) to take title to, and possession of, conserve, manage and dispose of
non-performing assets of the National Government. Thereafter, on February 27, 1987, a trust
agreement was entered into between the National Government and the APT wherein the latter was
named the trustee of the National Government's share in PHILSECO. In 1989, as a result of a quasireorganization of PHILSECO to settle its huge obligations to PNB, the National Government's
shareholdings in PHILSECO increased to 97.41% thereby reducing KAWASAKI's shareholdings to
2.59%.
In the interest of the national economy and the government, the COP and the APT deemed it best to
sell the National Government's share in PHILSECO to private entities. After a series of negotiations
between the APT and KAWASAKI, they agreed that the latter's right of first refusal under the JVA be
"exchanged" for the right to top by five percent (5%) the highest bid for the said shares. They further
agreed that KAWASAKI would be entitled to name a company in which it was a stockholder, which

110
MAS

Atty. Mohammad

WMSU LLB 2A

could exercise the right to top. On September 7, 1990, KAWASAKI informed APT that Philyards
Holdings, Inc. (PHI)1 would exercise its right to top.
At the pre-bidding conference held on September 18, 1993, interested bidders were given copies of
the JVA between NIDC and KAWASAKI, and of the Asset Specific Bidding Rules (ASBR) drafted for
the National Government's 87.6% equity share in PHILSECO. The provisions of the ASBR were
explained to the interested bidders who were notified that the bidding would be held on December 2,
1993. A portion of the ASBR reads:
1.0 The subject of this Asset Privatization Trust (APT) sale through public bidding is the National
Government's equity in PHILSECO consisting of 896,869,942 shares of stock (representing 87.67%
of PHILSECO's outstanding capital stock), which will be sold as a whole block in accordance with
the rules herein enumerated.
xxx xxx xxx
2.0 The highest bid, as well as the buyer, shall be subject to the final approval of both the APT Board
of Trustees and the Committee on Privatization (COP).
2.1 APT reserves the right in its sole discretion, to reject any or all bids.
3.0 This public bidding shall be on an Indicative Price Bidding basis. The Indicative price set for the
National Government's 87.67% equity in PHILSECO is PESOS: ONE BILLION THREE HUNDRED
MILLION (P1,300,000,000.00).
xxx xxx xxx
6.0 The highest qualified bid will be submitted to the APT Board of Trustees at its regular meeting
following the bidding, for the purpose of determining whether or not it should be endorsed by the
APT Board of Trustees to the COP, and the latter approves the same. The APT shall advise
Kawasaki Heavy Industries, Inc. and/or its nominee, [PHILYARDS] Holdings, Inc., that the highest
bid is acceptable to the National Government. Kawasaki Heavy Industries, Inc. and/or [PHILYARDS]
Holdings, Inc. shall then have a period of thirty (30) calendar days from the date of receipt of such
advice from APT within which to exercise their "Option to Top the Highest Bid" by offering a bid
equivalent to the highest bid plus five (5%) percent thereof.
6.1 Should Kawasaki Heavy Industries, Inc. and/or [PHILYARDS] Holdings, Inc. exercise their
"Option to Top the Highest Bid," they shall so notify the APT about such exercise of their option and
deposit with APT the amount equivalent to ten percent (10%) of the highest bid plus five percent
(5%) thereof within the thirty (30)-day period mentioned in paragraph 6.0 above. APT will then serve
notice upon Kawasaki Heavy Industries, Inc. and/or [PHILYARDS] Holdings, Inc. declaring them as
the preferred bidder and they shall have a period of ninety (90) days from the receipt of the APT's
notice within which to pay the balance of their bid price.
6.2 Should Kawasaki Heavy Industries, Inc. and/or [PHILYARDS] Holdings, Inc. fail to exercise their
"Option to Top the Highest Bid" within the thirty (30)-day period, APT will declare the highest bidder
as the winning bidder.
xxx xxx xxx
12.0 The bidder shall be solely responsible for examining with appropriate care these rules, the
official bid forms, including any addenda or amendments thereto issued during the bidding period.
The bidder shall likewise be responsible for informing itself with respect to any and all conditions
concerning the PHILSECO Shares which may, in any manner, affect the bidder's proposal. Failure
on the part of the bidder to so examine and inform itself shall be its sole risk and no relief for error or
omission will be given by APT or COP. . . .
At the public bidding on the said date, petitioner J.G. Summit Holdings, Inc.2 submitted a bid of Two
Billion and Thirty Million Pesos (P2,030,000,000.00) with an acknowledgment of
KAWASAKI/[PHILYARDS'] right to top, viz:
4. I/We understand that the Committee on Privatization (COP) has up to thirty (30) days to act on
APT's recommendation based on the result of this bidding. Should the COP approve the highest bid,

111
MAS

Atty. Mohammad

WMSU LLB 2A

APT shall advise Kawasaki Heavy Industries, Inc. and/or its nominee, [PHILYARDS] Holdings, Inc.
that the highest bid is acceptable to the National Government. Kawasaki Heavy Industries, Inc.
and/or [PHILYARDS] Holdings, Inc. shall then have a period of thirty (30) calendar days from the
date of receipt of such advice from APT within which to exercise their "Option to Top the Highest
Bid" by offering a bid equivalent to the highest bid plus five (5%) percent thereof.
As petitioner was declared the highest bidder, the COP approved the sale on December 3, 1993
"subject to the right of Kawasaki Heavy Industries, Inc./[PHILYARDS] Holdings, Inc. to top JGSMI's
bid by 5% as specified in the bidding rules."
On December 29, 1993, petitioner informed APT that it was protesting the offer of PHI to top its bid
on the grounds that: (a) the KAWASAKI/PHI consortium composed of KAWASAKI, [PHILYARDS],
Mitsui, Keppel, SM Group, ICTSI and Insular Life violated the ASBR because the last four (4)
companies were the losing bidders thereby circumventing the law and prejudicing the weak winning
bidder; (b) only KAWASAKI could exercise the right to top; (c) giving the same option to top to PHI
constituted unwarranted benefit to a third party; (d) no right of first refusal can be exercised in a
public bidding or auction sale; and (e) the JG Summit consortium was not estopped from questioning
the proceedings.
On February 2, 1994, petitioner was notified that PHI had fully paid the balance of the purchase
price of the subject bidding. On February 7, 1994, the APT notified petitioner that PHI had exercised
its option to top the highest bid and that the COP had approved the same on January 6, 1994. On
February 24, 1994, the APT and PHI executed a Stock Purchase Agreement. Consequently,
petitioner filed with this Court a Petition for Mandamus under G.R. No. 114057. On May 11, 1994,
said petition was referred to the Court of Appeals. On July 18, 1995, the Court of Appeals denied the
same for lack of merit. It ruled that the petition for mandamus was not the proper remedy to question
the constitutionality or legality of the right of first refusal and the right to top that was exercised by
KAWASAKI/PHI, and that the matter must be brought "by the proper party in the proper forum at the
proper time and threshed out in a full blown trial." The Court of Appeals further ruled that the right of
first refusal and the right to top are prima facie legal and that the petitioner, "by participating in the
public bidding, with full knowledge of the right to top granted to KAWASAKI/[PHILYARDS]
isestopped from questioning the validity of the award given to [PHILYARDS] after the latter
exercised the right to top and had paid in full the purchase price of the subject shares, pursuant to
the ASBR." Petitioner filed a Motion for Reconsideration of said Decision which was denied on
March 15, 1996. Petitioner thus filed a Petition for Certiorari with this Court alleging grave abuse of
discretion on the part of the appellate court.
On November 20, 2000, this Court rendered x x x [a] Decision ruling among others that the Court of
Appeals erred when it dismissed the petition on the sole ground of the impropriety of the special civil
action of mandamus because the petition was also one of certiorari. It further ruled that a shipyard
like PHILSECO is a public utility whose capitalization must be sixty percent (60%) Filipino-owned.
Consequently, the right to top granted to KAWASAKI under the Asset Specific Bidding Rules (ASBR)
drafted for the sale of the 87.67% equity of the National Government in PHILSECO is illegal not
only because it violates the rules on competitive bidding but more so, because it allows foreign
corporations to own more than 40% equity in the shipyard. It also held that "although the petitioner
had the opportunity to examine the ASBR before it participated in the bidding, it cannot be estopped
from questioning the unconstitutional, illegal and inequitable provisions thereof." Thus, this Court
voided the transfer of the national government's 87.67% share in PHILSECO to Philyard[s] Holdings,
Inc., and upheld the right of JG Summit, as the highest bidder, to take title to the said shares, viz:
WHEREFORE, the instant petition for review on certiorari is GRANTED. The assailed Decision and
Resolution of the Court of Appeals are REVERSED and SET ASIDE. Petitioner is ordered to pay to
APT its bid price of Two Billion Thirty Million Pesos (P2,030,000,000.00), less its bid deposit plus
interests upon the finality of this Decision. In turn, APT is ordered to:
(a) accept the said amount of P2,030,000,000.00 less bid deposit and interests from
petitioner;
(b) execute a Stock Purchase Agreement with petitioner;
(c) cause the issuance in favor of petitioner of the certificates of stocks representing 87.6%
of PHILSECO's total capitalization;

112
MAS

Atty. Mohammad

WMSU LLB 2A

(d) return to private respondent PHGI the amount of Two Billion One Hundred Thirty-One
Million Five Hundred Thousand Pesos (P2,131,500,000.00); and
(e) cause the cancellation of the stock certificates issued to PHI.
SO ORDERED.
In separate Motions for Reconsideration, respondents submit[ted] three basic issues for x x x
resolution: (1) Whether PHILSECO is a public utility; (2) Whether under the 1977 JVA, KAWASAKI
can exercise its right of first refusal only up to 40% of the total capitalization of PHILSECO; and (3)
Whether the right to top granted to KAWASAKI violates the principles of competitive
bidding.3 (citations omitted)
In a Resolution dated September 24, 2003, this Court ruled in favor of the respondents. On the first
issue, we held that Philippine Shipyard and Engineering Corporation (PHILSECO) is not a public
utility, as by nature, a shipyard is not a public utility4 and that no law declares a shipyard to be a
public utility.5 On the second issue, we found nothing in the 1977 Joint Venture Agreement (JVA)
which prevents Kawasaki Heavy Industries, Ltd. of Kobe, Japan (KAWASAKI) from acquiring more
than 40% of PHILSECOs total capitalization.6 On the final issue, we held that the right to top granted
to KAWASAKI in exchange for its right of first refusal did not violate the principles of competitive
bidding.7
On October 20, 2003, the petitioner filed a Motion for Reconsideration8 and a Motion to Elevate This
Case to the Court En Banc.9 Public respondents Committee on Privatization (COP) and Asset
Privatization Trust (APT), and private respondent Philyards Holdings, Inc. (PHILYARDS) filed their
Comments on J.G. Summit Holdings, Inc.s (JG Summits) Motion for Reconsideration and Motion to
Elevate This Case to the Court En Banc on January 29, 2004 and February 3, 2004, respectively.
II. Issues
Based on the foregoing, the relevant issues to resolve to end this litigation are the following:
1. Whether there are sufficient bases to elevate the case at bar to the Court en banc.
2. Whether the motion for reconsideration raises any new matter or cogent reason to warrant
a reconsideration of this Courts Resolution of September 24, 2003.
Motion to Elevate this Case to the
Court En Banc
The petitioner prays for the elevation of the case to the Court en banc on the following grounds:
1. The main issue of the propriety of the bidding process involved in the present case has
been confused with the policy issue of the supposed fate of the shipping industry which has
never been an issue that is determinative of this case.10
2. The present case may be considered under the Supreme Court Resolution dated
February 23, 1984 which included among en banc cases those involving a novel question of
law and those where a doctrine or principle laid down by the Court en banc or in division may
be modified or reversed.11
3. There was clear executive interference in the judicial functions of the Court when the
Honorable Jose Isidro Camacho, Secretary of Finance, forwarded to Chief Justice Davide, a
memorandum dated November 5, 2001, attaching a copy of the Foreign Chambers Report
dated October 17, 2001, which matter was placed in the agenda of the Court and noted by it
in a formal resolution dated November 28, 2001.12
Opposing J.G. Summits motion to elevate the case en banc, PHILYARDS points out the petitioners
inconsistency in previously opposing PHILYARDS Motion to Refer the Case to the Court En
Banc. PHILYARDS contends that J.G. Summit should now be estopped from asking that the case be
referred to the Court en banc. PHILYARDS further contends that the Supreme Court en banc is not
an appellate court to which decisions or resolutions of its divisions may be appealed citing Supreme

