G.R. No.
167707 October 8, 2008 On November 10, 1978, then President Ferdinand Marcos issued
THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, THE REGIONAL EXECUTIVE DIRECTOR,
DENR-REGION VI, REGIONAL TECHNICAL DIRECTOR FOR LANDS,
LANDS MANAGEMENT BUREAU, REGION VI PROVINCIAL
ENVIRONMENT AND NATURAL RESOURCES OFFICER OF KALIBO,
AKLAN, REGISTER OF DEEDS, DIRECTOR OF LAND
REGISTRATION AUTHORITY, DEPARTMENT OF TOURISM
SECRETARY, DIRECTOR OF PHILIPPINE TOURISM
AUTHORITY, petitioners,
vs.
MAYOR JOSE S. YAP, LIBERTAD TALAPIAN, MILA Y. SUMNDAD,
and ANICETO YAP, in their behalf and in behalf of all those similarly
situated, respondents.
x--------------------------------------------------x
G.R. No. G.R. No. 173775 October 8, 2008
DR. ORLANDO SACAY and WILFREDO GELITO, joined by THE
LANDOWNERS OF BORACAY SIMILARLY SITUATED NAMED IN A
LIST, ANNEX "A" OF THIS PETITION, petitioners,
vs.
THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, THE REGIONAL TECHNICAL DIRECTOR
FOR LANDS, LANDS MANAGEMENT BUREAU, REGION VI,
PROVINCIAL ENVIRONMENT AND NATURAL RESOURCES
OFFICER, KALIBO, AKLAN, respondents.
DECISION
REYES, R.T., J.:
AT stake in these consolidated cases is the right of the present
occupants of Boracay Island to secure titles over their occupied lands.
There are two consolidated petitions. The first is G.R. No. 167707, a
petition for review on certiorari of the Decision1of the Court of Appeals
(CA) affirming that2 of the Regional Trial Court (RTC) in Kalibo, Aklan,
which granted the petition for declaratory relief filed by respondents-
claimants Mayor Jose Yap, et al. and ordered the survey of Boracay for
titling purposes. The second is G.R. No. 173775, a petition for
prohibition, mandamus, and nullification of Proclamation No. 10645">[3]
issued by President Gloria Macapagal-Arroyo classifying Boracay into
reserved forest and agricultural land.
The Antecedents
G.R. No. 167707
Boracay Island in the Municipality of Malay, Aklan, with its powdery white
sand beaches and warm crystalline waters, is reputedly a premier
Philippine tourist destination. The island is also home to 12,003
inhabitants4 who live in the bone-shaped island’s three barangays.5
On April 14, 1976, the Department of Environment and Natural
Resources (DENR) approved the National Reservation Survey of
Boracay
Island,6 which identified several lots as being occupied or claimed by
named persons.7
Proclamation No. 18018 declaring Boracay Island, among other islands,
caves and peninsulas in the Philippines, as tourist zones and marine
reserves under the administration of the Philippine Tourism Authority
(PTA). President Marcos later approved the issuance of PTA Circular 3-
829 dated September 3, 1982, to implement Proclamation No. 1801.
Claiming that Proclamation No. 1801 and PTA Circular No 3-82
precluded them from filing an application for judicial confirmation of
imperfect title or survey of land for titling purposes, respondents-
claimants
Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto
Yap filed a petition for declaratory relief with the RTC in Kalibo, Aklan.
In their petition, respondents-claimants alleged that Proclamation No.
1801 and PTA Circular No. 3-82 raised doubts on their right to secure
titles over their occupied lands. They declared that they themselves, or
through their predecessors-in-interest, had been in open, continuous,
exclusive, and notorious possession and occupation in Boracay since
June 12, 1945, or earlier since time immemorial. They declared their
lands for tax purposes and paid realty taxes on them.10
Respondents-claimants posited that Proclamation No. 1801 and its
implementing Circular did not place Boracay beyond the commerce of
man. Since the Island was classified as a tourist zone, it was susceptible
of private ownership. Under Section 48(b) of Commonwealth Act (CA)
No. 141, otherwise known as the Public Land Act, they had the right to
have the lots registered in their names through judicial confirmation of
imperfect titles.
The Republic, through the Office of the Solicitor General (OSG),
opposed the petition for declaratory relief. The OSG countered that
Boracay Island was an unclassified land of the public domain. It formed
part of the mass of lands classified as "public forest," which was not
available for disposition pursuant to Section 3(a) of Presidential Decree
(PD) No. 705 or the Revised Forestry Code,11 as amended.
The OSG maintained that respondents-claimants’ reliance on PD No.
1801 and PTA Circular No. 3-82 was misplaced. Their right to judicial
confirmation of title was governed by CA No. 141 and PD No. 705. Since
Boracay Island had not been classified as alienable and disposable,
whatever possession they had cannot ripen into ownership.
During pre-trial, respondents-claimants and the OSG stipulated on the
following facts: (1) respondents-claimants were presently in possession
of parcels of land in Boracay Island; (2) these parcels of land were
planted with coconut trees and other natural growing trees; (3) the
coconut trees had heights of more or less twenty (20) meters and were
planted more or less fifty (50) years ago; and (4) respondents-claimants
declared the land they were occupying for tax purposes.12
The parties also agreed that the principal issue for resolution was purely
legal: whether Proclamation No. 1801 posed any legal hindrance or
impediment to the titling of the lands in Boracay. They decided to forego
with the trial and to submit the case for resolution upon submission of
their respective memoranda.13
The RTC took judicial notice14 that certain parcels of land in Boracay
Island, more particularly Lots 1 and 30, Plan PSU-5344, were covered by
Original Certificate of Title No. 19502 (RO 2222) in the name of the Heirs
of Ciriaco S. Tirol. These lots were involved in Civil Case Nos. 5222 and
5262 filed before the RTC of Kalibo, Aklan.15 The titles were issued on
August 7, 1933.16
RTC and CA Dispositions
On July 14, 1999, the RTC rendered a decision in favor of respondents-
claimants, with a fallo reading:
WHEREFORE, in view of the foregoing, the Court
declares that Proclamation No. 1801 and PTA
Circular No. 3-82 pose no legal obstacle to the
petitioners and those similarly situated to acquire
title to their lands in Boracay, in accordance with the
applicable laws and in the manner prescribed
therein; and to have their lands surveyed and
approved by respondent Regional Technical Director
of Lands as the approved survey does not in itself
constitute a title to the land.
SO ORDERED.17
The RTC upheld respondents-claimants’ right to have their occupied
lands titled in their name. It ruled that neither Proclamation No. 1801 nor
PTA Circular No. 3-82 mentioned that lands in Boracay were inalienable
or could not be the subject of disposition. 18 The Circular itself recognized
private ownership of lands.19 The trial court cited Sections 8720 and
5321 of the Public Land Act as basis for acknowledging private ownership
of lands in Boracay and that only those forested areas in public lands
were declared as part of the forest reserve.22
23
The OSG moved for reconsideration but its motion was denied. The
Republic then appealed to the CA.
mineral nor timber land, the island is deemed agricultural pursuant to the
Philippine Bill of 1902 and Act No. 926, known as the first Public Land
Act.32 Thus, their possession in the concept of owner for the required
period entitled them to judicial confirmation of imperfect title.
Opposing the petition, the OSG argued that petitioners-claimants do not
have a vested right over their occupied portions in the island. Boracay is
an unclassified public forest land pursuant to Section 3(a) of PD No. 705.
Being public forest, the claimed portions of the island are inalienable and
cannot be the subject of judicial confirmation of imperfect title. It is only
the executive department, not the courts, which has authority to
reclassify lands of the public domain into alienable and disposable lands.
There is a need for a positive government act in order to release the lots
for disposition.
On November 21, 2006, this Court ordered the consolidation of the two
petitions as they principally involve the same issues on the land
classification of Boracay Island.33
Issues
G.R. No. 167707
The OSG raises the lone issue of whether Proclamation No. 1801 and
PTA Circular No. 3-82 pose any legal obstacle for respondents, and all
those similarly situated, to acquire title to their occupied lands in Boracay
Island.34

On December 9, 2004, the appellate court affirmed in toto the RTC G.R. No. 173775
decision, disposing as follows:

Petitioners-claimants hoist five (5) issues, namely:

WHEREFORE, in view of the foregoing premises,
judgment is hereby rendered by us DENYING the
appeal filed in this case and AFFIRMING the I.
decision of the lower court.24
AT THE TIME OF THE ESTABLISHED
The CA held that respondents-claimants could not be prejudiced by a POSSESSION OF PETITIONERS IN CONCEPT OF
declaration that the lands they occupied since time immemorial were part OWNER OVER THEIR RESPECTIVE AREAS IN
of a forest reserve. BORACAY, SINCE TIME IMMEMORIAL OR AT THE
LATEST SINCE 30 YRS. PRIOR TO THE FILING
OF THE PETITION FOR DECLARATORY RELIEF
Again, the OSG sought reconsideration but it was similarly ON NOV. 19, 1997, WERE THE AREAS OCCUPIED
denied.25 Hence, the present petition under Rule 45. BY THEM PUBLIC AGRICULTURAL LANDS AS
DEFINED BY LAWS THEN ON JUDICIAL
G.R. No. 173775 CONFIRMATION OF IMPERFECT TITLES OR
PUBLIC FOREST AS DEFINED BY SEC. 3a, PD
On May 22, 2006, during the pendency of G.R. No. 167707, President 705?
Gloria Macapagal-Arroyo issued Proclamation No. 1064 26 classifying
Boracay Island into four hundred (400) hectares of reserved forest land II.
(protection purposes) and six hundred twenty-eight and 96/100 (628.96)
hectares of agricultural land (alienable and disposable). The HAVE PETITIONERS OCCUPANTS ACQUIRED
Proclamation likewise provided for a fifteen-meter buffer zone on each PRIOR VESTED RIGHT OF PRIVATE
side of the centerline of roads and trails, reserved for right-of-way and OWNERSHIPOVER THEIR OCCUPIED PORTIONS
which shall form part of the area reserved for forest land protection OF BORACAY LAND, DESPITE THE FACT THAT
purposes. THEY HAVE NOT APPLIED YET FOR JUDICIAL
CONFIRMATION OF IMPERFECT TITLE?
On August 10, 2006, petitioners-claimants Dr. Orlando Sacay, 27 Wilfredo
Gelito,28 and other landowners29 in Boracay filed with this Court an III.
original petition for prohibition, mandamus, and nullification of
Proclamation No. 1064.30 They allege that the Proclamation infringed on
their "prior vested rights" over portions of Boracay. They have been in IS THE EXECUTIVE DECLARATION OF THEIR
continued possession of their respective lots in Boracay since time AREAS AS ALIENABLE AND
immemorial. They have also invested billions of pesos in developing their DISPOSABLE UNDER SEC 6, CA 141 [AN]
lands and building internationally renowned first class resorts on their INDISPENSABLE PRE-REQUISITE FOR
lots.31 PETITIONERS TO OBTAIN TITLEUNDER THE
TORRENS SYSTEM?

Petitioners-claimants contended that there is no need for a proclamation

reclassifying Boracay into agricultural land. Being classified as neither IV.
 IS THE ISSUANCE OF PROCLAMATION 1064 ON
MAY 22, 2006, VIOLATIVE OF THE PRIOR
VESTED RIGHTS TO PRIVATE OWNERSHIP OF
PETITIONERS OVER THEIR LANDS IN BORACAY,
PROTECTED BY THE DUE PROCESS CLAUSE
OF THE CONSTITUTION OR IS PROCLAMATION
1064 CONTRARY TO SEC. 8, CA 141, OR SEC.
4(a) OF RA 6657.
V.
CAN RESPONDENTS BE COMPELLED BY
MANDAMUS TO ALLOW THE SURVEY AND TO
APPROVE THE SURVEY PLANS FOR PURPOSES
OF THE APPLICATION FOR TITLING OF THE
LANDS OF PETITIONERS IN BORACAY?
35
(Underscoring supplied)
In capsule, the main issue is whether private claimants (respondents-
claimants in G.R. No. 167707 and petitioners-claimants in G.R. No.
173775) have a right to secure titles over their occupied portions in
Boracay. The twin petitions pertain to their right, if any, to judicial
confirmation of imperfect title under CA No. 141, as amended. They do
not involve their right to secure title under other pertinent laws.
Our Ruling
Regalian Doctrine and power of the executive
to reclassify lands of the public domain
Private claimants rely on three (3) laws and executive acts in their bid for
judicial confirmation of imperfect title, namely: (a) Philippine Bill of
190236 in relation to Act No. 926, later amended and/or superseded by
Act No. 2874 and CA No. 141;37 (b) Proclamation No. 180138 issued by
then President Marcos; and (c) Proclamation No. 1064 39issued by
President Gloria Macapagal-Arroyo. We shall proceed to determine their
rights to apply for judicial confirmation of imperfect title under these laws
and executive acts.
But first, a peek at the Regalian principle and the power of the executive
to reclassify lands of the public domain.
The 1935 Constitution classified lands of the public domain into
agricultural, forest or timber. 40 Meanwhile, the 1973 Constitution provided
the following divisions: agricultural, industrial or commercial, residential,
resettlement, mineral, timber or forest and grazing lands, and such other
classes as may be provided by law,41 giving the government great
leeway for classification.42 Then the 1987 Constitution reverted to the
1935 Constitution classification with one addition: national parks.43 Of
these, only agricultural lands may be alienated.44 Prior to Proclamation
No. 1064 of May 22, 2006, Boracay Island had never been expressly
and administratively classified under any of these grand divisions.
Boracay was an unclassified land of the public domain.
The Regalian Doctrine dictates that all lands of the public domain belong
to the State, that the State is the source of any asserted right to
ownership of land and charged with the conservation of such
patrimony.45 The doctrine has been consistently adopted under the 1935,
1973, and 1987 Constitutions.46
All lands not otherwise appearing to be clearly within private ownership
are presumed to belong to the State. 47Thus, all lands that have not been
acquired from the government, either by purchase or by grant, belong to
the State as part of the inalienable public domain. 48 Necessarily, it is up
to the State to determine if lands of the public domain will be disposed of
for private ownership. The government, as the agent of the state, is
possessed of the plenary power as the persona in law to determine who
shall be the favored recipients of public lands, as well as under what
terms they may be granted such privilege, not excluding the placing of
obstacles in the way of their exercise of what otherwise would be
ordinary acts of ownership.49
Our present land law traces its roots to the Regalian Doctrine. Upon the
Spanish conquest of the Philippines, ownership of all lands, territories
and possessions in the Philippines passed to the Spanish Crown.50 The
Regalian doctrine was first introduced in the Philippines through
the Laws of the Indies and the Royal Cedulas, which laid the foundation
that "all lands that were not acquired from the Government, either by
purchase or by grant, belong to the public domain."51
The Laws of the Indies was followed by the Ley Hipotecaria or the
Mortgage Law of 1893. The Spanish Mortgage Law provided for the
systematic registration of titles and deeds as well as possessory claims.52
The Royal Decree of 1894 or the Maura Law 53 partly amended the
Spanish Mortgage Law and the Laws of the Indies. It established
possessory information as the method of legalizing possession of vacant
Crown land, under certain conditions which were set forth in said
decree.54 Under Section 393 of the Maura Law, an informacion
posesoria or possessory information title,55 when duly inscribed in the
Registry of Property, is converted into a title of ownership only after the
lapse of twenty (20) years of uninterrupted possession which must be
actual, public, and adverse,56 from the date of its inscription.57 However,
possessory information title had to be perfected one year after the
promulgation of the Maura Law, or until April 17, 1895. Otherwise, the
lands would revert to the State.58
In sum, private ownership of land under the Spanish regime could only
be founded on royal concessions which took various forms, namely:
(1) titulo real or royal grant; (2) concesion especial or special grant;
(3) composicion con el estado or adjustment title; (4) titulo de compra or
title by purchase; and (5) informacion posesoria or possessory
information title.59>
The first law governing the disposition of public lands in the Philippines
under American rule was embodied in the Philippine Bill of 1902.60 By
this law, lands of the public domain in the Philippine Islands were
classified into three (3) grand divisions, to wit: agricultural, mineral, and
timber or forest lands.61 The act provided for, among others, the disposal
of mineral lands by means of absolute grant (freehold system) and by
lease (leasehold system).62 It also provided the definition by exclusion of
"agricultural public lands."63 Interpreting the meaning of "agricultural
lands" under the Philippine Bill of 1902, the Court declared in Mapa v.
Insular Government:64
x x x In other words, that the phrase "agricultural
land" as used in Act No. 926 means those public
lands acquired from Spain which are not timber
or mineral lands. x x x65 (Emphasis Ours)
On February 1, 1903, the Philippine Legislature passed Act
No. 496, otherwise known as the Land Registration Act. The act
established a system of registration by which recorded title becomes
absolute, indefeasible, and imprescriptible. This is known as the Torrens
system.66
Concurrently, on October 7, 1903, the Philippine Commission passed Act
No. 926, which was the first Public Land Act. The Act introduced the
homestead system and made provisions for judicial and administrative
confirmation of imperfect titles and for the sale or lease of public lands. It
permitted corporations regardless of the nationality of persons owning
the controlling stock to lease or purchase lands of the public
domain.67 Under the Act, open, continuous, exclusive, and notorious
possession and occupation of agricultural lands for the next ten (10)
years preceding July 26, 1904 was sufficient for judicial confirmation of
imperfect title.68
On November 29, 1919, Act No. 926 was superseded by Act
No. 2874, otherwise known as the second Public Land Act. This new,
more comprehensive law limited the exploitation of agricultural lands to
Filipinos and Americans and citizens of other countries which gave
Filipinos the same privileges. For judicial confirmation of title, possession
and occupation en concepto dueño since time immemorial, or since July
26, 1894, was required.69
After the passage of the 1935 Constitution, CA No. 141 amended Act
No. 2874 on December 1, 1936. To this day, CA No. 141, as
amended, remains as the existing general law governing the
classification and disposition of lands of the public domain other than
timber and mineral lands,70 and privately owned lands which reverted to
the State.71
Section 48(b) of CA No. 141 retained the requirement under Act No.
2874 of possession and occupation of lands of the public domain since
time immemorial or since July 26, 1894. However, this provision was
superseded by Republic Act (RA) No. 1942, 72 which provided for a
simple thirty-year prescriptive period for judicial confirmation of imperfect
title. The provision was last amended by PD No. 1073,73 which now
provides for possession and occupation of the land applied for since
June 12, 1945, or earlier.74
The issuance of PD No. 89275 on February 16, 1976 discontinued the
use of Spanish titles as evidence in land registration
proceedings.76 Under the decree, all holders of Spanish titles or grants
should apply for registration of their lands under Act No. 496 within six
(6) months from the effectivity of the decree on February 16, 1976.
Thereafter, the recording of all unregistered lands77 shall be governed by
Section 194 of the Revised Administrative Code, as amended by Act No.
3344.
On June 11, 1978, Act No. 496 was amended and updated by PD No.
1529, known as the Property Registration Decree. It was enacted to
codify the various laws relative to registration of property. 78 It governs
registration of lands under the Torrens system as well as unregistered
lands, including chattel mortgages.79
A positive act declaring land as alienable and disposable is
required. In keeping with the presumption of State ownership, the Court
has time and again emphasized that there must be a positive act of the
government, such as an official proclamation,80 declassifying inalienable
public land into disposable land for agricultural or other purposes. 81 In
fact, Section 8 of CA No. 141 limits alienable or disposable lands only to
those lands which have been "officially delimited and classified."82
The burden of proof in overcoming the presumption of State ownership
of the lands of the public domain is on the person applying for
registration (or claiming ownership), who must prove that the land
subject of the application is alienable or disposable. 83 To overcome this
presumption, incontrovertible evidence must be established that the land
subject of the application (or claim) is alienable or disposable. 84 There
must still be a positive act declaring land of the public domain as
alienable and disposable. To prove that the land subject of an application
for registration is alienable, the applicant must establish the existence of
a positive act of the government such as a presidential proclamation or
an executive order; an administrative action; investigation reports of
Bureau of Lands investigators; and a legislative act or a statute. 85 The
applicant may also secure a certification from the government that the
land claimed to have been possessed for the required number of years is
alienable and disposable.86
In the case at bar, no such proclamation, executive order, administrative
action, report, statute, or certification was presented to the Court. The
records are bereft of evidence showing that, prior to 2006, the portions of
Boracay occupied by private claimants were subject of a government
proclamation that the land is alienable and disposable. Absent such well-
nigh incontrovertible evidence, the Court cannot accept the submission
that lands occupied by private claimants were already open to disposition
before 2006. Matters of land classification or reclassification cannot be
assumed. They call for proof.87
Ankron and De Aldecoa did not make the whole of Boracay Island,
or portions of it, agricultural lands.Private claimants posit that
Boracay was already an agricultural land pursuant to the old
cases Ankron v. Government of the Philippine Islands (1919)88 and De
Aldecoa v. The Insular Government (1909).89 These cases were decided
under the provisions of the Philippine Bill of 1902 and Act No. 926. There
is a statement in these old cases that "in the absence of evidence to the
contrary, that in each case the lands are agricultural lands until the
contrary is shown."90
Private claimants’ reliance on Ankron and De Aldecoa is misplaced.
These cases did not have the effect of converting the whole of Boracay
Island or portions of it into agricultural lands. It should be stressed that
the Philippine Bill of 1902 and Act No. 926 merely provided the manner
through which land registration courts would classify lands of the public
domain. Whether the land would be classified as timber, mineral, or
agricultural depended on proof presented in each case.
Ankron and De Aldecoa were decided at a time when the President of
the Philippines had no power to classify lands of the public domain into
mineral, timber, and agricultural. At that time, the courts were free to
make corresponding classifications in justiciable cases, or were vested
with implicit power to do so, depending upon the preponderance of the
evidence.91 This was the Court’s ruling in Heirs of the Late Spouses
Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v.
Republic,92 in which it stated, through Justice Adolfo Azcuna, viz.:
x x x Petitioners furthermore insist that a particular
land need not be formally released by an act of the
Executive before it can be deemed open to private
ownership, citing the cases of Ramos v. Director of
Lands and Ankron v. Government of the Philippine
Islands.
xxxx
Petitioner’s reliance upon Ramos v. Director of
Lands and Ankron v. Government is misplaced.
These cases were decided under the Philippine Bill
of 1902 and the first Public Land Act No. 926
enacted by the Philippine Commission on October 7,
1926, under which there was no legal provision
vesting in the Chief Executive or President of the
Philippines the power to classify lands of the public
domain into mineral, timber and agricultural so that
the courts then were free to make corresponding
classifications in justiciable cases, or were vested
with implicit power to do so, depending upon the
preponderance of the evidence.93
To aid the courts in resolving land registration cases under Act No. 926, it
was then necessary to devise a presumption on land classification. Thus
evolved the dictum in Ankron that "the courts have a right to presume, in
the absence of evidence to the contrary, that in each case the lands are
agricultural lands until the contrary is shown."94
But We cannot unduly expand the presumption in Ankron and De
Aldecoa to an argument that all lands of the public domain had been
automatically reclassified as disposable and alienable agricultural lands.
By no stretch of imagination did the presumption convert all lands of the
public domain into agricultural lands.
If We accept the position of private claimants, the Philippine Bill of 1902
and Act No. 926 would have automatically made all lands in the
Philippines, except those already classified as timber or mineral land,
alienable and disposable lands. That would take these lands out of State
ownership and worse, would be utterly inconsistent with and totally
repugnant to the long-entrenched Regalian doctrine.
The presumption in Ankron and De Aldecoa attaches only to land
registration cases brought under the provisions of Act No. 926, or more
specifically those cases dealing with judicial and administrative
confirmation of imperfect titles. The presumption applies to an applicant
for judicial or administrative conformation of imperfect title under Act No.
926. It certainly cannot apply to landowners, such as private claimants or
their predecessors-in-interest, who failed to avail themselves of the
benefits of Act No. 926. As to them, their land remained unclassified and,
by virtue of the Regalian doctrine, continued to be owned by the State.
In any case, the assumption in Ankron and De Aldecoa was not
absolute. Land classification was, in the end, dependent on proof. If
there was proof that the land was better suited for non-agricultural uses,
the courts could adjudge it as a mineral or timber land despite the
presumption. In Ankron, this Court stated:
In the case of Jocson vs. Director of
Forestry (supra), the Attorney-General admitted in
effect that whether the particular land in question
belongs to one class or another is a question of fact.
The mere fact that a tract of land has trees upon it or
has mineral within it is not of itself sufficient to
declare that one is forestry land and the other,
mineral land. There must be some proof of the
extent and present or future value of the forestry and
of the minerals. While, as we have just said, many
definitions have been given for "agriculture,"
"forestry," and "mineral" lands, and that in each case
it is a question of fact, we think it is safe to say that
in order to be forestry or mineral land the proof must
show that it is more valuable for the forestry or the
mineral which it contains than it is for agricultural
purposes. (Sec. 7, Act No. 1148.) It is not sufficient
to show that there exists some trees upon the land
or that it bears some mineral. Land may be
classified as forestry or mineral today, and, by
reason of the exhaustion of the timber or mineral, be
classified as agricultural land tomorrow. And vice-
versa, by reason of the rapid growth of timber or the
discovery of valuable minerals, lands classified as
agricultural today may be differently classified
tomorrow. Each case must be decided upon the
proof in that particular case, having regard for
its present or future value for one or the other
purposes. We believe, however, considering the
fact that it is a matter of public knowledge that a
majority of the lands in the Philippine Islands are
agricultural lands that the courts have a right to
presume, in the absence of evidence to the contrary,
that in each case the lands are agricultural lands
until the contrary is shown. Whatever the land
involved in a particular land registration case is
forestry or mineral land must, therefore, be a
matter of proof. Its superior value for one
purpose or the other is a question of fact to be
settled by the proof in each particular case. The
fact that the land is a manglar [mangrove swamp] is
not sufficient for the courts to decide whether it is
agricultural, forestry, or mineral land. It may
perchance belong to one or the other of said classes
of land. The Government, in the first instance, under
the provisions of Act No. 1148, may, by reservation,
decide for itself what portions of public land shall be
considered forestry land, unless private interests
have intervened before such reservation is made. In
the latter case, whether the land is agricultural,
forestry, or mineral, is a question of proof. Until
private interests have intervened, the Government,
by virtue of the terms of said Act (No. 1148), may
decide for itself what portions of the "public domain"
shall be set aside and reserved as forestry or
mineral land. (Ramos vs. Director of Lands, 39 Phil.
175; Jocson vs. Director of
Forestry, supra)95(Emphasis ours)
Since 1919, courts were no longer free to determine the classification of
lands from the facts of each case, except those that have already
became private lands.96 Act No. 2874, promulgated in 1919 and
reproduced in Section 6 of CA No. 141, gave the Executive Department,
through the President, the exclusive prerogative to classify or reclassify
public lands into alienable or disposable, mineral or forest. 96-a Since then,
courts no longer had the authority, whether express or implied, to
determine the classification of lands of the public domain.97
Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued
their title in 1933,98 did not present a justiciable case for determination by
the land registration court of the property’s land classification. Simply put,
there was no opportunity for the courts then to resolve if the land the
Boracay occupants are now claiming were agricultural lands. When Act
No. 926 was supplanted by Act No. 2874 in 1919, without an application
for judicial confirmation having been filed by private claimants or their
predecessors-in-interest, the courts were no longer authorized to
determine the property’s land classification. Hence, private claimants
cannot bank on Act No. 926.
We note that the RTC decision99 in G.R. No. 167707 mentioned Krivenko
v. Register of Deeds of Manila,100 which was decided in 1947 when CA
No. 141, vesting the Executive with the sole power to classify lands of
the public domain was already in effect. Krivenko cited the old
cases Mapa v. Insular Government,101 De Aldecoa v. The Insular
Government,102 and Ankron v. Government of the Philippine Islands.103
Krivenko, however, is not controlling here because it involved a totally
different issue. The pertinent issue in Krivenko was whether residential
lots were included in the general classification of agricultural lands; and if
so, whether an alien could acquire a residential lot. This Court ruled that
as an alien, Krivenko was prohibited by the 1935 Constitution 104 from
acquiring agricultural land, which included residential lots. Here, the
issue is whether unclassified lands of the public domain are
automatically deemed agricultural.
Notably, the definition of "agricultural public lands" mentioned
in Krivenko relied on the old cases decided prior to the enactment of Act
No. 2874, including Ankron and De Aldecoa.105 As We have already
stated, those cases cannot apply here, since they were decided when
the Executive did not have the authority to classify lands as agricultural,
timber, or mineral.
Private claimants’ continued possession under Act No. 926 does
not create a presumption that the land is alienable. Private claimants
also contend that their continued possession of portions of Boracay
Island for the requisite period of ten (10) years under Act No. 926 106 ipso
facto converted the island into private ownership. Hence, they may apply
for a title in their name.
A similar argument was squarely rejected by the Court in Collado v.
Court of Appeals.107 Collado, citing the separate opinion of now Chief
Justice Reynato S. Puno in Cruz v. Secretary of Environment and
Natural Resources,107-a ruled:
"Act No. 926, the first Public
Land Act, was passed in
pursuance of the provisions of
the Philippine Bill of 1902. The
law governed the disposition of
lands of the public domain. It
prescribed rules and regulations
for the homesteading, selling
and leasing of portions of the
public domain of the Philippine
Islands, and prescribed the
terms and conditions to enable
persons to perfect their titles to
public lands in the Islands. It
also provided for the "issuance
of patents to certain native
settlers upon public lands," for
the establishment of town sites
and sale of lots therein, for the
completion of imperfect titles,
and for the cancellation or
confirmation of Spanish
concessions and grants in the
Islands." In short, the Public
Land Act operated on the
assumption that title to public
lands in the Philippine Islands
remained in the government;
and that the government’s title
to public land sprung from the
Treaty of Paris and other
subsequent treaties between
Spain and the United
States. The term "public land"
referred to all lands of the public
domain whose title still
remained in the government
and are thrown open to private
appropriation and settlement,
and excluded the patrimonial
property of the government and
the friar lands."
Thus, it is plain error for petitioners to argue that
under the Philippine Bill of 1902 and Public Land
Act No. 926, mere possession by private
individuals of lands creates the legal
presumption that the lands are alienable and
disposable.108 (Emphasis Ours)
Except for lands already covered by existing titles, Boracay was an
unclassified land of the public domain prior to Proclamation No.
1064. Such unclassified lands are considered public forest under
PD No. 705. The DENR109 and the National Mapping and Resource
Information Authority110 certify that Boracay Island is an unclassified land
of the public domain.
PD No. 705 issued by President Marcos categorized all unclassified
lands of the public domain as public forest. Section 3(a) of PD No. 705
defines a public forest as "a mass of lands of the public domain
which has not been the subject of the present system of classification for
the determination of which lands are needed for forest purpose and
which are not." Applying PD No. 705, all unclassified lands, including
those in Boracay Island, are ipso factoconsidered public forests. PD No.
705, however, respects titles already existing prior to its effectivity.
The Court notes that the classification of Boracay as a forest land under
PD No. 705 may seem to be out of touch with the present realities in the
island. Boracay, no doubt, has been partly stripped of its forest cover to
pave the way for commercial developments. As a premier tourist
destination for local and foreign tourists, Boracay appears more of a
commercial island resort, rather than a forest land.
Nevertheless, that the occupants of Boracay have built multi-million peso
beach resorts on the island;111 that the island has already been stripped
of its forest cover; or that the implementation of Proclamation No. 1064
will destroy the island’s tourism industry, do not negate its character as
public forest.
Forests, in the context of both the Public Land Act and the
Constitution112 classifying lands of the public domain into "agricultural,
forest or timber, mineral lands, and national parks," do not necessarily
refer to large tracts of wooded land or expanses covered by dense
growths of trees and underbrushes. 113 The discussion in Heirs of
Amunategui v. Director of Forestry114 is particularly instructive:
A forested area classified as forest land of the public
domain does not lose such classification simply
because loggers or settlers may have stripped it of
its forest cover. Parcels of land classified as forest
land may actually be covered with grass or planted
to crops by kaingin cultivators or other farmers.
"Forest lands" do not have to be on mountains or in
out of the way places. Swampy areas covered by
mangrove trees, nipa palms, and other trees
growing in brackish or sea water may also be
classified as forest land. The classification is
descriptive of its legal nature or status and does
not have to be descriptive of what the land
actually looks like. Unless and until the land
classified as "forest" is released in an official
proclamation to that effect so that it may form part of
the disposable agricultural lands of the public
domain, the rules on confirmation of imperfect title
do not apply.115 (Emphasis supplied)
There is a big difference between "forest" as defined in a dictionary and
"forest or timber land" as a classification of lands of the public domain as
appearing in our statutes. One is descriptive of what appears on the land
while the other is a legal status, a classification for legal purposes. 116 At
any rate, the Court is tasked to determine the legalstatus of Boracay
Island, and not look into its physical layout. Hence, even if its forest
cover has been replaced by beach resorts, restaurants and other
commercial establishments, it has not been automatically converted from
public forest to alienable agricultural land.
Private claimants cannot rely on Proclamation No. 1801 as basis for
judicial confirmation of imperfect title. The proclamation did not
convert Boracay into an agricultural land. However, private claimants
argue that Proclamation No. 1801 issued by then President Marcos in
1978 entitles them to judicial confirmation of imperfect title. The
Proclamation classified Boracay, among other islands, as a tourist zone.
Private claimants assert that, as a tourist spot, the island is susceptible
of private ownership.
Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the
whole of Boracay into an agricultural land. There is nothing in the law or
the Circular which made Boracay Island an agricultural land. The
reference in Circular No. 3-82 to "private lands" 117 and "areas declared as
alienable and disposable"118 does not by itself classify the entire island as
agricultural. Notably, Circular No. 3-82 makes reference not only to
private lands and areas but also to public forested lands. Rule VIII,
Section 3 provides:
 No trees in forested private lands may be cut without
prior authority from the PTA. All forested areas in
public lands are declared forest reserves.
(Emphasis supplied)
Clearly, the reference in the Circular to both private and public lands
merely recognizes that the island can be classified by the Executive
department pursuant to its powers under CA No. 141. In fact, Section 5
of the Circular recognizes the then Bureau of Forest Development’s
authority to declare areas in the island as alienable and disposable when
it provides:
Subsistence farming, in areas declared as alienable
and disposable by the Bureau of Forest
Development.
Therefore, Proclamation No. 1801 cannot be deemed the positive act
needed to classify Boracay Island as alienable and disposable land. If
President Marcos intended to classify the island as alienable and
disposable or forest, or both, he would have identified the specific limits
of each, as President Arroyo did in Proclamation No. 1064. This was not
done in Proclamation No. 1801.
The Whereas clauses of Proclamation No. 1801 also explain the
rationale behind the declaration of Boracay Island, together with other
islands, caves and peninsulas in the Philippines, as a tourist zone and
marine reserve to be administered by the PTA – to ensure the
concentrated efforts of the public and private sectors in the development
of the areas’ tourism potential with due regard for ecological balance in
the marine environment. Simply put, the proclamation is aimed at
administering the islands for tourism and ecological purposes. It does
not address the areas’ alienability.119
More importantly, Proclamation No. 1801 covers not only Boracay Island,
but sixty-four (64) other islands, coves, and peninsulas in the Philippines,
such as Fortune and Verde Islands in Batangas, Port Galera in Oriental
Mindoro, Panglao and Balicasag Islands in Bohol, Coron Island, Puerto
Princesa and surrounding areas in Palawan, Camiguin Island in
Cagayan de Oro, and Misamis Oriental, to name a few. If the designation
of Boracay Island as tourist zone makes it alienable and disposable by
virtue of Proclamation No. 1801, all the other areas mentioned would
likewise be declared wide open for private disposition. That could not
have been, and is clearly beyond, the intent of the proclamation.
It was Proclamation No. 1064 of 2006 which positively declared part
of Boracay as alienable and opened the same to private
ownership. Sections 6 and 7 of CA No. 141120 provide that it is only the
President, upon the recommendation of the proper department head,
who has the authority to classify the lands of the public domain into
alienable or disposable, timber and mineral lands.121
In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo
merely exercised the authority granted to her to classify lands of the
public domain, presumably subject to existing vested rights.
Classification of public lands is the exclusive prerogative of the Executive
Department, through the Office of the President. Courts have no
authority to do so.122 Absent such classification, the land remains
unclassified until released and rendered open to disposition. 123
Proclamation No. 1064 classifies Boracay into 400 hectares of reserved
forest land and 628.96 hectares of agricultural land. The Proclamation
likewise provides for a 15-meter buffer zone on each side of the center
line of roads and trails, which are reserved for right of way and which
shall form part of the area reserved for forest land protection purposes.
Contrary to private claimants’ argument, there was nothing invalid or
irregular, much less unconstitutional, about the classification of Boracay
Island made by the President through Proclamation No. 1064. It was
within her authority to make such classification, subject to existing vested
rights.
Proclamation No. 1064 does not violate the Comprehensive
Agrarian Reform Law. Private claimants further assert that
Proclamation No. 1064 violates the provision of the Comprehensive
Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of
public forests into agricultural lands. They claim that since Boracay is a
public forest under PD No. 705, President Arroyo can no longer convert it
into an agricultural land without running afoul of Section 4(a) of RA No.
6657, thus:
SEC. 4. Scope. – The Comprehensive Agrarian
Reform Law of 1988 shall cover, regardless of
tenurial arrangement and commodity produced, all
public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229,
including other lands of the public domain suitable
for agriculture.
More specifically, the following lands are covered by
the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable
lands of the public domain
devoted to or suitable for
agriculture.
No reclassification of forest or
mineral lands to agricultural
lands shall be undertaken after
the approval of this Act until
Congress, taking into account
ecological, developmental and
equity considerations, shall
have determined by law, the
specific limits of the public
domain.
That Boracay Island was classified as a public forest under PD No. 705
did not bar the Executive from later converting it into agricultural land.
Boracay Island still remained an unclassified land of the public domain
despite PD No. 705.
In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v.
Republic,124 the Court stated that unclassified lands are public forests.
While it is true that the land classification map
does not categorically state that the islands are
public forests, the fact that they were
unclassified lands leads to the same result. In
the absence of the classification as mineral or timber
land, the land remains unclassified land until
released and rendered open to
disposition.125 (Emphasis supplied)
Moreover, the prohibition under the CARL applies only to a
"reclassification" of land. If the land had never been previously classified,
as in the case of Boracay, there can be no prohibited reclassification
under the agrarian law. We agree with the opinion of the Department of
Justice126 on this point:
Indeed, the key word to the correct application of the
prohibition in Section 4(a) is the word
"reclassification." Where there has been no previous
classification of public forest [referring, we repeat, to
the mass of the public domain which has not been
the subject of the present system of classification for
purposes of determining which are needed for forest
 purposes and which are not] into permanent forest
or forest reserves or some other forest uses under
the Revised Forestry Code, there can be no
"reclassification of forest lands" to speak of within
the meaning of Section 4(a).
Thus, obviously, the prohibition in Section 4(a) of the
CARL against the reclassification of forest lands to
agricultural lands without a prior law delimiting the
limits of the public domain, does not, and cannot,
apply to those lands of the public domain,
denominated as "public forest" under the Revised
Forestry Code, which have not been previously
determined, or classified, as needed for forest
purposes in accordance with the provisions of the
Revised Forestry Code.127
Private claimants are not entitled to apply for judicial confirmation
of imperfect title under CA No. 141. Neither do they have vested
rights over the occupied lands under the said law. There are two
requisites for judicial confirmation of imperfect or incomplete title under
CA No. 141, namely: (1) open, continuous, exclusive, and notorious
possession and occupation of the subject land by himself or through his
predecessors-in-interest under a bona fide claim of ownership since time
immemorial or from June 12, 1945; and (2) the classification of the land
as alienable and disposable land of the public domain.128
As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation
No. 1801 did not convert portions of Boracay Island into an agricultural
land. The island remained an unclassified land of the public domain and,
applying the Regalian doctrine, is considered State property.
Private claimants’ bid for judicial confirmation of imperfect title, relying on
the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must
fail because of the absence of the second element of alienable and
disposable land. Their entitlement to a government grant under our
present Public Land Act presupposes that the land possessed and
applied for is already alienable and disposable. This is clear from the
wording of the law itself.129Where the land is not alienable and
disposable, possession of the land, no matter how long, cannot confer
ownership or possessory rights.130
Neither may private claimants apply for judicial confirmation of imperfect
title under Proclamation No. 1064, with respect to those lands which
were classified as agricultural lands. Private claimants failed to prove the
first element of open, continuous, exclusive, and notorious possession of
their lands in Boracay since June 12, 1945.
We cannot sustain the CA and RTC conclusion in the petition for
declaratory relief that private claimants complied with the requisite period
of possession.
The tax declarations in the name of private claimants are insufficient to
prove the first element of possession. We note that the earliest of the tax
declarations in the name of private claimants were issued in 1993. Being
of recent dates, the tax declarations are not sufficient to convince this
Court that the period of possession and occupation commenced on June
12, 1945.
Private claimants insist that they have a vested right in Boracay, having
been in possession of the island for a long time. They have invested
millions of pesos in developing the island into a tourist spot. They say
their continued possession and investments give them a vested right
which cannot be unilaterally rescinded by Proclamation No. 1064.
The continued possession and considerable investment of private
claimants do not automatically give them a vested right in Boracay. Nor
do these give them a right to apply for a title to the land they are
presently occupying. This Court is constitutionally bound to decide cases
based on the evidence presented and the laws applicable. As the law
and jurisprudence stand, private claimants are ineligible to apply for a
judicial confirmation of title over their occupied portions in Boracay even
with their continued possession and considerable investment in the
island.
One Last Note
The Court is aware that millions of pesos have been invested for the
development of Boracay Island, making it a by-word in the local and
international tourism industry. The Court also notes that for a number of
years, thousands of people have called the island their home. While the
Court commiserates with private claimants’ plight, We are bound to apply
the law strictly and judiciously. This is the law and it should prevail. Ito
ang batas at ito ang dapat umiral.
All is not lost, however, for private claimants. While they may not be
eligible to apply for judicial confirmation of imperfect title under Section
48(b) of CA No. 141, as amended, this does not denote their automatic
ouster from the residential, commercial, and other areas they possess
now classified as agricultural. Neither will this mean the loss of their
substantial investments on their occupied alienable lands. Lack of title
does not necessarily mean lack of right to possess.
For one thing, those with lawful possession may claim good faith as
builders of improvements. They can take steps to preserve or protect
their possession. For another, they may look into other modes of
applying for original registration of title, such as by homestead 131 or sales
patent,132 subject to the conditions imposed by law.
More realistically, Congress may enact a law to entitle private claimants
to acquire title to their occupied lots or to exempt them from certain
requirements under the present land laws. There is one such bill 133 now
pending in the House of Representatives. Whether that bill or a similar
bill will become a law is for Congress to decide.
In issuing Proclamation No. 1064, the government has taken the step
necessary to open up the island to private ownership. This gesture may
not be sufficient to appease some sectors which view the classification of
the island partially into a forest reserve as absurd. That the island is no
longer overrun by trees, however, does not becloud the vision to protect
its remaining forest cover and to strike a healthy balance between
progress and ecology. Ecological conservation is as important as
economic progress.
To be sure, forest lands are fundamental to our nation’s survival. Their
promotion and protection are not just fancy rhetoric for politicians and
activists. These are needs that become more urgent as destruction of
our environment gets prevalent and difficult to control. As aptly observed
by Justice Conrado Sanchez in 1968 in Director of Forestry v. Munoz:134
The view this Court takes of the cases at bar is but
in adherence to public policy that should be followed
with respect to forest lands. Many have written
much, and many more have spoken, and quite often,
about the pressing need for forest preservation,
conservation, protection, development and
reforestation. Not without justification. For, forests
constitute a vital segment of any country's natural
resources. It is of common knowledge by now that
absence of the necessary green cover on our lands
produces a number of adverse or ill effects of
serious proportions. Without the trees, watersheds
dry up; rivers and lakes which they supply are
emptied of their contents. The fish disappear.
Denuded areas become dust bowls. As waterfalls
cease to function, so will hydroelectric plants. With
 the rains, the fertile topsoil is washed away;
geological erosion results. With erosion come the
dreaded floods that wreak havoc and destruction to
property – crops, livestock, houses, and highways –
not to mention precious human lives. Indeed, the
foregoing observations should be written down in a
lumberman’s decalogue.135
WHEREFORE, judgment is rendered as follows:
1. The petition for certiorari in G.R. No. 167707 is GRANTED and the
Court of Appeals Decision in CA-G.R. CV No. 71118 REVERSED AND
SET ASIDE.
2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of
merit.
SO ORDERED.
G.R. No. 134209 January 24, 2006
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
CELESTINA NAGUIAT, Respondent.
DECISION
GARCIA, J.:
Before the Court is this petition for review under Rule 45 of the Rules of
Court seeking the reversal of the Decision1dated May 29, 1998 of the
Court of Appeals (CA) in CA-G.R. CV No. 37001 which affirmed an
earlier decision2 of the Regional Trial Court at Iba, Zambales, Branch 69
in Land Registration Case No. N-25-1.
The decision under review recites the factual backdrop, as follows:
This is an application for registration of title to four (4) parcels of land
located in Panan, Botolan, Zambales, more particularly described in the
amended application filed by Celestina Naguiat on 29 December 1989
with the Regional Trial Court of Zambales, Branch 69. Applicant [herein
respondent] alleges, inter alia, that she is the owner of the said parcels of
land having acquired them by purchase from the LID Corporation which
likewise acquired the same from Demetria Calderon, Josefina Moraga
and Fausto Monje and their predecessors-in-interest who have been in
possession thereof for more than thirty (30) years; and that to the best of
her knowledge, said lots suffer no mortgage or encumbrance of whatever
kind nor is there any person having any interest, legal or equitable, or in
possession thereof.
On 29 June 1990, the Republic of the Philippines [herein petitioner]. . .
filed an opposition to the application on the ground that neither the
applicant nor her predecessors-in interest have been in open,
continuous, exclusive and notorious possession and occupation of the
lands in question since 12 June 1945 or prior thereto; that the muniments
of title and tax payment receipts of applicant do not constitute competent
and sufficient evidence of a bona-fide acquisition of the lands applied for
or of his open, continuous, exclusive and notorious possession and
occupation thereof in the concept of (an) owner; that the applicant’s
claim of ownership in fee simple on the basis of Spanish title or grant can
no longer be availed of . . .; and that the parcels of land applied for are
part of the public domain belonging to the Republic of the Philippines not
subject to private appropriation.
On 15 October 1990, the lower court issued an order of general default
as against the whole world, with the exception of the Office of the
Solicitor General, and proceeded with the hearing of this registration
case.
After she had presented and formally offered her evidence . . . applicant
rested her case. The Solicitor General, thru the Provincial Prosecutor,
interposed no objection to the admission of the exhibits. Later . . . the
Provincial Prosecutor manifest (sic) that the Government had no
evidence to adduce. 3
In a decision4 dated September 30, 1991, the trial court rendered
judgment for herein respondent Celestina Naguiat, adjudicating unto her
the parcels of land in question and decreeing the registration thereof in
her name, thus:
WHEREFORE, premises considered, this Court hereby adjudicates the
parcels of land situated in Panan, Botolan, Zambales, appearing on Plan
AP-03-003447 containing an area of 3,131 square meters, appearing on
Plan AP-03-003446 containing an area of 15,322 containing an area of
15,387 square meters to herein applicant Celestina T. Naguiat, of legal
age, Filipino citizen, married to Rommel Naguiat and a resident of
Angeles City, Pampanga together with all the improvements existing
thereon and orders and decrees registration in her name in accordance
with Act No. 496, Commonwealth Act No. 14, [should be 141] as
amended, and Presidential Decree No. 1529. This adjudication, however,
is subject to the various easements/reservations provided for under
pertinent laws, presidential decrees and/or presidential letters of
instructions which should be annotated/ projected on the title to be
issued. And once this decision becomes final, let the corresponding
decree of registration be immediately issued. (Words in bracket added)
With its motion for reconsideration having been denied by the trial court,
petitioner Republic went on appeal to the CA in CA-G.R. CV No. 37001.
As stated at the outset hereof, the CA, in the herein assailed decision of
May 29, 1998, affirmed that of the trial court, to wit:
WHEREFORE, premises considered, the decision appealed from is
hereby AFFIRMED.
SO ORDERED.
Hence, the Republic’s present recourse on its basic submission that the
CA’s decision "is not in accordance with law, jurisprudence and the
evidence, since respondent has not established with the required
evidence her title in fee simple or imperfect title in respect of the subject
lots which would warrant their registration under … (P.D. 1529 or Public
Land Act (C.A.) 141." In particular, petitioner Republic faults the appellate
court on its finding respecting the length of respondent’s occupation of
the property subject of her application for registration and for not
considering the fact that she has not established that the lands in
question have been declassified from forest or timber zone to alienable
and disposable property.
Public forest lands or forest reserves, unless declassified and released
by positive act of the Government so that they may form part of the
disposable agricultural lands of the public domain, are not capable of
private appropriation.5 As to these assets, the rules on confirmation of
imperfect title do not apply.6 Given this postulate, the principal issue to be
addressed turns on the question of whether or not the areas in question
have ceased to have the status of forest or other inalienable lands of the
public domain.
Forests, in the context of both the Public Land Act 7 and the
Constitution8 classifying lands of the public domain into "agricultural,
forest or timber, mineral lands and national parks," do not necessarily
refer to a large tract of wooded land or an expanse covered by dense
growth of trees and underbrush. As we stated in Heirs of Amunategui 9-
A forested area classified as forest land of the public domain does not
lose such classification simply because loggers or settlers have stripped
it of its forest cover. Parcels of land classified as forest land may actually
be covered with grass or planted to crops by kaingin cultivators or other
farmers. "Forest lands" do not have to be on mountains or in out of the
way places. xxx. The classification is merely descriptive of its legal
nature or status and does not have to be descriptive of what the land
actually looks like. xxx
Under Section 2, Article XII of the Constitution, 10 which embodies
the Regalian doctrine, all lands of the public domain belong to the State
– the source of any asserted right to ownership of land. 11 All lands not
appearing to be clearly of private dominion presumptively belong to the
State.12 Accordingly, public lands not shown to have been reclassified or
released as alienable agricultural land or alienated to a private person by
the State remain part of the inalienable public domain.13 Under Section 6
of the Public Land Act, the prerogative of classifying or reclassifying
lands of the public domain, i.e., from forest or mineral to agricultural and
vice versa, belongs to the Executive Branch of the government and not
the court.14 Needless to stress, the onus to overturn, by incontrovertible
evidence, the presumption that the land subject of an application for
registration is alienable or disposable rests with the applicant.15
In the present case, the CA assumed that the lands in question are
already alienable and disposable. Wrote the appellate court:
The theory of [petitioner] that the properties in question are lands of the
public domain cannot be sustained as it is directly against the above
doctrine. Said doctrine is a reaffirmation of the principle established in
the earlier cases . . . that open, exclusive and undisputed possession of
alienable public land for period prescribed by law creates the legal fiction
whereby the land, upon completion of the requisite period, ipso jure and
without the need of judicial or other sanction, ceases to be public land
and becomes private property …. (Word in bracket and underscoring
added.)
The principal reason for the appellate court’s disposition, finding a
registerable title for respondent, is her and her predecessor-in-interest’s
open, continuous and exclusive occupation of the subject property for
more than 30 years. Prescinding from its above assumption and finding,
the appellate court went on to conclude, citing Director of Lands vs.
Intermediate Appellate Court (IAC)16 and Herico vs. DAR,17 among other
cases, that, upon the completion of the requisite period of possession,
the lands in question cease to be public land and become private
property.
Director of Lands, Herico and the other cases cited by the CA are not,
however, winning cards for the respondent, for the simple reason that, in
said cases, the disposable and alienable nature of the land sought to be
registered was established, or, at least, not put in issue. And there lies
the difference.
Here, respondent never presented the required certification from the
proper government agency or official proclamation reclassifying the land
applied for as alienable and disposable. Matters of land classification or
reclassification cannot be assumed. It calls for proof. 18 Aside from tax
receipts, respondent submitted in evidence the survey map and technical
descriptions of the lands, which, needless to state, provided no
information respecting the classification of the property. As the Court has
held, however, these documents are not sufficient to overcome the
presumption that the land sought to be registered forms part of the public
domain.19
It cannot be overemphasized that unwarranted appropriation of public
lands has been a notorious practice resorted to in land registration
cases.20 For this reason, the Court has made it a point to stress, when
appropriate, that declassification of forest and mineral lands, as the case
may be, and their conversion into alienable and disposable lands need
an express and positive act from the government.21
The foregoing considered, the issue of whether or not respondent and
her predecessor-in-interest have been in open, exclusive and continuous
possession of the parcels of land in question is now of little moment. For,
unclassified land, as here, cannot be acquired by adverse occupation or
possession; occupation thereof in the concept of owner, however long,
cannot ripen into private ownership and be registered as title. 22
WHEREFORE, the instant petition is GRANTED and the assailed
decision dated May 29, 1998 of the Court of Appeals in CA-G.R. CV No.
37001 is REVERSED and SET ASIDE. Accordingly, respondent’s
application for original registration of title in Land Registration Case No.
N-25-1 of the Regional Trial Court at Iba, Zambales, Branch 69,
is DENIED.
No costs.
SO ORDERED.
[G.R. No. L-27873. November 29, 1983.]
HEIRS OF JOSE AMUNATEGUI, Petitioners, v. DIRECTOR OF
FORESTRY, Respondent.
[G.R. No. L-30035. November 29, 1983.]
ROQUE BORRE and ENCARNACION DELFIN, Petitioners, v. ANGEL
ALPASAN, HEIRS OF MELQUIADES BORRE, EMETERIO BEREBER
and HEIRS OF JOSE AMUNATEGUI and THE CAPIZ COURT OF
FIRST INSTANCE, Respondents.
SYLLABUS
1. CIVIL LAW; PUBLIC LAND ACT; FOREST LAND; CLASSIFICATION
NOT LOST EVEN IF IT HAS BEEN STRIPPED OF FOREST COVER;
UNLESS RELEASED IN AN OFFICIAL PROCLAMATION AS
DISPOSABLE LANDS, RULES ON CONFIRMATION OF IMPERFECT
TITLE DO NOT APPLY. — A forested area classified as forest land of the
public domain does not lose such classification simply because loggers
or settlers may have stripped it of its forest cover. Parcels of land
classified as forest land may actually be covered with grass or planted to
crops by kaingin cultivators or other farmers. "Forest lands" do not have
to be on mountains or in out of the way places. Swampy areas covered
by mangrove trees, nipa palms, and other tress growing in brackish or
sea water may also be classified as forest land. The classification is
descriptive of its legal nature or status and does not have to be
descriptive of what the land actually looks like. Unless and until the land
classified as "forest" is released in an official proclamation to that effect
so that it may form part of the disposable agricultural lands of the public
domain, the rules on confirmation of imperfect title do not apply.
2. ID.; ID.; FOREST LANDS; ACQUISITIVE OWNERSHIP NOT
ACQUIRED. — This Court ruled in the leading case of Director of
Forestry v. Muñoz (23 SCRA 1184) that possession of forest lands, no
matter how long, cannot ripen into private ownership. And in Republic v.
Animas (56 SCRA 499), we granted the petition on the ground that the
ares covered by the patent and title was not disposable public land, it
being a part of the forest zone and any patent and title to said area is
void ab initio. It bears emphasizing that a positive act of 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.
3. ID.; ID.; CONFIRMATION, OF IMPERFECT TITLE CASES; BURDEN
OF PROVING THAT THE REQUIREMENTS OF THE LAW HAVE BEEN
MET, RESTS ON THE APPLICANT. — In confirmation of imperfect title
cases, the applicant shoulders the burden of proving that he meets the
requirements of Section 48, Commonwealth Act No. 141, as amended by
Republic Act No. 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.
DECISION
GUTIERREZ, JR., J.:
The two petitions for review on certiorari before us question the decision
of the Court of Appeals which declared the disputed property as forest
land, not subject to titling in favor of private persons.
These two petitions have their genesis in an application for confirmation
of imperfect title and its registration filed with the Court of First Instance
of Capiz. The parcel of land sought to be registered is known as Lot No.
885 of the Cadastral Survey of Pilar, Capiz, and has an area of 645,703
square meters.cralawnad
Roque Borre, petitioner in G.R. No, L-30035, and Melquiades Borre, filed
the application for registration. In due time, the heirs of Jose Amunategui,
petitioners in G.R. No. L-27873 filed an opposition to the application of
Roque and Melquiades Borre. At the same time, they prayed that the title
to a portion of Lot No. 885 of Pilar Cadastre containing 527,747 square
meters be confirmed and registered in the names of said Heirs of Jose
Amunategui.
The Director of Forestry, through the Provincial Fiscal of Capiz, also filed
an opposition to the application for registration of title claiming that the
land was mangrove swamp which was still classified as forest land and
part of the public domain.
Another oppositor, Emeterio Bereber filed his opposition insofar as a
portion of Lot No. 885 containing 117,956 square meters was concerned
and prayed that title to said portion be confirmed and registered in his
name.
During the progress of the trial, applicant-petitioner Roque Borre sold
whatever rights and interests he may have on Lot No. 885 to Angel
Alpasan. The latter also filed an opposition, claiming that he is entitled to
have said lot registered in his name.
After trial, the Court of First Instance of Capiz adjudicated 117,956
square meters to Emeterio Bereber and the rest of the land containing
527,747 square meters was adjudicated in the proportion of 5/6 share to
Angel Alpasan and 1/6 share to Melquiades Borre.
Only the Heirs of Jose Amunategui and the Director of Forestry filed their
respective appeals with the Court of Appeals, The case was docketed as
CA-G.R. No. 34190-R.
In its decision, the Court of Appeals held:jgc:chanrobles.com.ph
". . . the conclusion so far must have to be that as to the private litigants
that have been shown to have a better right over Lot 885 are, as to the
northeastern portion of a little less than 117,956 square meters, it was
Emeterio Bereber and as to the rest of 527,747 square meters, it was the
heirs of Jose Amunategui; but the last question that must have to be
considered is whether after all, the title that these two (2) private litigants
have shown did not amount to a registerable one in view of the
opposition and evidence of the Director of Forestry; . . .
". . . turning back the clock thirty (30) years from 1955 when the
application was filed which would place it at 1925, the fact must have to
be accepted that during that period, the land was a classified forest land
so much so that timber licenses had to be issued to certain licensee
before 1926 and after that; that even Jose Amunategui himself took the
trouble to ask for a license to cut timber within the area; and this can only
mean that the Bureau of Forestry had stood and maintained its ground
that it was a forest land as indeed the testimonial evidence referred to
above persuasively indicates, and the only time when the property was
converted into a fishpond was sometime after 1950; or a bare five (5)
years before the filing of the application; but only after there had been a
previous warning by the District Forester that that could not be done
because it was classified as a public forest; so that having these in mind
and remembering that even under Republic Act 1942 which came into
effect in 1957, two (2) years after this case had already been filed in the
lower Court, in order for applicant to be able to demonstrate a
registerable title he must have shown.
"‘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 (30) years, preceding the filing
of the application;’
the foregoing details cannot but justify the conclusion that not one of the
applicants or oppositors had shown that during the required period of
thirty (30) years prescribed by Republic Act 1942 in order for him to have
shown a registerable title for the entire period of thirty (30) years before
filing of the application, he had been in
"‘open, continuous, exclusive and notorious possession and occupation
of agricultural lands of the public domain’,
it is evident that the Bureau of Forestry had insisted on its claim all
throughout that period of thirty (30) years and even before and applicants
and their predecessors had made implicit recognition of that; the result
must be to deny all these applications; this Court stating that it had felt
impelled notwithstanding, just the same to resolve the conflicting
positions of the private litigants among themselves as to who of them
had demonstrated a better right to possess because this Court foresees
that this litigation will go all the way to the Supreme Court and it is
always better that the findings be as complete as possible to enable the
Highest Court to pass final judgment;
"IN VIEW WHEREOF, the decision must have to be as it is hereby
reversed; the application as well as all the oppositions with the exception
of that of the Director of Forestry which is hereby sustained are
dismissed; no more pronouncement as to costs."cralaw virtua1aw library
A petition for review on certiorari was filed by the Heirs of Jose
Amunategui contending that the disputed lot had been in the possession
of private persons for over thirty years and therefore in accordance with
Republic Act No. 1942, said lot could still be the subject of registration
and confirmation of title in the name of a private person in accordance
with Act No. 496 known as the Land Registration Act. On the other hand,
another petition for review on certiorari was filed by Roque Borre and
Encarnacion Delfin, contending that the trial court committed grave
abuse of discretion in dismissing their complaint against the Heirs of
Jose Amunategui. The Borre complaint was for the annulment of the
deed of absolute sale of Lot No. 885 executed by them in favor of the
Heirs of Amunategui. The complaint was dismissed on the basis of the
Court of Appeals’ decision that the disputed lot is part of the public
domain. The petitioners also question the jurisdiction of the Court of
Appeals in passing upon the relative rights of the parties over the
disputed lot when its final decision after all is to declare said lot a part of
the public domain classified as forest land.chanrobles law library : red
The need for resolving the questions raised by Roque Borre and
Encarnacion Delfin in their petition depends on the issue raised by the
Heirs of Jose Amunategui, that is, whether or not Lot No. 885 is public
forest land, not capable of registration in the names of the private
applicants.
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 swamp." Although conceding that a "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 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.
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.
The decision of the appellate court is not based merely on the
presumptions implicit in Commonwealth Act No. 141 as amended. The
records show that Lot No. 88S never ceased to be classified as forest
land of the public domain.
In Republic v. Gonong (118 SCRA 729) we ruled:jgc:chanrobles.com.ph
"As held in Oh Cho v. Director of Lands, 75 Phil. 890, all lands that were
not acquired from the Government, either by purchase or by grant,
belong 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-interests 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."cralaw virtua1aw library

The petition is without merit. In the instant petitions, the exception in the Oh Cho case does not apply.
The evidence is clear that Lot No. 885 had always been public land
A forested area classified as forest land of the public domain does not classified as forest.
lose such classification simply because loggers or settlers may have
stripped it of its forest cover. Parcels of land classified as forest land may Similarly, in Republic v. Vera (120 SCRA 210), we
actually be covered with grass or planted to crops by kaingin cultivators ruled:jgc:chanrobles.com.ph
or other farmers. "Forest lands" do not have to be on mountains or in out
of the way places. Swampy areas covered by mangrove trees, nipa ". . . The possession of public land however long the period thereof may
palms, and other trees growing in brackish or sea water may also be have extended, never confers title thereto upon the possessor because
classified as forest land. The classification is descriptive of its legal the statute of limitations with regard to public land does not operate
nature or status and does not have to be descriptive of what the land against the State, unless the occupant can prove possession and
actually looks like. Unless and until the land classified as "forest" is occupation of the same under claim of ownership for the required
released in an official proclamation to that effect so that it may form part number of years to constitute a grant from the State. (Director of Lands v.
of the disposable agricultural lands of the public domain, the rules on Reyes, 68 SCRA 177, 195)."cralaw virtua1aw library
confirmation of imperfect title do not apply.
We, therefore, affirm the finding that the disputed property Lot No. 885 is
This Court ruled in the leading case of Director of Forestry v. Muñoz (23 part of the public domain, classified as public forest land. There is no
SCRA 1184) that possession of forest lands, no matter how long, cannot need for us to pass upon the other issues raised by petitioners Roque
ripen into private ownership. And in Republic v. Animas (56 SCRA 499), Borre and Encarnacion Delfin, as such issues are rendered moot by this
we granted the petition on the ground that the area covered by the patent finding.chanrobles virtual lawlibrary
and title was not disposable public land, it being a part of the forest zone
and any patent and title to said area is void ab initio. It bears WHEREFORE, the petitions in G. R. No. L-30035 and G. R. No. L-27873
emphasizing that a positive act of Government is needed to declassify are DISMISSED for lack of merit. Costs against the petitioners.
land which is classified as forest and to convert it into alienable or
disposable land for agricultural or other purposes. SO ORDERED.

The findings of the Court of Appeals are particularly well-grounded in the G.R. No. 100709 November 14, 1997
instant petition.