113
MAS

Atty. Mohammad

WMSU LLB 2A

Court Circular No. 2-89 dated February 7, 1989.13 PHILYARDS also alleges that there is no novel
question of law involved in the present case as the assailed Resolution was based on well-settled
jurisprudence. Likewise, PHILYARDS stresses that the Resolution was merely an outcome of the
motions for reconsideration filed by it and the COP and APT and is "consistent with the inherent
power of courts to amend and control its process and orders so as to make them conformable to law
and justice. (Rule 135, sec. 5)"14 Private respondent belittles the petitioners allegations regarding
the change in ponente and the alleged executive interference as shown by former Secretary of
Finance Jose Isidro Camachos memorandum dated November 5, 2001 arguing that these do not
justify a referral of the present case to the Court en banc.
In insisting that its Motion to Elevate This Case to the Court En Banc should be granted, J.G.
Summit further argued that: its Opposition to the Office of the Solicitor Generals Motion to Refer is
different from its own Motion to Elevate; different grounds are invoked by the two motions; there was
unwarranted "executive interference"; and the change in ponente is merely noted in asserting that
this case should be decided by the Court en banc.15
We find no merit in petitioners contention that the propriety of the bidding process involved in the
present case has been confused with the policy issue of the fate of the shipping industry which,
petitioner maintains, has never been an issue that is determinative of this case. The Courts
Resolution of September 24, 2003 reveals a clear and definitive ruling on the propriety of the bidding
process. In discussing whether the right to top granted to KAWASAKI in exchange for its right of first
refusal violates the principles of competitive bidding, we made an exhaustive discourse on the rules
and principles of public bidding and whether they were complied with in the case at bar.16 This Court
categorically ruled on the petitioners argument that PHILSECO, as a shipyard, is a public utility
which should maintain a 60%-40% Filipino-foreign equity ratio, as it was a pivotal issue. In doing so,
we recognized the impact of our ruling on the shipbuilding industry which was beyond avoidance.17
We reject petitioners argument that the present case may be considered under the Supreme Court
Resolution dated February 23, 1984 which included among en banc cases those involving a novel
question of law and those where a doctrine or principle laid down by the court en banc or in division
may be modified or reversed. The case was resolved based on basic principles of the right of first
refusal in commercial law and estoppel in civil law. Contractual obligations arising from rights of first
refusal are not new in this jurisdiction and have been recognized in numerous cases.18 Estoppel is
too known a civil law concept to require an elongated discussion. Fundamental principles on public
bidding were likewise used to resolve the issues raised by the petitioner. To be sure, petitioner leans
on the right to top in a public bidding in arguing that the case at bar involves a novel issue. We are
not swayed. The right to top was merely a condition or a reservation made in the bidding rules which
was fully disclosed to all bidding parties. In Bureau Veritas, represented by Theodor H.
Hunermann v. Office of the President, et al., 19 we dealt with this conditionality, viz:
x x x It must be stressed, as held in the case of A.C. Esguerra & Sons v. Aytona, et al., (L-18751, 28
April 1962, 4 SCRA 1245), that in an "invitation to bid, there is a condition imposed upon the
bidders to the effect that the bidding shall be subject to the right of the government to reject
any and all bids subject to its discretion. In the case at bar, the government has made its
choice and unless an unfairness or injustice is shown, the losing bidders have no cause to
complain nor right to dispute that choice. This is a well-settled doctrine in this jurisdiction
and elsewhere."
The discretion to accept or reject a bid and award contracts is vested in the Government agencies
entrusted with that function. The discretion given to the authorities on this matter is of such wide
latitude that the Courts will not interfere therewith, unless it is apparent that it is used as a shield to a
fraudulent award (Jalandoni v. NARRA, 108 Phil. 486 [1960]). x x x The exercise of this discretion is
a policy decision that necessitates prior inquiry, investigation, comparison, evaluation, and
deliberation. This task can best be discharged by the Government agencies concerned, not by the
Courts. The role of the Courts is to ascertain whether a branch or instrumentality of the Government
has transgressed its constitutional boundaries. But the Courts will not interfere with executive or
legislative discretion exercised within those boundaries. Otherwise, it strays into the realm of policy
decision-making.
It is only upon a clear showing of grave abuse of discretion that the Courts will set aside the award of
a contract made by a government entity. Grave abuse of discretion implies a capricious, arbitrary
and whimsical exercise of power (Filinvest Credit Corp. v. Intermediate Appellate Court, No. 65935,
30 September 1988, 166 SCRA 155). The abuse of discretion must be so patent and gross as to
amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, as to

114
MAS

Atty. Mohammad

WMSU LLB 2A

act at all in contemplation of law, where the power is exercised in an arbitrary and despotic manner
by reason of passion or hostility (Litton Mills, Inc. v. Galleon Trader, Inc., et al[.], L-40867, 26 July
1988, 163 SCRA 489).
The facts in this case do not indicate any such grave abuse of discretion on the part of public
respondents when they awarded the CISS contract to Respondent SGS. In the "Invitation to
Prequalify and Bid" (Annex "C," supra), the CISS Committee made an express reservation of the
right of the Government to "reject any or all bids or any part thereof or waive any defects
contained thereon and accept an offer most advantageous to the Government." It is a wellsettled rule that where such reservation is made in an Invitation to Bid, the highest or lowest
bidder, as the case may be, is not entitled to an award as a matter of right (C & C Commercial
Corp. v. Menor, L-28360, 27 January 1983, 120 SCRA 112). Even the lowest Bid or any Bid may be
rejected or, in the exercise of sound discretion, the award may be made to another than the lowest
bidder (A.C. Esguerra & Sons v. Aytona, supra, citing 43 Am. Jur., 788). (emphases supplied)
1awphi 1.nt

Like the condition in the Bureau Veritas case, the right to top was a condition imposed by the
government in the bidding rules which was made known to all parties. It was a condition imposed
on all bidders equally, based on the APTs exercise of its discretion in deciding on how best
to privatize the governments shares in PHILSECO. It was not a whimsical or arbitrary condition
plucked from the ether and inserted in the bidding rules but a condition which the APT approved as
the best way the government could comply with its contractual obligations to KAWASAKI under the
JVA and its mandate of getting the most advantageous deal for the government. The right to top had
its history in the mutual right of first refusal in the JVA and was reached by agreement of the
government and KAWASAKI.
Further, there is no "executive interference" in the functions of this Court by the mere filing of a
memorandum by Secretary of Finance Jose Isidro Camacho. The memorandum was merely "noted"
to acknowledge its filing. It had no further legal significance. Notably too, the assailed Resolution
dated September 24, 2003 was decided unanimously by the Special First Division in favor of
the respondents.
Again, we emphasize that a decision or resolution of a Division is that of the Supreme Court20 and
the Court en banc is not an appellate court to which decisions or resolutions of a Division may be
appealed.21
For all the foregoing reasons, we find no basis to elevate this case to the Court en banc.
Motion for Reconsideration
Three principal arguments were raised in the petitioners Motion for Reconsideration. First, that a fair
resolution of the case should be based on contract law, not on policy considerations; the contracts
do not authorize the right to top to be derived from the right of first refusal.22 Second, that neither the
right of first refusal nor the right to top can be legally exercised by the consortium which is not the
proper party granted such right under either the JVA or the Asset Specific Bidding Rules
(ASBR).23 Third, that the maintenance of the 60%-40% relationship between the National Investment
and Development Corporation (NIDC) and KAWASAKI arises from contract and from the
Constitution because PHILSECO is a landholding corporation and need not be a public utility to be
bound by the 60%-40% constitutional limitation.24
On the other hand, private respondent PHILYARDS asserts that J.G. Summit has not been able to
show compelling reasons to warrant a reconsideration of the Decision of the Court.25 PHILYARDS
denies that the Decision is based mainly on policy considerations and points out that it is premised
on principles governing obligations and contracts and corporate law such as the rule requiring
respect for contractual stipulations, upholding rights of first refusal, and recognizing the assignable
nature of contracts rights.26 Also, the ruling that shipyards are not public utilities relies on established
case law and fundamental rules of statutory construction. PHILYARDS stresses that KAWASAKIs
right of first refusal or even the right to top is not limited to the 40% equity of the latter.27 On the
landholding issue raised by J.G. Summit, PHILYARDS emphasizes that this is a non-issue and even
involves a question of fact. Even assuming that this Court can take cognizance of such question of
fact even without the benefit of a trial, PHILYARDS opines that landholding by PHILSECO at the
time of the bidding is irrelevant because what is essential is that ultimately a qualified entity would
eventually hold PHILSECOs real estate properties.28 Further, given the assignable nature of the
right of first refusal, any applicable nationality restrictions, including landholding limitations, would not
affect the right of first refusal itself, but only the manner of its exercise.29 Also, PHILYARDS argues

115
MAS

Atty. Mohammad

WMSU LLB 2A

that if this Court takes cognizance of J.G. Summits allegations of fact regarding PHILSECOs
landholding, it must also recognize PHILYARDS assertions that PHILSECOs landholdings were
sold to another corporation.30 As regards the right of first refusal, private respondent explains that
KAWASAKIs reduced shareholdings (from 40% to 2.59%) did not translate to a deprivation or loss
of its contractually granted right of first refusal.31 Also, the bidding was valid because PHILYARDS
exercised the right to top and it was of no moment that losing bidders later joined PHILYARDS in
raising the purchase price.32
In cadence with the private respondent PHILYARDS, public respondents COP and APT contend:
1. The conversion of the right of first refusal into a right to top by 5% does not violate any
provision in the JVA between NIDC and KAWASAKI.
2. PHILSECO is not a public utility and therefore not governed by the constitutional
restriction on foreign ownership.
3. The petitioner is legally estopped from assailing the validity of the proceedings of the
public bidding as it voluntarily submitted itself to the terms of the ASBR which included the
provision on the right to top.
4. The right to top was exercised by PHILYARDS as the nominee of KAWASAKI and the fact
that PHILYARDS formed a consortium to raise the required amount to exercise the right to
top the highest bid by 5% does not violate the JVA or the ASBR.
5. The 60%-40% Filipino-foreign constitutional requirement for the acquisition of lands does
not apply to PHILSECO because as admitted by petitioner itself, PHILSECO no longer owns
real property.
6. Petitioners motion to elevate the case to the Court en banc is baseless and would only
delay the termination of this case.33
In a Consolidated Comment dated March 8, 2004, J.G. Summit countered the arguments of the
public and private respondents in this wise:
1. The award by the APT of 87.67% shares of PHILSECO to PHILYARDS with losing bidders
through the exercise of a right to top, which is contrary to law and the constitution is null and
void for being violative of substantive due process and the abuse of right provision in the
Civil Code.
a. The bidders[] right to top was actually exercised by losing bidders.
b. The right to top or the right of first refusal cannot co-exist with a genuine
competitive bidding.
c. The benefits derived from the right to top were unwarranted.
2. The landholding issue has been a legitimate issue since the start of this case but is
shamelessly ignored by the respondents.
a. The landholding issue is not a non-issue.
b. The landholding issue does not pose questions of fact.
c. That PHILSECO owned land at the time that the right of first refusal was agreed
upon and at the time of the bidding are most relevant.
d. Whether a shipyard is a public utility is not the core issue in this case.
3. Fraud and bad faith attend the alleged conversion of an inexistent right of first refusal to
the right to top.
a. The history behind the birth of the right to top shows fraud and bad faith.

116
MAS

Atty. Mohammad

WMSU LLB 2A

b. The right of first refusal was, indeed, "effectively useless."

4. Petitioner is not legally estopped to challenge the right to top in this case.
a. Estoppel is unavailing as it would stamp validity to an act that is prohibited by law
or against public policy.
b. Deception was patent; the right to top was an attractive nuisance.
c. The 10% bid deposit was placed in escrow.
J.G. Summits insistence that the right to top cannot be sourced from the right of first refusal is not
new and we have already ruled on the issue in our Resolution of September 24, 2003. We upheld
the mutual right of first refusal in the JVA.34 We also ruled that nothing in the JVA prevents
KAWASAKI from acquiring more than 40% of PHILSECOs total capitalization.35 Likewise, nothing in
the JVA or ASBR bars the conversion of the right of first refusal to the right to top. In sum, nothing
new and of significance in the petitioners pleading warrants a reconsideration of our ruling.
Likewise, we already disposed of the argument that neither the right of first refusal nor the right to
top can legally be exercised by the consortium which is not the proper party granted such right under
either the JVA or the ASBR. Thus, we held:
The fact that the losing bidder, Keppel Consortium (composed of Keppel, SM Group, Insular Life
Assurance, Mitsui and ICTSI), has joined PHILYARDS in the latter's effort to raise P2.131 billion
necessary in exercising the right to top is not contrary to law, public policy or public morals. There is
nothing in the ASBR that bars the losing bidders from joining either the winning bidder (should the
right to top is not exercised) or KAWASAKI/PHI (should it exercise its right to top as it did), to raise
the purchase price. The petitioner did not allege, nor was it shown by competent evidence, that the
participation of the losing bidders in the public bidding was done with fraudulent intent. Absent any
proof of fraud, the formation by [PHILYARDS] of a consortium is legitimate in a free enterprise
system. The appellate court is thus correct in holding the petitioner estopped from questioning the
validity of the transfer of the National Government's shares in PHILSECO to respondent.36
Further, we see no inherent illegality on PHILYARDS act in seeking funding from parties who were
losing bidders. This is a purely commercial decision over which the State should not interfere absent
any legal infirmity. It is emphasized that the case at bar involves the disposition of shares in a
corporation which the government sought to privatize. As such, the persons with whom PHILYARDS
desired to enter into business with in order to raise funds to purchase the shares are basically its
business. This is in contrast to a case involving a contract for the operation of or construction of a
government infrastructure where the identity of the buyer/bidder or financier constitutes an important
consideration. In such cases, the government would have to take utmost precaution to protect public
interest by ensuring that the parties with which it is contracting have the ability to satisfactorily
construct or operate the infrastructure.
On the landholding issue, J.G. Summit submits that since PHILSECO is a landholding company,
KAWASAKI could exercise its right of first refusal only up to 40% of the shares of PHILSECO due to
the constitutional prohibition on landholding by corporations with more than 40% foreign-owned
equity. It further argues that since KAWASAKI already held at least 40% equity in PHILSECO, the
right of first refusal was inutile and as such, could not subsequently be converted into the right to
top. 37 Petitioner also asserts that, at present, PHILSECO continues to violate the constitutional
provision on landholdings as its shares are more than 40% foreign-owned.38 PHILYARDS admits
that it may have previously held land but had already divested such landholdings.39 It contends,
however, that even if PHILSECO owned land, this would not affect the right of first refusal but only
the exercise thereof. If the land is retained, the right of first refusal, being a property right, could be
assigned to a qualified party. In the alternative, the land could be divested before the exercise of the
right of first refusal. In the case at bar, respondents assert that since the right of first refusal was
validly converted into a right to top, which was exercised not by KAWASAKI, but by PHILYARDS
which is a Filipino corporation (i.e., 60% of its shares are owned by Filipinos), then there is no
violation of the Constitution.40 At first, it would seem that questions of fact beyond cognizance by this
Court were involved in the issue. However, the records show that PHILYARDS admits it had
owned land up until the time of the bidding.41 Hence, the only issue is whether KAWASAKI
had a valid right of first refusal over PHILSECO shares under the JVA considering that
PHILSECO owned land until the time of the bidding and KAWASAKI already held 40% of
PHILSECOs equity.

117
MAS

Atty. Mohammad

WMSU LLB 2A

We uphold the validity of the mutual rights of first refusal under the JVA between KAWASAKI and
NIDC. First of all, the right of first refusal is a property right of PHILSECO shareholders, KAWASAKI
and NIDC, under the terms of their JVA. This right allows them to purchase the shares of their coshareholder before they are offered to a third party. The agreement of co-shareholders to
mutually grant this right to each other, by itself, does not constitute a violation of the
provisions of the Constitution limiting land ownership to Filipinos and Filipino corporations.
As PHILYARDS correctly puts it, if PHILSECO still owns land, the right of first refusal can be validly
assigned to a qualified Filipino entity in order to maintain the 60%-40% ratio. This transfer, by itself,
does not amount to a violation of the Anti-Dummy Laws, absent proof of any fraudulent intent. The
transfer could be made either to a nominee or such other party which the holder of the right of first
refusal feels it can comfortably do business with. Alternatively, PHILSECO may divest of its
landholdings, in which case KAWASAKI, in exercising its right of first refusal, can exceed 40% of
PHILSECOs equity. In fact, it can even be said that if the foreign shareholdings of a
landholding corporation exceeds 40%, it is not the foreign stockholders ownership of the
shares which is adversely affected but the capacity of the corporation to own land that is,
the corporation becomes disqualified to own land. This finds support under the basic corporate law
principle that the corporation and its stockholders are separate juridical entities. In this vein, the right
of first refusal over shares pertains to the shareholders whereas the capacity to own land pertains to
the corporation. Hence, the fact that PHILSECO owns land cannot deprive stockholders of their right
of first refusal. No law disqualifies a person from purchasing shares in a landholding
corporation even if the latter will exceed the allowed foreign equity, what the law disqualifies
is the corporation from owning land. This is the clear import of the following provisions in the
Constitution:
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. The State may directly undertake such
activities, or it may enter into co-production, joint venture, or production-sharing agreements with
Filipino citizens, or corporations or associations at least sixty per centum of whose capital is
owned by such citizens. Such agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such terms and conditions as may be
provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other
than the development of water power, beneficial use may be the measure and limit of the grant.
xxx xxx xxx
Section 7. Save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations, or associations qualified to acquire or hold
lands of the public domain.42 (emphases supplied)
The petitioner further argues that "an option to buy land is void in itself (Philippine Banking
Corporation v. Lui She, 21 SCRA 52 [1967]). The right of first refusal granted to KAWASAKI, a
Japanese corporation, is similarly void. Hence, the right to top, sourced from the right of first refusal,
is also void."43 Contrary to the contention of petitioner, the case of Lui She did not that say "an
option to buy land is void in itself," for we ruled as follows:
x x x To be sure, a lease to an alien for a reasonable period is valid. So is an option giving an
alien the right to buy real property on condition that he is granted Philippine citizenship. As
this Court said in Krivenko vs. Register of Deeds:
[A]liens are not completely excluded by the Constitution from the use of lands for residential
purposes. Since their residence in the Philippines is temporary, they may be granted temporary
rights such as a lease contract which is not forbidden by the Constitution. Should they desire to
remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to
acquire.
But if an alien is given not only a lease of, but also an option to buy, a piece of land, by virtue
of which the Filipino owner cannot sell or otherwise dispose of his property, this to last for 50
years, then it becomes clear that the arrangement is a virtual transfer of ownership whereby
the owner divests himself in stages not only of the right to enjoy the land (jus possidendi, jus
utendi, jus fruendi and jus abutendi) but also of the right to dispose of it (jus disponendi)
rights the sum total of which make up ownership. It is just as if today the possession is