The fact that no trees enumerated in Section 1821 of the Revised
Administrative Code are found in Lot No. 885 does not divest such land
of its being classified as forest land, much less as land of the public
domain. The appellate court found that in 1912, the land must have been
a virgin forest as stated by Emeterio Bereber’s witness Deogracias
Gavacao, and that as late as 1926, it must have been a thickly forested
area as testified by Jaime Bertolde. The opposition of the Director of
Forestry was strengthened by the appellate court’s finding that timber
licenses had to be issued to certain licensees and even Jose
Amunategui himself took the trouble to ask for a license to cut timber
within the area. It was only sometime in 1950 that the property was
converted into fishpond but only after a previous warning from the District
Forester that the same could not be done because it was classified as
"public forest." chanrobles.com:cralaw:red
In confirmation of imperfect title cases, the applicant shoulders the
burden of proving that he meets the requirements of Section 48,
Commonwealth Act No. 141, as amended by Republic Act No. 1942. He
REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF
LANDS, petitioner,
vs.
COURT OF APPEALS, JOSEFINA L. MORATO, SPOUSES NENITA
CO and ANTONIO QUILATAN AND THE REGISTER OF DEEDS OF
QUEZON PROVINCE, respondents.
PANGANIBAN, J.:
Will the lease and/or mortgage of a portion of a realty acquired through
free patent constitute sufficient ground for the nullification of such land
grant? Should such property revert to the State once it is invaded by the
sea and thus becomes foreshore land?
The Case
These are the two questions raised in the petition before us assailing the
Court of Appeals' 1 Decision in CA-G.R. CV No. 02667 promulgated on
June 13, 1991 which answered the said questions in the
negative. 2 Respondent Court's dismissed 3 petitioner's appeal and
affirmed in toto the decision of the Regional Trial Court4 of Calauag,
Quezon, dated December 28, 1983 in Civil Case No. C-608. In turn, the
Regional Trial Court's decision dismissed petitioner's complaint for
cancellation of the Torrens Certificate of Title of Respondent Morato and
for reversion of the parcel of land subject thereof of the public domain.
The Facts
The petition of the solicitor general, representing the Republic of the
Philippines, recites the following facts: 5
Sometime in December, 1972, respondent Morato filed a Free Patent
Application No. III-3-8186-B on a parcel of land with an area of 1,265
square meters situated at Pinagtalleran, Calauag, Quezon. On January
16, 1974, the patent was approved and the Register of Deeds of Quezon
at Lucena City issued on February 4, 1974 Original Certificate of Title
No. P-17789. Both the free paten and the title specifically mandate that
the land shall not be alienated nor encumbered within five years from the
date of the issuance of the patent (Sections 118 and 124 of CA No. 141,
as amended).
Subsequently, the District Land Officer in Lucena City, acting upon
reports that respondent Morato had encumbered the land in violation of
the condition of the patent, conducted an investigation. Thereafter, it was
established that the subject land is a portion of the Calauag Bay, five (5)
to six (6) feet deep under water during high tide and two (2) feet deep at
low tide, and not suitable to vegetation. Moreover, on October 24, 1974,
a portion of the land was mortgaged by respondent Morato to
respondents Nenita Co and Antonio Quilatan for P10,000.00 (pp. 2, 25,
Folder of Exhibits). The spouses Quilatan constructed a house on the
land. Another portion of the land was leased to Perfecto Advincula on
February 2, 1976 at P100.00 a month, where a warehouse was
constructed.
On November 5, 1978, petitioner filed an amended complaint against
respondents Morato, spouses Nenita Co and Antonio Quilatan, and the
Register of Deeds of Quezon for the cancellation of title and reversion of
a parcel of land to the public domain, subject of a free patent in favor of
respondent Morato, on the grounds that the land is a foreshore land and
was mortgaged and leased within the five-year prohibitory period (p. 46,
Records).
After trial, the lower court, on December 28, 1983, rendered a decision
dismissing petitioner's complaint. In finding for private respondents, the
lower court ruled that there was no violation of the 5-year period ban
against alienating or encumbering the land, because the land was merely
leased and not alienated. It also found that the mortgage to Nenita Co
and Antonio Quilatan covered only the improvement and not the land
itself.
On appeal, the Court of Appeals affirmed the decision of the trial court.
Thereafter, the Republic of the Philippines filed the present petition. 6
The Issues
Petitioner alleges that the following errors were committed by
Respondent Court: 7
I subject land."9 Further, petitioner argues that the defense of
Respondent court erred in holding that the patent granted and certificate
of title issued to Respondent Morato cannot be cancelled and annulled
since the certificate of title becomes indefeasible after one year from the
issuance of the title.
II
Respondent Court erred in holding that the questioned land is part of a
disposable public land and not a foreshore land.
The Court's Ruling
The petition is meritorious.
First Issue: Indefeasibility of a Free Patent Title
In resolving the first issue against petitioner, Respondent Court held: 8
. . . As ruled in Heirs of Gregorio Tengco vs. Heirs of Jose Alivalas, 168
SCRA 198. ". . . The rule is well-settled that an original certificate of title
issued on the strength of a homestead patent partakes of the nature of a
certificate of title issued in a judicial proceeding, as long as the land
disposed of is really part of the disposable land of the public domain, and
becomes indefeasible and incontrovertible upon the expiration of one
year from the date of promulgation of the order of the Director of Lands
for the issuance of the patent. (Republic v. Heirs of Carle, 105 Phil. 1227
(1959); Ingaran v. Ramelo, 107 Phil. 498 (1960); Lopez v. Padilla, (G.R.
No. L-27559, May 18, 1972, 45 SCRA 44). A homestead patent, one
registered under the Land Registration Act, becomes as indefeasible as
a Torrens Title. (Pamintuan v. San Agustin, 43 Phil. 558 (1982); El Hogar
Filipino v. Olviga, 60 Phil. 17 (1934); Duran v. Oliva, 113 Phil. 144 (1961);
Pajomayo v. Manipon, G.R. No. L-33676, June 30, 1971, 39 SCRA 676).
(p. 203).
Again, in Lopez vs. Court of Appeals, 169 SCRA 271, citing Iglesia ni
Cristo v. Hon. Judge, CFI of Nueva Ecija, Branch I, (123 SCRA 516
(1983) and Pajomayo, et al. v. Manipon, et al. (39 SCRA 676 (1971) held
that once a homestead patent granted in accordance with the Public
Land Act is registered pursuant to Section 122 of Act 496, the certificate
of title issued in virtue of said patent has the force and effect of a Torrens
Title issued under the Land Registration Act.
Indefeasibility of the title, however, may not bar the State, thru the
Solicitor General, from filing an action for reversion, as ruled in Heirs
of Gregorio Tengco v. Heirs of Jose Aliwalas, (supra), as follows:
But, as correctly pointed out by the respondent Court of Appeals, Dr.
Aliwalas' title to the property having become incontrovertible, such may
no longer be collaterally attacked. If indeed there had been any fraud or
misrepresentation in obtaining the title, an action for reversion instituted
by the Solicitor General would be the proper remedy (Sec. 101, C.A. No.
141; Director of Lands v. Jugado, G.R. No. L-14702, May 21, 1961, 2
SCRA 32; Lopez v. Padilla, supra). (p. 204).
Petitioner contends that the grant of Free Patent (IV-3) 275 and the
subsequent issuance of Original Certificate of Title No. P-17789 to
Respondent Josefina L. Morato were subject to the conditions provided
for in Commonwealth Act (CA) No. 141. It alleges that on October 24,
1974, or nine (9) months and eight (8) days after the grant of the patent,
mortgaged a portion of the land" to Respondent Nenita Co, who
thereafter constructed a house thereon. Likewise, on February 2, 1976
and "within the five-year prohibitory period," Respondent Morato "leased
a portion of the land to Perfecto Advincula at a monthly rent of P100.00
who, shortly thereafter, constructed a house of concrete materials on the
indefeasibility of title is "inaccurate." The original certificate of title issued
to Respondent Morato "contains the seeds of its own cancellation": such
certificate specifically states on its face that "it is subject to the provisions
of Sections 118, 119, 121, 122, 124 of CA No. 141, as amended." 10
Respondent Morato counters by stating that although a "portion of the
land was previously leased," it resulted "from the fact that Perfecto
Advincula built a warehouse in the subject land without [her] prior
consent." The mortgage executed over the improvement "cannot be
considered a violation of the said grant since it can never affect the
ownership." 11 She states further:
. . . . the appeal of the petitioner was dismissed not because of the
principle of indefeasibility of title but mainly due to failure of the latter to
support and prove the alleged violations of respondent Morato. The
records of this case will readily show that although petitioner was able to
establish that Morato committed some acts during the prohibitory period
of 5 years, a perusal thereof will also show that what petitioner was able
to prove never constituted a violation of the grant. 12
Respondent-Spouses Quilatan, on the other hand, state that the
mortgage contract they entered into with Respondent Morato "can never
be considered as [an] 'alienation' inasmuch as the ownership over the
property remains with the owner." 13 Besides, it is the director of lands
and not the Republic of the Philippines who is the real party in interest in
this case, contrary to the provision of the Public Land Act which states
that actions for reversion should be instituted by the solicitor general in
the name of Republic of the Philippines. 14
We find for petitioner.
Quoted below are relevant sections of Commonwealth Act No. 141,
otherwise known as the Public Land Act:
Sec. 118. Except in favor of the Government or any of its branches, units
or institutions, or legally constituted banking corporations, lands acquired
under free patent or homestead provisions shall not be subject to
encumbrance or alienation from the date of the approval of the
application and for a term of five years from and after the date of
issuance of the patent or grant nor shall they become liable to the
satisfaction of any debt contracted prior to the expiration of said period;
but the improvements or crops on the land may be mortgaged or pledged
to qualified persons, associations, or corporations.
No alienation, transfer, or conveyance of any homestead after five years
and before twenty-five years after issuance of title shall be valid without
the approval of the Secretary of Agriculture and Natural Resources,
which approval shall not be denied except on constitutional and legal
grounds. (As amended by Com. Act No. 456, approved June 8, 1939.)
xxx xxx xxx
Sec. 121. Except with the consent of the grantee and the approval of the
Secretary of Agriculture and Natural Resources, and solely for
educational, religious, or charitable purposes or for a right of way, no
corporation, association, or partnership may acquire or have any right,
title, interest, or property right whatsoever to any land granted under the
free patent, homestead, or individual sale provisions of this Act or to any
permanent improvement on such land. (As amended by Com. Act No.
615, approved May 5, 1941)
Sec. 122. No land originally acquired in any manner under the provisions
of this Act, nor any permanent improvement on such land, shall be
encumbered, alienation or transferred, except to persons, corporations,
association, or partnerships who may acquire lands of the public domain
under this Act or to corporations organized in the Philippines authorized
therefore by their charters.
Except in cases of hereditary successions, no land or any portion thereof
originally acquired under the free patent, homestead, or individual sale
provisions of this Act, or any permanent improvement on such land, shall
be transferred or assigned to any individual, nor shall such land or any
permanent improvement thereon be leased to such individual, when the
area of said land, added to that of this own, shall exceed one hundred
and forty-four hectares. Any transfer, assignment, or lease made in
violation hereto shall be null and void. (As amended by Com Act No.
615, Id.).
xxx xxx xxx
Sec. 124. Any acquisition, conveyance, alienation, transfer, or other
contract made or executed in violation of any of the provisions of
sections one hundred and eighteen, one hundred and twenty, one
hundred and twenty-one, one hundred and twenty-two, and one hundred
and twenty-three of this Actshall be unlawful and null and void from its
execution and shall produce the effect of annulling and cancelling the
grant, title, patent, or permit originally issued, recognized or confirmed,
actually or presumatively, and cause the reversion of the property and its
improvements to the State. (Emphasis supplied)
The foregoing legal provisions clearly proscribe the encumbrance of a
parcel of land acquired under a free patent or homestead within five
years from the grant of such patent. Furthermore, such encumbrance
results in the cancellation of the grant and the reversion of the land to the
public domain. Encumbrance has been defined as "[a]nything that
impairs the use or transfer of property; anything which constitutes a
burden on the title; a burden or charge upon property; a claim or lien
upon property." It may be a "legal claim on an estate for the discharge of
which the estate is liable; and embarrassment of the estate or property
so that it cannot be disposed of without being subject to it; an estate,
interest, or right in lands, diminishing their value to the general owner; a
liability resting upon an estate." 15 Do the contracts of lease and
mortgage executed within five (5) years from the issuance of the patent
constitute an "encumbrance" and violate the terms and conditions of
such patent? Respondent Court answered in the negative: 16
From the evidence adduced by both parties, it has been proved that the
area of the portion of the land, subject matter of the lease contract (Exh.
"B") executed by and between Perfecto Advincula and Josefina L.
Morato is only 10 x 12 square meters, where the total area of the land
granted to Morato is 1,265 square meters. It is clear from this that the
portion of the land leased by Advincula does not significantly affect
Morato's ownership and possession. Above all, the circumstances under
which the lease was executed do not reflect a voluntary and blatant
intent to violate the conditions provided for in the patent issued in her
favor. On the contrary, Morato was compelled to enter into that contract
of lease
out of sympathy and the goodness of her heart to accommodate a fellow
man. . . .
It is indisputable, however, that Respondent Morato cannot fully use or
enjoy the land during the duration of the lease contract. This restriction
on the enjoyment of her property sufficiently meets the definition of an
encumbrance under Section 118 of the Public Land Act, because such
contract "impairs the use of the property" by the grantee. In a contract of
lease which is consensual, bilateral, onerous and commutative, the
owner temporarily grants the use of his or her property to another who
undertakes to pay rent therefor. 17 During the term of the lease, the
grantee of the patent cannot enjoy the beneficial use of the land leased.
As already observed, the Public Land Act does not permit a grantee of a
free patent from encumbering any portion of such land. Such
encumbrance is a ground for the nullification of the award.
Morato's resort to equity, i.e. that the lease was executed allegedly out of
the goodness of her heart without any intention of violating the law,
cannot help her. Equity, which has been aptly described as "justice
outside legality," is applied only in the absence of, and never against,
statutory law or judicial rules of procedure. Positive rules prevail over all
abstract arguments based on equity contra legem. 18
Respondents failed to justify their position that the mortgage should not
be considered an encumbrance. Indeed, we do not find any support for
such contention. The questioned mortgage falls squarely within the term
"encumbrance" proscribed by Section 118 of the Public Land
Act. 19 Verily, a mortgage constitutes a legal limitation on the estate, and
the foreclosure of such mortgage would necessarily result in the auction
of the property. 20
Even if only part of the property has been sold or alienated within the
prohibited period of five years from the issuance of the patent, such
alienation is a sufficient cause for the reversion of the whole estate to the
State. As a condition for the grant of a free patent to an applicant, the law
requires that the land should not be encumbered, sold or alienated within
five years from the issuance of
the patent. The sale or the alienation of part of the homestead violates
that condition. 21
The prohibition against the encumbrance — lease and mortgage
included — of a homestead which, by analogy applies to a free patent, is
mandated by the rationale for the grant, viz.: 22
It is well-known that the homestead laws were designed to distribute
disposable agricultural lots of the State to land-destitute citizens for their
home and cultivation. Pursuant to such benevolent intention the State
prohibits the sale or incumbrance of the homestead (Section 116) within
five years after the grant of the patent. After that five-year period the law
impliedly permits alienation of the homestead; but in line with the
primordial purpose to favor the homesteader and his family the statute
provides that such alienation or conveyance (Section 117) shall be
subject to the right of repurchase by the homesteader, his widow or heirs
within five years. This section 117 is undoubtedly a complement of
section 116. It aims to preserve and keep in the family of the
homesteader that portion of public land which the State had gratuitously
given to him. It would, therefore, be in keeping with this fundamental idea
to hold, as we hold, that the right to repurchase exists not only when the
original homesteader makes the conveyance, but also when it is made
by his widow or heirs. This construction is clearly deducible from the
terms of the statute.
By express provision of Section 118 of Commonwealth Act 141 and in
conformity with the policy of the law, any transfer or alienation of a free
patent or homestead within five years from the issuance of the patent is
proscribed. Such transfer nullifies said alienation and constitutes a cause
for the reversion of the property to the State.
The prohibition against any alienation or encumbrance of the land grant
is a proviso attached to the approval of every application. 23 Prior to the
fulfillment of the requirements of law, Respondent Morato had only an
inchoate right to the property; such property remained part of the public
domain and, therefore, not susceptible to alienation or encumbrance.
Conversely, when a "homesteader has complied with all the terms and
conditions which entitled him to a patent for [a] particular tract of public
land, he acquires a vested interest therein and has to be regarded an
equitable owner thereof." 24 However, for Respondent Morato's title of
ownership over the patented land to be perfected, she should have
complied with the requirements of the law, one of which was to keep the
property for herself and her family within the prescribed period of five (5)
years. Prior to the fulfillment of all requirements of the law, Respondent
Morato's title over the property was incomplete. Accordingly, if the
requirements are not complied with, the State as the grantor could
petition for the annulment of the patent and the cancellation of the title.
Respondent Morato cannot use the doctrine of the indefeasibility of her
Torrens title to bar the state from questioning its transfer or
encumbrance. The certificate of title issued to her clearly stipulated that
its award was "subject to the conditions provided for in Sections 118,
119, 121, 122 and 124 of Commonwealth Act (CA) No. 141." Because
she violated Section 118, the reversion of the property to the public
domain necessarily follows, pursuant to Section 124.
Second Issue: Foreshore Land
Revert to the Public Domain
There is yet another reason for granting this petition.
Although Respondent Court found that the subject land was foreshore
land, it nevertheless sustained the award thereof to Respondent
Morato: 25
First of all, the issue here is whether the land in question, is really part of
the foreshore lands. The Supreme Court defines foreshore land in the
case of Republic vs. Alagad, 169 SCRA 455, 464, as follows:
Otherwise, where the rise in water level is due to, the "extraordinary"
action of nature, rainful, for instance, the portions inundated thereby are
not considered part of the bed or basin of the body of water in question.
It cannot therefore be said to be foreshore land but land outside of the
public dominion, and land capable of registration as private property.
A foreshore land, on the other hand has been defined as follows:
. . . that part of (the land) which is between high
and low water and left dry by the flux and reflux of the tides . . . .
(Republic vs. C.A., Nos. L-43105, L-43190, August 31, 1984, 131 SCRA
532; Government vs. Colegio de San Jose, 53 Phil 423)
The strip of land that lies between the high and low water marks and that
is alternatively wet and dry according to the flow of the tide. (Rep. vs.
CA, supra, 539).
The factual findings of the lower court regarding the nature of the parcel
of land in question reads:
Evidence disclose that the marginal area of the land radically changed
sometime in 1937 up to 1955 due to a strong earthquake followed by
frequent storms eventually eroding the land. From 1955 to 1968,
however, gradual reclamation was undertaken by the lumber company
owned by the Moratos. Having thus restored the land thru mostly human
hands employed by the lumber company, the area continued to be
utilized by the owner of the sawmill up to the time of his death in 1965.
On or about March 17, 1973, there again was a strong earthquake
unfortunately causing destruction to hundreds of residential houses
fronting the Calauag Bay including the Santiago Building, a cinema
house constructed of concrete materials. The catastrophe totally caused
the sinking of a concrete bridge at Sumulong river also in the municipality
of Calauag, Quezon.
On November 13, 1977 a typhoon code named "Unding" wrought havoc
as it lashed the main land of Calauag, Quezon causing again great
erosion this time than that which the area suffered in 1937. The Court
noted with the significance of the newspaper clipping entitled "Baryo ng
Mangingisda Kinain ng Dagat" (Exh. "11").
xxx xxx xxx
Evidently this was the condition of the land when on or about December
5, 1972 defendant Josefina L. Morato filed with the Bureau of Lands her
free patent application. The defendant Josefina Morato having taken
possession of the land after the demise of Don Tomas Morato, she
introduced improvement and continued developing the area, planted it to
coconut tree. Having applied for a free patent, defendant had the land
area surveyed and an approved plan (Exh. "9") based on the cadastral
survey as early as 1927 (Exh. "10") was secured. The area was declared
for taxation purposes in the name of defendant Josefina Morato
denominated as Tax Declaration No. 4115 (Exh. "8") and the
corresponding realty taxes religiously paid as shown by Exh. "8-A"). (pp.
12-14, DECISION).
Being supported by substantial evidence and for failure of the appellant
to show cause which would warrant disturbance, the aforecited findings
of the lower court, must be respected.
Petitioner correctly contends, however, that Private Respondent Morato
cannot own foreshore land:
Through the encroachment or erosion by the ebb and flow of the tide, a
portion of the subject land was invaded by the waves and sea advances.
During high tide, at least half of the land (632.5 square meters) is 6 feet
deep under water and three (3) feet deep during low tide. The Calauag
Bay shore has extended up to a portion of the questioned land.
While at the time of the grant of free patent to respondent Morato, the
land was not reached by the water, however, due to gradual sinking of
the land caused by natural calamities, the sea advances had
permanently invaded a portion of subject land. As disclosed at the trial,
through the testimony of the court-appointed commissioner, Engr.
Abraham B. Pili, the land was under water during high tide in the month
of August 1978. The water margin covers half of the property, but during
low tide, the water is about a kilometer (TSN, July 19, 1979, p. 12). Also,
in 1974, after the grant of the patent, the land was covered with
vegetation, but it disappeared in 1978 when the land was reached by the
tides (Exh. "E-1", "E-14"). In fact, in its decision dated December 28,
1983, the lower court observed that the erosion of the land was caused
by natural calamities that struck the place in 1977 (Cf. Decision, pp. 17-
18). 26
Respondent-Spouses Quilatan argue, however, that it is "unfair and
unjust if Josefina Morato will be deprived of the whole property just
because a portion thereof was immersed in water for reasons not her
own doing." 27
As a general rule, findings of facts of the Court of Appeals are binding
and conclusive upon this Court, unless such factual findings are palpably
unsupported by the evidence on record or unless the judgment itself is
based on a misapprehension of facts. 28 The application for a free patent
was made in 1972. From the undisputed factual findings of the Court of
Appeals, however, the land has since become foreshore. Accordingly, it
can no longer be subject of a free patent under the Public Land
Act. Government of the Philippine Islands vs. Cabañgis 29 explained the
rationale for this proscription:
Article 339, subsection 1, of the Civil Code, reads:
Art. 339. Property of public ownership 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.
xxx xxx xxx
Article 1, case 3, of the law of Waters of August 3, 1866, provides as
follows:
Art. 1. The following are part of the national domain open to public use.
xxx xxx xxx
3. The Shores. By the shore is understood that space covered and
uncovered by the movement of the tide. Its interior or terrestrial limit is
the line reached by the highest equinoctal tides. Where the tides are not
appreciable, the shore begins on the land side at the line reached by the
sea during ordinary storms or tempests.
In the case of Aragon vs. Insular Government (19 Phil. 223), with
reference to article 339 of the Civil Code just quoted, this Court said:
We should not be understood, by this decision, to hold that in a case of
gradual encroachment or erosion by the ebb and flow of the tide, private
property may not become "property of public ownership." as defined in
article 339 of the code, where it appear that the owner has to all intents
and purposes abandoned it and permitted it to be totally destroyed, so as
to become a part of the "playa" (shore of the sea), "rada" (roadstead), or
the like. . . .
In the Enciclopedia Juridica Española, volume XII, page 558, we read
the following:
With relative frequency the opposite phenomenon occurs; that is, the sea
advances and private properties are permanently invaded by the waves,
and in this case they become part of the shore or breach. The then pass
to the public domain, but the owner thus dispossessed does not retain
any right to the natural products resulting from their new nature; it is a de
facto case of eminent domain, and not subject to indemnity.
In comparison, Article 420 of the Civil Code provides:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, banks, shores, roadsteads,
and others of similar character;
(2) Those which belong to the State, without being for public use, and
are intended for some public service or for the development of the
national wealth.
When the sea moved towards the estate and the tide invaded it, the
invaded property became foreshore land and passed to the realm of the
public domain. In fact, the Court in Government vs. Cabangis 30 annulled
the registration of land subject of cadastral proceedings when the parcel
subsequently became foreshore land. 31 In another case, the Court
voided the registration decree of a trial court and held that said court had
no jurisdiction to award foreshore land to any private person or
entity. 32 The subject land in this case, being foreshore land, should
therefore be returned to the public domain.
WHEREFORE, the petition is GRANTED. This Court hereby REVERSES
and SETS ASIDE the assailed Decision of Respondent Court and
ORDERS the CANCELLATION of Free Patent No. (IV-3) 275 issued to
Respondent Morato and the subsequent Original Certificate of Title No.
P-17789. The subject land therefore REVERTS to the State. No costs.
SO ORDERED.
Romero, Melo and Francisco, JJ., concur.
Narvasa, C.J., is on leave.
Footnotes
G.R. No. 133250 July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,
vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY
DEVELOPMENT CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of
preliminary injunction and a temporary restraining order. The petition
seeks to compel the Public Estates Authority ("PEA" for brevity) to
disclose all facts on PEA's then on-going renegotiations with Amari
Coastal Bay and Development Corporation ("AMARI" for brevity) to
reclaim portions of Manila Bay. The petition further seeks to enjoin PEA
from signing a new agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of
Public Highways, signed a contract with the Construction and
Development Corporation of the Philippines ("CDCP" for brevity) to
reclaim certain foreshore and offshore areas of Manila Bay. The contract
also included the construction of Phases I and II of the Manila-Cavite
Coastal Road. CDCP obligated itself to carry out all the works in
consideration of fifty percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued
Presidential Decree No. 1084 creating PEA. PD No. 1084 tasked PEA "to
reclaim land, including foreshore and submerged areas," and "to
develop, improve, acquire, x x x lease and sell any and all kinds of
lands."1 On the same date, then President Marcos issued Presidential
Decree No. 1085 transferring to PEA the "lands reclaimed in the
foreshore and offshore of the Manila Bay"2 under the Manila-Cavite
Coastal Road and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum
directing PEA to amend its contract with CDCP, so that "[A]ll future works
in MCCRRP x x x shall be funded and owned by PEA." Accordingly, PEA
and CDCP executed a Memorandum of Agreement dated December 29,
1981, which stated:
"(i) CDCP shall undertake all reclamation, construction, and such other
works in the MCCRRP as may be agreed upon by the parties, to be paid
according to progress of works on a unit price/lump sum basis for items
of work to be agreed upon, subject to price escalation, retention and
other terms and conditions provided for in Presidential Decree No. 1594.
All the financing required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby
agrees to cede and transfer in favor of PEA, all of the rights, title, interest
and participation of CDCP in and to all the areas of land reclaimed by
CDCP in the MCCRRP as of December 30, 1981 which have not yet
been sold, transferred or otherwise disposed of by CDCP as of said date,
which areas consist of approximately Ninety-Nine Thousand Four
Hundred Seventy Three (99,473) square meters in the Financial Center
Area covered by land pledge No. 5 and approximately Three Million
Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight
(3,382,888) square meters of reclaimed areas at varying elevations
above Mean Low Water Level located outside the Financial Center Area
and the First Neighborhood Unit."3
On January 19, 1988, then President Corazon C. Aquino issued Special
Patent No. 3517, granting and transferring to PEA "the parcels of land so
reclaimed under the Manila-Cavite Coastal Road and Reclamation
Project (MCCRRP) containing a total area of one million nine hundred
fifteen thousand eight hundred ninety four (1,915,894) square meters."
Subsequently, on April 9, 1988, the Register of Deeds of the Municipality
of Parañaque 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, Parañaque 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. 5 On
June 8, 1995, then President Fidel V. Ramos, through then Executive
Secretary Ruben Torres, approved the JVA.6
On November 29, 1996, then Senate President Ernesto Maceda
delivered a privilege speech in the Senate and denounced the JVA as
the "grandmother of all scams." As a result, the Senate Committee on
Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint
investigation. The Senate Committees reported the results of their
investigation in Senate Committee Report No. 560 dated September 16,
1997.7 Among the conclusions of their report are: (1) the reclaimed lands
PEA seeks to transfer to AMARI under the JVA are lands of the public
domain which the government has not classified as alienable lands and
therefore PEA cannot alienate these lands; (2) the certificates of title
covering the Freedom Islands are thus void, and (3) the JVA itself is
illegal.
On December 5, 1997, then President Fidel V. Ramos issued
Presidential Administrative Order No. 365 creating a Legal Task Force to
conduct a study on the legality of the JVA in view of Senate Committee
Report No. 560. The members of the Legal Task Force were the
Secretary of Justice,8 the Chief Presidential Legal Counsel,9 and the
Government Corporate Counsel.10 The Legal Task Force upheld the
legality of the JVA, contrary to the conclusions reached by the Senate
Committees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published
reports that there were on-going renegotiations between PEA and
AMARI under an order issued by then President Fidel V. Ramos.
According to these reports, PEA Director Nestor Kalaw, PEA Chairman
Arsenio Yulo and retired Navy Officer Sergio Cruz composed the
negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for
Prohibition with Application for the Issuance of a Temporary Restraining
Order and Preliminary Injunction docketed as G.R. No. 132994 seeking
to nullify the JVA. The Court dismissed the petition "for unwarranted
disregard of judicial hierarchy, without prejudice to the refiling of the case
before the proper court."12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as
a taxpayer, filed the instant Petition for Mandamus with Prayer for the
Issuance of a Writ of Preliminary Injunction and Temporary Restraining
Order. Petitioner contends the government stands to lose billions of
pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner
prays that PEA publicly disclose the terms of any renegotiation of the
JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987
Constitution on the right of the people to information on matters of public
concern. Petitioner assails the sale to AMARI of lands of the public
domain as a blatant violation of Section 3, Article XII of the 1987
Constitution prohibiting the sale of alienable lands of the public domain to
private corporations. Finally, petitioner asserts that he seeks to enjoin the
loss of billions of pesos in properties of the State that are of public
dominion.
After several motions for extension of time, 13 PEA and AMARI filed their
Comments on October 19, 1998 and June 25, 1998, respectively.
Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion:
(a) to require PEA to submit the terms of the renegotiated PEA-AMARI
contract; (b) for issuance of a temporary restraining order; and (c) to set
the case for hearing on oral argument. Petitioner filed a Reiterative
Motion for Issuance of a TRO dated May 26, 1999, which the Court
denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the
petition and required the parties to file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture
Agreement ("Amended JVA," for brevity). On May 28, 1999, the Office of
the President under the administration of then President Joseph E.
Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President,
petitioner now prays that on "constitutional and statutory grounds the
renegotiated contract be declared null and void."14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE
PETITION ARE MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT
EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO
OBSERVE THE PRINCIPLE GOVERNING THE HIERARCHY OF
COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-
EXHAUSTION OF ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS
SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION
INCLUDES OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS
BEFORE A FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT
VENTURE AGREEMENT FOR THE TRANSFER TO AMARI OF
CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED,
VIOLATE THE 1987 CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING
THE ISSUE OF WHETHER THE AMENDED JOINT VENTURE
AGREEMENT IS GROSSLY DISADVANTAGEOUS TO THE
GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in the petition
are moot and academic because of subsequent events.
The petition prays that PEA publicly disclose the "terms and conditions of
the on-going negotiations for a new agreement." The petition also prays
that the Court enjoin PEA from "privately entering into, perfecting and/or
executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and academic because
AMARI furnished petitioner on June 21, 1999 a copy of the signed
Amended JVA containing the terms and conditions agreed upon in the
renegotiations. Thus, PEA has satisfied petitioner's prayer for a public
disclosure of the renegotiations. Likewise, petitioner's prayer to enjoin
the signing of the Amended JVA is now moot because PEA and AMARI
have already signed the Amended JVA on March 30, 1999. Moreover,
the Office of the President has approved the Amended JVA on May 28,
1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional
issue by simply fast-tracking the signing and approval of the Amended
JVA before the Court could act on the issue. Presidential approval does
not resolve the constitutional issue or remove it from the ambit of judicial
review.
We rule that the signing of the Amended JVA by PEA and AMARI and its
approval by the President cannot operate to moot the petition and divest
the Court of its jurisdiction. PEA and AMARI have still to implement the
Amended JVA. The prayer to enjoin the signing of the Amended JVA on
constitutional grounds necessarily includes preventing its implementation
if in the meantime PEA and AMARI have signed one in violation of the
Constitution. Petitioner's principal basis in assailing the renegotiation of
the JVA is its violation of Section 3, Article XII of the Constitution, which
prohibits the government from alienating lands of the public domain to
private corporations. If the Amended JVA indeed violates the
Constitution, it is the duty of the Court to enjoin its implementation, and if
already implemented, to annul the effects of such unconstitutional
contract.
The Amended JVA is not an ordinary commercial contract but one which
seeks to transfer title and ownership to 367.5 hectares of reclaimed
lands and submerged areas of Manila Bay to a single private
corporation. It now becomes more compelling for the Court to resolve
the issue to insure the government itself does not violate a provision of
the Constitution intended to safeguard the national patrimony.
Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the
Constitution. In the instant case, if the Amended JVA runs counter to the
Constitution, the Court can still prevent the transfer of title and ownership
of alienable lands of the public domain in the name of AMARI. Even in
cases where supervening events had made the cases moot, the Court
did not hesitate to resolve the legal or constitutional issues raised to
formulate controlling principles to guide the bench, bar, and the public.17
Also, the instant petition is a case of first impression. All previous
decisions of the Court involving Section 3, Article XII of the 1987
Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural lands sold to private corporations
which acquired the lands from private parties. The transferors of the
private corporations claimed or could claim the right to judicial
confirmation of their imperfect titles19 under Title II of Commonwealth
Act. 141 ("CA No. 141" for brevity). In the instant case, AMARI seeks to
acquire from PEA, a public corporation, reclaimed lands and submerged
areas for non-agricultural purposes by purchase under PD No. 1084
(charter of PEA) and Title III of CA No. 141. Certain undertakings by
AMARI under the Amended JVA constitute the consideration for the
purchase. Neither AMARI nor PEA can claim judicial confirmation of their
titles because the lands covered by the Amended JVA are newly
reclaimed or still to be reclaimed. Judicial confirmation of imperfect title
requires open, continuous, exclusive and notorious occupation of
agricultural lands of the public domain for at least thirty years since June
12, 1945 or earlier. Besides, the deadline for filing applications for judicial
confirmation of imperfect title expired on December 31, 1987.20
Lastly, there is a need to resolve immediately the constitutional issue
raised in this petition because of the possible transfer at any time by PEA
to AMARI of title and ownership to portions of the reclaimed lands. Under
the Amended JVA, PEA is obligated to transfer to AMARI the latter's
seventy percent proportionate share in the reclaimed areas as the
reclamation progresses. The Amended JVA even allows AMARI to
mortgage at any time the entire reclaimed area to raise financing for the
reclamation project.21
Second issue: whether the petition merits dismissal for failing to
observe the principle governing the hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking
relief directly from the Court. The principle of hierarchy of courts applies
generally to cases involving factual questions. As it is not a trier of facts,
the Court cannot entertain cases involving factual issues. The instant
case, however, raises constitutional issues of transcendental importance
to the public.22 The Court can resolve this case without determining any
factual issue related to the case. Also, the instant case is a petition for
mandamus which falls under the original jurisdiction of the Court under
Section 5, Article VIII of the Constitution. We resolve to exercise primary
jurisdiction over the instant case.
Third issue: whether the petition merits dismissal for non-
exhaustion of administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA
to disclose publicly certain information without first asking PEA the
needed information. PEA claims petitioner's direct resort to the Court
violates the principle of exhaustion of administrative remedies. It also
violates the rule that mandamus may issue only if there is no other plain,
speedy and adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Tañada v. Tuvera 23 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 Tañada, the Executive
Department had an affirmative statutory duty under Article 2 of the Civil
Code24 and Section 1 of Commonwealth Act No. 638 25 to publish the
presidential decrees. There was, therefore, no need for the petitioners in
Tañada to make an initial demand from the Office of the President. In the
instant case, PEA claims it has no affirmative statutory duty to disclose
publicly information about its renegotiation of the JVA. Thus, PEA asserts
that the Court must apply the principle of exhaustion of administrative
remedies to the instant case in view of the failure of petitioner here to
demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a
government corporation. Under Section 79 of the Government Auditing
Code,26 the disposition of government lands to private parties requires
public bidding. PEA was under a positive legal duty to disclose to the
public the terms and conditions for the sale of its lands. The law
obligated PEA to make this public disclosure even without demand from
petitioner or from anyone. PEA failed to make this public disclosure
because the original JVA, like the Amended JVA, was the result of
a negotiated contract, not of a public bidding. Considering that PEA
had an affirmative statutory duty to make the public disclosure, and was
even in breach of this legal duty, petitioner had the right to seek direct
judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of
exhaustion of administrative remedies does not apply when the issue
involved is a purely legal or constitutional question. 27 The principal issue
in the instant case is the capacity of AMARI to acquire lands held by PEA
in view of the constitutional ban prohibiting the alienation of lands of the
public domain to private corporations. We rule that the principle of
exhaustion of administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to
institute mandamus proceedings to enforce his constitutional right to
information without a showing that PEA refused to perform an affirmative
duty imposed on PEA by the Constitution. PEA also claims that petitioner
has not shown that he will suffer any concrete injury because of the
signing or implementation of the Amended JVA. Thus, there is no actual
controversy requiring the exercise of the power of judicial review.
The petitioner has standing to bring this taxpayer's suit because the
petition seeks to compel PEA to comply with its constitutional duties.
There are two constitutional issues involved here. First is the right of
citizens to information on matters of public concern. Second is the
application of a constitutional provision intended to insure the equitable
distribution of alienable lands of the public domain among Filipino
citizens. The thrust of the first issue is to compel PEA to disclose publicly
information on the sale of government lands worth billions of pesos,
information which the Constitution and statutory law mandate PEA to
disclose. The thrust of the second issue is to prevent PEA from alienating
hundreds of hectares of alienable lands of the public domain in violation
of the Constitution, compelling PEA to comply with a constitutional duty
to the nation.
Moreover, the petition raises matters of transcendental importance to the
public. In Chavez v. PCGG,28 the Court upheld the right of a citizen to
bring a taxpayer's suit on matters of transcendental importance to the
public, thus -
"Besides, petitioner emphasizes, the matter of recovering the ill-gotten
wealth of the Marcoses is an issue of 'transcendental importance to the
public.' He asserts that ordinary taxpayers have a right to initiate and
prosecute actions questioning the validity of acts or orders of
government agencies or instrumentalities, if the issues raised are of
'paramount public interest,' and if they 'immediately affect the social,
economic and moral well being of the people.'
Moreover, the mere fact that he is a citizen satisfies the requirement of
personal interest, when the proceeding involves the assertion of a public
right, such as in this case. He invokes several decisions of this Court
which have set aside the procedural matter of locus standi, when the
subject of the case involved public interest.
xxx
In Tañada v. Tuvera, the Court asserted that when the issue concerns a
public right and the object of mandamus is to obtain the enforcement of a
public duty, the people are regarded as the real parties in interest; and
because it is sufficient that petitioner is a citizen and as such is
interested in the execution of the laws, he need not show that he has any
legal or special interest in the result of the action. In the aforesaid case,
the petitioners sought to enforce their right to be informed on matters of
public concern, a right then recognized in Section 6, Article IV of the
1973 Constitution, in connection with the rule that laws in order to be
valid and enforceable must be published in the Official Gazette or
otherwise effectively promulgated. In ruling for the petitioners' legal
standing, the Court declared that the right they sought to be enforced 'is
a public right recognized by no less than the fundamental law of the
land.'
Legaspi v. Civil Service Commission, while reiterating Tañada, further
declared that 'when a mandamus proceeding involves the assertion of a
public right, the requirement of personal interest is satisfied by the mere
fact that petitioner is a citizen and, therefore, part of the general 'public'
which possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure of public
funds may not have been involved under the questioned contract for the
development, management and operation of the Manila International
Container Terminal, 'public interest [was] definitely involved considering
the important role [of the subject contract] . . . in the economic
development of the country and the magnitude of the financial
consideration involved.' We concluded that, as a consequence, the
disclosure provision in the Constitution would constitute sufficient
authority for upholding the petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to
information and access to official records, documents and papers — a
right guaranteed under Section 7, Article III of the 1987 Constitution.
Petitioner, a former solicitor general, is a Filipino citizen. Because of the
satisfaction of the two basic requisites laid down by decisional law to
sustain petitioner's legal standing, i.e. (1) the enforcement of a public
right (2) espoused by a Filipino citizen, we rule that the petition at bar
should be allowed."
We rule that since the instant petition, brought by a citizen, involves the
enforcement of constitutional rights - to information and to the equitable
diffusion of natural resources - matters of transcendental public
importance, the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information includes
official information on on-going negotiations before a final
agreement.
Section 7, Article III of the Constitution explains the people's right to
information on matters of public concern in this manner:
"Sec. 7. The right of the people to information on matters of public
concern shall be recognized. Access to official records, and to
documents, and papers pertaining to official acts, transactions, or
decisions, as well as to government research data used as basis for
policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law." (Emphasis supplied)
The State policy of full transparency in all transactions involving public
interest reinforces the people's right to information on matters of public
concern. This State policy is expressed in Section 28, Article II of the
Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law, the State
adopts and implements a policy of full public disclosure of all its
transactions involving public interest." (Emphasis supplied)
These twin provisions of the Constitution seek to promote transparency
in policy-making and in the operations of the government, as well as
provide the people sufficient information to exercise effectively other
constitutional rights. These twin provisions are essential to the exercise
of freedom of expression. If the government does not disclose its official
acts, transactions and decisions to citizens, whatever citizens say, even
if expressed without any restraint, will be speculative and amount to
nothing. These twin provisions are also essential to hold public officials
"at all times x x x accountable to the people," 29 for unless citizens have
the proper information, they cannot hold public officials accountable for
anything. Armed with the right information, citizens can participate in
public discussions leading to the formulation of government policies and
their effective implementation. An informed citizenry is essential to the
existence and proper functioning of any democracy. As explained by the
Court in Valmonte v. Belmonte, Jr.30 –
"An essential element of these freedoms is to keep open a continuing
dialogue or process of communication between the government and the
people. It is in the interest of the State that the channels for free political
discussion be maintained to the end that the government may perceive
and be responsive to the people's will. Yet, this open dialogue can be
effective only to the extent that the citizenry is informed and thus able to
formulate its will intelligently. Only when the participants in the discussion
are aware of the issues and have access to information relating thereto
can such bear fruit."
PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going
negotiations the right to information is limited to "definite propositions of
the government." PEA maintains the right does not include access to
"intra-agency or inter-agency recommendations or communications
during the stage when common assertions are still in the process of
being formulated or are in the 'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the right at the pre-
decisional stage or before the closing of the transaction. To support its
contention, AMARI cites the following discussion in the 1986
Constitutional Commission:
"Mr. Suarez. And when we say 'transactions' which should be
distinguished from contracts, agreements, or treaties or whatever, does
the Gentleman refer to the steps leading to the consummation of the
contract, or does he refer to the contract itself?
Mr. Ople: The 'transactions' used here, I suppose is generic and
therefore, it can cover both steps leading to a contract and already
a consummated contract, Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of negotiations leading to
the consummation of the transaction.
Mr. Ople: Yes, subject only to reasonable safeguards on the
national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
AMARI argues there must first be a consummated contract before
petitioner can invoke the right. Requiring government officials to reveal
their deliberations at the pre-decisional stage will degrade the quality of
decision-making in government agencies. Government officials will
hesitate to express their real sentiments during deliberations if there is
immediate public dissemination of their discussions, putting them under
all kinds of pressure before they decide.
We must first distinguish between information the law on public bidding
requires PEA to disclose publicly, and information the constitutional right
to information requires PEA to release to the public. Before the
consummation of the contract, PEA must, on its own and without
demand from anyone, disclose to the public matters relating to the
disposition of its property. These include the size, location, technical
description and nature of the property being disposed of, the terms and
conditions of the disposition, the parties qualified to bid, the minimum
price and similar information. PEA must prepare all these data and
disclose them to the public at the start of the disposition process, long
before the consummation of the contract, because the Government
Auditing Code requires public bidding. If PEA fails to make this
disclosure, any citizen can demand from PEA this information at any time
during the bidding process.
Information, however, on on-going evaluation or review of bids or
proposals being undertaken by the bidding or review committee is not
immediately accessible under the right to information. While the
evaluation or review is still on-going, there are no "official acts,
transactions, or decisions" on the bids or proposals. However, once the
committee makes its official recommendation, there arises a "definite
proposition" on the part of the government. From this moment, the
public's right to information attaches, and any citizen can access all the
non-proprietary information leading to such definite proposition.
In Chavez v. PCGG,33 the Court ruled as follows:
"Considering the intent of the framers of the Constitution, we believe that
it is incumbent upon the PCGG and its officers, as well as other
government representatives, to disclose sufficient public information on
any proposed settlement they have decided to take up with the
ostensible owners and holders of ill-gotten wealth. Such information,
though, must pertain to definite propositions of the government, not
necessarily to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in
the process of being formulated or are in the "exploratory" stage. There
is need, of course, to observe the same restrictions on disclosure of
information in general, as discussed earlier – such as on matters
involving national security, diplomatic or foreign relations, intelligence
and other classified information." (Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the 1986
Constitutional Commission understood that the right to
information "contemplates inclusion of negotiations leading to the
consummation of the transaction."Certainly, a consummated contract
is not a requirement for the exercise of the right to information.
Otherwise, the people can never exercise the right if no contract is
consummated, and if one is consummated, it may be too late for the
public to expose its defects.1âwphi1.nêt
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 proposed contract, effectively truncating a basic right enshrined in
the Bill of Rights. We can allow neither an emasculation of a
constitutional right, nor a retreat by the State of its avowed "policy of full
disclosure of all its transactions involving public interest."
The right covers three categories of information which are "matters of
public concern," namely: (1) official records; (2) documents and papers
pertaining to official acts, transactions and decisions; and (3) government
research data used in formulating policies. The first category refers to
any document that is part of the public records in the custody of
government agencies or officials. The second category refers to
documents and papers recording, evidencing, establishing, confirming,
supporting, justifying or explaining official acts, transactions or decisions
of government agencies or officials. The third category refers to research
data, whether raw, collated or processed, owned by the government and
used in formulating government policies.
The information that petitioner may access on the renegotiation of the
JVA includes evaluation reports, recommendations, legal and expert
opinions, minutes of meetings, terms of reference and other documents
attached to such reports or minutes, all relating to the JVA. However, the
right to information does not compel PEA to prepare lists, abstracts,
summaries and the like relating to the renegotiation of the JVA. 34 The
right only affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One who exercises the
right must copy the records, documents and papers at his expense. The
exercise of the right is also subject to reasonable regulations to protect
the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct
the inspection and copying.35
The right to information, however, does not extend to matters recognized
as privileged information under the separation of powers. 36 The right
does not also apply to information on military and diplomatic secrets,
information affecting national security, and information on investigations
of crimes by law enforcement agencies before the prosecution of the
accused, which courts have long recognized as confidential. 37 The right
may also be subject to other limitations that Congress may impose by
law.
There is no claim by PEA that the information demanded by petitioner is
privileged information rooted in the separation of powers. The
information does not cover Presidential conversations, correspondences,
or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or
executive sessions of either house of Congress, 38 are recognized as
confidential. This kind of information cannot be pried open by a co-equal
branch of government. A frank exchange of exploratory ideas and
assessments, free from the glare of publicity and pressure by interested
parties, is essential to protect the independence of decision-making of
those tasked to exercise Presidential, Legislative and Judicial
power.39 This is not the situation in the instant case.
We rule, therefore, that the constitutional right to information includes
official information on on-going negotiationsbefore a final contract. The
information, however, must constitute definite propositions by the