118
MAS

Atty. Mohammad

WMSU LLB 2A

transferred, tomorrow, the use, the next day, the disposition, and so on, until ultimately all
the rights of which ownership is made up are consolidated in an alien. And yet this is just exactly
what the parties in this case did within this pace of one year, with the result that Justina Santos'[s]
ownership of her property was reduced to a hollow concept. If this can be done, then the
Constitutional ban against alien landholding in the Philippines, as announced in Krivenko vs.
Register of Deeds, is indeed in grave peril.44 (emphases supplied; Citations omitted)
In Lui She, the option to buy was invalidated because it amounted to a virtual transfer of ownership
as the owner could not sell or dispose of his properties. The contract in Lui She prohibited the owner
of the land from selling, donating, mortgaging, or encumbering the property during the 50-year
period of the option to buy. This is not so in the case at bar where the mutual right of first refusal in
favor of NIDC and KAWASAKI does not amount to a virtual transfer of land to a non-Filipino. In fact,
the case at bar involves a right of first refusal over shares of stockwhile the Lui She case
involves an option to buy the land itself. As discussed earlier, there is a distinction between the
shareholders ownership of shares and the corporations ownership of land arising from the separate
juridical personalities of the corporation and its shareholders.
We note that in its Motion for Reconsideration, J.G. Summit alleges that PHILSECO continues to
violate the Constitution as its foreign equity is above 40% and yet owns long-term leasehold
rights which are real rights.45 It cites Article 415 of the Civil Code which includes in the definition of
immovable property, "contracts for public works, and servitudes and other real rights over immovable
property."46 Any existing landholding, however, is denied by PHILYARDS citing its recent financial
statements.47 First, these are questions of fact, the veracity of which would require introduction of
evidence. The Court needs to validate these factual allegations based on competent and reliable
evidence. As such, the Court cannot resolve the questions they pose. Second, J.G. Summit
misreads the provisions of the Constitution cited in its own pleadings, to wit:
29.2 Petitioner has consistently pointed out in the past that private respondent is not a 60%-40%
corporation, and this violates the Constitution x x x The violation continues to this day because under
the law, it continues to own real property
xxx xxx xxx
32. To review the constitutional provisions involved, Section 14, Article XIV of the 1973 Constitution
(the JVA was signed in 1977), provided:
"Save in cases of hereditary succession, no private lands shall be transferred or conveyed except
to individuals, corporations, or associations qualified to acquire or hold lands of the public domain."
32.1 This provision is the same as Section 7, Article XII of the 1987 Constitution.
32.2 Under the Public Land Act, corporations qualified to acquire or hold lands of the public
domain are corporations at least 60% of which is owned by Filipino citizens (Sec. 22,
Commonwealth Act 141, as amended). (emphases supplied)
As correctly observed by the public respondents, the prohibition in the Constitution applies only to
ownership of land.48 It does not extend to immovable or real property as defined under Article
415 of the Civil Code.Otherwise, we would have a strange situation where the ownership of
immovable property such as trees, plants and growing fruit attached to the land49 would be limited to
Filipinos and Filipino corporations only.
III.
WHEREFORE, in view of the foregoing, the petitioners Motion for Reconsideration is DENIED WITH
FINALITY and the decision appealed from is AFFIRMED. The Motion to Elevate This Case to the
Court En Banc is likewise DENIED for lack of merit.
SO ORDERED.

119
MAS

Atty. Mohammad

WMSU LLB 2A

ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO VS

LAND REGISTRATION COMMISSION
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-8451

December 20, 1957

THE ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO, INC., petitioner,

vs.
THE LAND REGISTRATION COMMISSION and THE REGISTER OF DEEDS OF DAVAO
CITY, respondents.
Teodoro Padilla, for petitioner.
Office of the Solicitor General Ambrosio Padilla, Assistant Solicitor General Jose G. Bautista and
Troadio T. Quianzon, Jr., for respondents.

FELIX, J.:
This is a petition for mandamus filed by the Roman Catholic Apostolic Administrator of Davao
seeking the reversal of a resolution by the Land Registration Commissioner in L.R.C. Consulta No.
14. The facts of the case are as follows:
On October 4, 1954, Mateo L. Rodis, a Filipino citizen and resident of the City of Davao, executed a
deed of sale of a parcel of land located in the same city covered by Transfer Certificate No. 2263, in
favor of the Roman Catholic Apostolic Administrator of Davao Inc., s corporation sole organized and
existing in accordance with Philippine Laws, with Msgr. Clovis Thibault, a Canadian citizen, as actual
incumbent. When the deed of sale was presented to Register of Deeds of Davao for registration, the
latter.
having in mind a previous resolution of the Fourth Branch of the Court of First Instance of
Manila wherein the Carmelite Nuns of Davao were made to prepare an affidavit to the effect
that 60 per cent of the members of their corporation were Filipino citizens when they sought
to register in favor of their congregation of deed of donation of a parcel of land
required said corporation sole to submit a similar affidavit declaring that 60 per cent of the members
thereof were Filipino citizens.
The vendee in the letter dated June 28, 1954, expressed willingness to submit an affidavit, both not
in the same tenor as that made the Progress of the Carmelite Nuns because the two cases were not
similar, for whereas the congregation of the Carmelite Nuns had five incorporators, the corporation
sole has only one; that according to their articles of incorporation, the organization of the Carmelite
Nuns became the owner of properties donated to it, whereas the case at bar, the totality of the
Catholic population of Davao would become the owner of the property bought to be registered.
As the Register of Deeds entertained some doubts as to the registerability if the document, the
matter was referred to the Land Registration Commissioner en consulta for resolution in accordance
with section 4 of Republic Act No. 1151. Proper hearing on the matter was conducted by the
Commissioner and after the petitioner corporation had filed its memorandum, a resolution was
rendered on September 21, 1954, holding that in view of the provisions of Section 1 and 5 of Article
XIII of the Philippine Constitution, the vendee was not qualified to acquire private lands in the
Philippines in the absence of proof that at least 60 per centum of the capital, property, or assets of
the Roman Catholic Apostolic Administrator of Davao, Inc., was actually owned or controlled by
Filipino citizens, there being no question that the present incumbent of the corporation sole was a
Canadian citizen. It was also the opinion of the Land Registration Commissioner that section 159 of
the corporation Law relied upon by the vendee was rendered operative by the aforementioned
provisions of the Constitution with respect to real estate, unless the precise condition set therein

120
MAS

Atty. Mohammad

WMSU LLB 2A

that at least 60 per cent of its capital is owned by Filipino citizens be present, and, therefore,
ordered the Registered Deeds of Davao to deny registration of the deed of sale in the absence of
proof of compliance with such condition.
After the motion to reconsider said resolution was denied, an action for mandamus was instituted
with this Court by said corporation sole, alleging that under the Corporation Law as well as the
settled jurisprudence on the matter, the deed of sale executed by Mateo L. Rodis in favor of
petitioner is actually a deed of sale in favor of the Catholic Church which is qualified to acquire
private agricultural lands for the establishment and maintenance of places of worship, and prayed
that judgment be rendered reserving and setting aside the resolution of the Land Registration
Commissioner in question. In its resolution of November 15, 1954, this Court gave due course to this
petition providing that the procedure prescribed for appeals from the Public Service Commission of
the Securities and Exchange Commissions (Rule 43), be followed.
Section 5 of Article XIII of the Philippine Constitution reads as follows:
SEC. 5. Save in cases of hereditary succession, no private agricultural land shall be
transferred or assigned except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain in the Philippines.
Section 1 of the same Article also provides the following:
SECTION 1. All agricultural, timber, and mineral lands of the public domain, water, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be
limited to cititzens 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 CONSTITUTION. Natural resources, with the exception of public agricultural land, shall not
be alienated, and no license, concession, or leases 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 other than the development and
limit of the grant.
In virtue of the foregoing mandates of the Constitution, who are considered "qualified" to acquire and
hold agricultural lands in the Philippines? What is the effect of these constitutional prohibition of the
right of a religious corporation recognized by our Corporation Law and registered as a corporation
sole, to possess, acquire and register real estates in its name when the Head, Manager,
Administrator or actual incumbent is an alien?
Petitioner consistently maintained that a corporation sole, irrespective of the citizenship of its
incumbent, is not prohibited or disqualified to acquire and hold real properties. The Corporation Law
and the Canon Law are explicit in their provisions that a corporation sole or "ordinary" is not the
owner of the of the properties that he may acquire but merely the administrator thereof. The Canon
Law also specified that church temporalities are owned by the Catholic Church as a "moral person"
or by the diocess as minor "moral persons" with the ordinary or bishop as administrator.
And elaborating on the composition of the Catholic Church in the Philippines, petitioner explained
that as a religious society or organization, it is made up of 2 elements or divisions the clergy or
religious members and the faithful or lay members. The 1948 figures of the Bureau of Census
showed that there were 277,551 Catholics in Davao and aliens residing therein numbered 3,465.
Ever granting that all these foreigners are Catholics, petitioner contends that Filipino citizens form
more than 80 per cent of the entire Catholics population of that area. As to its clergy and religious
composition, counsel for petitioner presented the Catholic Directory of the Philippines for 1954
(Annex A) which revealed that as of that year, Filipino clergy and women novices comprise already
60.5 per cent of the group. It was, therefore, allowed that the constitutional requirement was fully met
and satisfied.
Respondents, on the other hand, averred that although it might be true that petitioner is not the
owner of the land purchased, yet he has control over the same, with full power to administer, take
possession of, alienate, transfer, encumber, sell or dispose of any or all lands and their
improvements registered in the name of the corporation sole and can collect, receive, demand or
sue for all money or values of any kind that may be kind that may become due or owing to said

121
MAS

Atty. Mohammad

WMSU LLB 2A

corporation, and vested with authority to enter into agreements with any persons, concerns or
entities in connection with said real properties, or in other words, actually exercising all rights of
ownership over the properties. It was their stand that the theory that properties registered in the
name of the corporation sole are held in true for the benefit of the Catholic population of a place, as
of Davao in the case at bar should be sustained because a conglomeration of persons cannot just
be pointed out as the cestui que trust or recipient of the benefits from the property allegedly
administered in their behalf. Neither can it be said that the mass of people referred to as such
beneficiary exercise ant right of ownership over the same. This set-up, respondents argued, falls
short of a trust. The respondents instead tried to prove that in reality, the beneficiary of ecclesiastical
properties are not members or faithful of the church but someone else, by quoting a portion a portion
of the ought of fidelity subscribed by a bishop upon his elevation to the episcopacy wherein he
promises to render to the Pontificial Father or his successors an account of his pastoral office and of
all things appertaining to the state of this church.
Respondents likewise advanced the opinion that in construing the constitutional provision calling for
60 per cent of Filipino citizenship, the criterion of the properties or assets thereof.
In solving the problem thus submitted to our consideration, We can say the following: A corporation
sole is a special form of corporation usually associated with the clergy. Conceived and introduced
into the common law by sheer necessity, this legal creation which was referred to as "that unhappy
freak of English law" was designed to facilitate the exercise of the functions of ownership carried on
by the clerics for and on behalf of the church which was regarded as the property owner (See I
Couvier's Law Dictionary, p. 682-683).
A corporation sole consists of one person only, and his successors (who will always be one at a
time), in some particular station, who are incorporated by law in order to give them some legal
capacities and advantages, particularly that of perpetuity, which in their natural persons they could
not have had. In this sense, the king is a sole corporation; so is a bishop, or dens, distinct from their
several chapters (Reid vs. Barry, 93 Fla. 849, 112 So. 846).
The provisions of our Corporation law on religious corporations are illuminating and sustain the
stand of petitioner. Section 154 thereof provides:
SEC. 154. For the administration of the temporalities of any religious denomination,
society or church and the management of the estates and the properties thereof, it shall be
lawful for the bishop, chief priest, or presiding either of any such religious denomination,
society or church to become a corporation sole, unless inconsistent wit the rules, regulations
or discipline of his religious denomination, society or church or forbidden by competent
authority thereof.
See also the pertinent provisions of the succeeding sections of the same Corporation Law copied
hereunder:
SEC. 155. In order to become a corporation sole the bishop, chief priest, or presiding elder of
any religious denomination, society or church must file with the Securities and Exchange
Commissioner articles of incorporation setting forth the following facts:
xxx xxx xxx.
(3) That as such bishop, chief priest, or presiding elder he is charged with the
administration of the temporalities and the management of the estates and properties of his
religious denomination, society, or church within its territorial jurisdiction, describing it;
xxx xxx xxx.
(As amended by Commonwealth Act No. 287).
SEC. 157. From and after the filing with the Securities and Exchange Commissioner of the
said articles of incorporation, which verified by affidavit or affirmation as aforesaid and
accompanied by the copy of the commission, certificate of election, or letters of appointment
of the bishop, chief priest, or presiding elder, duly certified as prescribed in the section
immediately preceding such the bishop, chief priest, or presiding elder, as the case may be,
shall become a corporation sole and all temporalities, estates, and properties the religious

122
MAS

Atty. Mohammad

WMSU LLB 2A

denomination, society, or church therefore administered or managed by him as such bishop,

chief priest, or presiding elder, shall be held in trust by him as a corporation sole, for the use,
purpose, behalf, and sole benefit of his religious denomination, society, or church, including
hospitals, schools, colleges, orphan, asylums, parsonages, and cemeteries thereof. For the
filing of such articles of incorporation, the Securities and Exchange Commissioner shall
collect twenty-five pesos. (As amended by Commonwealth Act. No. 287); and.
SEC. 163. The right to administer all temporalities and all property held or owned by a
religious order or society, or by the diocese, synod, or district organization of any religious
denomination or church shall, on its incorporation, pass to the corporation and shall be held
in trust for the use, purpose behalf, and benefit of the religious society, or order so
incorporated or of the church of which the diocese, or district organization is an organized
and constituent part.
The Cannon Law contains similar provisions regarding the duties of the corporation sole or ordinary
as administrator of the church properties, as follows:
Al Ordinario local pertenence vigilar diligentemente sobre la administracion de todos los
bienes eclesiasticos que se hallan en su territorio y no estuvieren sustraidos de su
jurisdiccion, salvs las prescriciones legitimas que le concedan mas aamplios derechos.
Teniendo en cuenta los derechos y las legitimas costumbres y circunstancias, procuraran los
Ordinarios regular todo lo concerniente a la administracion de los bienes eclesciasticos,
dando las oportunas instucciones particularles dentro del narco del derecho comun. (Title
XXVIII, Codigo de Derecho Canonico, Lib. III, Canon 1519).1
That leaves no room for doubt that the bishops or archbishops, as the case may be, as corporation's
sole are merely administrators of the church properties that come to their possession, in which they
hold in trust for the church. It can also be said that while it is true that church properties could be
administered by a natural persons, problems regarding succession to said properties can not be
avoided to rise upon his death. Through this legal fiction, however, church properties acquired by the
incumbent of a corporation sole pass, by operation of law, upon his death not his personal heirs but
to his successor in office. It could be seen, therefore, that a corporation sole is created not only to
administer the temporalities of the church or religious society where he belongs but also to hold and
transmit the same to his successor in said office. If the ownership or title to the properties do not
pass to the administrators, who are the owners of church properties?.
Bouscaren and Elis, S.J., authorities on cannon law, on their treatise comment:
In matters regarding property belonging to the Universal Church and to the Apostolic See,
the Supreme Pontiff exercises his office of supreme administrator through the Roman
Curia; in matters regarding other church property, through the administrators of the individual
moral persons in the Church according to that norms, laid down in the Code of Cannon
Law. This does not mean, however, that the Roman Pontiff is the owner of all the church
property; but merely that he is the supreme guardian (Bouscaren and Ellis, Cannon Law, A
Text and Commentary, p. 764).
and this Court, citing Campes y Pulido, Legislacion y Jurisprudencia Canonica, ruled in the case of
Trinidad vs. Roman Catholic Archbishop of Manila, 63 Phil. 881, that:
The second question to be decided is in whom the ownership of the properties constituting
the endowment of the ecclesiastical or collative chaplaincies is vested.
Canonists entertain different opinions as to the persons in whom the ownership of the
ecclesiastical properties is vested, with respect to which we shall, for our purpose, confine
ourselves to stating with Donoso that, while many doctors cited by Fagnano believe that it
resides in the Roman Pontiff as Head of the Universal Church, it is more probable that
ownership, strictly speaking, does not reside in the latter, and, consequently, ecclesiastical
properties are owned by the churches, institutions and canonically established private
corporations to which said properties have been donated.
Considering that nowhere can We find any provision conferring ownership of church properties on
the Pope although he appears to be the supreme administrator or guardian of his flock, nor on the

123
MAS

Atty. Mohammad

WMSU LLB 2A

corporation sole or heads of dioceses as they are admittedly mere administrators of said properties,
ownership of these temporalities logically fall and develop upon the church, diocese or congregation
acquiring the same. Although this question of ownership of ecclesiastical properties has off and on
been mentioned in several decisions of the Court yet in no instance was the subject of citizenship of
this religious society been passed upon.
We are not unaware of the opinion expressed by the late Justice Perfecto in his dissent in the case
of Agustines vs. Court of First Instance of Bulacan, 80 Phil. 565, to the effect that "the Roman
Catholic Archbishop of Manila is only a branch of a universal church by the Pope, with permanent
residence in Rome, Italy". There is no question that the Roman Catholic Church existing in the
Philippines is a tributary and part of the international religious organization, for the word "Roman"
clearly expresses its unity with and recognizes the authority of the Pope in Rome. However, lest We
become hasty in drawing conclusions, We have to analyze and take note of the nature of the
government established in the Vatican City, of which it was said:
GOVERNMENT. In the Roman Catholic Church supreme authority and jurisdiction over
clergy and laity alike as held by the pope who (since the Middle Ages) is elected by the
cardinals assembled in conclave, and holds office until his death or legitimate abdication. . .
While the pope is obviously independent of the laws made, and the officials appointed, by
himself or his predecessors, he usually exercises his administrative authority according to
the code of canon law and through the congregations, tribunals and offices of the Curia
Romana. In their respective territories (called generally dioceses) and over their respective
subjects, the patriarchs, metropolitans or archbishops and bishops exercise a jurisdiction
which is called ordinary (as attached by law to an office given to a person. . . (Collier's
Encyclopedia, Vol. 17, p. 93).
While it is true and We have to concede that in the profession of their faith, the Roman Pontiff is the
supreme head; that in the religious matters, in the exercise of their belief, the Catholic congregation
of the faithful throughout the world seeks the guidance and direction of their Spiritual Father in the
Vatican, yet it cannot be said that there is a merger of personalities resultant therein. Neither can it
be said that the political and civil rights of the faithful, inherent or acquired under the laws of their
country, are affected by that relationship with the Pope. The fact that the Roman Catholic Church in
almost every country springs from that society that saw its beginning in Europe and the fact that the
clergy of this faith derive their authorities and receive orders from the Holy See do not give or bestow
the citizenship of the Pope upon these branches. Citizenship is a political right which cannot be
acquired by a sort of "radiation". We have to realize that although there is a fraternity among all the
catholic countries and the dioceses therein all over the globe, the universality that the word "catholic"
implies, merely characterize their faith, a uniformity in the practice and the interpretation of their
dogma and in the exercise of their belief, but certainly they are separate and independent from one
another in jurisdiction, governed by different laws under which they are incorporated, and entirely
independent on the others in the management and ownership of their temporalities. To allow theory
that the Roman Catholic Churches all over the world follow the citizenship of their Supreme Head,
the Pontifical Father, would lead to the absurdity of finding the citizens of a country who embrace the
Catholic faith and become members of that religious society, likewise citizens of the Vatican or of
Italy. And this is more so if We consider that the Pope himself may be an Italian or national of any
other country of the world. The same thing be said with regard to the nationality or citizenship of the
corporation sole created under the laws of the Philippines, which is not altered by the change of
citizenship of the incumbent bishops or head of said corporation sole.
We must therefore, declare that although a branch of the Universal Roman Catholic Apostolic
Church, every Roman Catholic Church in different countries, if it exercises its mission and is lawfully
incorporated in accordance with the laws of the country where it is located, is considered an entity or
person with all the rights and privileges granted to such artificial being under the laws of that country,
separate and distinct from the personality of the Roman Pontiff or the Holy See, without prejudice to
its religious relations with the latter which are governed by the Canon Law or their rules and
regulations.
We certainly are conscious of the fact that whatever conclusion We may draw on this matter will
have a far reaching influence, nor can We overlook the pages of history that arouse indignation and
criticisms against church landholdings. This nurtured feeling that snowbailed into a strong
nationalistic sentiment manifested itself when the provisions on natural to be embodied in the
Philippine Constitution were framed, but all that has been said on this regard referred more
particularly to landholdings of religious corporations known as "Friar Estates" which have already
bee acquired by our government, and not to properties held by corporations sole which, We repeat,

124
MAS

Atty. Mohammad

WMSU LLB 2A

are properties held in trust for the benefit of the faithful residing within its territorial jurisdiction.
Though that same feeling probably precipitated and influenced to a large extent the doctrine laid
down in the celebrated Krivenco decision, We have to take this matter in the light of legal provisions
and jurisprudence actually obtaining, irrespective of sentiments.
The question now left for our determination is whether the Universal Roman Catholic Apostolic
Church in the Philippines, or better still, the corporation sole named the Roman Catholic Apostolic
Administrator of Davao, Inc., is qualified to acquire private agricultural lands in the Philippines
pursuant to the provisions of Article XIII of the Constitution.
We see from sections 1 and 5 of said Article quoted before, that only persons or corporations
qualified to acquire hold lands of the public domain in the Philippines may acquire or be assigned
and hold private agricultural lands. Consequently, the decisive factor in the present controversy
hinges on the proposition or whether or not the petitioner in this case can acquire agricultural lands
of the public domain.
From the data secured from the Securities and Exchange Commission, We find that the Roman
Catholic Bishop of Zamboanga was incorporated (as a corporation sole) in September, 1912,
principally to administer its temporalities and manage its properties. Probably due to the ravages of
the last war, its articles of incorporation werereconstructed in the Securities and Exchange
Commission on April 8, 1948. At first, this corporation sole administered all the temporalities of the
church existing or located in the island of Mindanao. Later on, however, new dioceses were formed
and new corporations sole were created to correspond with the territorial jurisdiction of the new
dioceses, one of them being petitioner herein, the Roman Catholic Apostolic Administrator of Davao,
Inc., which was registered with the Securities and Exchange Commission on September 12, 1950,
and succeeded in the administrative for all the "temporalities" of the Roman Catholic Church existing
in Davao.
According to our Corporation Law, Public Act No. 1549, approved April 1, 1906, a corporation sole.
is organized and composed of a single individual, the head of any religious society or church,
for the ADMINISTRATION of the temporalities of such society or church. By "temporalities" is
meant estate and properties not used exclusively for religious worship. The successor in
office of such religious head or chief priest incorporated as a corporation sole shall become
the corporation sole on ascension to office, and shall be permitted to transact business as
such on filing with the Securities and Exchange Commission a copy of his commission,
certificate of election or letter of appointment duly certified by any notary public or clerk of
court of record (Guevara's The Philippine Corporation Law, p. 223).
The Corporation Law also contains the following provisions:
SECTION 159. Any corporation sole may purchase and hold real estate and personal;
property for its church, charitable, benevolent, or educational purposes, and may receive
bequests or gifts of such purposes. Such corporation may mortgage or sell real property held
by it upon obtaining an order for that purpose from the Court of First Instance of the province
in which the property is situated; but before making the order proof must be made to the
satisfaction of the Court that notice of the application for leave to mortgage or sell has been
given by publication or otherwise in such manner and for such time as said Court or the
Judge thereof may have directed, and that it is to the interest of the corporation that leave to
mortgage or sell must be made by petition, duly verified by the bishop, chief priest, or
presiding elder acting as corporation sole, and may be opposed by any member of the
religious denomination, society or church represented by the corporation sole: Provided,
however, That in cases where the rules, regulations, and discipline of the religious
denomination, society or church concerned represented by such corporation sole regulate
the methods of acquiring, holding, selling and mortgaging real estate and personal property,
such rules, regulations, and discipline shall control and the intervention of the Courts shall
not be necessary.
It can, therefore, be noticed that the power of a corporation sole to purchase real property, like the
power exercised in the case at bar, it is not restricted although the power to sell or
mortgage sometimes is, depending upon the rules, regulations, and discipline of the church
concerned represented by said corporation sole. If corporations sole can purchase and sell real
estate for its church, charitable, benevolent, or educational purposes, can they register said real
properties? As provided by law, lands held in trust for specific purposes me be subject of registration