government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting
national security and public order.40 Congress has also prescribed other
limitations on the right to information in several legislations.41
Sixth issue: whether stipulations in the Amended JVA for the
transfer to AMARI of lands, reclaimed or to be reclaimed, violate the
Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas
is rooted in the Regalian doctrine which holds that the State owns all
lands and waters of the public domain. Upon the Spanish conquest of
the Philippines, ownership of all "lands, territories and possessions" in
the Philippines passed to the Spanish Crown. 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 property of public
dominion although employed for some economic or commercial activity
to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of
property of public dominion into private property, to wit:
"Art. 341. Property of public dominion, when no longer devoted to public
use or to the defense of the territory, shall become a part of the private
property of the State."
This provision, however, was not self-executing. The legislature, or the
executive department pursuant to law, must declare the property no
longer needed for public use or territorial defense before the government
could lease or alienate the property to private parties.45
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which
regulated the lease of reclaimed and foreshore lands. The salient
provisions of this law were as follows:
"Section 1. The control and disposition of the foreshore as defined in
existing law, and the title to all Government or public lands made or
reclaimed by the Government by dredging or filling or otherwise
throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to
rights conceded to the City of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or
public lands made or reclaimed by the Government by dredging or filling
or otherwise to be divided into lots or blocks, with the necessary streets
and alleyways located thereon, and shall cause plats and plans of such
surveys to be prepared and filed with the Bureau of Lands.
(b) Upon completion of such plats and plans the Governor-General
shall give notice to the public that such parts of the lands so made
or reclaimed as are not needed for public purposes will be leased
for commercial and business purposes, x x x.
xxx
(e) The leases above provided for shall be disposed of to the
highest and best bidder therefore, subject to such regulations and
safeguards as the Governor-General may by executive order prescribe."
(Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all
lands reclaimed by the government. The Act also vested in the
government control and disposition of foreshore lands. Private parties
could lease lands reclaimed by the government only if these lands were
no longer needed for public purpose. Act No. 1654 mandated public
bidding in the lease of government reclaimed lands. Act No. 1654 made
government reclaimed lands sui generis in that unlike other public lands
which the government could sell to private parties, these reclaimed lands
were available only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of
Waters of 1866. Act No. 1654 did not prohibit private parties from
reclaiming parts of the sea under Section 5 of the Spanish Law of
Waters. Lands reclaimed from the sea by private parties with government
permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874,
the Public Land Act.46 The salient provisions of Act No. 2874, on
reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the recommendation of the
Secretary of Agriculture and Natural Resources, shall from time to
time classify the lands of the public domain into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable
or disposable public lands, the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural
Resources, shall from time to time declare what lands are open to
disposition or concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither
timber nor mineral land, shall be classified as suitable for residential
purposes or for commercial, industrial, or other productive
purposes other than agricultural purposes, and shall be open to
disposition or concession, shall be disposed of under the provisions of
this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores
or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section
fifty-six shall be disposed of to private parties by lease only and not
otherwise, as soon as the 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 non-
agricultural purposes. These provisions vested upon the Governor-
General the power to classify inalienable lands of the public domain into
disposable lands of the public domain. These provisions also
empowered the Governor-General to classify further such disposable
lands of the public domain into government reclaimed, foreshore or
marshy lands of the public domain, as well as other non-agricultural
lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands
of the public domain classified as government reclaimed, foreshore and
marshy lands "shall be disposed of to private parties by lease only
and not otherwise." The Governor-General, before allowing the lease
of these lands to private parties, must formally declare that the lands
were "not necessary for the public service." Act No. 2874 reiterated the
State policy to lease and not to sell government reclaimed, foreshore and
marshy lands of the public domain, a policy first enunciated in 1907 in
Act No. 1654. Government reclaimed, foreshore and marshy lands
remained sui generis, as the only alienable or disposable lands of the
public domain that the government could not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed,
foreshore and marshy public lands for non-agricultural purposes retain
their inherent potential as areas for public service. This is the reason the
government prohibited the sale, and only allowed the lease, of these
lands to private parties. The State always reserved these lands for some
future public service.
Act No. 2874 did not authorize the reclassification of government
reclaimed, foreshore and marshy lands into other non-agricultural lands
under Section 56 (d). Lands falling under Section 56 (d) were the only
lands for non-agricultural purposes the government could sell to private
parties. Thus, under Act No. 2874, the government could not sell
government reclaimed, foreshore and marshy lands to private parties,
unless the legislature passed a law allowing their sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of the
sea pursuant to Section 5 of the Spanish Law of Waters of 1866. Lands
reclaimed from the sea by private parties with government permission
remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification
by the Filipino people. The 1935 Constitution, in adopting the Regalian
doctrine, declared in Section 1, Article XIII, that –
"Section 1. All agricultural, timber, and mineral lands of the public
domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy and other natural resources of the Philippines
belong to the State, and their disposition, exploitation, development, or
utilization shall be limited to citizens of the Philippines or to corporations
or associations at least sixty per centum of the capital of which is owned
by such citizens, subject to any existing right, grant, lease, or concession
at the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public
agricultural land, shall not be alienated, and no license, concession,
or lease for the exploitation, development, or utilization of any of the
natural resources shall be granted for a period exceeding twenty-five
years, renewable for another twenty-five years, except as to water rights
for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the
measure and limit of the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources
except public agricultural lands, which were the only natural resources
the State could alienate. Thus, foreshore lands, considered part of the
State's natural resources, became inalienable by constitutional fiat,
available only for lease for 25 years, renewable for another 25 years.
The government could alienate foreshore lands only after these lands
were reclaimed and classified as alienable agricultural lands of the public
domain. Government reclaimed and marshy lands of the public domain,
being neither timber nor mineral lands, fell under the classification of
public agricultural lands.50 However, government reclaimed and marshy
lands, although subject to classification as disposable public agricultural
lands, could only be leased and not sold to private parties because of Act
No. 2874.
The prohibition on private parties from acquiring ownership of
government reclaimed and marshy lands of the public domain was only a
statutory prohibition and the legislature could therefore remove such
prohibition. The 1935 Constitution did not prohibit individuals and
corporations from acquiring government reclaimed and marshy lands of
the public domain that were classified as agricultural lands under existing
public land laws. Section 2, Article XIII of the 1935 Constitution provided
as follows:
"Section 2. No private corporation or association may acquire,
lease, or hold public agricultural lands in excess of one thousand
and twenty four hectares, nor may any individual acquire such
lands by purchase in excess of one hundred and forty hectares, or
by lease in excess of one thousand and twenty-four hectares, or by
homestead in excess of twenty-four hectares. Lands adapted to grazing,
not exceeding two thousand hectares, may be leased to an individual,
private corporation, or association." (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not
repeal Section 58 of Act No. 2874 to open for sale to private parties
government reclaimed and marshy lands of the public domain. On the
contrary, the legislature continued the long established State policy of
retaining for the government title and ownership of government
reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth
Act No. 141, also known as the Public Land Act, which compiled the then
existing laws on lands of the public domain. CA No. 141, as amended,
remains to this day the existing general law governing the classification
and disposition of lands of the public domain other than timber and
mineral lands.51
Section 6 of CA No. 141 empowers the President to classify lands of the
public domain into "alienable or disposable"52 lands of the public domain,
which prior to such classification are inalienable and outside the
commerce of man. Section 7 of CA No. 141 authorizes the President to
"declare what lands are open to disposition or concession." Section 8 of
CA No. 141 states that the government can declare open for disposition
or concession only lands that are "officially delimited and classified."
Sections 6, 7 and 8 of CA No. 141 read as follows:
"Sec. 6. The President, upon the recommendation of the Secretary
of Agriculture and Commerce, shall from time to time classify the
lands of the public domain into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one
class to another,53 for the purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of
alienable or disposable public lands, the President, upon
recommendation by the Secretary of Agriculture and Commerce,
shall from time to time declare what lands are open to disposition
or concession under this Act.
Sec. 8. Only those lands shall be declared open to disposition or
concession which have been officially delimited and classified and,
when practicable, surveyed, and which have not been reserved for
public or quasi-public uses, nor appropriated by the Government, nor
in any manner become private property, nor those on which a private
right authorized and recognized by this Act or any other valid law may be
claimed, or which, having been reserved or appropriated, have ceased to
be so. x x x."
Thus, before the government could alienate or dispose of lands of the
public domain, the President must first officially classify these lands as
alienable or disposable, and then declare them open to disposition or
concession. There must be no law reserving these lands for public or
quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed,
foreshore and marshy lands of the public domain, are as follows:
"Sec. 58. Any tract of land of the public domain which, being neither
timber nor mineral land, is intended to be used for residential
purposes or for commercial, industrial, or other productive
purposes other than agricultural, and is open to disposition or
concession, shall be disposed of under the provisions of this
chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores
or banks of navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or
sold, as the case may be, to any person, corporation, or association
authorized to purchase or lease public lands for agricultural purposes. x
x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section
fifty-nine shall be disposed of to private parties by lease only and
not otherwise, as soon as the President, upon recommendation by the
Secretary of Agriculture, shall declare that the same are not
necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale
or lease under the provisions of this Act." (Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935
Constitution, Section 58 of Act No. 2874 prohibiting the sale of
government reclaimed, foreshore and marshy disposable lands of the
public domain. All these lands are intended for residential, commercial,
industrial or other non-agricultural purposes. As before, Section 61
allowed only the lease of such lands to private parties. The government
could sell to private parties only lands falling under Section 59 (d) of CA
No. 141, or those lands for 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 under Section 59 (d) are the only alienable or
disposable lands for non-agricultural purposes that the government could
sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional
authority before lands under Section 59 that the government previously
transferred to government units or entities could be sold to private
parties. Section 60 of CA No. 141 declares that –
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the
judgment of the Secretary of Agriculture and Natural Resources, be
reasonably necessary for the purposes for which such sale or lease is
requested, and shall not exceed one hundred and forty-four hectares:
Provided, however, That this limitation shall not apply to grants,
donations, or transfers made to a province, municipality or branch or
subdivision of the Government for the purposes deemed by said entities
conducive to the public interest; but the land so granted, donated, or
transferred to a province, municipality or branch or subdivision of
the Government shall not be alienated, encumbered, or otherwise
disposed of in a manner affecting its title, except when authorized
by Congress: x x x." (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors
the legislative authority required in Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No.
141 exempted government units and entities from the maximum area of
public lands that could be acquired from the State. These government
units and entities should not just turn around and sell these lands to
private parties in violation of constitutional or statutory limitations.
Otherwise, the transfer of lands for non-agricultural purposes to
government units and entities could be used to circumvent constitutional
limitations on ownership of alienable or disposable lands of the public
domain. In the same manner, such transfers could also be used to evade
the statutory prohibition in CA No. 141 on the sale of government
reclaimed and marshy lands of the public domain to private parties.
Section 60 of CA No. 141 constitutes by operation of law a lien on these
lands.57
In case of sale or lease of disposable lands of the public domain falling
under Section 59 of CA No. 141, Sections 63 and 67 require a public
bidding. Sections 63 and 67 of CA No. 141 provide as follows:
"Sec. 63. Whenever it is decided that lands covered by this chapter are
not needed for public purposes, the Director of Lands shall ask the
Secretary of Agriculture and Commerce (now the Secretary of Natural
Resources) for authority to dispose of the same. Upon receipt of such
authority, the Director of Lands shall give notice by public advertisement
in the same manner as in the case of leases or sales of agricultural
public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and
adjudication shall be made to the highest bidder. x x x." (Emphasis
supplied)
Thus, CA No. 141 mandates the Government to put to public auction all
leases or sales of alienable or disposable lands of the public domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal
Section 5 of the Spanish Law of Waters of 1866. Private parties could
still reclaim portions of the sea with government permission. However,
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;
(2) Those which belong to the State, without being for public use, and
are intended for some public service or for the development of the
national wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended for public
use or for public service, shall form part of the patrimonial property of the
State."
Again, the government must formally declare that the property of public
dominion is no longer needed for public use or public service, before the
same could be classified as patrimonial property of the State. 59 In the
case of government reclaimed and marshy lands of the public domain,
the declaration of their being disposable, as well as the manner of their
disposition, is governed by the applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property
of public dominion those properties of the State which, without being for
public use, are intended for public service or the "development of the
national wealth." Thus, government reclaimed and marshy lands of the
State, even if not employed for public use or public service, if developed
to enhance the national wealth, are classified as property of public
dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17, 1973, likewise
adopted the Regalian doctrine. Section 8, Article XIV of the 1973
Constitution stated that –
"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum
and other mineral oils, all forces of potential energy, fisheries, wildlife,
and other natural resources of the Philippines belong to the State. With
the exception of agricultural, industrial or commercial, residential,
and resettlement lands of the public domain, natural resources
shall not be alienated, and no license, concession, or lease for the
exploration, development, exploitation, or utilization of any of the natural
resources shall be granted for a period exceeding twenty-five years,
renewable for not more than twenty-five years, except as to water rights
for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases, beneficial use may be the
measure and the limit of the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural resources
with the exception of "agricultural, industrial or commercial, residential,
and resettlement lands of the public domain." In contrast, the 1935
Constitution barred the alienation of all natural resources except "public
agricultural lands." However, the term "public agricultural lands" in the
1935 Constitution encompassed industrial, commercial, residential and
resettlement lands of the public domain.60 If the land of public domain
were neither timber nor mineral land, it would fall under the classification
of agricultural land of the public domain. Both the 1935 and 1973
Constitutions, therefore, prohibited the alienation of all natural
resources except agricultural lands of the public domain.
The 1973 Constitution, however, limited the alienation of lands of the
public domain to individuals who were citizens of the Philippines. Private
corporations, even if wholly owned by Philippine citizens, were no longer
allowed to acquire alienable lands of the public domain unlike in the 1935
Constitution. Section 11, Article XIV of the 1973 Constitution declared
that –
"Sec. 11. The Batasang Pambansa, taking into account conservation,
ecological, and development requirements of the natural resources, shall
determine by law the size of land of the public domain which may be
developed, held or acquired by, or leased to, any qualified individual,
corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public
domain except by lease not to exceed one thousand hectares in area
nor may any citizen hold such lands by lease in excess of five hundred
hectares or acquire by purchase, homestead or grant, in excess of
twenty-four hectares. No private corporation or association may hold by
lease, concession, license or permit, timber or forest lands and other
timber or forest resources in excess of one hundred thousand hectares.
However, such area may be increased by the Batasang Pambansa upon
recommendation of the National Economic and Development Authority."
(Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold
alienable lands of the public domain only through lease. Only individuals
could now acquire alienable lands of the public domain, and private
corporations became absolutely barred from acquiring any kind of
alienable land of the public domain. The constitutional ban extended
to all kinds of alienable lands of the public domain, while the statutory
ban under CA No. 141 applied only to government reclaimed, foreshore
and marshy alienable lands of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued
Presidential Decree No. 1084 creating PEA, a wholly government owned
and controlled corporation with a special charter. Sections 4 and 8 of PD
No. 1084, vests PEA with the following purposes and powers:
"Sec. 4. Purpose. The Authority is hereby created for the following
purposes:
(a) To reclaim land, including foreshore and submerged areas, by
dredging, filling or other means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide,
dispose, lease and sell any and all kinds of lands, buildings, estates
and other forms of real property, owned, managed, controlled and/or
operated by the government;
(c) To provide for, operate or administer such service as may be
necessary for the efficient, economical and beneficial utilization of the
above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in
carrying out the purposes for which it is created, have the following
powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted
to private corporations by statute.
(j) To reclaim lands and to construct work across, or otherwise, any
stream, watercourse, canal, ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be
necessary for the attainment of the purposes and objectives herein
specified." (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged
areas of the public domain. Foreshore areas are those covered and
uncovered by the ebb and flow of the tide. 61 Submerged areas are those
permanently under water regardless of the ebb and flow of the
tide.62 Foreshore and submerged areas indisputably belong to the public
domain63 and are inalienable unless reclaimed, classified as alienable
lands open to disposition, and further declared no longer needed for
public service.
The ban in the 1973 Constitution on private corporations from acquiring
alienable lands of the public domain did not apply to PEA since it was
then, and until today, a fully owned government corporation. The
constitutional ban applied then, as it still applies now, only to "private
corporations and associations." PD No. 1084 expressly empowers PEA
"to hold lands of the public domain" even "in excess of the area
permitted to private corporations by statute." Thus, PEA can hold title
to private lands, as well as title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable
lands of the public domain, there must be legislative authority
empowering PEA to sell these lands. This legislative authority is
necessary in view of Section 60 of CA No.141, which states –
"Sec. 60. x x x; but the land so granted, donated or transferred to a
province, municipality, or branch or subdivision of the Government shall
not be alienated, encumbered or otherwise disposed of in a manner
affecting its title, except when authorized by Congress; x x x."
(Emphasis supplied)
Without such legislative authority, PEA could not sell but only lease its
reclaimed foreshore and submerged alienable lands of the public
domain. Nevertheless, any legislative authority granted to PEA to sell its
reclaimed alienable lands of the public domain would be subject to the
constitutional ban on private corporations from acquiring alienable lands
of the public domain. Hence, such legislative authority could only benefit
private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions before it,
has adopted the Regalian doctrine. The 1987 Constitution declares that
all natural resources are "owned by the State," and except for alienable
agricultural lands of the public domain, natural resources cannot be
alienated. Sections 2 and 3, Article XII of the 1987 Constitution state that
–
"Section 2. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources
are owned by the State. With the exception of agricultural lands, all
other natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be under the full
control and supervision of the State. x x x.
Section 3. Lands of the public domain are classified into agricultural,
forest or timber, mineral lands, and national parks. Agricultural lands of
the public domain may be further classified by law according to the uses
which they may be devoted. Alienable lands of the public domain
shall be limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of the public
domain except by lease, for a period not exceeding twenty-five
years, renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area. Citizens of the Philippines may
lease not more than five hundred hectares, or acquire not more than
twelve hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public domain
which may be acquired, developed, held, or leased and the conditions
therefor." (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution
banning private corporations from acquiring any kind of alienable land
of the public domain. Like the 1973 Constitution, the 1987 Constitution
allows private corporations to hold alienable lands of the public
domain only through lease. As in the 1935 and 1973 Constitutions, the
general law governing the lease to private corporations of reclaimed,
foreshore and marshy alienable lands of the public domain is still CA No.
141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from
acquiring, except through lease, alienable lands of the public domain is
not well understood. During the deliberations of the 1986 Constitutional
Commission, the commissioners probed the rationale behind this ban,
thus:
"FR. BERNAS: Mr. Vice-President, my questions have reference to page
3, line 5 which says:
`No private corporation or association may hold alienable lands of the
public domain except by lease, not to exceed one thousand hectares in
area.'
If we recall, this provision did not exist under the 1935 Constitution, but
this was introduced in the 1973 Constitution. In effect, it prohibits private
corporations from acquiring alienable public lands. But it has not been
very clear in jurisprudence what the reason for this is. In some of the
cases decided in 1982 and 1983, it was indicated that the purpose of
this is to prevent large landholdings. Is that the intent of this
provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there
were instances where the Iglesia ni Cristo was not allowed to acquire a
mere 313-square meter land where a chapel stood because the
Supreme Court said it would be in violation of this." (Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this
constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against purchases
of public agricultural lands by private corporations is to equitably diffuse
land ownership or to encourage 'owner-cultivatorship and the economic
family-size farm' and to prevent a recurrence of cases like the instant
case. Huge landholdings by corporations or private persons had
spawned social unrest."
However, if the constitutional intent is to prevent huge landholdings, the
Constitution could have simply limited the size of alienable lands of the
public domain that corporations could acquire. The Constitution could
have followed the limitations on individuals, who could acquire not more
than 24 hectares of alienable lands of the public domain under the 1973
Constitution, and not more than 12 hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic family-size farms,
placing the land in the name of a corporation would be more effective in
preventing the break-up of farmlands. If the farmland is registered in the
name of a corporation, upon the death of the owner, his heirs would
inherit shares in the corporation instead of subdivided parcels of the
farmland. This would prevent the continuing break-up of farmlands into
smaller and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional
limitation on individuals from acquiring more than the allowed area of
alienable lands of the public domain. Without the constitutional ban,
individuals who already acquired the maximum area of alienable lands of
the public domain could easily set up corporations to acquire more
alienable public lands. An individual could own as many corporations as
his means would allow him. An individual could even hide his ownership
of a corporation by putting his nominees as stockholders of the
corporation. The corporation is a convenient vehicle to circumvent the
constitutional limitation on acquisition by individuals of alienable lands of
the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to
transfer ownership of only a limited area of alienable land of the public
domain to a qualified individual. This constitutional intent is safeguarded
by the provision prohibiting corporations from acquiring alienable lands of
the public domain, since the vehicle to circumvent the constitutional
intent is removed. The available alienable public lands are gradually
decreasing in the face of an ever-growing population. The most effective
way to insure faithful adherence to this constitutional intent is to grant or
sell alienable lands of the public domain only to individuals. This, it would
seem, is the practical benefit arising from the constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas
clause, consists of three properties, namely:
1. "[T]hree partially reclaimed and substantially eroded islands along
Emilio Aguinaldo Boulevard in Paranaque and Las Pinas, Metro Manila,
with a combined titled area of 1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to the three
islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares
more or less to regularize the configuration of the reclaimed area."65
PEA confirms that the Amended JVA involves "the development of the
Freedom Islands and further reclamation of about 250 hectares x x x,"
plus an option "granted to AMARI to subsequently reclaim another 350
hectares x x x."66
In short, the Amended JVA covers a reclamation area of 750
hectares. Only 157.84 hectares of the 750-hectare reclamation
project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of
P1,894,129,200.00 for PEA's "actual cost" in partially reclaiming the
Freedom Islands. AMARI will also complete, at its own expense, the
reclamation of the Freedom Islands. AMARI will further shoulder all the
reclamation costs of all the other areas, totaling 592.15 hectares, still to
be reclaimed. AMARI and PEA will share, in the proportion of 70 percent
and 30 percent, respectively, the total net usable area which is defined in
the Amended JVA as the total reclaimed area less 30 percent earmarked
for common areas. Title to AMARI's share in the net usable area, totaling
367.5 hectares, will be issued in the name of AMARI. Section 5.2 (c) of
the Amended JVA provides that –
"x x x, PEA shall have the duty to execute without delay the necessary
deed of transfer or conveyance of the title pertaining to AMARI's Land
share based on the Land Allocation Plan. PEA, when requested in
writing by AMARI, shall then cause the issuance and delivery of the
proper certificates of title covering AMARI's Land Share in the
name of AMARI, x x x; provided, that if more than seventy percent
(70%) of the titled area at any given time pertains to AMARI, PEA shall
deliver to AMARI only seventy percent (70%) of the titles pertaining to
AMARI, until such time when a corresponding proportionate area of
additional land pertaining to PEA has been titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a
maximum of 367.5 hectares of reclaimed land which will be titled in
its name.
To implement the Amended JVA, PEA delegated to the unincorporated
PEA-AMARI joint venture PEA's statutory authority, rights and privileges
to reclaim foreshore and submerged areas in Manila Bay. Section 3.2.a
of the Amended JVA states that –
"PEA hereby contributes to the joint venture its rights and privileges to
perform Rawland Reclamation and Horizontal Development as well as
own the Reclamation Area, thereby granting the Joint Venture the full
and exclusive right, authority and privilege to undertake the Project in
accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the original JVA
dated April 25, 1995 and its supplemental agreement dated August 9,
1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire
and own under the Amended JVA 367.5 hectares of reclaimed foreshore
and submerged areas in Manila Bay in view of Sections 2 and 3, Article
XII of the 1987 Constitution which state that:
"Section 2. All lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources
are owned by the State. With the exception of agricultural lands, all
other natural resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not hold
such alienable lands of the public domain except by lease, x x
x."(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged
areas of Manila Bay are alienable or disposable lands of the public
domain. In its Memorandum,67 PEA admits that –
"Under the Public Land Act (CA 141, as amended), reclaimed lands are
classified as alienable and disposable lands of the public domain:
'Sec. 59. The lands disposable under this title shall be classified as
follows:
(a) Lands reclaimed by the government by dredging, filling, or other
means;
x x x.'" (Emphasis supplied)
Likewise, the Legal Task Force68 constituted under Presidential
Administrative Order No. 365 admitted in its Report and
Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands
are classified as alienable and disposable lands of the public
domain."69 The Legal Task Force concluded that –
"D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory
authority, the rights of ownership and disposition over reclaimed lands
have been transferred to PEA, by virtue of which PEA, as owner, may
validly convey the same to any qualified person without violating the
Constitution or any statute.
The constitutional provision prohibiting private corporations from holding
public land, except by lease (Sec. 3, Art. XVII, 70 1987 Constitution), does
not apply to reclaimed lands whose ownership has passed on to PEA by
statutory grant."
Under Section 2, Article XII of the 1987 Constitution, the foreshore and
submerged areas of Manila Bay are part of the "lands of the public
domain, waters x x x and other natural resources" and consequently
"owned by the State." As such, foreshore and submerged areas "shall
not be alienated," unless they are classified as "agricultural lands" of the
public domain. The mere reclamation of these areas by PEA does not
convert these inalienable natural resources of the State into alienable or
disposable lands of the public domain. There must be a law or
presidential proclamation officially classifying these reclaimed lands as
alienable or disposable and open to disposition or concession. Moreover,
these reclaimed lands cannot be classified as alienable or disposable if
the law has reserved them for some public or quasi-public use.71
Section 8 of CA No. 141 provides that "only those lands shall be declared
open to disposition or concession which have been officially delimited
and classified."72 The President has the authority to classify inalienable
lands of the public domain into alienable or disposable lands of the public
domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia, 73 the
Executive Department attempted to sell the Roppongi property in Tokyo,
Japan, which was acquired by the Philippine Government for use as the
Chancery of the Philippine Embassy. Although the Chancery had
transferred to another location thirteen years earlier, the Court still ruled
that, under Article 42274 of the Civil Code, a property of public dominion
retains such character until formally declared otherwise. The Court ruled
that –
"The fact that the Roppongi site has not been used for a long time for
actual Embassy service does not automatically convert it to patrimonial
property. Any such conversion happens only if the property is withdrawn
from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA
481 [1975]. A property continues to be part of the public domain,
not available for private appropriation or ownership 'until there is a
formal declaration on the part of the government to withdraw it
from being such' (Ignacio v. Director of Lands, 108 Phil. 335 [1960]."
(Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of
special land patents for lands reclaimed by PEA from the foreshore or
submerged areas of Manila Bay. On January 19, 1988 then President
Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA
for the 157.84 hectares comprising the partially reclaimed Freedom
Islands. Subsequently, on April 9, 1999 the Register of Deeds of the
Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the
name of PEA pursuant to Section 103 of PD No. 1529 authorizing the
issuance of certificates of title corresponding to land patents. To this day,
these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of a
special patent covering the Freedom Islands, is equivalent to an official
proclamation classifying the Freedom Islands as alienable or disposable
lands of the public domain. PD No. 1085 and President Aquino's
issuance of a land patent also constitute a declaration that the Freedom
Islands are no longer needed for public service. The Freedom Islands
are thus alienable or disposable lands of the public domain, open
to disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA
had already reclaimed the Freedom Islands although subsequently there
were partial erosions on some areas. The government had also
completed the necessary surveys on these islands. Thus, the Freedom
Islands were no longer part of Manila Bay but part of the land mass.
Section 3, Article XII of the 1987 Constitution classifies lands of the
public domain into "agricultural, forest or timber, mineral lands, and
national parks." Being neither timber, mineral, nor national park lands,
the reclaimed Freedom Islands necessarily fall under the classification of
agricultural lands of the public domain. Under the 1987 Constitution,
agricultural lands of the public domain are the only natural resources that
the State may alienate to qualified private parties. All other natural
resources, such as the seas or bays, are "waters x x x owned by the
State" forming part of the public domain, and are inalienable pursuant to
Section 2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because
CDCP, then a private corporation, reclaimed the islands under a contract
dated November 20, 1973 with the Commissioner of Public Highways.
AMARI, citing Article 5 of the Spanish Law of Waters of 1866, argues that
"if the ownership of reclaimed lands may be given to the party
constructing the works, then it cannot be said that reclaimed lands are
lands of the public domain which the State may not alienate." 75 Article 5
of the Spanish Law of Waters reads as follows:
"Article 5. Lands reclaimed from the sea in consequence of works
constructed by the State, or by the provinces, pueblos or private
persons, with proper permission, shall become the property of the party
constructing such works, unless otherwise provided by the terms of
the grant of authority." (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties
could reclaim from the sea only with "proper permission" from the State.
Private parties could own the reclaimed land only if not "otherwise
provided by the terms of the grant of authority." This clearly meant that
no one could reclaim from the sea without permission from the State
because the sea is property of public dominion. It also meant that the
State could grant or withhold ownership of the reclaimed land because
any reclaimed land, like the sea from which it emerged, belonged to the
State. Thus, a private person reclaiming from the sea without permission
from the State could not acquire ownership of the reclaimed land which
would remain property of public dominion like the sea it
replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the
time-honored principle of land ownership that "all lands that were not
acquired from the government, either by purchase or by grant, belong to
the public domain."77
Article 5 of the Spanish Law of Waters must be read together with laws
subsequently enacted on the disposition of public lands. In particular, CA
No. 141 requires that lands of the public domain must first be classified
as alienable or disposable before the government can alienate them.
These lands must not be reserved for public or quasi-public
purposes.78 Moreover, the contract between CDCP and the government
was executed after the effectivity of the 1973 Constitution which barred
private corporations from acquiring any kind of alienable land of the
public domain. This contract could not have converted the Freedom
Islands into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all
laws authorizing the reclamation of areas under water and revested
solely in the National Government the power to reclaim lands. Section 1
of PD No. 3-A declared that –
"The provisions of any law to the contrary notwithstanding, the
reclamation of areas under water, whether foreshore or inland, shall
be limited to the National Government or any person authorized by
it under a proper contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866
because reclamation of areas under water could now be undertaken only
by the National Government or by a person contracted by the National
Government. Private parties may reclaim from the sea only under a
contract with the National Government, and no longer by grant or
permission as provided in Section 5 of the Spanish Law of Waters of
1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA
as the National Government's implementing arm to undertake "all
reclamation projects of the government," which "shall be undertaken by
the PEA or through a proper contract executed by it with any
person or entity." Under such contract, a private party receives
compensation for reclamation services rendered to PEA. Payment to the
contractor may be in cash, or in kind consisting of portions of the
reclaimed land, subject to the constitutional ban on private corporations
from acquiring alienable lands of the public domain. The reclaimed land
can be used as payment in kind only if the reclaimed land is first
classified as alienable or disposable land open to disposition, and then
declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an
additional 592.15 hectares which are still submerged and forming part of
Manila Bay. There is no legislative or Presidential act classifying
these submerged areas as alienable or disposable lands of the
public domain open to disposition. These submerged areas are not
covered by any patent or certificate of title. There can be no dispute that
these submerged areas form part of the public domain, and in their
present state are inalienable and outside the commerce of man. Until
reclaimed from the sea, these submerged areas are, under the
Constitution, "waters x x x owned by the State," forming part of the public
domain and consequently inalienable. Only when actually reclaimed from
the sea can these submerged areas be classified as public agricultural
lands, which under the Constitution are the only natural resources that
the State may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially classify these lands
as alienable or disposable lands open to disposition. Thereafter, the
government may declare these lands no longer needed for public
service. Only then can these reclaimed lands be considered alienable or
disposable lands of the public domain and within the commerce of man.
The classification of PEA's reclaimed foreshore and submerged lands
into alienable or disposable lands open to disposition is necessary
because PEA is tasked under its charter to undertake public services that
require the use of lands of the public domain. Under Section 5 of PD No.
1084, the functions of PEA include the following: "[T]o own or operate
railroads, tramways and other kinds of land transportation, x x x; [T]o
construct, maintain and operate such systems of sanitary sewers as may
be necessary; [T]o construct, maintain and operate such storm drains as
may be necessary." PEA is empowered to issue "rules and regulations as
may be necessary for the proper use by private parties of any or all of
the highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus, part
of the reclaimed foreshore and submerged lands held by the PEA would
actually be needed for public use or service since many of the functions
imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall
be primarily responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National Government." The
same section also states that "[A]ll reclamation projects shall be
approved by the President upon recommendation of the PEA, and shall
be undertaken by the PEA or through a proper contract executed by it
with any person or entity; x x x." Thus, under EO No. 525, in relation to
PD No. 3-A and PD No.1084, PEA became the primary implementing
agency of the National Government to reclaim foreshore and submerged
lands of the public domain. EO No. 525 recognized PEA as the
government entity "to undertake the reclamation of lands and ensure
their maximum utilization in promoting public welfare and
interests."79 Since large portions of these reclaimed lands would
obviously be needed for public service, there must be a formal
declaration segregating reclaimed lands no longer needed for public
service from those still needed for public service.1âwphi1.nêt
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA
"shall belong to or be owned by the PEA," could not automatically
operate to classify inalienable lands into alienable or disposable lands of
the public domain. Otherwise, reclaimed foreshore and submerged lands
of the public domain would automatically become alienable once
reclaimed by PEA, whether or not classified as alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD No.
1084 or EO No. 525, vests in the Department of Environment and
Natural Resources ("DENR" for brevity) the following powers and
functions:
"Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and
disposable public lands, mineral resources and, in the process of
exercising such control, impose appropriate taxes, fees, charges, rentals
and any such form of levy and collect such revenues for the exploration,
development, utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance
of licenses, permits, concessions, lease agreements and such
other privileges concerning the development, exploration and
utilization of the country's marine, freshwater, and brackish water
and over all aquatic resources of the country and shall continue to
oversee, supervise and police our natural resources; cancel or cause
to cancel such privileges upon failure, non-compliance or violations of
any regulation, order, and for all other causes which are in furtherance of
the conservation of natural resources and supportive of the national
interest;
(15) Exercise exclusive jurisdiction on the management and
disposition of all lands of the public domain and serve as the sole
agency responsible for classification, sub-classification, surveying
and titling of lands in consultation with appropriate
agencies."80 (Emphasis supplied)
As manager, conservator and overseer of the natural resources of the
State, DENR exercises "supervision and control over alienable and
disposable public lands." DENR also exercises "exclusive jurisdiction on
the management and disposition of all lands of the public domain." Thus,
DENR decides whether areas under water, like foreshore or submerged
areas of Manila Bay, should be reclaimed or not. This means that PEA
needs authorization from DENR before PEA can undertake reclamation
projects in Manila Bay, or in any part of the country.
DENR also exercises exclusive jurisdiction over the disposition of all
lands of the public domain. Hence, DENR decides whether reclaimed
lands of PEA should be classified as alienable under Sections 6 81 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 III83 of CA No. 141 and other applicable laws.84
PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable
lands of the public domain, the reclaimed lands shall be disposed of in
accordance with CA No. 141, the Public Land Act. PEA, citing Section 60
of CA No. 141, admits that reclaimed lands transferred to a branch or
subdivision of the government "shall not be alienated, encumbered, or
otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x."85 (Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised
Administrative Code of 1987, which states that –
"Sec. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of the government by
the following: x x x."
Thus, the Court concluded that a law is needed to convey any real
property belonging to the Government. The Court declared that -
"It is not for the President to convey real property of the government on
his or her own sole will. Any such conveyance must be authorized
and approved by a law enacted by the Congress. It requires
executive and legislative concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the
legislative authority allowing PEA to sell its reclaimed lands. PD No.
1085, issued on February 4, 1977, provides that –
"The land reclaimed in the foreshore and offshore area of Manila
Bay pursuant to the contract for the reclamation and construction of the
Manila-Cavite Coastal Road Project between the Republic of the
Philippines and the Construction and Development Corporation of the
Philippines dated November 20, 1973 and/or any other contract or
reclamation covering the same area is hereby transferred, conveyed
and assigned to the ownership and administration of the Public
Estates Authority established pursuant to PD No. 1084; Provided,
however, That the rights and interests of the Construction and
Development Corporation of the Philippines pursuant to the aforesaid
contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and
assume the obligations of the Republic of the Philippines (Department of
Public Highways) arising from, or incident to, the aforesaid contract
between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public
Estates Authority shall issue in favor of the Republic of the Philippines
the corresponding shares of stock in said entity with an issued value of
said shares of stock (which) shall be deemed fully paid and 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 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 propertiesin 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. 89-296 91 dated January
27, 1989. This circular emphasizes that government assets must be
disposed of only through public auction, and a negotiated sale can be
resorted to only in case of "failure of public auction."
At the public auction sale, only Philippine citizens are qualified to bid for
PEA's reclaimed foreshore and submerged alienable lands of the public
domain. Private corporations are barred from bidding at the auction sale
of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on
December 10, 1991. PEA imposed a condition that the winning bidder
should reclaim another 250 hectares of submerged areas to regularize
the shape of the Freedom Islands, under a 60-40 sharing of the
additional reclaimed areas in favor of the winning bidder. 92 No one,
however, submitted a bid. On December 23, 1994, the Government
Corporate Counsel advised PEA it could sell the Freedom Islands
through negotiation, without need of another public bidding, because of
the failure of the public bidding on December 10, 1991.93
However, the original JVA dated April 25, 1995 covered not only the
Freedom Islands and the additional 250 hectares still to be reclaimed, it
also granted an option to AMARI to reclaim another 350 hectares. The
original JVA, a negotiated contract, enlarged the reclamation area to 750
hectares.94 The failure of public bidding on December 10, 1991,
involving only 407.84 hectares,95 is not a valid justification for a
negotiated sale of 750 hectares, almost double the area publicly
auctioned. Besides, the failure of public bidding happened on December
10, 1991, more than three years before the signing of the original JVA on
April 25, 1995. The economic situation in the country had greatly
improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987
Constitution is absolute and clear: "Private corporations or associations
may not hold such alienable lands of the public domain except by lease,
x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA
and AMARI as legislative authority to sell reclaimed lands to private
parties, recognizes the constitutional ban. Section 6 of RA No. 6957
states –
"Sec. 6. Repayment Scheme. - For the financing, construction, operation
and maintenance of any infrastructure projects undertaken through the
build-operate-and-transfer arrangement or any of its variations pursuant
to the provisions of this Act, the project proponent x x x may likewise be
repaid in the form of a share in the revenue of the project or other non-
monetary payments, such as, but not limited to, the grant of a portion or
percentage of the reclaimed land, subject to the constitutional
requirements with respect to the ownership of the land: x x x."
(Emphasis supplied)
A private corporation, even one that undertakes the physical reclamation
of a government BOT project, cannot acquire reclaimed alienable lands
of the public domain in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and
AMARI, authorizes local governments in land reclamation projects to pay
the contractor or developer in kind consisting of a percentage of the
reclaimed land, to wit:
"Section 302. Financing, Construction, Maintenance, Operation, and
Management of Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the
repayment plan may consist of the grant of a portion or percentage of the
reclaimed land or the industrial estate constructed."
Although Section 302 of the Local Government Code does not contain a
proviso similar to that of the BOT Law, the constitutional restrictions on
land ownership automatically apply even though not expressly
mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the
contractor or developer, if a corporate entity, can only be paid with
leaseholds on portions of the reclaimed land. If the contractor or
developer is an individual, portions of the reclaimed land, not exceeding
12 hectares96 of non-agricultural lands, may be conveyed to him in
ownership in view of the legislative authority allowing such conveyance.
This is the only way these provisions of the BOT Law and the Local
Government Code can avoid a direct collision with Section 3, Article XII
of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of the
reclaimed lands to public respondent PEA transformed such lands of the
public domain to private lands." This theory is echoed by AMARI which
maintains that the "issuance of the special patent leading to the eventual
issuance of title takes the subject land away from the land of public
domain and converts the property into patrimonial or private property." In
short, PEA and AMARI contend that with the issuance of Special Patent
No. 3517 and the corresponding certificates of titles, the 157.84 hectares
comprising the Freedom Islands have become private lands of PEA. In
support of their theory, PEA and AMARI cite the following rulings of the
Court:
1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –
"Once the patent was granted and the corresponding certificate of title
was issued, the land ceased to be part of the public domain and became
private property over which the Director of Lands has neither control nor
jurisdiction."
2. Lee Hong Hok v. David,98 where the Court declared -
"After the registration and issuance of the certificate and duplicate
certificate of title based on a public land patent, the land covered thereby
automatically comes under the operation of Republic Act 496 subject to
all the safeguards provided therein."3. Heirs of Gregorio Tengco v. Heirs
of Jose Aliwalas,99 where the Court ruled -
"While the Director of Lands has the power to review homestead patents,
he may do so only so long as the land remains part of the public domain
and continues to be under his exclusive control; but once the patent is
registered and a certificate of title is issued, the land ceases to be part of
the public domain and becomes private property over which the Director
of Lands has neither control nor jurisdiction."
4. Manalo v. Intermediate Appellate Court,100 where the Court held –
"When the lots in dispute were certified as disposable on May 19, 1971,
and free patents were issued covering the same in favor of the private
respondents, the said lots ceased to be part of the public domain and,
therefore, the Director of Lands lost jurisdiction over the same."
5.Republic v. Court of Appeals,101 where the Court stated –
"Proclamation No. 350, dated October 9, 1956, of President Magsaysay
legally effected a land grant to the Mindanao Medical Center, Bureau of
Medical Services, Department of Health, of the whole lot, validly
sufficient for initial registration under the Land Registration Act. Such
land grant is constitutive of a 'fee simple' title or absolute title in favor of
petitioner Mindanao Medical Center. Thus, Section 122 of the Act, which
governs the registration of grants or patents involving public lands,
provides that 'Whenever public lands in the Philippine Islands belonging
to the Government of the United States or to the Government of the
Philippines are alienated, granted or conveyed to persons or to public or
private corporations, the same shall be brought forthwith under the
operation of this Act (Land Registration Act, Act 496) and shall become
registered lands.'"
The first four cases cited involve petitions to cancel the land patents and
the corresponding certificates of titles issued to private parties. These
four cases uniformly hold that the Director of Lands has no jurisdiction
over private lands or that upon issuance of the certificate of title the land
automatically comes under the Torrens System. The fifth case cited
involves the registration under the Torrens System of a 12.8-hectare
public land granted by the National Government to Mindanao Medical
Center, a government unit under the Department of Health. The National
Government transferred the 12.8-hectare public land to serve as the site
for the hospital buildings and other facilities of Mindanao Medical Center,
which performed a public service. The Court affirmed the registration of
the 12.8-hectare public land in the name of Mindanao Medical Center
under Section 122 of Act No. 496. This fifth case is an example of a
public land being registered under Act No. 496 without the land losing its
character as a property of public dominion.
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;
Whereas, there is a need to give further institutional support to the
Government's declared policy to provide for a coordinated, economical
and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of
areas shall be limited to the National Government or any person
authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the
National Government which shall ensure a coordinated and
integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates
Authority as a government corporation to undertake reclamation of
lands and ensure their maximum utilization in promoting public
welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with
continuing authority to reorganize the national government including the
transfer, abolition, or merger of functions and offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution and