125
MAS

Atty. Mohammad

WMSU LLB 2A

(section 69, Act 496), and the capacity of a corporation sole, like petitioner herein, to register lands
belonging to it is acknowledged, and title thereto may be issued in its name (Bishop of Nueva
Segovia vs. Insular Government, 26 Phil. 300-1913). Indeed it is absurd that while the corporations
sole that might be in need of acquiring lands for the erection of temples where the faithful can pray,
or schools and cemeteries which they are expressly authorized by law to acquire in connection with
the propagation of the Roman Catholic Apostolic faith or in furtherance of their freedom of religion
they could not register said properties in their name. As professor Javier J. Nepomuceno very well
says "Man in his search for the immortal and imponderable, has, even before the dawn of recorded
history, erected temples to the Unknown God, and there is no doubt that he will continue to do so for
all time to come, as long as he continues 'imploring the aid of Divine Providence'" (Nepomuceno's
Corporation Sole, VI Ateneo Law Journal, No. 1, p. 41, September, 1956). Under the circumstances
of this case, We might safely state that even before the establishment of the Philippine
Commonwealth and of the Republic of the Philippines every corporation sole then organized and
registered had by express provision of law the necessary power and qualification to purchase in its
name private lands located in the territory in which it exercised its functions or ministry and for which
it was created, independently of the nationality of its incumbent unique and single member and
head, the bishop of the dioceses. It can be also maintained without fear of being gainsaid that the
Roman Catholic Apostolic Church in the Philippines has no nationality and that the framers of the
Constitution, as will be hereunder explained, did not have in mind the religious corporations sole
when they provided that 60 per centum of the capital thereof be owned by Filipino citizens.
There could be no controversy as to the fact that a duly registered corporation sole is an artificial
being having the right of succession and the power, attributes, and properties expressly authorized
by law or incident to its existence (section 1, Corporation Law). In outlining the general powers of a
corporation. Public Act. No. 1459 provides among others:
SEC. 13. Every corporation has the power:
(5) To purchase, hold, convey, sell, lease, lot, mortgage, encumber, and otherwise deal with
such real and personal property as the purpose for which the corporation was formed may
permit, and the transaction of the lawful business of the corporation may reasonably and
necessarily require, unless otherwise prescribed in this Act: . . .
In implementation of the same and specially made applicable to a form of corporation recognized by
the same law, Section 159 aforequoted expressly allowed the corporation sole to purchase and hold
real as well as personal properties necessary for the promotion of the objects for which said
corporation sole is created. Respondent Land Registration Commissioner, however, maintained that
since the Philippine Constitution is a later enactment than public Act No. 1459, the provisions of
Section 159 in amplification of Section 13 thereof, as regard real properties, should be considered
repealed by the former.
There is a reason to believe that when the specific provision of the Constitution invoked by
respondent Commissioner was under consideration, the framers of the same did not have in mind or
overlooked this particular form of corporation. It is undeniable that the naturalization and
conservation of our national resources was one of the dominating objectives of the Convention and
in drafting the present Article XII of the Constitution, the delegates were goaded by the desire (1) to
insure their conservation for Filipino posterity; (2) to serve as an instrument of national defense,
helping prevent the extension into the country of foreign control through peaceful economic
penetration; and (3) to prevent making the Philippines a source of international conflicts with the
consequent danger to its internal security and independence (See The Framing of the Philippine
Constitution by Professor Jose M. Aruego, a Delegate to the Constitutional Convention, Vol. II. P.
592-604). In the same book Delegate Aruego, explaining the reason behind the first consideration,
wrote:
At the time of the framing of Philippine Constitution, Filipino capital had been to be rather
shy. Filipinos hesitated s a general rule to invest a considerable sum of their capital for the
development, exploitation and utilization of the natural resources of the country. They had
not as yet been so used to corporate as the peoples of the west. This general apathy, the
delegates knew, would mean the retardation of the development of the natural resources,
unless foreign capital would be encouraged to come and help in that development. They
knew that the naturalization of the natural resources would certainly not encourage
theINVESTMENT OF FOREIGN CAPITAL into them. But there was a general feeling in the
Convention that it was better to have such a development retarded or even postpone
together until such time when the Filipinos would be ready and willing to undertake it rather

126
MAS

Atty. Mohammad

WMSU LLB 2A

than permit the natural resources to be placed under the ownership or control of foreigners in
order that they might be immediately be developed, with the Filipinos of the future serving
not as owners but utmost as tenants or workers under foreign masters. By all means, the
delegates believed, the natural resources should be conserved for Filipino posterity.
It could be distilled from the foregoing that the farmers of the Constitution intended said provisions
as barrier for foreigners or corporations financed by such foreigners to acquire, exploit and develop
our natural resources, saving these undeveloped wealth for our people to clear and enrich when
they are already prepared and capable of doing so. But that is not the case of corporations sole in
the Philippines, for, We repeat, they are mere administrators of the "temporalities" or properties titled
in their name and for the benefit of the members of their respective religion composed of an
overwhelming majority of Filipinos. No mention nor allusion whatsoever is made in the Constitution
as to the prohibition against or the liability of the Roman Catholic Church in the Philippines to acquire
and hold agricultural lands. Although there were some discussions on landholdings, they were
mostly confined in the inclusion of the provision allowing the Government to break big landed estates
to put an end to absentee landlordism.
But let us suppose, for the sake of argument, that the above referred to inhibitory clause of Section 1
of Article XIII of the constitution does have bearing on the petitioner's case; even so the clause
requiring that at least 60 per centum of the capital of the corporation be owned by Filipinos is
subordinated to the petitioner's aforesaid right already existing at the time of the inauguration of the
Commonwealth and the Republic of the Philippines. In the language of Mr. Justice Jose P. Laurel (a
delegate to the Constitutional Convention), in his concurring opinion of the case of Gold Creek
mining Corporation, petitioner vs. Eulogio Rodriguez, Secretary of Agriculture and Commerce, and
Quirico Abadilla, Director of the Bureau of Mines, respondent, 66 Phil. 259:
The saving clause in the section involved of the Constitution was originally embodied in the
report submitted by the Committee on Naturalization and Preservation of Land and Other
Natural Resources to the Constitutional Convention on September 17, 1954. It was later
inserted in the first draft of the Constitution as section 13 of Article XIII thereof, and finally
incorporated as we find it now. Slight have been the changes undergone by the proviso from
the time when it comes out of the committee until it was finally adopted. When first submitted
and as inserted to the first draft of the Constitution it reads: 'subject to any right, grant, lease,
or concession existing in respect thereto on the date of the adoption of the Constitution'. As
finally adopted, the proviso reads: 'subject to any existing right, grant, lease, or concession at
the time of the inauguration of the Government established under this Constitution'. This
recognition is not mere graciousness but springs form the just character of the government
established. The framers of the Constitution were not obscured by the rhetoric of democracy
or swayed to hostility by an intense spirit of nationalism. They well knew that conservation of
our natural resources did not mean destruction or annihilation of acquired property rights.
Withal, they erected a government neither episodic nor stationary but well-nigh conservative
in the protection of property rights. This notwithstanding nationalistic and socialistic traits
discoverable upon even a sudden dip into a variety of the provisions embodied in the
instrument.
The writer of this decision wishes to state at this juncture that during the deliberation of this case he
submitted to the consideration of the Court the question that may be termed the "vested right saving
clause" contained in Section 1, Article XII of the Constitution, but some of the members of this Court
either did not agree with the theory of the writer, or were not ready to take a definite stand on the
particular point I am now to discuss deferring our ruling on such debatable question for a better
occasion, inasmuch as the determination thereof is not absolutely necessary for the solution of the
problem involved in this case. In his desire to face the issues squarely, the writer will endeavor, at
least as a disgression, to explain and develop his theory, not as a lucubration of the Court, but of his
own, for he deems it better and convenient to go over the cycle of reasons that are linked to one
another and that step by step lead Us to conclude as We do in the dispositive part of this decision.
It will be noticed that Section 1 of Article XIII of the Constitution provides, among other things, that
"all agricultural lands of the public domain and their disposition shall be limited to citizens of the
Philippines or to corporations at least 60 per centum of the capital of which is owned by such
citizens, SUBJECT TO ANY EXISTING RIGHT AT THE TIME OF THE INAUGURATION OF THE
GOVERNMENT ESTABLISHED UNDER THIS CONSTITUTION."
As recounted by Mr. Justice Laurel in the aforementioned case of Gold Creek Mining Corporation vs.
Rodriguez et al., 66 Phil. 259, "this recognition (in the clause already quoted), is not mere