pursuant to Presidential Decree No. 1416, do hereby order and direct the
following:
Section 1. The Public Estates Authority (PEA) shall be primarily
responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National Government.
All reclamation projects shall be approved by the President upon
recommendation of the PEA, and shall be undertaken by the PEA or
through a proper contract executed by it with any person or entity;
Provided, that, reclamation projects of any national government agency
or entity authorized under its charter shall be undertaken in consultation
with the PEA upon approval of the President.
x x x ."
As the central implementing agency tasked to undertake reclamation
projects nationwide, with authority to sell reclaimed lands, PEA took the
place of DENR as the government agency charged with leasing or selling
reclaimed lands of the public domain. The reclaimed lands being leased
or sold by PEA are not private lands, in the same manner that DENR,
when it disposes of other alienable lands, does not dispose of private
lands but alienable lands of the public domain. Only when qualified
private parties acquire these lands will the lands become private
lands. In the hands of the government agency tasked and
authorized to dispose of alienable of disposable lands of the public
domain, these lands are still public, not private lands.
Furthermore, PEA's charter expressly states that PEA "shall hold lands
of the public domain" as well as "any and all kinds of lands." PEA can
hold both lands of the public domain and private lands. Thus, the mere
fact that alienable lands of the public domain like the Freedom Islands
are transferred to PEA and issued land patents or certificates of title in
PEA's name does not automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be
transferred to PEA as private lands will sanction a gross violation of the
constitutional ban on private corporations from acquiring any kind of
alienable land of the public domain. PEA will simply turn around, as PEA
has now done under the Amended JVA, and transfer several hundreds
of hectares of these reclaimed and still to be reclaimed lands to a single
private corporation in only one transaction. This scheme will effectively
nullify the constitutional ban in Section 3, Article XII of the 1987
Constitution which was intended to diffuse equitably the ownership of
alienable lands of the public domain among Filipinos, now numbering
over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural
lands of the public domain since PEA can "acquire x x x any and all kinds
of lands." This will open the floodgates to corporations and even
individuals acquiring hundreds of hectares of alienable lands of the
public domain under the guise that in the hands of PEA these lands are
private lands. This will result in corporations amassing huge landholdings
never before seen in this country - creating the very evil that the
constitutional ban was designed to prevent. This will completely reverse
the clear direction of constitutional development in this country. The 1935
Constitution allowed private corporations to acquire not more than 1,024
hectares of public lands. 105 The 1973 Constitution prohibited private
corporations from acquiring any kind of public land, and the 1987
Constitution has unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered
under Act No. 496 or PD No. 1529, automatically become private lands is
contrary to existing laws. Several laws authorize lands of the public
domain to be registered under the Torrens System or Act No. 496, now
PD No. 1529, without losing their character as public lands. Section 122
of Act No. 496, and Section 103 of PD No. 1529, respectively, provide as
follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands belonging to
the x x x Government of the Philippine Islands are alienated, granted, or
conveyed to persons or the public or private corporations, the same
shall be brought forthwith under the operation of this Act and shall
become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the
Government alienated, granted or conveyed to any person, the same
shall be brought forthwith under the operation of this Decree." (Emphasis
supplied)
Based on its legislative history, the phrase "conveyed to any person" in
Section 103 of PD No. 1529 includes conveyances of public lands to
public corporations.
Alienable lands of the public domain "granted, donated, or transferred to
a province, municipality, or branch or subdivision of the Government," as
provided in Section 60 of CA No. 141, may be registered under the
Torrens System pursuant to Section 103 of PD No. 1529. Such
registration, however, is expressly subject to the condition in Section 60
of CA No. 141 that the land "shall not be alienated, encumbered or
otherwise disposed of in a manner affecting its title, except when
authorized by Congress." This provision refers to government
reclaimed, foreshore and marshy lands of the public domain that have
been titled but still cannot be alienated or encumbered unless expressly
authorized by Congress. The need for legislative authority prevents the
registered land of the public domain from becoming private land that can
be disposed of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of
the public domain may be registered under the Torrens System. Section
48, Chapter 12, Book I of the Code states –
"Sec. 48. Official Authorized to Convey Real Property. Whenever real
property of the Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of the government by
the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency or
instrumentality." (Emphasis supplied)
Thus, private property purchased by the National Government for
expansion of a public wharf may be titled in the name of a government
corporation regulating port operations in the country. Private property
purchased by the National Government for expansion of an airport may
also be titled in the name of the government agency tasked to administer
the airport. Private property donated to a municipality for use as a town
plaza or public school site may likewise be titled in the name of the
municipality.106 All these properties become properties of the public
domain, and if already registered under Act No. 496 or PD No. 1529,
remain registered land. There is no requirement or provision in any
existing law for the de-registration of land from the Torrens System.
Private lands taken by the Government for public use under its power of
eminent domain become unquestionably part of the public domain.
Nevertheless, Section 85 of PD No. 1529 authorizes the Register of
Deeds to issue in the name of the National Government new certificates
of title covering such expropriated lands. Section 85 of PD No. 1529
states –
"Sec. 85. Land taken by eminent domain. Whenever any registered land,
or interest therein, is expropriated or taken by eminent domain, the
National Government, province, city or municipality, or any other agency
or instrumentality exercising such right shall file for registration in the
proper Registry a certified copy of the judgment which shall state
definitely by an adequate description, the particular property or interest
expropriated, the number of the certificate of title, and the nature of the
public use. A memorandum of the right or interest taken shall be made
on each certificate of title by the Register of Deeds, and where the fee
simple is taken, a new certificate shall be issued in favor of the
National Government, province, city, municipality, or any other
agency or instrumentality exercising such right for the land so taken. The
legal expenses incident to the memorandum of registration or issuance
of a new certificate of title shall be for the account of the authority taking
the land or interest therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are
not exclusively private or patrimonial lands. Lands of the public domain
may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to
AMARI of the Freedom Islands or of the lands to be reclaimed from
submerged areas of Manila Bay. In the words of AMARI, the Amended
JVA "is not a sale but a joint venture with a stipulation for reimbursement
of the original cost incurred by PEA for the earlier reclamation and
construction works performed by the CDCP under its 1973 contract with
the Republic." Whether the Amended JVA is a sale or a joint venture, the
fact remains that the Amended JVA requires PEA to "cause the issuance
and delivery of the certificates of title conveying AMARI's Land Share in
the name of AMARI."107
This stipulation still contravenes Section 3, Article XII of the 1987
Constitution which provides that private corporations "shall not hold such
alienable lands of the public domain except by lease." The transfer of title
and ownership to AMARI clearly means that AMARI will "hold" the
reclaimed lands other than by lease. The transfer of title and ownership
is a "disposition" of the reclaimed lands, a transaction considered a sale
or alienation under CA No. 141,108 the Government Auditing Code,109 and
Section 3, Article XII of the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore
and submerged areas form part of the public domain and are inalienable.
Lands reclaimed from foreshore and submerged areas also form part of
the public domain and are also inalienable, unless converted pursuant to
law into alienable or disposable lands of the public domain. Historically,
lands reclaimed by the government are sui generis, not available for
sale to private parties unlike other alienable public lands. Reclaimed
lands retain their inherent potential as areas for public use or public
service. Alienable lands of the public domain, increasingly becoming
scarce natural resources, are to be distributed equitably among our ever-
growing population. To insure such equitable distribution, the 1973 and
1987 Constitutions have barred private corporations from acquiring any
kind of alienable land of the public domain. Those who attempt to
dispose of inalienable natural resources of the State, or seek to
circumvent the constitutional ban on alienation of lands of the public
domain to private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom
Islands, now covered by certificates of title in the name of PEA,
are alienable lands of the public domain. PEA may lease these lands
to private corporations but may not sell or transfer ownership of these
lands to private corporations. PEA may only sell these lands to Philippine
citizens, subject to the ownership limitations in the 1987 Constitution and
existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain
inalienable natural resources of the public domain until classified as
alienable or disposable lands open to disposition and declared no longer
needed for public service. The government can make such classification
and declaration only after PEA has reclaimed these submerged areas.
Only then can these lands qualify as agricultural lands of the public
domain, which are the only natural resources the government can
alienate. In their present state, the 592.15 hectares of submerged
areas are inalienable and outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private
corporation, ownership of 77.34 hectares110of the Freedom Islands, such
transfer is void for being contrary to Section 3, Article XII of the 1987
Constitution which prohibits private corporations from acquiring any kind
of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of
290.156 hectares111 of still submerged areas of Manila Bay, such transfer
is void for being contrary to Section 2, Article XII of the 1987 Constitution
which prohibits the alienation of natural resources other than agricultural
lands of the public domain. PEA may reclaim these submerged areas.
Thereafter, the government can classify the reclaimed lands as alienable
or disposable, and further declare them no longer needed for public
service. Still, the transfer of such reclaimed alienable lands of the public
domain to AMARI will be void in view of Section 3, Article XII of the 1987
Constitution which prohibits private corporations from acquiring any kind
of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII
of the 1987 Constitution. Under Article 1409112 of the Civil Code,
contracts whose "object or purpose is contrary to law," or whose "object
is outside the commerce of men," are "inexistent and void from the
beginning." The Court must perform its duty to defend and uphold the
Constitution, and therefore declares the Amended JVA null and void ab
initio.
Seventh issue: whether the Court is the proper forum to raise the
issue of whether the Amended JVA is grossly disadvantageous to
the government.
Considering that the Amended JVA is null and void ab initio, there is no
necessity to rule on this last issue. Besides, the Court is not a trier of
facts, and this last issue involves a determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority
and Amari Coastal Bay Development Corporation are PERMANENTLY
ENJOINED from implementing the Amended Joint Venture Agreement
which is hereby declared NULL and VOID ab initio.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza,
Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Austria-Martinez, and Corona, JJ., concur.
G.R. No. 103882 November 25, 1998
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL
ESTATE CORPORATION, respondents, CULTURAL CENTER OF THE
PHILIPPINES, intervenor.
G.R. No. 105276 November 25, 1998
PASAY CITY AND REPUBLIC REAL ESTATE
CORPORATION, petitioners,
vs.
COURT OF APPEALS and REPUBLIC OF THE
PHILIPPINES, respondents.
PURISIMA, J.:
At bar are two consolidated petitions for review on certiorari under Rule
45 of the Revised Rules of Court. Here, the Court is confronted with a
case commenced before the then Court of First Instance (now Regional
Trial Court) of Rizal in Pasay City, in 1961, more than 3 decades back,
that has spanned six administrations of the Republic and outlasted the
tenure of ten (10) Chief Justices of the Supreme Court.
In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails
the Decision, dated January 29, 1992 and Amended Decision, dated
April 28, 1992, of the Court of Appeals 1 which affirmed with
modification the Decision of the former Court of First Instance of
Rizal (Branch 7, Pasay City) in Civil Case No. 2229-P, entitled
"Republic of the Philippines vs. Pasay City and Republic Real
Estate Corporation".
The facts that matter are, as follows:
Republic Act No. 1899 ("RA 1899"), which was approved on June
22, 1957, authorized the reclamation of foreshore lands by
chartered cities and municipalities. Section I of said law, reads:
Sec. 1. Authority is hereby granted to all municipalities and
chartered cities to undertake and carry out at their own expense the
reclamation by dredging, filling, or other means, of any foreshore
lands bordering them, and to establish, provide, construct, maintain
and repair proper and adequate docking and harbor facilities as
such municipalities and chartered cities may determine in
consultation with the Secretary of Finance and the Secretary of
Public Works and Communications.
On May 6, 1958, invoking the a forecited provision of RA 1899, the
Pasay City Council passed Ordinance No. 121, for the reclamation
of Three Hundred (300) hectares of foreshore lands in Pasay City,
empowering the City Mayor to award and enter into reclamation
contracts, and prescribing terms and conditions therefor. The said
Ordinance was amended on April 21, 1959 by Ordinance No. 158,
which authorized the Republic Real Estate Corporation ("RREC") to
reclaim foreshore lands of Pasay City under certain terms and
conditions.
On April 24, 1959, Pasay City and RREC entered into an
Agreement 2 for the reclamation of the foreshore lands in Pasay
City.
On December 19, 1961, the Republic of the Philippines ("Republic")
filed a Complaint 3 for Recovery of Possession and Damages with
Writ of Preliminary Preventive injunction and Mandatory Injunction,
docketed as Civil Case No. 2229-P before the former Court of First
Instance of Rizal, (Branch 7, Pasay City).
On March 5, 1962, the Republic of the Philippines filed an Amended
Complaint 4 questioning subject Agreement between Pasay City and
RREC (Exhibit "P") on the grounds that the subject-matter of such
Agreement is outside the commerce of man, that its terms and
conditions are violative of RA 1899, and that the said Agreement
was executed without any public bidding.
The Answers 5 of RREC and Pasay City, dated March 10 and March
14, 1962, respectively, averred that the subject-matter of said
Agreement is within the commerce of man, that the phrase
"foreshore lands" within the contemplation of RA 1899 has a
broader meaning than the cited definition of the term in the Words
and Phrases and in the Webster's Third New International
Dictionary and the plans and specifications of the reclamation
involved were approved by the authorities concerned.
On April 26,1962, Judge Angel H. Mojica, (now deceased) of the
former Court of First Instance of Rizal (Branch 7, Pasay City) issued
an Order6 the dispositive portion of which was to the following
effect:
WHEREFORE, the court hereby orders the defendants, their agents,
and all persons claiming under them, to refrain from "further
reclaiming or committing acts of dispossession or dispoilation over
any area within the Manila Bay or the Manila Bay Beach Resort",
until further orders of the court.
On the following day, the same trial court issued a writ of
preliminary injunction 7 which enjoined the defendants, RREC and
Pasay City, their agents, and all persons claiming under them "from
further reclaiming or committing acts of dispossession."
Thereafter, a Motion to Intervene 8, dated June 27, 1962, was filed by
Jose L. Bautista, Emiliano Custodio, Renato Custodio, Roger de la
Rosa, Belen Gonzales, Norma Martiner, Emilia E. Paez, Ambrosio R.
Parreno, Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento,
Jesus Yujuico, Zamora Enterprises, Inc., Industrial and Commercial
Factors, Inc., Metropolitan Distributors of the Philippines, and
Bayview Hotel, Inc. stating inter alia that they were buyers of lots in
the Manila Bay area being reclaimed by RREC, whose rights would
be affected by whatever decision to be rendered in the case. The
Motion was granted by the trial court and the Answer attached
thereto admitted.9
The defendants and the intervenors then moved to dismiss 10 the
Complaint of the Republic, placing reliance on Section 3 of
Republic Act No. 5187, which reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from
the south boundary of the City of Manila to Cavite City, to the south,
and from the north boundary of the City of Manila to the
municipality of Mariveles, province of Bataan, to the north,
including the reclamation of the foreshore and submerged
areas: Provided, That priority in the construction of such seawalls,
highway and attendant reclamation works shall be given to any
corporation and/or corporations that may offer to undertake at its
own expense such projects, in which case the President of the
Philippines may, after competitive didding, award contracts for the
construction of such project, with the winning bidder shouldering
all costs thereof, the same to be paid in terms of percentage fee of
the contractor which shall not exceed fifty percent of the area
reclaimed by the contractor and shall represent full compensation
for the purpose, the provisions of the Public Land Law concerning
disposition of reclaimed and foreshore lands to the contrary
notwithstanding: Provided, finally, that the foregoing provisions
and those of other laws, executive orders, rules and regulations to
the contrary notwithstanding, existing rights, projects and/or
contracts of city or municipal governments for the reclamation of
foreshore and submerged lands shall be respected. . . . . (emphasis
ours).
Since the aforecited law provides that existing contracts shall be
respected, movants contended that the issues raised by the
pleadings have become "moot, academic and of no further validity
or effect."
Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU")
moved to intervene 11, alleging as legal interest in the matter in
litigation the avowed purpose of the organization for the promotion
of good government in Pasay City. In its Order of June 10, 1969, the
lower court of origin allowed the said intervention 12.
On March 24, 1972, the trial court of origin came out with a
Decision, disposing, thus:
WHEREFORE, after carefully considering (1) the original complaint,
(2) the first Amended Complaint, (3) the Answer of Defendant
Republic Real Estate Corporation to the first Amended Complaint,
(4) the Answer of Defendant Pasay City to the first Amended
Complaint, (5) the Second Amended Complaint, (6) the Answer of
Defendant Republic Real Estate Corporation to the Second
Amended Complaint, (7) the Answer of Defendant Pasay City to the
Second Amended Complaint, (8) the Memorandum in Support of
Preliminary Injunction of Plaintiff, (9) the Memorandum In Support
of the Opposition to the Issuance of Preliminary Injunction of
Defendant Pasay City and Defendant Republic Real Estate
Corporation, (10) the Answer in Intervention of Intervenors
Bautista, et. al., (11) Plaintiff's Opposition to Motion to Intervene,
(12) the Reply to Opposition to Motion to Intervene of Intervenors
Bautista, et. al., (13) the Stipulation of Facts by all the parties, (14)
the Motion for Leave to Intervene of Intervenor Pasay Law and
Conscience Union, Inc., (15) the Opposition to Motion For Leave to
Intervene of Intervenors Bautista, et. al., (16) the Reply of Intervenor
Pasay Law and Conscience Union, Inc., (17) the Supplement to
Opposition to Motion to Intervene of Defendant Pasay City and
Republic Real Estate Corporation (18) the Complain in Intervention
of Intervenor Pasay Law and Conscience Union, Inc., (19) the
Answer of Defendant Republic Real Estate Corporation, (20) the
Answer of Intervenor Jose L. Bautista, et. al., to Complaint in
Intervention, (21) the Motion to Dismiss of Defendant Republic Real
Estate Corporation, and Intervenors Bautista, et. al., (22) the
Opposition of Plaintiff to said Motion to Dismiss, (23) the
Opposition of Intervenor Pasay Law and Conscience Union, Inc.,
(24) the Memorandum of the Defendant Republic Real Estate
Corporation, (25) the Memorandum for the Intervenor Pasay Law
and Conscience Union, Inc., (26) the Manifestation of Plaintiff filed
by the Office of the Solicitor General, and all the documentary
evidence by the parties to wit: (a) Plaintiff's Exhibits "A" to "YYY-
4", (b) Defendant Republic Real Estate Corporation's Exhibits "1-
RREC" to "40-a" and (c) Intervenor Pasay Law and Conscience
Union, Inc's., Exhibits "A-PLACU" to "C-PLACU", the Court hereby:
(1) Denies the "Motion to Dismiss" filed on January 10, 1968, by
Defendant Republic Real Estate Corporation and Intervenors
Bautista, et. al., as it is the finding of this Court that Republic Act
No. 5187 was not passed by Congress to cure any defect in the
ordinance and agreement in question and that the passage of said
Republic Act No. 5187 did not make the legal issues raised in the
pleadings "moot, academic and of no further validity or effect;" and
(2) Renders judgment:
(a) dismissing the Plaintiff's Complaint;
(b) Dismissing the Complaint in Intervention of Intervenor Pasay
Law and Conscience Union, Inc.,
(c) Enjoining Defendant Republic Real Estate Corporation and
Defendant Pasay City to have all the plans and specifications in the
reclamation approved by the Director of Public Works and to have
all the contracts and sub-contracts for said reclamation awarded by
means of, and only after, public bidding; and
(d) Lifting the preliminary Injunction issued by the Court on April
26, 1962, as soon as Defendant Republic Real Estate Corporation
and Defendant Pasay City shall have submitted the corresponding
plans and specifications to the Director of Public Works, and shall
have obtained approval thereof, and as soon as the corresponding
public bidding for the award to the contractor and sub-contractor
that will undertake the reclamation project shall have been effected.
No pronouncement as to costs.
SO ORDERED. (See Court of Appeals' Decision dated January 28,
1992; pp. 6-8)
Dissatisfied with the said judgment, the Republic appealed
therefrom to the Court of Appeals. However, on January 11, 1973,
before the appeal could be resolved, Presidential Decree No. 3-A
issued, amending Presidential Decree No. 3, thus:
Sec. 1. Section 7 of Presidential Decree No. 3, dated September 26,
1972, is hereby amended by the addition of the following
paragraphs:
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.
All reclamations made in violation of this provision shall be
forfeited to the State without need of judicial action.
Contracts for reclamation still legally existing or whose validity has
been accepted by the National Government shall be taken over by
the National Government on the basis of quantum meruit, for
proper prosecution of the project involved by administration.
On November 20, 1973, the Republic and the Construction
Development Corporation of the Philippines ("CDCP") signed a
Contract13 for the Manila-Cavite Coastal Road Project (Phases I and
II) which contract included the reclamation and development of
areas covered by the Agreement between Pasay City and RREC.
Then, there was issued Presidential Decree No. 1085 which
transferred to the Public Estate Authority ("PEA") the rights and
obligations of the Republic of the Philippines under the contract
between the Republic and CDCP.
Attempts to settle amicably the dispute between representatives of
the Republic, on the one hand, and those of Pasay City and RREC,
on the other, did not work out. The parties involved failed to
hammer out a compromise.
On January 28, 1992, the Court of Appeals came out with a
Decision 14 dismissing the appeal of the Republic and holding, thus:
WHEREFORE, the decision appealed from is hereby AFFIRMED with
the following modifications:
1. The requirement by the trial court on public bidding and
submission of RREC's plans specification to the Department Public
Works and Highways in order that RREC may continue the
implementation of the reclamation work is deleted for being moot
and academic;
2. Ordering the plaintiff-appellant to turn over to Pasay City the
ownership and possession over all vacant spaces in the twenty-one
hectare area already reclaimed by Pasay City and RREC at the time
it took over the same. Areas thereat over which permanent
structures has (sic) been introduced shall, including the structures,
remain in the possession of the present possessor, subject to any
negotiation between Pasay City and the said present possessor, as
regards the continued possession and ownership of the latter area.
3. Sustaining RREC's irrevocable option to purchase sixty (60%)
percent of the Twenty-One (21) hectares of land already reclaimed
by it, to be exercised within one (1) year from the finality of this
decision, at the same terms and condition embodied in the Pasay
City-RREC reclamation contract, and enjoining appellee Pasay City
to respect RREC's option.
SO ORDERED.
On February 14, 1992, Pasay City and RREC presented a Motion for
Reconsideration of such Decision of the Court of Appeals,
contending, among others, that RREC had actually reclaimed Fifty-
Five (55) hectares, and not only Twenty-one (21) hectares, and the
respondent Court of Appeals erred in not awarding damages to
them, movants.
On April 28, 1992, the Court of Appeals acted favorably on the said
Motion for Reconsideration, by amending the dispositive portion of
its judgment of January 28, 1992, to read as follows:
WHEREFORE, the dispositive portion of our Decision dated
January 28, 1992 is hereby AMENDED to read as follows:
1. The requirement by the trial court on public bidding and the
submission of the RREC's plans and specification to the
Department of Public Works and Highways in order that RREC may
continue the implementation of the reclamation work is deleted for
being moot and academic.
2. Ordering plaintiff-appellant to turn over to Pasay City the
ownership and possession of the above enumerated lots (1 to 9).
3. Sustaining RREC's irrevocable option to purchase sixty (60%)
percent of the land referred to in No. 2 of this dispositive portion, to
be exercised within one (1) year from the finality of this Decision, at
the same terms and condition embodied in the Pasay City-RREC
reclamation contract, and enjoining Pasay City to respect RREC's
irrevocable option.
SO ORDERED.
From the Decision and Amended Decision of the Court of Appeals
aforementioned, the Republic of the Philippines, as well as Pasay
City and RREC, have come to this Court to seek relief, albeit with
different prayers.
On September 10, 1997, the Court commissioned the former
thirteenth Division of Court of Appeals to hear and receive evidence
on the controversy. The corresponding Commissioner's Report,
dated November 25, 1997, was submitted and now forms part of the
records.
On October 11, 1997, the Cultural Center of the Philippines ("CCP")
filed a Petition in Intervention, theorizing that it has a direct interest
in the case being the owner of subject nine (9) lots titled in its (CCP)
name, which the respondent Court of Appeals ordered to be turned
over to Pasay City. The CCP, as such intervenor, was allowed to
present its evidence, as it did, before the Court of Appeals, which
evidence has been considered in the formulation of this
disposition.
In G.R. No. 103882, the Republic of the Philippines theorizes, by
way of assignment of errors, that:
I
THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY
OF PASAY CITY ORDINANCE NO. 158 DATED APRIL 21, 1959 AND
THE RECLAMATION CONTRACT ENTERED INTO BETWEEN PASAY
CITY AND RREC;
II
THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD
RECLAIMED 55 HECTARES AND IN ORDERING THE TURN-OVER
TO PASAY CITY OF THE OWNERSHIP AND POSSESSION OF NINE
(9) LOTS TITLED IN THE NAME OF CCP.
In G.R. No. 105276, the petitioners, Pasay City and RREC, contend,
that:
I
THE COURT OF APPEALS ERRED IN NOT DECLARING
PRESIDENTIAL DECREE NO. 3-A UNCONSTITUTIONAL;
II
THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN
FAVOR OF PASAY CITY AND RREC.
Let us first tackle the issues posed in G.R. No. 103882.
On the first question regarding the validity of Pasay City Ordinance
No. 158 dated April 21, 1959 and the Agreement dated April 24, 1959
between Pasay City and RREC, we rule in the negative.
Sec. 1 of RA 1899, reads:
Sec. 1. Authority is hereby granted to all municipalities and
chartered cities to undertake and carry out at their own expense the
reclamation by dredging, filling, or other means, of any foreshore
lands bordering them, and to establish, provide, construct, maintain
and repair proper and adequate docking and harbor facilities as
such municipalities and chartered cities may determine in
consultation with the Secretary of Finance and the Secretary of
Public Works and Communications.
It is the submission of the petitioner, Republic of the Philippines,
that there are no foreshore lands along the seaside of Pasay City 15;
that what Pasay City has are submerged or offshore areas outside
the commerce of man which could not be a proper subject matter of
the Agreement between Pasay City and RREC in question as the
area affected is within the National Park, known as Manila Bay
Beach Resort, established under Proclamation No. 41, dated July 5,
1954, pursuant to Act No. 3915, of which area it (Republic) has been
in open, continuous and peaceful possession since time
immemorial.
Petitioner faults the respondent court for unduly expanding what
may be considered "foreshore land" through the following
disquisition:
The former Secretary of Justice Alejo Mabanag, in response to a
request for an opinion from the then Secretary of Public Works and
Communications as to whether the term, "foreshore areas" as used
in Section I of the immediately aforequoted law is that defined in
Webster's Dictionary and the Law of Waters so as to make any
dredging or filling beyond its prescribed limit illegal, opined:
According to the basic letter of the Director of Public Works, the law
of Waters speaks of "shore" and defines it thus: "that space
movement of the tide. Its interior or terrestrial limit in the line
reached by highest equinoctial tides."
Webster's definition of foreshore reads as follows:
That part of the shore between high water and low-water marks
usually fixed at the line to which the ordinary means tide flows:
also, by extension, the beach, the shore near the water's edge.
If we were to be strictly literal the term foreshore or foreshore lands
should be confined to but a portion of the shore, in itself a very
limited area. (p. 6, Intervenors-appellees' brief).
Bearing in mind the (Webster's and Law of Waters) definitions of
"shore" and of foreshore lands, one is struck with the apparent
inconsistency between the areas thus described and the purpose to
which that area, when reclaimed under the provision of Republic
Act No. 1899, shall be devoted. Section I (of said Law) authorizes
the construction thereat of "adequate docking and harbor
facilities". This purpose is repeated in Sections 3 and 4 of the Act.
And yet, it is well known fact that foreshore lands normally extend
only from 10 to 20 meters along the coast. Not very much more if at
all. In fact certain parts in Manila bordering on Manila Bay, has no
foreshore to speak of since the sea washes the sea wall.
It does not seem logical, then, that Congress had in mind.
Webster's limited concept of foreshore when it enacted Republic
Act No. 1899, unless it intends that the wharves, piers,
docks, etc. should be constructed parallel to the shore, which is
impractical.
Since it is to be presumed that Congress could not have intended
to enact an ineffectual measure not one that would lead to absurd
consequences, it would seem that it used "foreshore" in a sense
wider in scope that defined by Webster. . . .
To said opinion on the interpretation of the R.A. 1899, plaintiff-
appellant could not offer any refutation or contrary opinion. Neither
can we. In fact, the above construction is consistent with the "rule
on context" in statutory construction which provides that in
construing a statute, the same must be construed as a whole. The
particular words, clauses and phrases should not be studied as
detached and isolated expressions, but the whole and every part of
the statute must be considered in fixing the meaning of any of its
parts in order to produce a harmonious whole (see Araneta vs.
Concepcion, 99 Phil. 709). There are two reasons for this. Firstly,
the force and significance of particular expressions will largely
depend upon the connection in which they are found and their
relation to the general subject-matter of the law. The legislature
must be understood to have expressed its whole mind on the
special object to which the legislative act is directed but the vehicle
for the expressions of that meaning is the statute, considered as
one entire and continuous act, and not as an agglomeration of
unrelated clauses. Each clause or provision will be illuminated by
those which are cognate to it and by the general tenor of the whole
statute and thus obscurities end ambiguities may often be cleared
up by the most direct and natural means. Secondly effect must be
given, if it is possible, to every word and clause of the statute, so
that nothing shall be left devoid of meaning or destitute of force. To
this end, each provision of the statute should be read in the light of
the whole. For the general meaning of the legislature, as gathered
from the entire act, may often prevail over the construction which
would appear to be the most natural and obvious on the face of a
particular clause. If is by this means that contradiction and
repugnance between the different parts of the statute may be
avoided. (See Black, Interpretation of Laws, 2nd Ed., pp. 317-319).
Resorting to extrinsic aids, the "Explanatory Note" to House Bill No.
3830, which was subsequently enacted as Republic Act No. 1899,
reads:
In order to develop and expand the Maritime Commerce of the
Philippines, it is necessary that harbor facilities be correspondingly
improved and, where necessary, expanded and developed. The
national government is not in a financial position to handle all this
work. On the other hand, with a greater autonomy many chartered
cities and provinces are financially able to have credit position
which will allow them to undertake these projects. Some cities,
such as the City of Bacolod under R.A. 161, has been authorized to
reclaim foreshore lands bordering it.
Other cities end provinces have continuously been requesting for
authority to reclaim foreshore lands on the basis of the Bacolod
City pattern, and to undertake work to establish, construct on the
reclaimed area and maintain such port facilities as may be
necessary. In order not to unduly delay the undertaking of these
projects, and inorder to obviate the passage of individual pieces of
legislation for every chartered city and province, it is hereby
recommended that the accompanying bill be approved. It covers
Authority for All chartered cities and provinces to undertake this
work. . . . (emphasis supplied)
Utilizing the above explanatory note in interpreting and construing
the provisions of R.A. 1899, then Secretary of Justice Mabanag
opined:
It is clear that the "Bacolod City pattern" was the basis of the
enactment of the aforementioned bill of general application. This
so-called "Bacolod City pattern" appears to be composed of 3
parts, namely: Republic Ad No. 161, which grants authority to
Bacolod City to undertake or carry out . . . the reclamation . . . of
any [sic] carry out the reclamation project conformably with
Republic Act No. 161; and Republic Act No. 1132 authorizing
Bacolod City to contract indebtedness or to issue bonds in the
amount not exceeding six million pesos to finance the reclamation
of land in said city.
Republic Act No. 161 did not in itself specify the precise space
therein referred to as "foreshore" lands, but it provided that
docking and harbor facilities should be erected on the reclaimed
portions thereof, while not conclusive would indicate that Congress
used the word "foreshore" in its broadest sense. Significantly, the
plan of reclamation of foreshore drawn up by the Bureau of Public
Works maps out an area of approximately 1,600,000 square meters,
the boundaries of which clearly extend way beyond Webster's
limited concept of the term "foreshore". As a contemporaneous
construction by that branch of the Government empowered to
oversee at least, the conduct of the work, such an interpretation
deserves great weight. Finally, Congress in enacting Republic Act
No. 1132 (supplement to RA 161), tacitly confirmed and approved
the Bureau's interpretation of the term 'foreshore' when instead of
taking the occasion to correct the Bureau of over extending its
plan, it authorized the city of Bacolod to raise the full estimated
cost of reclaiming the total area covered by the plan. The
explanatory note to House Bill No. 1249 which became Republic Act
No. 1132 states among the things:
The Bureau of Public Works already prepared a plan for the
reclamation of about 1,600,000 square meters of land at an
estimated costs of about P6,000,000.00. The project is self-
supporting because the proceeds from the sales or leases of lands
so reclaimed will be more than sufficient to cover the cost of the
project.
Consequently, when Congress passed Republic Act No. 1899 in
order to facilitate the reclamation by local governments of
foreshore lands on the basis of the Bacolod City pattern and in
order to obviate the passage of individual pieces of legislation for
every chartered city and provinces requesting authority to
undertake such projects, the lawmaking body could not have had in
mind the limited area described by Webster as "foreshore" lands. . .
..
If it was really the intention of Congress to limit the area to the strict
literal meaning of "foreshore" lands which may be reclaimed by
chartered cities and municipalities, Congress would have excluded
the cities of Manila, Iloilo, Cebu, Zamboanga and Davao from the
operation of RA 1899 as suggested by Senator Cuenco during the
deliberation of the bill considering that these cities do not have
'foreshore' lands in the strict meaning of the term. Yet, Congress
did not approve the proposed amendment of Senator Cuenco,
implying therefore, that Congress intended not to limit the area that
may be reclaimed to the strict definition of "foreshore" lands.
The opinion of the then Secretary of Justice Mabanag, who was at
that time the chief law officer and legal adviser of the government
and whose office is required by law to issue opinions for the
guidance of the various departments of the government, there
being then no judicial interpretation to the contrary, is entitled to
respect (see Bengzon vs. Secretary of Justice and Insular Auditor,
68 Phil. 912).
We are not unmindful of the Supreme Court Resolution dated
February 3, 1965 inPonce vs. Gomez (L-21870) and Ponce vs. City
of Cebu (L-2266), by a unanimous vote of six (6) justices (the other
five (5) members deemed it unnecessary to express their view
because in their opinion the questions raised were not properly
brought before the court), which in essence applied the strict
dictionary meaning of "foreshore lands" as used in RA 1899 in the
case of the city of Cebu. But this was promulgated long after the
then Secretary of Justice Mabanag rendered the above opinion on
November 16, 1959 and long after RREC has started the subject
reclamation project.
Furthermore, as held by the lower court, Congress, after the
Supreme Court issued the aforementioned Resolution, enacted RA
5187. In Sec. 3 (m) of said law, Congress appropriated money "for
the construction of the seawall and limited access highway from
the South boundary of the city of Manila to Cavite City, to the South,
and from the North boundary of the city of Manila to the
municipality of Mariveles, province of Bataan, to the North
(including the reclamation of foreshore and submerged
areas . . . provided . . . that . . . existing projects and/or contracts of
city or municipal governments for the reclamation of foreshore and
submerged lands shall be respected . . ." This is a clear
manifestation that Congress in enacting RA 1899, did not intend to
limit the interpretation of the term "foreshore land" to its dictionary
meaning.
It is presumed that the legislature was acquainted with and had in
mind the judicial construction given to a former statute on the
subject, and that the statute on the subject, and that the statute was
enacted having in mind the judicial construction that the prior
enactment had received, or in the light of such existing judicial
decisions as have direct bearing upon it (see 50 Am. Jur., Sec. 321,
pp. 312-313). But notwithstanding said interpretation by the
Supreme Court of RA 1899 in the Ponce cases, Congress enacted a
law covering the same areas previously embraced in a RA 1899 (as
mentioned earlier, cities without foreshore lands which were sought
to be excluded from the operation of RA 1899 were not excluded),
providing that respect be given the reclamation of not only
foreshore lands but also of submerged lands signifying its non-
conformity to the judicial construction given to RA 1899. If
Congress was in accord with the interpretation and construction
made by the Supreme Court on RA 1899, it would have mentioned
reclamation of "foreshore lands" only in RA 5187, but Congress
included "submerged lands" in order to clarify the intention on the
grant of authority to cities and municipalities in the reclamation of
lands bordering them as provided in RA 1899. It is, therefore, our
opinion that it is actually the intention of Congress in RA 1899 not
to limit the authority granted to cities and municipalities to reclaim
foreshore lands in its strict dictionary meaning but rather in its
wider scope as to include submerged lands.
The Petition is impressed with merit.
To begin with, erroneous and unsustainable is the opinion of
respondent court that under RA 1899, the term "foreshore lands"
includes submerged areas. As can be gleaned from its disquisition
and rationalization aforequoted, the respondent court unduly
stretched and broadened the meaning of "foreshore lands", beyond
the intentment of the law, and against the recognized legal
connotation of "foreshore lands". Well entrenched, to the point of
being elementary, is the rule that when the law speaks in clear and
categorical language, there is no reason for interpretation or
construction, but only for application. 16 So also, resort to extrinsic
aids, like the records of the constitutional convention, is
unwarranted, the language of the law being plain and
unambiguous. 17 Then, too, opinions of the Secretary of Justice are
unavailing to supplant or rectify any mistake or omission in the
law. 18 To repeat, the term "foreshore lands" refers to:
The strip of land that lies between the high and low water marks
and that is alternately wet and dry according to the flow of the tide.
(Words and Phrases, "Foreshore")
A strip of land margining a body of water (as a lake or stream); the
part of a seashore between the low-water line usually at the
seaward margin of a low-tide terrace and the upper limit of wave
wash at high tide usually marked by a beach scarp or berm.
(Webster's Third New International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so
doing, we cannot broaden its meaning, much less widen the
coverage thereof. If the intention of Congress were to include
submerged areas, it should have provided expressly. That
Congress did not so provide could only signify the exclusion of
submerged areas from the term "foreshore lands".
Neither is there any valid ground to disregard the Resolution of this
Court dated February 3, 1965 in Ponce v. Gomez (L-21870)
and Ponce v. City of Cebu (L-22669) despite the enactment of
Republic Act No. 5187 ("RA 5187"), the relevant portion of which,
reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from
the south boundary of the City of Manila to Cavite City, to the south,
and from the north boundary of the City of Manila to the
municipality of Mariveles, province of Bataan, to the north,
including the reclamation of the foreshore and submerged
areas:Provided, That priority in the construction of such seawalls,
highway and attendant reclamation works shell be given to any
corporation and/or corporations that may offer to undertake at its
own expense such projects, in which case the President of the
Philippines may, after competitive bidding, award contracts for the
construction of such projects, with the winning bidder shouldering
all costs thereof, the same to be paid in terms of percentage fee of
the contractor which shall not exceed fifty percent of the area
reclaimed by the contractor and shall represent full compensation
for the purpose, the provisions of the Public Land Law concerning
disposition of reclaimed and foreshore lands to the contrary
notwithstanding:Provided, finally, that the foregoing provisions and
those of other laws, executive orders, rules and regulations to the
contrary notwithstanding, existing rights, projects and/or contracts
of city or municipal governments for the reclamation of foreshore
and submerged lands shall be respected. . . . .
There is nothing in the foregoing provision of RA 5187 which can be
interpreted to broaden the scope of "foreshore lands." The said law
is not amendatory to RA 1899. It is an Appropriations Act, entitled
— "AN ACT APPROPRIATING FUNDS FOR PUBLIC WORKS,
SYNCHRONIZING THE SAME WITH PREVIOUS PUBLIC WORKS
APPROPRIATIONS."
All things viewed in proper perspective, we reiterate what was said
in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669)
that the term "foreshore" refers to "that part of the land adjacent to
the sea which is alternately covered and left dry by the ordinary
flow of the tides." As opined by this Court in said cases:
WHEREAS, six (6) members of the Court (Justices Bautista Angelo,
Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine that
said city ordinance and contracts are ultra vires and hence, null
and void, insofar as the remaining 60% of the area aforementioned,
because the term "foreshore lands" as used in Republic Act No.
1899 should be understood in the sense attached thereto by
common parlance; (emphasis ours)
The aforesaid ruling was applied by then Secretary of Justice
Claudio Teehankee, in his opinion dated December 22, 1966, in a
case with analogous facts as the present one, to wit:
December 22, 1966
The Secretary of Agriculture
and Natural Resources
Diliman, Quezon City
Sir:
xxx xxx xxx
I. Facts —
1. On January 19, 1961, pursuant to the provisions of Republic Act
No. 1899, the Municipality of Navotas enacted Ordinance No. 1
authorizing the Municipal Mayor to enter into a reclamation contract
with Mr. Chuanico.
2. On March 15, 1961, a reclamation contract was concluded
between the Municipality of Navotas, represented by the Municipal
Mayor, and Mr. Chuanico in accordance with the above ordinance.
Thereunder, Mr. Chuanico shall be the attorney-in-fact of the
Municipality in prosecuting the reclamation project and shall
advance the money needed therefor; that the actual expenses
incurred shall be deemed a loan to the Municipality; that Mr.
Chuanico shall have the irrevocable option to buy 70% of the
reclaimed area at P7.00 per square meter; that he shall have the full
and irrevocable powers to do any and all things necessary and
proper in and about the premises," including the power to hire
necessary personnel for the prosecution of the work, purchase
materials and supplies, and purchase or lease construction
machineries and equipment, but any and all contracts to be
concluded by him in behalf of the Municipality shall be submitted to
public bidding.
xxx xxx xxx
3. On March 16, 1961, the Municipal Council of Navotas passed
Resolution No. 22 approving and ratifying the contract.
xxx xxx xxx
III. Comments —
1. The above reclamation contract was concluded on the basis of
Navotas Ordinance No. 1 which, in turn, had been enacted
avowedly pursuant to Republic Act No. 1899. This being so, the
contract, in order to be valid, must conform to the provisions of the
said law.
By authorizing local governments "to execute by administration any
reclamation work," (Republic Act No. 1899 impliedly forbids the
execution of said project bycontract. Thus, in the case or Ponce et
al. vs. Gomez (February 3, 1966), five justices of the Supreme Court
voted to annul the contract between Cebu Development
Corporation and Cebu City for the reclamation of foreshore lands
because "the provisions of said . . . contract are not . . . in
accordance with the provisions of Republic Act No. 1899," as
against one Justice who opined that the contract substantially
complied with the provisions of the said law. (Five Justices
expressed no opinion on this point.)
Inasmuch as the Navotas reclamation contract is substantially
similar to the Cebu reclamation contract, it is believed that the
former is likewise fatally defective.
2. The Navotas reclamation project envisages the construction of a
channel along the Manila Bay periphery of that town and the
reclamation of approximately 650 hectares of land from said
channel to a seaward distance of one kilometer. In the basic letter it
is stated that "practically, all the 650 hectares of lands proposed to
be reclaimed under the agreement" do not constitute foreshore
lands and that "the greater portion of the area . . . is in fact
navigable and presently being used as a fishing harbor by deep-sea
fishing operators as well as a fishing ground of sustenance
fisherman. Assuming the correctness of these averments, the
Navotas reclamation contract evidently transcends the authority
granted under Republic Act No. 1899, which empowers the local
governments to reclaim nothing more than "foreshore lands, i.e.,
"that part of the land adjacent to the see which is alternately
covered and left dry by the ordinary flow of the tides." (26 C.J. 890.)
It was for this reason that in the cited case Ponce case, the
Supreme Court, by a vote of 6-0 with five Justices abstaining,
declared ultra vires and void the contractual stipulation for the
reclamation of submerged lands off Cebu City, and permanently
enjoined its execution under Republic Act No. 1899.
xxx xxx xxx
In accordance with the foregoing, I have the honor to submit the
view that the Navotas reclamation contract is not binding and
should be disregarded for non-compliance with law.
Very truly yours,
(SGD) CLAUDIO TEEHANKEE
Secretary of Justice
The said opinion of Justice Secretary Teehankee who became
Associate Justice, and later Chief Justice, of this Court, did, in our
considered view, supersede the earlier opinion of former justice
Secretary Alejo Mabanag, aforestated, as the cases, in connection
with which subject opinions were sought, were with similar facts.
The said Teehankee opinion accords with RA 1899.
It bears stressing that the subject matter of Pasay City Ordinance
No. 121, as amended by Ordinance No. 158, and the Agreement
under attack, have been found to be outside the intendment and
scope of RA 1899, and therefore ultra vires and null and void.
What is worse, the same Agreement was vitiated by the glaring
absence of a public bidding.
Obviously, there is a complete dearth of evidence to prove that
RREC had really reclaimed 55 hectares. The letter of Minister
Baltazar Aquino relied upon by RREC is no proof at all that RREC
had reclaimed 55 hectares. Said letter was just referring to a
tentative schedule of work to be done by RREC, even as it required
RREC to submit the pertinent papers to show its supposed
accomplishment, to secure approval by the Ministry of Public
Works and Highways to the reclamation plan, and to submit to a
public bidding all contracts and sub-contracts for subject
reclamation project but RREC never complied with such
requirements and conditions sine qua non.
No contracts or sub-contracts or agreements, plans, designs,
and/or specifications of the reclamation project were presented to
reflect any accomplishment. Not even any statement or itemization
of works accomplished by contractors or subcontractors or
vouchers and other relevant papers were introduced to describe the
extent of RREC's accomplishment. Neither was the requisite
certification from the City Engineer concerned that "portions of the
reclamation project not less than 50 hectares in area shall have
been accomplished or completed" obtained and presented by
RREC.
As a matter of fact, no witness ever testified on any reclamation
work done by RREC, and extent thereof, as of April 26, 1962. Not a
single contractor, sub-contractor, engineer, surveyor, or any other
witness involved in the alleged reclamation work of RREC testified
on the 55 hectares supposedly reclaimed by RREC. What work was
done, who did the work, where was it commenced, and when was it
completed, was never brought to light by any witness before the
court. Certainly, onus probandi was on RREC and Pasay City to
show and point out the as yet unidentified 55 hectares they
allegedly reclaimed. But this burden of proof RREC and Pasay City
miserably failed to discharge.
So also, in the decision of the Pasay Court of First Instance
dismissing the complaint of plaintiff-appellant, now petitioner
Republic of the Philippines, the lifting of the writ of Preliminary
Injunction issued on April 26, 1962 would become effective only "as
soon as Defendant Republic Real Estate Corporation and Defendant
Pasay City shall have submitted the corresponding plans and
specifications to the Director of Public Work, and shall have
obtained approval thereof, and as soon as corresponding public
bidding for the award to the contractor and sub-contractor that will
undertake the reclamation project shall have been effected." (Rollo,
pp. 127-129, G.R. No. 103882)
From the records on hand, it is abundantly clear that RREC and
Pasay City never complied with such prerequisites for the lifting of
the writ of Preliminary Injunction. Consequently, RREC had no
authority to resume its reclamation work which was stopped by
said writ of preliminary injunction issued on April 26, 1962.
From the Contract for Dredging Work, dated November 26, 1960,
marked Exhibit "21-A" for RREC before the lower court, and Exhibit
"EE" for CCP before the Court of Appeals, it can be deduced that
only on November 26, 1960 did RREC contract out the dredging
work to C and A Construction Company, Inc., for the reclamation of
the 55 hectares initially programmed to be reclaimed by it. But, as
stated by RREC itself in the position paper filed with this Court on
July 15, 1997, with reference to CDCP's reclamation work,
mobilization of the reclamation team would take one year before a
reclamation work could actually begin. Therefore, the reclamation
work undertaker by RREC could not have started before November
26, 1961.
Considering that on April 26, 1962 RREC was enjoined from
proceeding any further with its reclamation work, it had barely five
(5) months, from November, 1961 to April, 1962, to work on subject
reclamation project. It was thus physically impossible for RREC to
reclaim 55 hectares, with the stipulated specifications and
elevation, in such a brief span of time. In the report of RREC
(Exhibit "DD" for CCP), it was conceded that due to the writ of
preliminary injunction issued on April 26, 1962, C and A
Construction Co., Inc. had suspended its dredging operation since
May, 1962.
The "graphical report" on the Pasay Reclamation project, as of April
30, 1962, attached to the Progress Report marked Exhibit "DD", is a
schematic representation of the work accomplishment referred to in
such Progress Report, indicating the various elevations of the land
surface it embraced, ranging from 0.00 meters to the highest
elevation of 2.5 meters above MLLW. Such portrayal of work
accomplished is crucial in our determination of whether or not
RREC had actually "reclaimed" any land as under its Contract for
Dredging Work with C and A Construction Company (Exhibit "EE",
the required final elevation for a completely reclaimed land was 3.5
meters above MLLW, as explicitly provided in said Contract for
Dredging Work. So, the irresistible conclusion is — when the work
on subject RREC-Pasay City reclamation project stopped in April,
1962 in compliance with the writ of preliminary injunction issued by
the trial court of origin, no portion of the reclamation project
worked on by RREC had reached the stipulated elevation of 3.5
meters above MLLW. The entire area it worked on was only at sea
level or 0.00 meter above MLLW. In short, RREC had not yet
reclaimed any area when the writ of preliminary injunction issued in
April 1962.
On this point, the testimonies of Architect Ruben M. Protacio,
Architect and Managing partner of Leandro V. Locsin and partners,
Architect and City Planner Manuel T. Mañoza, Jr. of Planning
Resources and Operation System, Inc., Rose D. Cruz, Executive
Assistant, Office of the President, from 1966 to 1970, and Dr.
Lucrecia Kasilag, National Artist and member of CCP Advisory
Committee, come to the fore. These credible, impartial and
knowledgeable witnesses recounted on the witness stand that
when the construction of the Main Building of the Cultural Center of
the Philippines (CCP) began in 1966, the only surface land available
was the site for the said building (TSN, Sept. 29, 1997, pages 8, 14
and 50), what could be seen in front of and behind it was all water
(TSN, Sept. 29, 1997 pages 127-128). When the CCP Main Building
was being constructed, from 1968 to 1969, the land above sea level
thereat was only where the CCP Main Building was erected and the
rest of the surroundings were all under water, particularly the back
portion fronting the bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186,
188). Dr. Lucrecia R. Kasilag stressed that on April 16, 1966, during
the ground breaking for the CCP Main Building, it was water all
around (TSN, Sept. 30, 1997, pp. 320, 324, 325).
There was indeed no legal and factual basis for the Court of Artists-site of
Appeals to order and declare that "the requirement by the trial court
on public bidding and the submission of RREC's plans and Boom na Boom
specification to the Department of Public Works and Highways in
order that RREC may continue the implementation of the
reclamation work is deleted for being moot and academic." Said 23 open space, back 34,346 sq.m. TCT 75677 in the
requirement has never become moot and academic. It has remained
indispensable, as ever, and non-compliance therewith restrained of Philcite name of CCP
RREC from lawfully resuming the reclamation work under
controversy, notwithstanding the rendition below of the decision in 24 Parking space for 10,352 sq.m. TCT 75678 in the
its favor.

Star City, CCP, name of CCP

Verily, contrary to what the Court of Appeals found, RREC had not
reclaimed any area with the prescribed elevation of 3.5 meters
above MLLW, so much so that in 1978, it (RREC) opted to file with Philcite
the former Ministry of Public Highways, a claim for compensation of
P30,396,878.20, for reclamation work allegedly done before the 25 open space 11,323 sq.m. TCT 75679 in the
CDCP started working on the reclamation of the CCP grounds. On
September 7, 1979, RREC asked the Solicitor General to settle its occupied by Star name of CCP
subject claim for compensation at the same amount of
P30,396,878.20. But on June 10, 1981, guided by the cost data, work
City
volume accomplished and other relevant information gathered by
the former Ministry of Public Highways, the Solicitor General
informed RREC that the value of what it had accomplished, based 28 open space, 27,689 sq.m. TCT 75684 in the
on 1962 price levels, was only P8,344,741.29, and the expenses for
mobilization of equipment amounted to P2,581,330.00. The beside PICC name of CCP
aforesaid evaluation made by the government, through the then
Minister of Public Highways, is factual and realistic, so much so
29 open space, 106,067 sq.m. TCT 75681 in the
that on June 25, 1981, RREC, in its reply letter to the Solicitor
General, stated:
leased by El name of CCP
We regret that we are not agreeable to the amount of
P10,926,071.29, based on 1962 cost data, etc., as compensation Shaddai
based on quantum meruit. The least we would consider is the
amount of P10,926,071.29 plus interest at the rate of 6% per annum We discern no factual basis nor any legal justification therefor. In
from 1962 to the time of payment. We feel that 6% is very much less the first place, in their answer to the Complaint and Amended
than the accepted rate of inflation that has supervened since 1962 Complaint below, RREC and Pasay City never prayed for the
to the present, and even less than the present legal rate of 12% per transfer to Pasay City of subject lots, title to which had long
annum. 19 become indefeasible in favor of the rightful title holders, CCP and
GSIS, respectively.
Undoubtedly, what RREC claimed for was compensation for what it
had done, and for the dredge fill of 1,558,395 cubic meters it used, The annotation of a notice of lis pendens on the certificates of title
on subject reclamation project. covering the said lots is of no moment. It did not vest in Pasay City
and RREC any real right superior to the absolute ownership
Respondent Court likewise erred in ordering the turn-over to Pasay thereover of CCP and GSIS. Besides, the nature of the action did
City of the following titled lots, to wit: not really warrant the issuance of a notice of lis pendens.

LOT NO. BUILDING AREA OCT/TCT Sec. 14 of Rule 13, Revised Rules of Civil Procedure, reads:

42 Gloria Maris 9,516 sq.m. OCT 159 in the Sec. 14. Notice of lis pendens. — In an action affecting the title or
the right of possession of real properly, the plaintiff and the
defendant, when affirmative relief is claimed in his answer, may
Restaurant name of GSIS
record in the office of the registry of deeds of the province in which
the property is situated a notice of the pendency of the action. Said
3 Asean Garden 76,299 sq.m. OCT 10251 in the notice shall contain the names of the parties and the object of the
action or defense, and a description of the property in that province
name of CCP affected thereby. Only from the time of filing such notice for record
shall a purchaser, or encumbrancer of the property affected
thereby, be deemed to have constructive notice of the pendency of
12 Folk Arts Theater 1.7503 hec. TCT 18627 in the
the action, and only of its pendency against the parties designated
by their real names.
and PICC parking name of CCP