127
MAS

Atty. Mohammad

WMSU LLB 2A

graciousness but springs from the just character of the government established. The farmers of the
Constitution were not obscured by the rhetoric of democracy or swayed to hostility by an intense
spirit of nationalism. They well knew that conservation of our natural resources did not mean
destruction or annihilation of ACQUIRED PROPERTY RIGHTS".
But respondents' counsel may argue that the preexisting right of acquisition of public or private lands
by a corporation which does not fulfill this 60 per cent requisite, refers to purchases of the
Constitution and not to later transactions. This argument would imply that even assuming that
petitioner had at the time of the enactment of the Constitution the right to purchase real property or
right could not be exercised after the effectivity of our Constitution, because said power or right of
corporations sole, like the herein petitioner, conferred in virtue of the aforequoted provisions of the
Corporation Law, could no longer be exercised in view of the requisite therein prescribed that at
least 60 per centum of the capital of the corporation had to be Filipino. It has been shown before
that: (1) the corporation sole, unlike the ordinary corporations which are formed by no less than 5
incorporators, is composed of only one persons, usually the head or bishop of the diocese, a unit
which is not subject to expansion for the purpose of determining any percentage whatsoever; (2) the
corporation sole is only the administrator and not the owner of the temporalities located in the
territory comprised by said corporation sole; (3) such temporalities are administered for and on
behalf of the faithful residing in the diocese or territory of the corporation sole; and (4) the latter, as
such, has no nationality and the citizenship of the incumbent Ordinary has nothing to do with the
operation, management or administration of the corporation sole, nor effects the citizenship of the
faithful connected with their respective dioceses or corporation sole.
In view of these peculiarities of the corporation sole, it would seem obvious that when the specific
provision of the Constitution invoked by respondent Commissioner (section 1, Art. XIII), was under
consideration, the framers of the same did not have in mind or overlooked this particular form of
corporation. If this were so, as the facts and circumstances already indicated tend to prove it to be
so, then the inescapable conclusion would be that this requirement of at least 60 per cent of Filipino
capital was never intended to apply to corporations sole, and the existence or not a vested right
becomes unquestionably immaterial.
But let us assumed that the questioned proviso is material. yet We might say that a reading of said
Section 1 will show that it does not refer to any actual acquisition of land up to the right, qualification
or power to acquire and hold private real property. The population of the Philippines, Catholic to a
high percentage, is ever increasing. In the practice of religion of their faithful the corporation sole
may be in need of more temples where to pray, more schools where the children of the congregation
could be taught in the principles of their religion, more hospitals where their sick could be treated,
more hallow or consecrated grounds or cemeteries where Catholics could be buried, many more
than those actually existing at the time of the enactment of our Constitution. This being the case,
could it be logically maintained that because the corporation sole which, by express provision of law,
has the power to hold and acquire real estate and personal property of its churches, charitable
benevolent, or educational purposes (section 159, Corporation Law) it has to stop its growth and
restrain its necessities just because the corporation sole is a non-stock corporation composed of
only one person who in his unity does not admit of any percentage, especially when that person is
not the owner but merely an administrator of the temporalities of the corporation sole? The writer
leaves the answer to whoever may read and consider this portion of the decision.
Anyway, as stated before, this question is not a decisive factor in disposing the case, for even if We
were to disregard such saving clause of the Constitution, which reads: subject to any existing right,
grant, etc., at the same time of the inauguration of the Government established under this
Constitution, yet We would have, under the evidence on record, sufficient grounds to uphold
petitioner's contention on this matter.
In this case of the Register of Deeds of Rizal vs. Ung Sui Si Temple, 2 G.R. No. L-6776, promulgated
May 21, 1955, wherein this question was considered from a different angle, this Court through Mr.
Justice J.B.L. Reyes, said:
The fact that the appellant religious organization has no capital stock does not suffice to
escape the Constitutional inhibition, since it is admitted that its members are of foreign
nationality. The purpose of the sixty per centum requirement is obviously to ensure that
corporation or associations allowed to acquire agricultural land or to exploit natural resources
shall be controlled by Filipinos; and the spirit of the Constitution demands that in the absence
of capital stock, the controlling membership should be composed of Filipino citizens.

128
MAS

Atty. Mohammad

WMSU LLB 2A

In that case respondent-appellant Ung Siu Si Temple was not a corporation sole but a corporation
aggregate, i.e., an unregistered organization operating through 3 trustees, all of Chinese nationality,
and that is why this Court laid down the doctrine just quoted. With regard to petitioner, which likewise
is a non-stock corporation, the case is different, because it is a registered corporation sole, evidently
of no nationality and registered mainly to administer the temporalities and manage the properties
belonging to the faithful of said church residing in Davao. But even if we were to go over the record
to inquire into the composing membership to determine whether the citizenship requirement is
satisfied or not, we would find undeniable proof that the members of the Roman Catholic Apostolic
faith within the territory of Davao are predominantly Filipino citizens. As indicated before, petitioner
has presented evidence to establish that the clergy and lay members of this religion fully covers the
percentage of Filipino citizens required by the Constitution. These facts are not controverted by
respondents and our conclusion in this point is sensibly obvious.
Dissenting OpinionDiscussed. After having developed our theory in the case and arrived at the
findings and conclusions already expressed in this decision. We now deem it proper to analyze and
delve into the basic foundation on which the dissenting opinion stands up. Being aware of the
transcendental and far-reaching effects that Our ruling on the matter might have, this case was
thoroughly considered from all points of view, the Court sparing no effort to solve the delicate
problems involved herein.
At the deliberations had to attain this end, two ways were open to a prompt dispatch of the case: (1)
the reversal of the doctrine We laid down in the celebrated Krivenko case by excluding urban lots
and properties from the group of the term "private agricultural lands" use in this section 5, Article XIII
of the Constitution; and (2) by driving Our reasons to a point that might indirectly cause the
appointment of Filipino bishops or Ordinary to head the corporations sole created to administer the
temporalities of the Roman Catholic Church in the Philippines. With regard to the first way, a great
majority of the members of this Court were not yet prepared nor agreeable to follow that course, for
reasons that are obvious. As to the second way, it seems to be misleading because the nationality of
the head of a diocese constituted as a corporation sole has no material bearing on the functions of
the latter, which are limited to the administration of the temporalities of the Roman Catholic Apostolic
Church in the Philippines.
Upon going over the grounds on which the dissenting opinion is based, it may be noticed that its
author lingered on the outskirts of the issues, thus throwing the main points in controversy out of
focus. Of course We fully agree, as stated by Professor Aruego, that the framers of our Constitution
had at heart to insure the conservation of the natural resources of Our motherland of Filipino
posterity; to serve them as an instrument of national defense, helping prevent the extension into the
country of foreign control through peaceful economic penetration; and to prevent making the
Philippines a source of international conflicts with the consequent danger to its internal security and
independence. But all these precautions adopted by the Delegates to Our Constitutional Assembly
could have not been intended for or directed against cases like the one at bar. The emphasis and
wonderings on the statement that once the capacity of a corporation sole to acquire private
agricultural lands is admitted there will be no limit to the areas that it may hold and that this will pave
the way for the "revival or revitalization of religious landholdings that proved so troublesome in our
past", cannot even furnish the "penumbra" of a threat to the future of the Filipino people. In the first
place, the right of Filipino citizens, including those of foreign extraction, and Philippine corporations,
to acquire private lands is not subject to any restriction or limit as to quantity or area, and We
certainly do not see any wrong in that. The right of Filipino citizens and corporations to acquire public
agricultural lands is already limited by law. In the second place, corporations sole cannot be
considered as aliens because they have no nationality at all. Corporations sole are, under the law,
mere administrators of the temporalities of the Roman Catholic Church in the Philippines. In the third
place, every corporation, be it aggregate or sole, is only entitled to purchase, convey, sell, lease, let,
mortgage, encumber and otherwise deal with real properties when it is pursuant to or in consonance
with the purposes for which the corporation was formed, and when the transactions of the lawful
business of the corporation reasonably and necessarily require such dealing section 13-(5) of the
Corporation Law, Public Act No. 1459 and considering these provisions in conjunction with
Section 159 of the same law which provides that a corporation sole may only "purchase and hold
real estate and personal properties for its church, charitable, benevolent or educational purposes",
the above mentioned fear of revitalization of religious landholdings in the Philippines is absolutely
dispelled. The fact that the law thus expressly authorizes the corporations sole to receive bequests
or gifts of real properties (which were the main source that the friars had to acquire their big
haciendas during the Spanish regime), is a clear indication that the requisite that bequests or gifts of
real estate be for charitable, benevolent, or educational purposes, was, in the opinion of the
legislators, considered sufficient and adequate protection against the revitalization of religious
landholdings.

129
MAS

Atty. Mohammad

WMSU LLB 2A

Finally, and as previously stated, We have reason to believe that when the Delegates to the
Constitutional Convention drafted and approved Article XIII of the Constitution they do not have in
mind the corporation sole. We come to this finding because the Constitutional Assembly, composed
as it was by a great number of eminent lawyers and jurists, was like any other legislative body
empowered to enact either the Constitution of the country or any public statute, presumed to know
the conditions existing as to particular subject matter when it enacted a statute (Board of Commerce
of Orange Country vs. Bain, 92 S.E. 176; N. C. 377).
Immemorial customs are presumed to have been always in the mind of the Legislature in
enacting legislation. (In re Kruger's Estate, 121 A. 109; 277 P. 326).
The Legislative is presumed to have a knowledge of the state of the law on the subjects
upon which it legislates. (Clover Valley Land and Stock Co. vs. Lamb et al., 187, p. 723,726.)
The Court in construing a statute, will assume that the legislature acted with full knowledge
of the prior legislation on the subject and its construction by the courts. (Johns vs. Town of
Sheridan, 89 N. E. 899, 44 Ind. App. 620.).
The Legislature is presumed to have been familiar with the subject with which it was dealing .
. . . (Landers vs. Commonwealth, 101 S. E. 778, 781.).
The Legislature is presumed to know principles of statutory construction. (People vs. Lowell,
230 N. W. 202, 250 Mich. 349, followed in P. vs. Woodworth, 230 N.W. 211, 250 Mich. 436.).
It is not to be presumed that a provision was inserted in a constitution or statute without
reason, or that a result was intended inconsistent with the judgment of men of common
sense guided by reason" (Mitchell vs. Lawden, 123 N.E. 566, 288 Ill. 326.) See City of
Decatur vs. German, 142 N. E. 252, 310 Ill. 591, and may other authorities that can be cited
in support hereof.
Consequently, the Constitutional Assembly must have known:
1. That a corporation sole is organized by and composed of a single individual, the head of
any religious society or church operating within the zone, area or jurisdiction covered by said
corporation sole (Article 155, Public Act No. 1459);
2. That a corporation sole is a non-stock corporation;
3. That the Ordinary ( the corporation sole proper) does not own the temporalities which he
merely administers;
4. That under the law the nationality of said Ordinary or of any administrator has absolutely
no bearing on the nationality of the person desiring to acquire real property in the Philippines
by purchase or other lawful means other than by hereditary succession, who according to the
Constitution must be a Filipino (sections 1 and 5, Article XIII).
5. That section 159 of the Corporation Law expressly authorized the corporation sole to
purchase and holdreal estate for its church, charitable, benevolent or educational purposes,
and to receive bequests or giftsfor such purposes;
6. That in approving our Magna Carta the Delegates to the Constitutional Convention, almost
all of whom were Roman Catholics, could not have intended to curtail the propagation of the
Roman Catholic faith or the expansion of the activities of their church, knowing pretty well
that with the growth of our population more places of worship, more schools where our youth
could be taught and trained; more hallow grounds where to bury our dead would be needed
in the course of time.
Long before the enactment of our Constitution the law authorized the corporations sole even to
receive bequests or gifts of real estates and this Court could not, without any clear and specific
provision of the Constitution, declare that any real property donated, let as say this year, could no
longer be registered in the name of the corporation sole to which it was conveyed. That would be an
absurdity that should not receive our sanction on the pretext that corporations sole which have no
nationality and are non-stock corporations composed of only one person in the capacity of