The notice of lis pendens herein above mentioned may be cancelled

space only upon order of the court, after proper showing that the notice is
for the purpose of molesting the adverse party, or that it is not
22 landscaped with 132,924 sq.m. TCT 75676 in the necessary to protect the rights of the party who caused it to be
recorded.
sculpture of Asean name of CCP
Under the aforecited provision of law in point, a notice of lis
pendens is necessary when the action is for recovery of
possession or ownership of a parcel of land. In the present
litigation, RREC and Pasay City, as defendants in the main case, did
not counterclaim for the turnover to Pasay City of the titled lots
aforementioned.
What is more, a torrens title cannot be collaterally attacked. The
issue of validity of a torrens title, whether fraudulently issued or
not, may be posed only in an action brought to impugn or annul it.
(Halili vs. National Labor Relations Commission, 257 SCRA 174,
Cimafranca vs. Intermediate Appellate Court, 147 SCRA 611.)
Unmistakable, and cannot be ignored, is the germane provision of
Section 48 of P.D. 1529, that a certificate of title can never be the
subject of a collateral attack. It cannot be altered, modified, or
cancelled except in a direct proceeding instituted in accordance
with law.
Although Pasay City and RREC did not succeed in their
undertaking to reclaim any area within subject reclamation project,
it appearing that something compensable was accomplished by
them, following the applicable provision of law and hearkening to
the dictates of equity, that no one, not even the government, shall
unjustly enrich oneself/itself at the expense of another 20, we
believe; and so hold, that Pasay City and RREC should be paid for
the said actual work done and dredge-fill poured in, worth
P10,926,071.29, as verified by the former Ministry of Public
Highways, and as claimed by RREC itself in its aforequoted letter
dated June 25, 1981.
It is fervently hoped that long after the end of our sojourn in this
valley of tears, the court, for its herein historic disposition, will be
exalted by the future generations of Filipinos, for the preservation
of the national patrimony and promotion of our cultural heritage. As
writer Channing rightly puts it: "Whatever expands the affections,
or enlarges the sphere of our sympathies — Whatever makes us
feel our relation to the universe and all that it inherits in time and in
eternity, and to the great and beneficent cause of all, must
unquestionably refine our nature, and elevate us in the scale of
being."
WHEREFORE:
In G.R. No. 103882, the Petition is GRANTED; the Decision, dated
January 28, 1992, and Amended Decision, dated April 28, 1992, of
the Court of Appeals, are both SET ASIDE; and Pasay City
Ordinance No. 121, dated May 6, 1958, and Ordinance No. 158,
dated April 21, 1959, as well as the Reclamation Agreements
entered into by Pasay City and Republic Real Estate Corporation
(RREC) as authorized by said city ordinances, are declared NULL
and VOID for being ultra vires, and contrary to Rep. Act 1899.
The writ of preliminary injunction issued on April 26, 1962 by the
trial court a quo in Civil Case No. 2229-P is made permanent and
the notice of lis pendens issued by the Court of Appeals in CA G.R.
CV No. 51349 ordered CANCELLED. The Register of Deeds of Pasay
City is directed to take note of and annotate on the certificates of
title involved, the cancellation of subject notice of lis pendens.
The petitioner, Republic of the Philippines, is hereby ordered to pay
Pasay City and Republic Real Estate Corporation the sum of TEN
MILLION NINE HUNDRED TWENTY-SIX THOUSAND SEVENTY-ONE
AND TWENTY-NINE CENTAVOS (P10,926,071.29) PESOS, plus
interest thereon of six (6%) percent per annum from May 1, 1962
until full payment, which amount shall be divided by Pasay City and
RREC, share and share alike.
In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED.
Bellosillo, Melo, Quisumbing and Pardo, JJ., concur.
Narvasa, C.J., I DISSENT: Ponce is not binding precedent, and P.D.
3-A is in utter nullity:
Davide, Jr., J., also that of the concurring opinion of Mr. Justice
Puno.
Romero, J., Please see Separate Opinion.
Puno, J., Please see Concurring Opinion.
Vitug, J., In the result.
Kapunan, J., No part, having appeared for the Gov't. when I was in
the OSG.
Mendoza, J., I concur in this and in the concurring opinion of
Justice Puno.
Panganiban, J., Please see Separate Opinion.
Martinez, J., I join the Chief Justice in his dissent.
Separate Opinions
ROMERO, J., separate opinion;
Culture doesn't save anything or any-one, it doesn't justify. But it's
a product of man: he projects himself into it, he recognizes himself
in it; that critical mirror alone offers him his image." So said Jean
Paul Sartre, one of the greatest philosophical thinkers of our time.
Matthew Arnold referred to it as the "pursuit of our total perfection"
or the "study of perfection." The English mathematican and
philosopher Alfred North Whitehead, placing premium on human
subjectivity, declared, "Culture is activity of thought, and
receptiveness to beauty and humane feeling.
Image, perfection, beauty, and feeling. These are elements which
are also associated with art and creation. Yet, art in itself is a multi-
faceted concept. The revered and, at times, controversial President
John Fitzgerald Kennedy, in one of his numerous speeches,
elevated art to the level of a pyscho-social necessity of man when
he said, ". . . (A)rt establishes the basic human truths which ust
serve as the touchstone of our judgment." Indeed, there is no
question that art satisfies one of the deepest spiritual needs of
man.
Of course, when one speaks of art and culture, he in fact speaks of
it in two ways: the abstract and the concrete. What is abstract is
conditioned by time; that which is and the concrete is ravaged by it.
While the concept of "culture and art" endures man's folies,
amassing innumerable, priceless enhancements as it effortlessly
slides through generations of human progress, its tangible
counterpart, that which is preserved for our children's appreciation,
is unfortunately fragile. Art works, music, architecture, literature,
and other cultural embellishments which exhibit extraordinary
longevity are proclaimed as national treasures, and rightly so, for
they are lasting testiminials of man's boundless imagination and
creativity, that single trait that places the human species above all
other creatures of the Almighty.
Most evidence of a culture's richness are lost, not in the tide of
nature's frivolity, but through man's foolishness and
capriciousness. Wars used to be the main culprit in the virtual
obliteration of the works of ancient scholars. We are now, and for
the past century or so, faced with a greater foe: progress. Progress
and development are the hallmarks of successful governance. Our
leaders, and there are so many of them now, decide "what is best"
for the public. Inopportunely, what is perceived to be in the "best
interest" of the majority in the name of "progress" may sometimes,
and in the long run, the calamitous to the entire people in terms of
cultural atrophy. This is the quandary in which this Court finds itself
as it attempts to weigh once more private rights against
sovereignty and the general welfare.
Background Facts
In a nutshell, the undisputed facts in these consolidated petitions
follow.
Pursuant to Republic Act No. 1899, which authorized chartered
cities and municipalities to reclaim adjoining foreshore lands, the
City Council of Pasay resolved to reclaim a portion of the Manila
Bay covering the Manila-Pasay-Parañaque bounderies and, for this
purpose, enacted Ordinance No. 121 on May 6, 1958. Two days later,
on the strength of said ordinance, Pasay City Mayor Pablo Cuneta
contracted with Republic Real Estate Corporation (RREC) for the
reclamation of portions of the Manila Bay. On April 21, 1959, the
City Council of Pasay amended Ordinance No. 121 by
enacting Ordinance No. 158. A new agreement between the parties
(the Reclamation Agreement) was executed three days thereafter,
whcih, among other things, granted the reclamation project to
RREC and gave it an irrevocable option to purchase a maximum of
60% of the area reclaimed at P10.00 per square meter, the amount
of which could be set off against any outstanding obligation of the
City to RREC. Such an option could only be effected within a year
from the time the City Engineer certified that 50 hectares had been
reclaimed. The reclamation itself was made by the RREC through
third parties who were awarded contracts on the various phases of
the project through public bidding. To raise more funds, RREC
entered into contracts to sell the reclaimed areas which it could
purchase from Pasay City by exercising its option under the
Reclamation Agreement.
Proceedings before the trial court
On December 19, 1961, the Republic of the Philippines filed
a complaint (amended on March 5, 1962) against Pasay City and
RREC for "Recovery of Possession and Damages with Writ of
Preliminary Preventive Injunction and Mandatory Injunction" before
Branch 7 of the then Court of First Instance of Rizal, Pasay City,
praying for the declaration of nullity of Ordinance Nos. 121 and 158,
the Reclamation Agreement, and the Contracts to Sell between
RREC and the buyers of the reclaimed land. Among other things,
the following matters were alleged: (a) the area reclaimed was
already reserved as a national park under Proclamation No. 41,
dated July 5, 1954 and Act No. 3915, hence, the subject of the
Reclamation Agreement was beyond man's commerce; (b)
Ordinance Nos. 121 and 158 were ultra vires and void ab initio for
being violative of R.A. No. 1899, because they involved the
reclamation of "submerged areas" and not "foreshore lands" as
allowed by said law; and (c) the Reclamation Agreement was illegal,
contrary to morals and public policy because it was executed with
neither authority from the National Government nor any public
bidding.
In their separate answer, Pasay City and RREC set forth the
following negative defenses: (a) Pasay City was empowered by R.A.
No. 1899 to reclaim any portion of the Manila Bay; (b) the area
reclaimed was not a portion of the Manila Bay Resort, which was
the area reserved as a national park under Proclamation No. 41 and
Act No. 3915; (c) under R.A. No. 1899, the term "foreshore lands"
meant much more than its technical definition and extended to
submerged areas beyond the water marks of the shore; and (d) all
the actuations of the City RREC regarding the reclamation project
were in accordance with R.A. No. 1899 and related laws.
On April 26, 1962, the trial court issued a writ of preliminary
injunction ordering Pasay City and RREC to refrain from their
activities at the Manila Bay. On January 10, 1968, however, RREC
filed a "Motion to Dismiss" the complaint on the ground that the
passage of Republic Act No. 5187 (otherwise known as the Public
Works Act) on September 16, 1967, rendered the issues raised by
the Republic of the Philippines moot and academic. Specifically,
RREC relied on Section 3 (m) thereof which stated that all
"contracts of city or municipal governments for the reclamation of
foreshore and submerged lands shall be respected" during the
construction by the national government of a sea wall and limited
access highway passing through the projected area of the
reclamation. In the meantime, the trial court allowed Jose Bautista
and others who allegedly bought in good faith and for value from
RREC some portions of the reclaimed land, to intervene in the
action and join cause with Pasay City and RREC. On the other
hand, the Pasay Law and Conscience Union, Inc. (PLCUI), a civic
organization, joined with the Republic of the Philippines and filed a
complaint in intervention.
On May 24, 1972, the court a quo rendered a judgment on the
pleadings, upholding the validity of Ordinance Nos. 121 and 158 of
the Reclamation Agreement; dismissing the complaint as well as
PLCUI's complaint in intervention; enjoining RREC and Pasay City
"to have all the plans and specifications in the reclamation
approved by the Director of Public Works, and to have all the
contracts and subcontracts for said reclamation awarded by means
of, and only after, public bidding"; and lifting the preliminary
injunction, dated April 26, 1962, as soon as said conditions shall
have been met by RREC and Pasay City.
Proceedings before the Court of Appeals
During the pendency of the State's appeal with the Court of
Appeals, President Marcos issued on January 11, 1973,
Pressidential Decree No. 3-A, providing, inter alia, that "the
reclamation of areas under water, whether foreshore or inland, shall
be limited to the National Government or any person aurhorized by
it under a proper contract," and that it shall take over any validly
existing reclamation contract on the basis of quantum meruit. On
the strength of P.D. No. 3-A, the Commission of Public Highways
and the Construction Development Corporation of the Philippines
(CDCP) took over the reclamation contract between Pasay City and
RREC for the construction of the Manila-Cavite City Coastal Road.
CDCP development the area already reclaimed by RREC and
continued reclaiming where the latter left off. These areas, which
came to be known as the Cultural Center Complex and the Financial
Center Complex, were registered in the name of the CCP.
On February 4, 1977, the Public Estates Authority (PEA) was
created by virtue of Presidential Decree No. 1084. It was designated
as the agency primarily responsible for all the reclaation projects of
the national government. The PEA then took over the Manila Bay
reclamation contract between the Republic of the Philippines and
CDCP.
In 1978, RREC filed a claim for P30,396,878.20 with the ten Ministry
of Public Highways (MPH) for its actual reclamation in the CCP
Complex before CDCP assumed authority over the project. The
MPH, on the other hand, determined the amount of reclamation by
RREC to be only P10,926,071.29. Later, RREC offered to settle the
case with the Office of the Solicitor General for the original amount
of its claim. The OSG would, however, settle only for the lesser
amount assessed by the MPH. This was acceptable to RREC only
with an additional 6% interest per annum from 1962 up to the time
of payment. Within the decade that followed, RREC's proposals for
settling the case ballooned from a P35,455,011.31 cash settlement
or a property settlement of 3.5 hectares in the CCP Complex
covered by TCT No. 75676, to a cash settlement of P175 million,
then later, P245 million. The Office of the President, to which the
proposals were referred, rejected the same. In other words, no
amicable settlement was reached.
The first decision
On January 28, 1992, the Court of Appeals rendered a decision,
affirming the trial court's judgment with the following modifications:
(a) the requirement on public bidding and submission of plans and
specifications to the DPWH by RREC was deleted; (b) the Republic
of the Philippines was ordered to turn over to Pasay City the
ownership and possession of the 21 hectares already reclaimed by
RREC; and (c) RREC's irrevocable option to purchase 60% of the 21
hectares it had already reclaimed was sustained.
The amended decision
On April 28, 1992, the appellate court rendered an amended
decision. It agreed with the position of Pasay City and RREC in their
motion for reconsideration that the actual the reclaimed was 55, not
21, hectares. Considering, however, that latter were willing to
accept 35 hectares of open land in the CCP Complex, the court
ordered the Republic of the Philippines to reconvey to Pasay City
and RREC said parcels of land comprising nine lots registered in
the name of CCP. This is the decision being assailed by both parties
in the instant consolidated petitions.
Issues raised
In G.R. No. 103882
Are Ordinance Nos. 121 and 158, as well as the Reclamation
Agreement between Pasay City and RREC, valid and bindings as
against the National Government and the Cultural Center of the
Philippines?
The Republic of the Philippines claims that the Court of Appeals
erred in sustaining the validity of Ordinance Nos. 121 and 158 and
the Reclamation Agreement executed pursuant thereto, and in
ordering the reconveyance of the nine lots titled in the name of CCP
to the City of Pasay and RREC. It stresses that the reclamation
project undertaken by Pasay City and RREC violated R.A. No. 1899,
especially since the subject areas were "submerged lands", not
"foreshore lands" which are the only lands that may be reclaimed
by local governments under said law.
The CCP, as intervenor in G.R. No. 103882, alleges that the appellate
court's amended decision was not binding upon it because it was
never made a party to the action and that it was compelled to
intervene in the instant petitions to protect its proprietary interests.
It claims that the Court of Appeals erred in findings that the actual
area reclaimed by RREC was 55 hectares, and in ordering it to turn
over to RREC and Pasay City the nine lots registered in its name.
In G.R. No. 105276
Is P.D. 3-A constitutional?
The City of Pasay and RREC claim it is not and that the Court of
Apealls erred in not ruling upon its constitutionality, considering
that said decree deprived them of their property and rights of
ownership without due process of law and without payment of just
compensation, and that it violated the non-impairment clause of the
Constitution; and in not awarding them damages for the alleged
illegal takeover of the reclamation contract and the reclaimed area.
Thus, they pray for the modification of the assailed amended
decision by awarding them damages and conveying to them, not
merely 35, but 55 hectares of the land allegedly reclaimed.
The Commissioner's Report
On September 10, 1997, the Court's Second Division issued a
Resolution remanding the case to the Court of Appeals to receive
further evidence and determine the actual area reclaimed by RREC
and the arreas of the CCP Complex which are "open spaces." In its
Commissioner's Report dated November 25, 1997, the appellate
court conclude that the CCP and the Solicitor General failed to
refute its earleir finding that RREC and Pasay City were able to
reclaim 55 hectares of the Manila Bay.
Discussion of Issues
1. Ordinance Nos. 121 and 158, as well as the Reclamation
Agreement between Pasay City and RREC, are null and void for
violating the clear and unambiguous provisions of R.A. No. 1899.
In 1984, the term "foreshore lands" was defined by this Court in the
case of Republic v. Court of Appeals.1Although the subject of this
case was part of the Laguna de Bay, the Court nevertheless applied
Bouvier's definition of "foreshore lands," viz: "that part of the land
immediately in front of the shore; the part which is between high
and low water marks, and alternately covered with water and left
dry by the flux and reflux of the tides. It is indicated by a middle line
between the highest and lowest tides."
This judicial interpretation did not escape the attention of the
legislature in the enactment of later related laws. In R.A. No. 5187,
for example, Congress specified the areas that may be reclaimed in
the construction of the Manila-Cavite City Coastal Road to include
both "foreshore and submerged areas." The Chief Executive also
recognized the disparity between the two terms when he signed
into law P.D. No. 3-A, authorizing the reclamation of "areas under
water, whether foreshore or inland." Similarly, P.D. No. 1094,
creating the Public Estates authority to "reclaim land, including
foreshore and submerged areas."
Initially, legislative intent and later jurisprudential usage clearly
delimited the term "foreshore lands" to that part of the land where
the tides literally converge, thus excluding submerged lands. This
restricted explication was unquestionably ackonwledged by the
other branches of government when, in passing subsequent related
statutes, they added the terms "submerged areas" or "areas under
water" to foreshore lands." Under the principles of legal
construction, since R.A No. 1899 partakes of the nature of a
legislative grant of a sovereign right to municipalities and chartered
cities, that is, the right "to reclaim," it must be strictly construed
against the latter.
R.A. No. 1899 was, therefore, enacted to apply strictly to "foreshore
lands." Thus, when RREC was permitted by the City of Pasay,
through Ordinance Nos. 121 and 158 and the ensuing Reclamation
Agreement, to reclaim up to a one-kilometer stretch into the Manila
Bay, more than just "foreshore lands" was obviously contemplated
and involved. Furthermore, R.A. No. 1899 mandates that any
reclamation must be carried out by the municipality or chartered
city concerned2 with the aid of funds which it may borrow from third
persons or lending institution. 3 The reclamation of Manila Bay was
undertaken, not by Pasay City, but by RREC itself under a special
power of attorney from Pasay City using funds exclusively
borrowed by the latter from RREC. To compound the anomaly of it
all, the reclamation project itself was awarded by Pasay City to
RREC without any public bidding. Finally, to complete Pasay City's
absolute abdication of its duty to champion public over private
interest, RREC was granted an irrevocable option to purchase the
land reclaimed in lieu of simply paying for it using a determinable
and liquadated amount "in Philippine currency or in the currency in
which the principal has been originally received," 4 as required by
R.A. No. 1899. In fact, RREC began disposing of the land by
entering into contracts to sell with various third persons while the
reclamation project was still in progress and long before it acquired
any right of dominion over the lands yet to be reclaimed. These are
all blatant violations of R.A. No. 1899. Hence, Ordinance Nos. 121
and 158, no less than the Reclamation Agreement and the Contracts
to Sell it has spawned, should all be deemed null and void, the
reclamation itself being ultra vires.
2. P.D. No. 3-A is constitutional and valid
Applying the regalian doctrine, the State owns all waters and lands
of the public domain, including those physically reclaimed. As a
general rule, therefore, only the National Government can reclaim
foreshore lands and other submerged areas. At times, though, the
State, to effectuate an expressed public, policy, delagates some of
its sovereign powers either to the legislature or to some of its alter
egos. One such instance was R.A. No. 1899 which was intended to
increase the autonomy of local governments, an innovation
introduced by the Marcos administration. There is no doubt,
however, that R.A. No. 1899 was a mere public grant, a privilege
which may be withdrawn by the granting authority, the sovereign, in
the exercise of police power. This is precisely what President
Marcos did when he issued P.D. No. 3-A, a valid and effective
means of regaining the State's right to reclaim. It must be noted that
this decree was not revoked by President Aquino when she
assumed the presidency.
P.D. No. 3-A does not violate the equal protection clause, as claimed
by Pasay City and RREC, because, far from singling out the latter,
its terminology is simple and extensive enough to cover just about
any municipality or city. The decree was signed by President
Marcos under his emergency powers when martial law was in effect
throughout the country. Thus, it is not an undue delegation or
usurpation of legislation power. Neither does it authorize the taking
of property without just compensation, for it specifically allows
such payment, albeit based on quantum meruit. Incidentally, while
RREC attacks the constitutionality of P.D. No. 3-A, and only at this
late stage in the proceedings, it relied on this "quantum
meruit compensation" clause in the same decree when it filed a
claim before the then Ministry of Public Works way back in 1978
and again in 1983. This is an oddity which this Court takes notice of
in disallowing RREC from taking contrary positions regarding the
validity of a statute in this action. It cannot take advantage of a
provision of law even as it attacks the same.
Finally, the Court notes that the amended decision of the Court of
Appeals dated April 28, 1992, is based on inadequate evidence. Its
conclusion that RREC was able to reclaim 35 hectares is totally
unsupported by the dubious proof presented by Pasay City and
RREC.
In ruling in favor of Pasay City and RREC, the appellate court relied
mostly on three documents issued by the government to the RREC,
namely, the "Cost of Data for Items of Work Covered by the
Republic Real Estate Corporation for Work Performed in the Manila
Bay" issued by the Ministry of Public Highways, and two letters
both addressed to RREC Executive Vice President Vicente
Asuncion, Jr., one dated June 6, 1979, from then Minister of Public
Highways Baltazar Aquino, and another, dated June 10, 1981; from
then Solicitor General Estelito Mendoza. These documents,
however, never proved that RREC was able to reclaim 35 hectares.
In fact, the letter of Aquino, finding that RREC had reclaimed 55
hectares, was in its own words, merely "tentative, pending the
submittal of corroborative documents"; hence, it does not amount
to the "certification" contemplated in R.A. No. 1899. Mendoza's
letter, on the other hand, far from supporting RREC's
position, rejected RREC's proposal in the latter's attempt at
settlement. It is puzzling why the appellate court even considered
this letter in favor of RREC and Pasay City .
On the other hand, there is aimple proof that RREC was not able to
reclaim the 55 hectares which it claims it did, or even 35 hectares,
as found by the Court of Appeals as follows: aerial photographs of
the Manila Bay area in 1966 and 1968; photographs of the CCP
taken 1967 and 1968 during construction of the main building; and
the testimonies of the persons familiar with the circumstances
under which said photographs were taken, as well as the other
witnesses who were, one way or another, connected with the
construction of the CCP main building, including a member of the
Board of Directors of RREC.
3. RREC is entitled to some monetary award
While the extent of reclamation actually done by RREC is debatable,
there is no dispute that it did reclaim some portion of the Manila
Bay. In the preceding discussion, we declared the nullity of
Ordinace Nos. 121 and 158 and the Reclamation Agreement, which
are the wellsprings of RREC's right to be compensated. Its
reclamation efforts were also found to be ultra vires. Equity and
fairness, however, dictate that it be compensated for the work
actually performed by it. After all, the State cannot deny that it did
benefit from such reclamation. RREC was initially willing to settle
the case for P30,396,878.20. In view of the foregoing premises, we
believe that RREC should only be given the amount which the State
was willing to pay, that is P10,929,071.29, without legal interest. It is
axiomatic that legal interest is given either for the use of the money
(a loan or forbearance of money) or as a penalty for beach of an
obligation (damages). In the case of Eastern Shipping Lines, Inc. v.
Court of Appeals,5 the Court had occassion to set the guidelines by
which litigants may claim or be awarded interest as or by way of
actual or compensatory damages. Thus,
II. With regard particularly to an award of interest in the concept of
actual and compensatory damages, the rate of interest, as well as
the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment
of a sum of money, i.e., a loan or forbearance of money, the interest
due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In the absence of stipulation, the rate
of interest shall be 12% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject
to the provisions of Article 1169 of the Civil Code.
2. When an obligation not consisting of a loan or forbearance of
money, is breached, an interest on the amount of damages awarded
may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated
claims or damages can be established with reasonable certainty.
Accordingly, were the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is
made judicially or extrajudicially (Art. 1169, Civil Code) but when
such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date
the judgment of the court is made (at which time the quantification
damages may be deemed to have been reasonably ascertained).
The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged. . . . (Citations omitted)
These are the only circumstances under which interest in the
concept of actual or compensatory damages, liquidated or
otherwise, may be justified. In the case at bar, no loan or
forbearance of money is involved; neither is there any breach of
obligation. Consequently, the lone commitment of the State would
be the payment for services allegedly rendered, services for which
RREC would have the National Government cede to it its property,
the value of which has been inflated to unimaginable proportions
since the inception of the reclamation project. This is manifestly
cupidity at its worst. Neither should the state be penalized for
something for which it is entirely blameless. The circumstances
which led to the filing of these twin actions have long been
overtaken by supervening events, rendering the issues incipiently
raised moot and academic. Thus, RREC and Pasay City are, as they
should be, only entilled to P10,926,071.29. No more, no less.
Conclusion
For almost three decades, the Cultural Center of the Philippines has
been the principal, if not the sole, purveyor of the arts in this
country. It has weathered criticism, civil unrest, and "internecine"
politics. It relies on the occasional beneficence of loyal patrons, the
so-called "cultured" class scorned and spurned by the "masa."
Otherwise, it subsists on the rental income it receives from private
entities leasing portions of the CCP Complex. With the trial and
appellate courts upholding their claims, Pasay City and RREC wish
to dismember this bastion of cultural heritage and stunt its growth
by claiming ownership over a substantial portion of its property,
that which literally serves as its bloodline. This must not be
countenanced. The CCP is certainly not about to draw its curtains
and take a final bow. As Matthew Arnold said more than a century
ago, "I am a Liberal, yet I am a Liberal tempered by experience,
reflection, and renouncement, and I am, above all, a believer in
culture.
I vote to grant the State's petition, with the qualification adverted to
above.
PANGANIBAN, J., separate opinion;
I concur with the persuasive ponencia of Mr. Justice Fidel P.
Purisima, as fortified by the Separate Opinion of Mr. Justice
Reynato S. Puno, insofar as it (1) nullifies (a) the Reclamation
Agreement between Pasay City and the Republic Real Estate
Corporation (RREC) and (b) Pasay City Ordinance Nos. 121 and 158,
and (2) retains ownership of the reclaimed land in favor of the
Cultural Center of the Philippines. With due respect, I submit,
however, that the majority has no factual basis for its determination
of the compensation awarded to RREC and Pasay City.
(1) Nullity of Reclamation Agreement and Ordinance Nos. 121 and
158.
Pasay City justifies its execution of the Reclamation Agreement
with RREC and the passage of Ordinance Nos. 121 and 158 on the
basis of Republic Act No. 1899 (RA 1899), the law authorizing
chartered cities and municipalities to undertake the undertake the
reclamation of foreshore lands. The questioned Agreement and
Ordinance, however, cover submerged areas of the Manila Bay. As
explained in the ponencia, with which I agree, the legal and
common definition of foreshore land does not include areas that
are fully submerged by the sea.
The Manila Bay area is, therefore, definitely outside the scope of RA
1899. It remains part of the public domain and is, as such, outside
the commerce of man. It could not be the object of ordinary
contracts or ordinances. The questioned Agreement and
Ordinances, the objects of which involve such public property, are
thus null and void.
(2) Reclained Area
Belongs to CCP
As a consequence, the Cultural Center of the Philippines (CCP), to
which PD Nos. 15 and 774 have conveyed ownership of the
reclaimed land, remains the lawful owner of the subject land. Title
to the nine (9) lots, which Respondent Court wrongfully ordered to
be turned over to Pasay City, had long been issued in favor of CCP
(One subsequently to the GSIS as a successor-in-interest). Such
titles are unaffected by the claims of RREC and cannot be
collaterally attacked 1 in this litigation.
(3) No Factual Basis for
Determination of Compensation
Even if the Agreement and Ordinances were null and void, it cannot
be denied that RREC and the city government of Pasay spent time,
money and effort which undoubtedly inured to the benefit of the
government. It is a time-honored principle that no one, not even the
government, may be enriched at the expenses of
another,2 particularly one who, like RREC and Pasay City, acted on
good faith.
While RREC and Pasay City should be compensated for their work
on the reclamation project, I respectfully submit that the amount of
such compensation must be supported by substantial and material
proof of the reasonable expenses they incurred. But, the records of
the case are bereft of any such factual evidence.
However, the records do indicate some attempts of the parties to
reach an amicable settlement as a consequence of the
promulgation of PD 3-A by former President Ferdinand Marcos.
Thus, in 1978, RREC sought the amount of P30,396.878.20
representing the supposed monetory value of the reclamation work
that it had undertaken so far. The then Ministry of Public Highways
(MPH) (and later the solicitor general also) rejected this offer in
1981 and, instead, counteroffered P10,926,071.29 as the reasonable
value of such work. RREC replied that it would be consider such
amount only if it would bear six (6) percent interest per annum from
1962 up to the time of payment. It submitted other proposals, but all
were rejected by the government. No final extrajudicial settlement
was ever reached.
Obviously, the offers and counteroffer were made by the parties
with a view to arriving at compromise agreement. At that point, they
were not submitted as evidence, but only as a means of arriving at
a peaceful settlemet prior to judgment. By then, the case, which had
commenced in December 1961 and was still on appeal with the
Court of Appeals, was already dragging on for the two decades.
Nature of Compromise
A compromise is an agreement between two or more parties
whereby their differences are adjusted in a manner which they
mutually agree on, and which they prefer to "hope of gaining,
balanced by the danger of losing.3 The parties usually make
reciprocal concessions in order to avoid litigation or terminate a
pending one.4
However, basic is the rule on evidence that in civil cases, an offer of
compromise cannot be taken as an admission of liability; nor can it
be admissable as an evidence against the offeror. 5 The offer to
compromise a claim or a cause of action is not an admission that
the claim is valid, but merely admits that there is a dispute and that
an amount is to be paid to avoid or end the controversy.6 I submit
that an unaccepted offer or counteroffer of compromise cannot be
the basis of the sum to be adjudged in favor of or against a party,
more so if such sum is unsuported by competent evidence. In such
case, the court itself insofar as it adopts the amount either offered
or conteroffered would be bereft of factual basis for its decision.
Where the proposed compromise is not accepted, the parties to the
litigation would be back to square one; they have to present before
the court sufficient and credible evidence to prove their respective
claims.
As a rule, an offer or a counteroffer given in an effort to reach a
compromise should not be accorded evidentiary value on its face,
because by its very nature, a compromise is concessionary. And if
one of the parties does not concur, the court cannot impose an
amount based on the unaccepted offer, even if culpability of a party
has been duly established. The amount of any such liability must be
independently ascertained with competent evidence. Otherwise,
this Court would be setting a dangerous precedent. Hence, parties,
would not submit offers to compromise for fear that such offers, if
not accepted, would be used by the Court against them. Upon the
other hand, parties may offer bloated amounts in the hope that siad
sums could influence the court to eventually grant them a relief
more than they deserve. In any, event, the rationale for the policy
encouraging compromise would be defeated.
In the case at bar, we should bear in mind that when RREC
conceded in 1981 to the solicitor general's counteroffer of
P10,926,071.29, provided the amount would bear 6 percent interest
per annum, it was with the caveat that such interest rate was
already "very much less that the accepted rate of inflation that has
supervened since 1962 . . . ." Indeed, if we are to compare current
prices with those of three and a half decades ago, or even
seventheen years ago, such interest rate on the principal may no
longer compensate the 1962 expense. In other words, what may
have been a "fair and reasonable" compromise in 1981 may no
longer be acceptable at this time. In any event, the solicitor
general's counteroffer, not being supported with factual evidence,
still cannot be the basis of a judicial award.
Need to Receive Evidence of
Value of RREC Accomplishment
In the instant case, there appears no dispute that RREC has
undertaken partil work for the Manila Bay reclamation project to the
extent of 1,558,395 cubic meteres of dredge-fill work. In the words
of theponencia:
Undoubtedly, what RREC claimed for was the payment for what it
had done on, and for dredge-fill of 1,558.395 cubic meters used for
the reclamation project worked on.
This case must therefore be remanded for the purpose of receiving
evidence of the peso value of the 1,558,395 cubic meters of dredge-
fill work undisputedly done by RREC.
WHEREFORE, I vote for the following:
1. The RECLARATION of the nullity of (a) the Reclamation
Agreement Between Pasay City and RREC and (b) Ordinance Nos.
121 and 158 of Pasay City.
2. The RETENTION of ownership of the reclaimed land in favor of
the Cultural Center of the Philippines.
3. The REMAND of the case to the Commission composed of the
former Thirteenth Division of the Court of Appeals (consisting of
Associate Justices Arturo B. Buena, chairman; Minerva P. Gonzaga-
Reyes and Quirino D. Abad Santos Jr.) for the sole purpose of
receiving evidence of the peso value of the work accomplished by
RREC and Pasay City for which they shall be paid by the national
government.
Separate Opinions
ROMERO, J., separate opinion;
Culture doesn't save anything or any-one, it doesn't justify. But it's
a product of man: he projects himself into it, he recognizes himself
in it; that critical mirror alone offers him his image." So said Jean
Paul Sartre, one of the greatest philosophical thinkers of our time.
Matthew Arnold referred to it as the "pursuit of our total perfection"
or the "study of perfection." The English mathematican and
philosopher Alfred North Whitehead, placing premium on human
subjectivity, declared, "Culture is activity of thought, and
receptiveness to beauty and humane feeling.
Image, perfection, beauty, and feeling. These are elements which
are also associated with art and creation. Yet, art in itself is a multi-
faceted concept. The revered and, at times, controversial President
John Fitzgerald Kennedy, in one of his numerous speeches,
elevated art to the level of a pyscho-social necessity of man when
he said, ". . . (A)rt establishes the basic human truths which ust
serve as the touchstone of our judgment." Indeed, there is no
question that art satisfies one of the deepest spiritual needs of
man.
Of course, when one speaks of art and culture, he in fact speaks of
it in two ways: the abstract and the concrete. What is abstract is
conditioned by time; that which is and the concrete is ravaged by it.
While the concept of "culture and art" endures man's folies,
amassing innumerable, priceless enhancements as it effortlessly
slides through generations of human progress, its tangible
counterpart, that which is preserved for our children's appreciation,
is unfortunately fragile. Art works, music, architecture, literature,
and other cultural embellishments which exhibit extraordinary
longevity are proclaimed as national treasures, and rightly so, for
they are lasting testiminials of man's boundless imagination and
creativity, that single trait that places the human species above all
other creatures of the Almighty.
Most evidence of a culture's richness are lost, not in the tide of
nature's frivolity, but through man's foolishness and
capriciousness. Wars used to be the main culprit in the virtual
obliteration of the works of ancient scholars. We are now, and for
the past century or so, faced with a greater foe: progress. Progress
and development are the hallmarks of successful governance. Our
leaders, and there are so many of them now, decide "what is best"
for the public. Inopportunely, what is perceived to be in the "best
interest" of the majority in the name of "progress" may sometimes,
and in the long run, the calamitous to the entire people in terms of
cultural atrophy. This is the quandary in which this Court finds itself
as it attempts to weigh once more private rights against
sovereignty and the general welfare.
Background Facts
In a nutshell, the undisputed facts in these consolidated petitions
follow.
Pursuant to Republic Act No. 1899, which authorized chartered
cities and municipalities to reclaim adjoining foreshore lands, the
City Council of Pasay resolved to reclaim a portion of the Manila
Bay covering the Manila-Pasay-Parañaque bounderies and, for this
purpose, enacted Ordinance No. 121 on May 6, 1958. Two days later,
on the strength of said ordinance, Pasay City Mayor Pablo Cuneta
contracted with Republic Real Estate Corporation (RREC) for the
reclamation of portions of the Manila Bay. On April 21, 1959, the
City Council of Pasay amended Ordinance No. 121 by
enacting Ordinance No. 158. A new agreement between the parties
(the Reclamation Agreement) was executed three days thereafter,
whcih, among other things, granted the reclamation project to
RREC and gave it an irrevocable option to purchase a maximum of
60% of the area reclaimed at P10.00 per square meter, the amount
of which could be set off against any outstanding obligation of the
City to RREC. Such an option could only be effected within a year
from the time the City Engineer certified that 50 hectares had been
reclaimed. The reclamation itself was made by the RREC through
third parties who were awarded contracts on the various phases of
the project through public bidding. To raise more funds, RREC
entered into contracts to sell the reclaimed areas which it could
purchase from Pasay City by exercising its option under the
Reclamation Agreement.
Proceedings before the trial court
On December 19, 1961, the Republic of the Philippines filed
a complaint (amended on March 5, 1962) against Pasay City and
RREC for "Recovery of Possession and Damages with Writ of
Preliminary Preventive Injunction and Mandatory Injunction" before
Branch 7 of the then Court of First Instance of Rizal, Pasay City,
praying for the declaration of nullity of Ordinance Nos. 121 and 158,
the Reclamation Agreement, and the Contracts to Sell between
RREC and the buyers of the reclaimed land. Among other things,
the following matters were alleged: (a) the area reclaimed was
already reserved as a national park under Proclamation No. 41,
dated July 5, 1954 and Act No. 3915, hence, the subject of the
Reclamation Agreement was beyond man's commerce; (b)
Ordinance Nos. 121 and 158 were ultra vires and void ab initio for
being violative of R.A. No. 1899, because they involved the
reclamation of "submerged areas" and not "foreshore lands" as
allowed by said law; and (c) the Reclamation Agreement was illegal,
contrary to morals and public policy because it was executed with
neither authority from the National Government nor any public
bidding.
In their separate answer, Pasay City and RREC set forth the
following negative defenses: (a) Pasay City was empowered by R.A.
No. 1899 to reclaim any portion of the Manila Bay; (b) the area
reclaimed was not a portion of the Manila Bay Resort, which was
the area reserved as a national park under Proclamation No. 41 and
Act No. 3915; (c) under R.A. No. 1899, the term "foreshore lands"
meant much more than its technical definition and extended to
submerged areas beyond the water marks of the shore; and (d) all
the actuations of the City RREC regarding the reclamation project
were in accordance with R.A. No. 1899 and related laws.
On April 26, 1962, the trial court issued a writ of preliminary
injunction ordering Pasay City and RREC to refrain from their
activities at the Manila Bay. On January 10, 1968, however, RREC
filed a "Motion to Dismiss" the complaint on the ground that the
passage of Republic Act No. 5187 (otherwise known as the Public
Works Act) on September 16, 1967, rendered the issues raised by
the Republic of the Philippines moot and academic. Specifically,
RREC relied on Section 3 (m) thereof which stated that all
"contracts of city or municipal governments for the reclamation of
foreshore and submerged lands shall be respected" during the
construction by the national government of a sea wall and limited
access highway passing through the projected area of the
reclamation. In the meantime, the trial court allowed Jose Bautista
and others who allegedly bought in good faith and for value from
RREC some portions of the reclaimed land, to intervene in the
action and join cause with Pasay City and RREC. On the other
hand, the Pasay Law and Conscience Union, Inc. (PLCUI), a civic
organization, joined with the Republic of the Philippines and filed a
complaint in intervention.
On May 24, 1972, the court a quo rendered a judgment on the
pleadings, upholding the validity of Ordinance Nos. 121 and 158 of
the Reclamation Agreement; dismissing the complaint as well as
PLCUI's complaint in intervention; enjoining RREC and Pasay City
"to have all the plans and specifications in the reclamation
approved by the Director of Public Works, and to have all the
contracts and subcontracts for said reclamation awarded by means
of, and only after, public bidding"; and lifting the preliminary
injunction, dated April 26, 1962, as soon as said conditions shall
have been met by RREC and Pasay City.
Proceedings before the Court of Appeals
During the pendency of the State's appeal with the Court of
Appeals, President Marcos issued on January 11, 1973,
Pressidential Decree No. 3-A, providing, inter alia, that "the
reclamation of areas under water, whether foreshore or inland, shall
be limited to the National Government or any person aurhorized by
it under a proper contract," and that it shall take over any validly
existing reclamation contract on the basis of quantum meruit. On
the strength of P.D. No. 3-A, the Commission of Public Highways
and the Construction Development Corporation of the Philippines
(CDCP) took over the reclamation contract between Pasay City and
RREC for the construction of the Manila-Cavite City Coastal Road.
CDCP development the area already reclaimed by RREC and
continued reclaiming where the latter left off. These areas, which
came to be known as the Cultural Center Complex and the Financial
Center Complex, were registered in the name of the CCP.
On February 4, 1977, the Public Estates Authority (PEA) was
created by virtue of Presidential Decree No. 1084. It was designated
as the agency primarily responsible for all the reclaation projects of
the national government. The PEA then took over the Manila Bay
reclamation contract between the Republic of the Philippines and
CDCP.
In 1978, RREC filed a claim for P30,396,878.20 with the ten Ministry
of Public Highways (MPH) for its actual reclamation in the CCP
Complex before CDCP assumed authority over the project. The
MPH, on the other hand, determined the amount of reclamation by
RREC to be only P10,926,071.29. Later, RREC offered to settle the
case with the Office of the Solicitor General for the original amount
of its claim. The OSG would, however, settle only for the lesser
amount assessed by the MPH. This was acceptable to RREC only
with an additional 6% interest per annum from 1962 up to the time
of payment. Within the decade that followed, RREC's proposals for
settling the case ballooned from a P35,455,011.31 cash settlement
or a property settlement of 3.5 hectares in the CCP Complex
covered by TCT No. 75676, to a cash settlement of P175 million,
then later, P245 million. The Office of the President, to which the
proposals were referred, rejected the same. In other words, no
amicable settlement was reached.
The first decision
On January 28, 1992, the Court of Appeals rendered a decision,
affirming the trial court's judgment with the following modifications:
(a) the requirement on public bidding and submission of plans and
specifications to the DPWH by RREC was deleted; (b) the Republic
of the Philippines was ordered to turn over to Pasay City the
ownership and possession of the 21 hectares already reclaimed by
RREC; and (c) RREC's irrevocable option to purchase 60% of the 21
hectares it had already reclaimed was sustained.
The amended decision
On April 28, 1992, the appellate court rendered an amended
decision. It agreed with the position of Pasay City and RREC in their
motion for reconsideration that the actual the reclaimed was 55, not
21, hectares. Considering, however, that latter were willing to
accept 35 hectares of open land in the CCP Complex, the court
ordered the Republic of the Philippines to reconvey to Pasay City
and RREC said parcels of land comprising nine lots registered in
the name of CCP. This is the decision being assailed by both parties
in the instant consolidated petitions.
Issues raised
In G.R. No. 103882
Are Ordinance Nos. 121 and 158, as well as the Reclamation
Agreement between Pasay City and RREC, valid and bindings as
against the National Government and the Cultural Center of the
Philippines?
The Republic of the Philippines claims that the Court of Appeals
erred in sustaining the validity of Ordinance Nos. 121 and 158 and
the Reclamation Agreement executed pursuant thereto, and in
ordering the reconveyance of the nine lots titled in the name of CCP
to the City of Pasay and RREC. It stresses that the reclamation
project undertaken by Pasay City and RREC violated R.A. No. 1899,
especially since the subject areas were "submerged lands", not
"foreshore lands" which are the only lands that may be reclaimed
by local governments under said law.
The CCP, as intervenor in G.R. No. 103882, alleges that the appellate
court's amended decision was not binding upon it because it was
never made a party to the action and that it was compelled to
intervene in the instant petitions to protect its proprietary interests.
It claims that the Court of Appeals erred in findings that the actual
area reclaimed by RREC was 55 hectares, and in ordering it to turn
over to RREC and Pasay City the nine lots registered in its name.
In G.R. No. 105276
Is P.D. 3-A constitutional?
The City of Pasay and RREC claim it is not and that the Court of
Apealls erred in not ruling upon its constitutionality, considering
that said decree deprived them of their property and rights of
ownership without due process of law and without payment of just
compensation, and that it violated the non-impairment clause of the
Constitution; and in not awarding them damages for the alleged
illegal takeover of the reclamation contract and the reclaimed area.
Thus, they pray for the modification of the assailed amended
decision by awarding them damages and conveying to them, not
merely 35, but 55 hectares of the land allegedly reclaimed.
The Commissioner's Report
On September 10, 1997, the Court's Second Division issued a
Resolution remanding the case to the Court of Appeals to receive
further evidence and determine the actual area reclaimed by RREC
and the arreas of the CCP Complex which are "open spaces." In its
Commissioner's Report dated November 25, 1997, the appellate
court conclude that the CCP and the Solicitor General failed to
refute its earleir finding that RREC and Pasay City were able to
reclaim 55 hectares of the Manila Bay.
Discussion of Issues
1. Ordinance Nos. 121 and 158, as well as the Reclamation
Agreement between Pasay City and RREC, are null and void for
violating the clear and unambiguous provisions of R.A. No. 1899.
In 1984, the term "foreshore lands" was defined by this Court in the
case of Republic v. Court of Appeals.1Although the subject of this
case was part of the Laguna de Bay, the Court nevertheless applied
Bouvier's definition of "foreshore lands," viz: "that part of the land
immediately in front of the shore; the part which is between high
and low water marks, and alternately covered with water and left
dry by the flux and reflux of the tides. It is indicated by a middle line
between the highest and lowest tides."
This judicial interpretation did not escape the attention of the
legislature in the enactment of later related laws. In R.A. No. 5187,
for example, Congress specified the areas that may be reclaimed in
the construction of the Manila-Cavite City Coastal Road to include
both "foreshore and submerged areas." The Chief Executive also
recognized the disparity between the two terms when he signed
into law P.D. No. 3-A, authorizing the reclamation of "areas under
water, whether foreshore or inland." Similarly, P.D. No. 1094,
creating the Public Estates authority to "reclaim land, including
foreshore and submerged areas."
Initially, legislative intent and later jurisprudential usage clearly
delimited the term "foreshore lands" to that part of the land where
the tides literally converge, thus excluding submerged lands. This
restricted explication was unquestionably ackonwledged by the
other branches of government when, in passing subsequent related
statutes, they added the terms "submerged areas" or "areas under
water" to foreshore lands." Under the principles of legal
construction, since R.A No. 1899 partakes of the nature of a
legislative grant of a sovereign right to municipalities and chartered
cities, that is, the right "to reclaim," it must be strictly construed
against the latter.
R.A. No. 1899 was, therefore, enacted to apply strictly to "foreshore
lands." Thus, when RREC was permitted by the City of Pasay,
through Ordinance Nos. 121 and 158 and the ensuing Reclamation
Agreement, to reclaim up to a one-kilometer stretch into the Manila
Bay, more than just "foreshore lands" was obviously contemplated
and involved. Furthermore, R.A. No. 1899 mandates that any
reclamation must be carried out by the municipality or chartered
city concerned2 with the aid of funds which it may borrow from third
persons or lending institution. 3 The reclamation of Manila Bay was
undertaken, not by Pasay City, but by RREC itself under a special
power of attorney from Pasay City using funds exclusively
borrowed by the latter from RREC. To compound the anomaly of it
all, the reclamation project itself was awarded by Pasay City to
RREC without any public bidding. Finally, to complete Pasay City's
absolute abdication of its duty to champion public over private
interest, RREC was granted an irrevocable option to purchase the
land reclaimed in lieu of simply paying for it using a determinable
and liquadated amount "in Philippine currency or in the currency in
which the principal has been originally received," 4 as required by
R.A. No. 1899. In fact, RREC began disposing of the land by
entering into contracts to sell with various third persons while the
reclamation project was still in progress and long before it acquired
any right of dominion over the lands yet to be reclaimed. These are
all blatant violations of R.A. No. 1899. Hence, Ordinance Nos. 121
and 158, no less than the Reclamation Agreement and the Contracts
to Sell it has spawned, should all be deemed null and void, the
reclamation itself being ultra vires.
2. P.D. No. 3-A is constitutional and valid
Applying the regalian doctrine, the State owns all waters and lands
of the public domain, including those physically reclaimed. As a
general rule, therefore, only the National Government can reclaim
foreshore lands and other submerged areas. At times, though, the
State, to effectuate an expressed public, policy, delagates some of
its sovereign powers either to the legislature or to some of its alter
egos. One such instance was R.A. No. 1899 which was intended to
increase the autonomy of local governments, an innovation
introduced by the Marcos administration. There is no doubt,
however, that R.A. No. 1899 was a mere public grant, a privilege
which may be withdrawn by the granting authority, the sovereign, in
the exercise of police power. This is precisely what President
Marcos did when he issued P.D. No. 3-A, a valid and effective
means of regaining the State's right to reclaim. It must be noted that
this decree was not revoked by President Aquino when she
assumed the presidency.
P.D. No. 3-A does not violate the equal protection clause, as claimed
by Pasay City and RREC, because, far from singling out the latter,
its terminology is simple and extensive enough to cover just about
any municipality or city. The decree was signed by President
Marcos under his emergency powers when martial law was in effect
throughout the country. Thus, it is not an undue delegation or
usurpation of legislation power. Neither does it authorize the taking
of property without just compensation, for it specifically allows
such payment, albeit based on quantum meruit. Incidentally, while
RREC attacks the constitutionality of P.D. No. 3-A, and only at this
late stage in the proceedings, it relied on this "quantum
meruit compensation" clause in the same decree when it filed a
claim before the then Ministry of Public Works way back in 1978
and again in 1983. This is an oddity which this Court takes notice of
in disallowing RREC from taking contrary positions regarding the
validity of a statute in this action. It cannot take advantage of a
provision of law even as it attacks the same.
Finally, the Court notes that the amended decision of the Court of
Appeals dated April 28, 1992, is based on inadequate evidence. Its
conclusion that RREC was able to reclaim 35 hectares is totally
unsupported by the dubious proof presented by Pasay City and
RREC.
In ruling in favor of Pasay City and RREC, the appellate court relied
mostly on three documents issued by the government to the RREC,
namely, the "Cost of Data for Items of Work Covered by the
Republic Real Estate Corporation for Work Performed in the Manila
Bay" issued by the Ministry of Public Highways, and two letters
both addressed to RREC Executive Vice President Vicente
Asuncion, Jr., one dated June 6, 1979, from then Minister of Public
Highways Baltazar Aquino, and another, dated June 10, 1981; from
then Solicitor General Estelito Mendoza. These documents,
however, never proved that RREC was able to reclaim 35 hectares.
In fact, the letter of Aquino, finding that RREC had reclaimed 55
hectares, was in its own words, merely "tentative, pending the
submittal of corroborative documents"; hence, it does not amount
to the "certification" contemplated in R.A. No. 1899. Mendoza's
letter, on the other hand, far from supporting RREC's
position, rejected RREC's proposal in the latter's attempt at
settlement. It is puzzling why the appellate court even considered
this letter in favor of RREC and Pasay City .
On the other hand, there is aimple proof that RREC was not able to
reclaim the 55 hectares which it claims it did, or even 35 hectares,
as found by the Court of Appeals as follows: aerial photographs of
the Manila Bay area in 1966 and 1968; photographs of the CCP
taken 1967 and 1968 during construction of the main building; and
the testimonies of the persons familiar with the circumstances
under which said photographs were taken, as well as the other
witnesses who were, one way or another, connected with the
construction of the CCP main building, including a member of the
Board of Directors of RREC.
3. RREC is entitled to some monetary award
While the extent of reclamation actually done by RREC is debatable,
there is no dispute that it did reclaim some portion of the Manila
Bay. In the preceding discussion, we declared the nullity of
Ordinace Nos. 121 and 158 and the Reclamation Agreement, which
are the wellsprings of RREC's right to be compensated. Its
reclamation efforts were also found to be ultra vires. Equity and
fairness, however, dictate that it be compensated for the work
actually performed by it. After all, the State cannot deny that it did
benefit from such reclamation. RREC was initially willing to settle
the case for P30,396,878.20. In view of the foregoing premises, we
believe that RREC should only be given the amount which the State
was willing to pay, that is P10,929,071.29, without legal interest. It is
axiomatic that legal interest is given either for the use of the money
(a loan or forbearance of money) or as a penalty for beach of an
obligation (damages). In the case of Eastern Shipping Lines, Inc. v.
Court of Appeals,5 the Court had occassion to set the guidelines by
which litigants may claim or be awarded interest as or by way of
actual or compensatory damages. Thus,
II. With regard particularly to an award of interest in the concept of
actual and compensatory damages, the rate of interest, as well as
the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment
of a sum of money, i.e., a loan or forbearance of money, the interest
due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the
time it is judicially demanded. In the absence of stipulation, the rate
of interest shall be 12% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject
to the provisions of Article 1169 of the Civil Code.
2. When an obligation not consisting of a loan or forbearance of
money, is breached, an interest on the amount of damages awarded
may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated
claims or damages can be established with reasonable certainty.
Accordingly, were the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is
made judicially or extrajudicially (Art. 1169, Civil Code) but when
such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date
the judgment of the court is made (at which time the quantification
damages may be deemed to have been reasonably ascertained).
The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged. . . . (Citations omitted)
These are the only circumstances under which interest in the
concept of actual or compensatory damages, liquidated or
otherwise, may be justified. In the case at bar, no loan or
forbearance of money is involved; neither is there any breach of
obligation. Consequently, the lone commitment of the State would
be the payment for services allegedly rendered, services for which
RREC would have the National Government cede to it its property,
the value of which has been inflated to unimaginable proportions
since the inception of the reclamation project. This is manifestly
cupidity at its worst. Neither should the state be penalized for
something for which it is entirely blameless. The circumstances
which led to the filing of these twin actions have long been
overtaken by supervening events, rendering the issues incipiently
raised moot and academic. Thus, RREC and Pasay City are, as they
should be, only entilled to P10,926,071.29. No more, no less.
Conclusion
For almost three decades, the Cultural Center of the Philippines has
been the principal, if not the sole, purveyor of the arts in this
country. It has weathered criticism, civil unrest, and "internecine"
politics. It relies on the occasional beneficence of loyal patrons, the
so-called "cultured" class scorned and spurned by the "masa."
Otherwise, it subsists on the rental income it receives from private
entities leasing portions of the CCP Complex. With the trial and
appellate courts upholding their claims, Pasay City and RREC wish
to dismember this bastion of cultural heritage and stunt its growth
by claiming ownership over a substantial portion of its property,
that which literally serves as its bloodline. This must not be
countenanced. The CCP is certainly not about to draw its curtains
and take a final bow. As Matthew Arnold said more than a century
ago, "I am a Liberal, yet I am a Liberal tempered by experience,
reflection, and renouncement, and I am, above all, a believer in
culture.
I vote to grant the State's petition, with the qualification adverted to
above.
PANGANIBAN, J., separate opinion;
I concur with the persuasive ponencia of Mr. Justice Fidel P.
Purisima, as fortified by the Separate Opinion of Mr. Justice
Reynato S. Puno, insofar as it (1) nullifies (a) the Reclamation
Agreement between Pasay City and the Republic Real Estate
Corporation (RREC) and (b) Pasay City Ordinance Nos. 121 and 158,
and (2) retains ownership of the reclaimed land in favor of the
Cultural Center of the Philippines. With due respect, I submit,
however, that the majority has no factual basis for its determination
of the compensation awarded to RREC and Pasay City.
(1) Nullity of Reclamation Agreement and Ordinance Nos. 121 and
158.
Pasay City justifies its execution of the Reclamation Agreement
with RREC and the passage of Ordinance Nos. 121 and 158 on the
basis of Republic Act No. 1899 (RA 1899), the law authorizing
chartered cities and municipalities to undertake the undertake the
reclamation of foreshore lands. The questioned Agreement and
Ordinance, however, cover submerged areas of the Manila Bay. As
explained in the ponencia, with which I agree, the legal and
common definition of foreshore land does not include areas that
are fully submerged by the sea.
The Manila Bay area is, therefore, definitely outside the scope of RA
1899. It remains part of the public domain and is, as such, outside
the commerce of man. It could not be the object of ordinary
contracts or ordinances. The questioned Agreement and
Ordinances, the objects of which involve such public property, are
thus null and void.
(2) Reclained Area
Belongs to CCP
As a consequence, the Cultural Center of the Philippines (CCP), to
which PD Nos. 15 and 774 have conveyed ownership of the
reclaimed land, remains the lawful owner of the subject land. Title
to the nine (9) lots, which Respondent Court wrongfully ordered to
be turned over to Pasay City, had long been issued in favor of CCP
(One subsequently to the GSIS as a successor-in-interest). Such
titles are unaffected by the claims of RREC and cannot be
collaterally attacked 1 in this litigation.
(3) No Factual Basis for
Determination of Compensation
Even if the Agreement and Ordinances were null and void, it cannot
be denied that RREC and the city government of Pasay spent time,
money and effort which undoubtedly inured to the benefit of the
government. It is a time-honored principle that no one, not even the
government, may be enriched at the expenses of
another,2 particularly one who, like RREC and Pasay City, acted on
good faith.
While RREC and Pasay City should be compensated for their work
on the reclamation project, I respectfully submit that the amount of
such compensation must be supported by substantial and material
proof of the reasonable expenses they incurred. But, the records of
the case are bereft of any such factual evidence.
However, the records do indicate some attempts of the parties to
reach an amicable settlement as a consequence of the
promulgation of PD 3-A by former President Ferdinand Marcos.
Thus, in 1978, RREC sought the amount of P30,396.878.20
representing the supposed monetory value of the reclamation work
that it had undertaken so far. The then Ministry of Public Highways
(MPH) (and later the solicitor general also) rejected this offer in
1981 and, instead, counteroffered P10,926,071.29 as the reasonable
value of such work. RREC replied that it would be consider such
amount only if it would bear six (6) percent interest per annum from
1962 up to the time of payment. It submitted other proposals, but all
were rejected by the government. No final extrajudicial settlement
was ever reached.
Obviously, the offers and counteroffer were made by the parties
with a view to arriving at compromise agreement. At that point, they
were not submitted as evidence, but only as a means of arriving at
a peaceful settlemet prior to judgment. By then, the case, which had
commenced in December 1961 and was still on appeal with the
Court of Appeals, was already dragging on for the two decades.
Nature of Compromise
A compromise is an agreement between two or more parties
whereby their differences are adjusted in a manner which they
mutually agree on, and which they prefer to "hope of gaining,
balanced by the danger of losing.3 The parties usually make
reciprocal concessions in order to avoid litigation or terminate a
pending one.4
However, basic is the rule on evidence that in civil cases, an offer of
compromise cannot be taken as an admission of liability; nor can it
be admissable as an evidence against the offeror. 5 The offer to
compromise a claim or a cause of action is not an admission that
the claim is valid, but merely admits that there is a dispute and that
an amount is to be paid to avoid or end the controversy. 6 I submit
that an unaccepted offer or counteroffer of compromise cannot be
the basis of the sum to be adjudged in favor of or against a party,
more so if such sum is unsuported by competent evidence. In such
case, the court itself insofar as it adopts the amount either offered
or conteroffered would be bereft of factual basis for its decision.
Where the proposed compromise is not accepted, the parties to the
litigation would be back to square one; they have to present before
the court sufficient and credible evidence to prove their respective
claims.
As a rule, an offer or a counteroffer given in an effort to reach a
compromise should not be accorded evidentiary value on its face,
because by its very nature, a compromise is concessionary. And if
one of the parties does not concur, the court cannot impose an
amount based on the unaccepted offer, even if culpability of a party
has been duly established. The amount of any such liability must be
independently ascertained with competent evidence. Otherwise,
this Court would be setting a dangerous precedent. Hence, parties,
would not submit offers to compromise for fear that such offers, if
not accepted, would be used by the Court against them. Upon the
other hand, parties may offer bloated amounts in the hope that siad
sums could influence the court to eventually grant them a relief
more than they deserve. In any, event, the rationale for the policy
encouraging compromise would be defeated.
In the case at bar, we should bear in mind that when RREC
conceded in 1981 to the solicitor general's counteroffer of
P10,926,071.29, provided the amount would bear 6 percent interest
per annum, it was with the caveat that such interest rate was
already "very much less that the accepted rate of inflation that has
supervened since 1962 . . . ." Indeed, if we are to compare current
prices with those of three and a half decades ago, or even
seventheen years ago, such interest rate on the principal may no
longer compensate the 1962 expense. In other words, what may
have been a "fair and reasonable" compromise in 1981 may no
longer be acceptable at this time. In any event, the solicitor
general's counteroffer, not being supported with factual evidence,
still cannot be the basis of a judicial award.
Need to Receive Evidence of
Value of RREC Accomplishment
In the instant case, there appears no dispute that RREC has
undertaken partil work for the Manila Bay reclamation project to the
extent of 1,558,395 cubic meteres of dredge-fill work. In the words
of theponencia:
Undoubtedly, what RREC claimed for was the payment for what it
had done on, and for dredge-fill of 1,558.395 cubic meters used for
the reclamation project worked on.
This case must therefore be remanded for the purpose of receiving
evidence of the peso value of the 1,558,395 cubic meters of dredge-
fill work undisputedly done by RREC.
WHEREFORE, I vote for the following:
1. The RECLARATION of the nullity of (a) the Reclamation
Agreement Between Pasay City and RREC and (b) Ordinance Nos.
121 and 158 of Pasay City.
2. The RETENTION of ownership of the reclaimed land in favor of
the Cultural Center of the Philippines.
3. The REMAND of the case to the Commission composed of the
former Thirteenth Division of the Court of Appeals (consisting of
Associate Justices Arturo B. Buena, chairman; Minerva P. Gonzaga-
Reyes and Quirino D. Abad Santos Jr.) for the sole purpose of
receiving evidence of the peso value of the work accomplished by
RREC and Pasay City for which they shall be paid by the national
government.
Footnotes
G.R. No. 160145 November 11, 2005
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
PEDRO O. ENCISO, Respondent.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules
of Court, as amended, assailing the Decision 1 of the Court of Appeals
(CA) dated September 26, 2003, which affirmed the Decision 2 of the
Regional Trial Court (RTC), Iba, Zambales, Branch 71, promulgated on
July 31, 2001 in LRC Case No. RTC-N-75-I. The CA and the trial court
adjudicated Lot No. 2278-A, Cad. 652-D, Masinloc Cadastre in favor of
respondent Pedro O. Enciso, pursuant to Section 29 of Presidential
Decree (P.D.) No. 1529.
The facts, as culled from the records of the case, show that on April 24,
2000, the respondent, alleging to be the owner in fee simple of a parcel
of residential land located in Barangay South Poblacion, Masinloc,
Zambales, filed a petition for land registration before the RTC of Iba,
Zambales. The lot is described as follows:
A parcel of land (Lot 2278-A of the subdivision plan Csd-03-012562-D
being a portion of Lot 2278, Cad. 652-D L.R.C. Rec. No.), situated in the
Barrio of South Poblacion, Municipality of Masinloc, Province of
Zambales. Bounded on the NW., along line 1-2 by Sta. Lucia Street; on
the NE., along line 2-3 by Capt. Albright Street; on the SE. & SW. along
line 3-4-1 by Lot 2278-B of the subd. plan. Beginning at a point marked
"1" on plan being N. 39 deg. 35’E., 12.05 m. from BLLM.1,
Cad. 652-D.
thence N. 16 deg. 13’E., 32.48 m. to point. 2;
thence S. 75 deg. 05’E., 44.83 m. to point. 3;
thence S. 16 deg. 19’W., 33.36 m. to point. 4;
thence N. 73 deg. 57’W., 44.76 m. to point. of;
beginning; containing an area of ONE THOUSAND FOUR HUNDRED
SEVENTY-FIVE (1,475) square meters. All points referred to are
indicated on the plan and are marked on the ground by P.S. cyl. conc.
mons. 15 x 40 cms. Bearings; true; date of original survey; Sept. 1927-
July 1928 and that of the subdivision survey; July 22, 1999 and was
approved on Jan. 20, 2000.3
The respondent averred, inter alia, that he acquired title to the said lot by
virtue of an extrajudicial settlement of estate and quitclaim on March 15,
1999; the said property is not tenanted or occupied by any person other
than the respondent and his family who are in actual physical possession
of the same; and the respondent and his predecessors-in-interest have
been in continuous, peaceful, open, notorious, uninterrupted and
adverse possession of the land in the concept of an owner for not less
than 30 years immediately preceding the filing of the application.4
Petitioner Republic of the Philippines, through the Office of the Solicitor
General (OSG), opposed the application on the following grounds: (a)
neither the respondent nor his predecessors-in-interest have been in
open, continuous, exclusive, and notorious possession and occupation of
the subject land since June 12, 1945 or prior thereto; (b) the respondent
failed to adduce any muniment of title and/or the tax declaration with the
application to prove bona fideacquisition of the land applied for or its
open, continuous, exclusive and notorious possession and occupation
thereof in the concept of owner since June 12, 1945 or prior thereto; (c)
the alleged tax declaration adverted to in the application does not appear
to be genuine and the tax declarations indicate such possession to be of
recent vintage; (d) the claim of ownership in fee simple on the basis of
Spanish title or grant can no longer be availed of by the respondent
considering that he failed to file an appropriate application for registration
within the period of six months from February 16, 1976 as required by
P.D. No. 892; and (e) the subject land is a portion of the public domain
belonging to the Republic of the Philippines which is not subject to
private appropriation.5
After ascertaining that the jurisdictional requirements for the application
were done in accordance with the law during the initial hearing 6 on
November 9, 2000, the trial court issued an Order of Default 7 on January
3, 2001 against all persons with the exception of the government.
The respondent presented tax receipts to show that the property was
declared for taxation purposes in his name. He also testified that he
acquired the property by inheritance from his deceased father, Vicente
Enciso, who died on May 18, 1991. He then immediately took
possession of the property and constructed a house thereon in 1991. On
March 15, 1999, he and his siblings executed an extrajudicial settlement
of estate where the land was adjudicated in his favor.
The respondent further narrated that the property was originally owned
by the Municipality of Masinloc, Zambales. On October 5, 1968, the
municipality passed Resolution No. 71,8 undertaking to construct a road
along the shoreline of the poblacion, but requiring landowners adjoining
the roads to share in the expenses for an inner wall adjacent to their lots.
In view of this, the same resolution provided that:
WHEREAS, where the above landowners share in the construction of the
roads, the same may be given the priority to acquire such additional
available areas by purchase, if such additional areas are not needed by
the government for public use, the advances of the landowners as a
result of his [sic] construction (inner wall) be considered as price of the
land, provided that the cost and value of the inner wall exceeds the
assessed value of the land, and if the cost of the inner wall is less than
the assessed value of the land, the landowners will have to pay the
corresponding balance to the government; …9
On March 8, 1969, the Municipality of Masinloc, Zambales passed
supplementary Resolution No. 102,10 which stated that in consideration
of the financial assistance extended by the abutting property owners, and
because the government no longer needed the additional areas for
public use, the municipality was authorizing the Municipal Mayor to enter
into and sign deeds of purchase between the municipality and the
landowners concerned. Consequently, the Municipal Council of Masinloc,
Zambales unanimously approved Resolution No. 102-A 11 dated March
15, 1969, authorizing its mayor to execute a deed of sale in favor of
Honorato Edaño, covering a portion of the reclaimed lots no longer
needed for public use. Honorato was thus entitled to buy the lot for his
help in carrying out the project envisioned in Resolution No. 71, and after
the submission of an itemized statement of the cost of the construction of
the inner wall along Sta. Lucia Street.
Immediately thereafter, the Municipality of Masinloc, Zambales,
represented by its Mayor, P.A. Edaño, executed a Deed of Absolute
Sale12 covering a piece of reclaimed land containing more or less 2,790
square meters in favor of Honorato Edaño. The deed stated that the
vendee constructed the inner wall needed to facilitate the fabrication of a
portion of Sta. Lucia Street, which was opposite his lot, and the
extensions of Magsaysay and Capt. Albright Streets at a total expense of
₱1,683.80. Considering that the assessed value of the lot was
₱2,092.50, or ₱408.70
more than the vendee spent for the construction of the inner wall, the
vendee paid ₱408.70 to the vendor.
The respondent admitted that Honorato was his uncle, being his father’s
half-brother.13 He further narrated that on December 9, 1980, the
spouses Honorato and Esperanza Edaño sold the lot to Vicente B.
Enciso for ₱2,092.50 viaa Deed of Absolute Sale.14 On January 17,
1981, Vicente Enciso, Natividad Edaño Asuncion and Thelma A. Edaño
entered into a Deed of Partition 15 involving the same parcel of land.
Vicente was awarded one-half of the total area of the property, 1,398
square meters, more or less; Natividad and Thelma got one-fourth each,
or approximately 697.5 square meters individually.
No cross-examination was conducted and no evidence was adduced by
the government to controvert the application for registration.
On May 8, 2001, Director Felino M. Cortez of the Department on
Registration submitted the Report16 of the Land Registration Authority,
informing the trial court that it was not in a position to verify whether the
parcel of land subject of registration was already covered by a land
patent and previously approved isolated survey. Acting on this report, the
trial court directed the Lands Management Bureau, the Community
Environment and Natural Resources Office of Iba, Zambales, and the
Department of Environment and Natural Resources Regional Executive
Director for Region III, San Fernando, Pampanga, to submit a report on
the status of the parcel of land.17
Without waiting for the final report, the trial court granted the application
for registration on July 31, 2001, the dispositive portion of the decision
reads:
WHEREFORE, this Court, after confirming the Order of General Default
entered into the record of this case on January 3, 2001 hereby
adjudicates Lot No. 2278-A, Cad. 652-D, Masinloc Cadastre, containing
an area of 1,475 square meters, situated at Brgy. South Poblacion,
Masinloc, Zambales, Philippines, as appearing on the approved Plan No.
Csd-03-012562-D (Exhibit "M") and also in the Technical Description of
said lot (Exhibit "K") in favor of the applicant whose address is at Brgy.
South Poblacion, Masinloc, Zambales, Philippines, in accordance with
Section 29 of Presidential Decree No. 1529. This adjudication however is
subject to the various easements/reservations provided for under
pertinent laws, Presidential Decree and/or Presidential Letters of
Instruction, which should be annotated/projected in the title to be issued.
Once this decision becomes final, let the corresponding decree and title
be issued.
SO ORDERED.18
The trial court ruled that the respondent satisfactorily proved his
ownership in fee simple, as well as the identity of the land sought to be
titled. Likewise, the trial court found that the respondent, as well as his
predecessors-in-interest, had been in open, peaceful, continuous, public,
adverse, and under a bona fide claim of ownership. According to the trial
court, there was no evidence that the subject parcel of land was within
any government reservation, or that the applicant was disqualified from
owning real property under the Constitution.19
The Republic of the Philippines appealed the case before the CA,
contending that the trial court erred in granting the application despite his
failure to prove registrable title over Lot No. 2278-A.
The CA disposed of the appeal on September 26, 2003 and affirmed the
decision of the trial court. The fallo of the decision reads:
WHEREFORE, premises considered, the assailed decision dated July
31, 2001 of the RTC, Branch 71 of Iba, Zambales in LRC Case No. RTC-
N-75-1 is hereby AFFIRMED.
SO ORDERED.20
The petitioner dispensed with the filing of a motion for reconsideration
and forthwith filed the instant petition.
The OSG assigned the following error to the appellate court:
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
GRANTING RESPONDENT’S PETITION FOR REGISTRATION SANS
ANY SHOWING THAT THE SUBJECT PROPERTY WAS PREVIOUSLY
DECLARED ALIENABLE AND DISPOSABLE LANDS OF THE PUBLIC
DOMAIN.21
The petitioner contends that the first and primordial element in order to
warrant the registration of title is to show that the land must be an
alienable and disposable land of the public domain. On this note, the
petitioner believes that the respondent failed to adduce any evidence to
show that the subject land was already previously declared part of such
alienable and disposable land of the public domain. Furthermore, the
petitioner adds that under the Regalian doctrine, all lands of the public
domain belong to the State, and those not otherwise appearing to be
clearly within private ownership are presumed to belong to it.
In his comment to the petition, the respondent asserts that the CA was
correct in affirming the decision of the land registration court. The
respondent cites the following justification of the CA in supporting his
claim over Lot No. 2278-A:
Records reveal that subject land is a residential land owned by the
Municipality of Masinloc, Zambales. The Municipality of Masinloc,
through Resolutions 71, 102 and 102-A-29 sold the subject land to
Honorato Edaño as evidenced by the Deed of Absolute Sale dated
March 31, 1969 executed by the Municipal Mayor.
Article 423 of the Civil Code provides that:
"Art. 423. The property of provinces, cities, and municipalities is divided
into property for public use and patrimonial property."
Properties of political subdivision[s] which are patrimonial in character
may be alienated. By analogy, when a municipality’s properties for public
use are no longer intended for such use, the same become patrimonial
and may be the subject of a contract. Thus, the Deed of Absolute Sale
executed by and between the Municipal Mayor of Masinloc and Honorato
Edaño was a valid contract. Subject land was likewise sold by Honorato
Edaño to petitioner-appellee’s father, Vicente Enciso, by virtue of a Deed
of Absolute Sale. From then, subject land changed hand until it was
acquired by petitioner-appellee when his siblings executed an
Extrajudicial Partition assigning said land to him. It was declared for
taxation purposes in his name under Tax Declaration No. 007-0700R. …
… November 7, 1936, the National Assembly approved Commonwealth Act
Subject land was reclassified as residential. It was already segregated
from the public domain and assumed the character of private ownership.
It was reclaimed by the Municipality of Masinloc and eventually
adjudicated to Honorato Edaño. The Municipality of Masinloc must have
been in possession of the subject land even before 1969 considering that
it was originally surveyed way back in 1927-1928. In the exercise of its
proprietary right, the Municipality of Masinloc validly conveyed the
subject land to petitioner-appellee’s predecessors-in-interest. Petitioner-
appellee’s possession and occupation of the subject land is continuous,
public, adverse and uninterrupted and in the concept an owner and no
other person claimed possession and ownership of the same. Article
1137 of the Civil Code provides:
"Art. 1137. Ownership and other real rights over immovables also
prescribed (sic) through uninterrupted adverse possession thereof for
thirty years, without need of titles or of good faith."
Parenthetically, petitioner-appellee’s possession tacked with that of his
predecessors-in-interest already complied with the thirty (30)-year
requirement of open, continuous, exclusive and notorious possession
required under the law.
Prescinding from the foregoing, petitioner-appellee sufficiently and
satisfactorily proved his real and absolute ownership in fee simple; that
he has a registrable title over the subject land and that he complied with
the requirements under the law to warrant registration of title over the
subject land.22
The petition is meritorious.
While it is the rule that findings of fact of appellate courts are conclusive
upon this Court, among the recognized exceptions is where the findings
of fact are not supported by the record or are conspicuously erroneous
as to constitute a serious abuse of discretion.23 This is the situation in this
case.
Section 14(1) of P.D. No. 1529, otherwise known as the Property
Registration Decree, provides:
SEC. 14. Who may apply. –The following persons may file in the proper
Court of First Instance an application for registration of title to land,
whether personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-in-interest
have been in open, continuous, exclusive and notorious possession and
occupation of alienable and disposable lands of the public domain under
a bona fideclaim of ownership since June 12, 1945, or earlier.
Applicants for registration of title must therefore prove the following: (a)
that the land forms part of the disposable and alienable lands of the
public domain; and (b) that they have been in open, continuous,
exclusive,
and notorious possession and occupation of the same under a bona
fide claim of ownership either since time immemorial, or since June 12,
1945. It is not disputed that the land sought to be registered was
originally part of the reclamation project undertaken by the Municipality of
Masinloc, Zambales. The prevailing rule is that reclaimed disposable
lands of the public domain may only be leased and not sold to private
parties. These lands remained sui generis, as the only alienable or
disposable lands of the public domain which the government could not
sell to private parties except if the legislature passes a law authorizing
such sale. Reclaimed lands retain their inherent potential as areas for
public use or public service. 24 The ownership of lands reclaimed from
foreshore areas is rooted in the Regalian doctrine, which declares that all
lands and waters of the public domain belong to the State. 25On
No. 141, also known as the Public Land Act, compiling all the existing
laws on lands of the public domain. This remains to this day the existing
and applicable general law governing the classification and disposition of
lands of the public domain. The State policy prohibiting the sale of
government reclaimed, foreshore and marshy alienable lands of the
public domain to private individuals continued under the 1935
Constitution.
Indeed, there is nothing to support the respondent’s claim that the
property "was reclassified as residential … already segregated from the
public domain and assumed the character of private ownership." At the WHEREFORE, the petition is GRANTED. The Decision of the Court of
Appeals dated September 26, 2003 in CA-G.R. CV No. 72859
moment, it is not clear as to when the proper authorities classified the is REVERSED and SET ASIDE. Respondent Pedro O. Enciso’s
subject as alienable and disposable. It must be stressed that application for registration and issuance of title to Lot No. 2278-A, Cad.
incontrovertible evidence must be presented to establish that the land 652-D, Masinloc Cadastre, is hereby DISMISSED for lack of merit.
subject of the application is alienable or disposable.26
SO ORDERED.
According to the CA, "the Municipality of Masinloc must have been in
possession of the subject land even before 1969 considering that it was --
originally surveyed way back in 1927-1928." This is not the kind of
possession and occupation contemplated under the law. While the
subject property was still in the hands of the municipality, it was
undeniably part of the public domain. The municipality cannot then be
considered a predecessor-in-interest of the applicant from whom the
period of possession and occupation required by law may be reckoned
with. Any other interpretation would be dangerously detrimental to our
national patrimony.

Even assuming that Honorato Edaño, the respondent’s earliest

predecessor-in-interest, possessed the property as early as 1969, the
respondent’s claim must still fail, as he was unable to prove open,
continuous, exclusive, and notorious possession and occupation of the
subject land under a bona fide claim of acquisition of ownership. As the
Court ruled in Republic v. Alconaba:27

The law speaks of possession and occupation. Since these words are
separated by the conjunction and, the clear intention of the law is not to
make one synonymous with the other. Possession is broader than
occupation because it includes constructive possession. When,
therefore, the law adds the word occupation, it seeks to delimit the all
encompassing effect of constructive possession. Taken together with the
words open, continuous, exclusive and notorious, the
word occupation serves to highlight the fact that for an applicant to
qualify, his possession must not be a mere fiction. Actual possession of a
land consists in the manifestation of acts of dominion over it of such a
nature as a party would naturally exercise over his own property.

The respondent’s possession and that of his "predecessors-in-interest"

will not suffice for purposes of judicial confirmation of title. What is
categorically required by law is open, continuous, exclusive, and
notorious possession and occupation under a bona fide claim of
ownership since June 12, 1945 or earlier.

The evidence on record shows that a house was constructed on the

subject property only in 1991. Certain discrepancies likewise surround
the application for registration: Honorato Edaño sold a parcel of land
consisting of 2,790 square meters on December 9, 1980 to Vicente
Enciso alone; on January 17, 1981, Vicente Enciso, Natividad Edaño
Asuncion and Thelma Edaño executed a deed of partition covering the
same lot. Why was there a need to partition the property if the entire land
had already been sold to Vicente? The Court also notes that in the said
deed of partition, one-half of the total area of the land, which was 1,398
square meters, was adjudicated in favor of Vicente; however, in the
respondent’s application for registration, the land sought to be registered
consists of 1,475 square meters.

Well-entrenched is the rule that the burden of proof in land registration

cases rests on the applicant who must show clear, positive and
convincing evidence that his alleged possession and occupation were of
the nature and duration required by law. Bare allegations, without more,
do not amount to preponderant evidence that would shift the burden to
the oppositor.28

Evidently, the respondent failed to prove that (1) Lot No. 2278-A was
classified as part of the disposable and alienable land of the public
domain; and (2) he and his predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation thereof
in the concept of owners since time immemorial, or from June 12, 1945.