130
MAS

Atty. Mohammad

WMSU LLB 2A

administrator, have to establish first that at least sixty per centum of their capital belong to Filipino
citizens. The new Civil Code even provides:
ART. 10. In case of doubt in the interpretation or application of laws, it is presumed that
the lawmaking body intended right and justice to prevail.
Moreover, under the laws of the Philippines, the administrator of the properties of a Filipino can
acquire, in the name of the latter, private lands without any limitation whatsoever, and that is so
because the properties thus acquired are not for and would not belong to the administrator but to the
Filipino whom he represents. But the dissenting Justice inquires: If the Ordinary is only the
administrator, for whom does he administer? And who can alter or overrule his acts? We will
forthwith proceed to answer these questions. The corporations sole by reason of their peculiar
constitution and form of operation have no designed owner of its temporalities, although by the terms
of the law it can be safely implied that the Ordinary holds them in trust for the benefit of the Roman
Catholic faithful to their respective locality or diocese. Borrowing the very words of the law, We may
say that the temporalities of every corporation sole are held in trust for the use, purpose, behalf and
benefit of the religious society, or order so incorporated or of the church to which the diocese, synod,
or district organization is an organized and constituent part (section 163 of the Corporation Law).
In connection with the powers of the Ordinary over the temporalities of the corporation sole, let us
see now what is the meaning and scope of the word "control". According to the Merriam-Webster's
New International Dictionary, 2nd ed., p. 580, on of the acceptations of the word "control" is:
4. To exercise restraining or directing influence over; to dominate; regulate; hence, to hold
from action; to curb; subject; also, Obs. to overpower.
SYN: restrain, rule, govern, guide, direct; check, subdue.
It is true that under section 159 of the Corporation Law, the intervention of the courts is not
necessary, tomortgage or sell real property held by the corporation sole where the rules, regulations
and discipline of the religious denomination, society or church concerned presented by such
corporation sole regulates the methods of acquiring, holding, selling and mortgaging real estate, and
that the Roman Catholic faithful residing in the jurisdiction of the corporation sole has no say either
in the manner of acquiring or of selling real property. It may be also admitted that the faithful of the
diocese cannot govern or overrule the acts of the Ordinary, but all this does not mean that the latter
can administer the temporalities of the corporation sole without check or restraint. We must not
forget that when a corporation sole is incorporated under Philippine laws, the head and only member
thereof subjects himself to the jurisdiction of the Philippine courts of justice and these tribunals can
thus entertain grievances arising out of or with respect to the temporalities of the church which came
into the possession of the corporation sole as administrator. It may be alleged that the courts cannot
intervene as to the matters of doctrine or teachings of the Roman Catholic Church. That is correct,
but the courts may step in, at the instance of the faithful for whom the temporalities are being held in
trust, to check undue exercise by the corporation sole of its power as administrator to insure that
they are used for the purpose or purposes for which the corporation sole was created.
American authorities have these to say:
It has been held that the courts have jurisdiction over an action brought by persons claiming
to be members of a church, who allege a wrongful and fraudulent diversion of the church
property to uses foreign to the purposes of the church, since no ecclesiastical question is
involved and equity will protect from wrongful diversion of the property (Hendryx vs. Peoples
United Church, 42 Wash. 336, 4 L.R.A. n.s. 1154).
The courts of the State have no general jurisdiction and control over the officers of such
corporations in respect to the performance of their official duties; but as in respect to the
property which they hold for the corporation, they stand in position of TRUSTEES and the
courts may exercise the same supervision as in other cases of trust (Ramsey vs. Hicks, 174
Ind. 428, 91 N.E. 344, 92 N.E. 164, 30 L.R.A. n.s. 665; Hendryx vs. Peoples United
Church, supra.).
Courts of the state do not interfere with the administration of church rules or discipline unless
civil rights become involved and which must be protected (Morris St., Baptist Church vs.
Dart, 67 S.C. 338, 45 S.E. 753, and others). (All cited in Vol. II, Cooley's Constitutional
Limitations, p. 960-964.).

131
MAS

Atty. Mohammad

WMSU LLB 2A

If the Constitutional Assembly was aware of all the facts above enumerated and of the provisions of
law relative to existing conditions as to management and operation of corporations sole in the
Philippines, and if, on the other hand, almost all of the Delegates thereto embraced the Roman
Catholic faith, can it be imagined even for an instant that when Article XIII of the Constitution was
approved the framers thereof intended to prevent or curtail from then on the acquisition sole, either
by purchase or donation, of real properties that they might need for the propagation of the faith and
for there religious and Christian activities such as the moral education of the youth, the care,
attention and treatment of the sick and the burial of the dead of the Roman Catholic faithful residing
in the jurisdiction of the respective corporations sole? The mere indulgence in said thought would
impress upon Us a feeling of apprehension and absurdity. And that is precisely the leit motiv that
permeates the whole fabric of the dissenting opinion.
It seems from the foregoing that the main problem We are confronted with in this appeal, hinges
around the necessity of a proper and adequate interpretation of sections 1 and 5 of Article XIII of the
Constitution. Let Us then be guided by the principles of statutory construction laid down by the
authorities on the matter:
The most important single factor in determining the intention of the people from whom the
constitution emanated is the language in which it is expressed. The words employed are to
be taken in their natural sense, except that legal or technical terms are to be given their
technical meaning. The imperfections of language as a vehicle for conveying meanings
result in ambiguities that must be resolved by result to extraneous aids for discovering the
intent of the framers. Among the more important of these are a consideration of the history of
the times when the provision was adopted and of the purposes aimed at in its adoption. The
debates of constitutional convention, contemporaneous construction, and practical
construction by the legislative and executive departments, especially if long continued, may
be resorted to resolve, but not to create, ambiguities. . . . Consideration of the consequences
flowing from alternative constructions of doubtful provisions constitutes an important
interpretative device. . . . The purposes of many of the broadly phrased constitutional
limitations were the promotion of policies that do not lend themselves to definite and specific
formulation. The courts have had to define those policies and have often drawn on natural
law and natural rights theories in doing so. The interpretation of constitutions tends to
respond to changing conceptions of political and social values. The extent to which these
extraneous aids affect the judicial construction of constitutions cannot be formulated in
precise rules, but their influence cannot be ignored in describing the essentials of the
process (Rottschaeffer on Constitutional Law, 1939 ed., p. 18-19).
There are times that when even the literal expression of legislation may be inconsistent with
the general objectives of policy behind it, and on the basis of equity or spirit of the statute the
courts rationalize a restricted meaning of the latter. A restricted interpretation is usually
applied where the effect of literal interpretation will make for injustice and absurdity or, in the
words of one court, the language must be so unreasonable 'as to shock general common
sense'. (Vol. 3, Sutherland on Statutory Construction, 3rd ed., 150.).
A constitution is not intended to be a limitation on the development of a country nor an
obstruction to its progress and foreign relations (Moscow Fire Ins. Co. of Moscow, Russia vs.
Bank of New York and Trust Co., 294 N. Y. S.648; 56 N.E. 2d. 745, 293 N.Y. 749).
Although the meaning or principles of a constitution remain fixed and unchanged from the
time of its adoption, a constitution must be construed as if intended to stand for a great
length of time, and it is progressive and not static. Accordingly, it should not receive too
narrow or literal an interpretation but rather the meaning given it should be applied in such
manner as to meet new or changed conditions as they arise (U.S. vs. Lassic, 313 U.S. 299,
85 L. Ed., 1368).
Effect should be given to the purpose indicated by a fair interpretation of the language used
and that construction which effectuates, rather than that which destroys a plain intent or
purpose of a constitutional provision, is not only favored but will be adopted (State ex rel.
Randolph Country vs. Walden, 206 S.W. 2d 979).
It is quite generally held that in arriving at the intent and purpose the construction should be
broad or liberal or equitable, as the better method of ascertaining that intent, rather than
technical (Great Southern Life Ins. Co. vs. City of Austin, 243 S.W. 778).

132
MAS

Atty. Mohammad

WMSU LLB 2A

All these authorities uphold our conviction that the framers of the Constitution had not in mind the
corporations sole, nor intended to apply them the provisions of section 1 and 5 of said Article XIII
when they passed and approved the same. And if it were so as We think it is, herein petitioner, the
Roman Catholic Apostolic Administrator of Davao, Inc., could not be deprived of the right to acquire
by purchase or donation real properties for charitable, benevolent and educational purposes, nor of
the right to register the same in its name with the Register of Deeds of Davao, an indispensable
requisite prescribed by the Land Registration Act for lands covered by the Torrens system.
We leave as the last theme for discussion the much debated question above referred to as "the
vested right saving clause" contained in section 1, Article XIII of the Constitution. The dissenting
Justice hurls upon the personal opinion expressed on the matter by the writer of the decision the
most pointed darts of his severe criticism. We think, however, that this strong dissent should have
been spared, because as clearly indicated before, some members of this Court either did not agree
with the theory of the writer or were not ready to take a definite stand on that particular point, so that
there being no majority opinion thereon there was no need of any dissension therefrom. But as the
criticism has been made the writer deems it necessary to say a few words of explanation.
The writer fully agrees with the dissenting Justice that ordinarily "a capacity to acquire (property) in
futuro, is not in itself a vested or existing property right that the Constitution protects from
impairment. For a property right to be vested (or acquired) there must be a transition from
the potential or contingent to the actual, and the proprietary interest must have attached to a thing; it
must have become 'fixed and established'" (Balboa vs. Farrales, 51 Phil. 498). But the case at bar
has to be considered as an exception to the rule because among the rights granted by section 159
of the Corporation Law was the right to receive bequests or gifts of real properties for charitable,
benevolent and educational purposes. And this right to receive such bequests or gifts (which implies
donations in futuro), is not a mere potentiality that could be impaired without any specific provision in
the Constitution to that effect, especially when the impairment would disturbingly affect the
propagation of the religious faith of the immense majority of the Filipino people and the curtailment of
the activities of their Church. That is why the writer gave us a basis of his contention what Professor
Aruego said in his book "The Framing of the Philippine Constitution" and the enlightening opinion of
Mr. Justice Jose P. Laurel, another Delegate to the Constitutional Convention, in his concurring
opinion in the case of Goldcreek Mining Co. vs. Eulogio Rodriguez et al., 66 Phil. 259. Anyway the
majority of the Court did not deem necessary to pass upon said "vested right saving clause" for the
final determination of this case.
JUDGMENT
Wherefore, the resolution of the respondent Land Registration Commission of September 21, 1954,
holding that in view of the provisions of sections 1 and 5 of Article XIII of the Philippine Constitution
the vendee (petitioner) is not qualified to acquire lands in the Philippines in the absence of proof that
at least 60 per centum of the capital, properties or assets of the Roman Catholic Apostolic
Administrator of Davao, Inc. is actually owned or controlled by Filipino citizens, and denying the
registration of the deed of sale in the absence of proof of compliance with such requisite, is hereby
reversed. Consequently, the respondent Register of Deeds of the City of Davao is ordered to
register the deed of sale executed by Mateo L. Rodis in favor of the Roman Catholic Apostolic
Administrator of Davao, Inc., which is the subject of the present litigation. No pronouncement is
made as to costs. It is so ordered.

133
MAS