I. PROPERTY, OWNERSHIP, & ITS MODIFICATIONS (Arts.

414 – 773)

G.R. No. 166102, August 05, 2015

MANILA ELECTRIC COMPANY, Petitioner, v. THE CITY ASSESSOR AND CITY TREASURER OF LUCENA CITY, Respondents.

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court filed by Manila Electric Company
(MERALCO), seeking the reversal of the Decision1 dated May 13, 2004 and Resolution2 dated November 18, 2004 of the Court of
Appeals in CA-G.R. SP No. 67027. The appellate court affirmed the Decision3 dated May 3, 2001 of the Central Board of Assessment
Appeals (CBAA) in CBAA Case No. L-20-98, which, in turn, affirmed with modification the Decision4 dated June 17, 19985 of the Local
Board of Assessment Appeals (LBAA) of Lucena City, Quezon Province, as regards Tax Declaration Nos. 019-6500 and 019-7394,
ruling that MERALCO is liable for real property tax on its transformers, electric posts (or poles), transmission lines, insulators, and
electric meters, beginning 1992.

MERALCO is a private corporation organized and existing under Philippine laws to operate as a public utility engaged in electric
distribution. MERALCO has been successively granted franchises to operate in Lucena City beginning 1922 until present time,
particularly, by: (1) Resolution No. 366 dated May 15, 1922 of the Municipal Council of Lucena; (2) Resolution No. 108 7 dated July 1,
1957 of the Municipal Council of Lucena; (3) Resolution No. 2679 8 dated June 13, 1972 of the Municipal Board of Lucena City; 9 (4)
Certificate of Franchise10 dated October 28, 1993 issued by the National Electrification Commission; and (5) Republic Act No. 9209 11
approved on June 9, 2003 by Congress.12

On February 20, 1989, MERALCO received from the City Assessor of Lucena a copy of Tax Declaration No. 019-650013 covering the
following electric facilities, classified as capital investment, of the company: (a) transformer and electric post; (b) transmission line; (c)
insulator; and (d) electric meter, located in Quezon Ave. Ext., Brgy. Gulang-Gulang, Lucena City. Under Tax Declaration No. 019-6500,
these electric facilities had a market value of P81,811,000.00 and an assessed value of P65,448,800.00, and were subjected to real
property tax as of 1985.

MERALCO appealed Tax Declaration No. 019-6500 before the LBAA of Lucena City, which was docketed as LBAA-89-2. MERALCO
claimed that its capital investment consisted only of its substation facilities, the true and correct value of which was only P9,454,400.00;
and that MERALCO was exempted from payment of real property tax on said substation facilities.

The LBAA rendered a Decision14 in LBAA-89-2 on July 5, 1989, finding that under its franchise, MERALCO was required to pay the City
Government of Lucena a tax equal to 5% of its gross earnings, and "[s]aid tax shall be due and payable quarterly and shall be in lieu of
any and all taxes of any kind, nature, or description levied, established, or collected, on its poles, wires, insulators, transformers and
structures, installations, conductors, and accessories, from which taxes the grantee (MERALCO) is hereby expressly exempted." 15 As
regards the issue of whether or not the poles, wires, insulators, transformers, and electric meters of MERALCO were real properties,
the LBAA cited the 1964 case of Board of Assessment Appeals v. Manila Electric Company 16 (1964 MERALCO case) in which the
Court held that: (1) the steel towers fell within the term "poles" expressly exempted from taxes under the franchise of MERALCO; and
(2) the steel towers were personal properties under the provisions of the Civil Code and, hence, not subject to real property tax. The
LBAA lastly ordered that Tax Declaration No. 019-6500 would remain and the poles, wires, insulators, transformers, and electric meters
of MERALCO would be continuously assessed, but the City Assessor would stamp on the said Tax Declaration the word "exempt." The
LBAA decreed in the end:

WHEREFORE, from the evidence adduced by the parties, the Board overrules the claim of the [City Assessor of Lucena] and sustain
the claim of [MERALCO].

Further, the Appellant (Meralco) is hereby ordered to render an accounting to the City Treasurer of Lucena and to pay the City
Government of Lucena the amount corresponding to the Five (5%) per centum of the gross earnings in compliance with paragraph 13
both Resolutions 108 and 2679, respectively, retroactive from November 9, 1957 to date, if said tax has not yet been paid.

The City Assessor of Lucena filed an appeal with the CBAA, which was docketed as CBAA Case No. 248. In its Decision18 dated April
10, 1991, the CBAA affirmed the assailed LBAA judgment. Apparently, the City Assessor of Lucena no longer appealed said CBAA
Decision and it became final and executory.

Six years later, on October 29, 1997, MERALCO received a letter19 dated October 16, 1997 from the City Treasurer of Lucena, which
stated that the company was being assessed real property tax delinquency on its machineries beginning 1990, in the total amount of
P17,925,117.34, computed as follows:

TAX ASSESSED COVERED TAX DUE PENALTY TOTAL

DEC. # VALUE PERIOD

019-6500 P65,448,800.00 1990-94 P3,272,440.00 P2,356,156.80 P5,628,596.80

019-7394 78,538,560.00 1995 785,385.60 534,062.21 1,319,447.81
1996 785,385.60 345,569.66 1,130,955.26
lst-3rd/1997 589,039.20 117,807.84 706,847.04
4th 1997 196,346.40 (19,634.64) 176,711.76
BASIC---- P8,962,558.67
 SEF---- 8,962,558.67
TOTAL TAX DELINQUENCY---- P17,925,117.34

The City Treasurer of Lucena requested that MERALCO settle the payable amount soon to avoid accumulation of penalties. Attached
to the letter were the following documents: (a) Notice of Assessment 20 dated October 20, 1997 issued by the City Assessor of Lucena,
pertaining to Tax Declaration No. 019-7394, which increased the market value and assessed value of the machinery; (b) Property
Record Form;21 and (c) Tax Declaration No. 019-6500.22

MERALCO appealed Tax Declaration Nos. 019-6500 and 019-7394 before the LBAA of Lucena City on December 23, 1997 and posted
a surety bond23 dated December 10, 1997 to guarantee payment of its real property tax delinquency. MERALCO asked the LBAA to
cancel and nullify the Notice of Assessment dated October 20, 1997 and declare the properties covered by Tax Declaration Nos. 019-
6500 and 019-7394 exempt from real property tax.

In its Decision dated June 17, 1998 regarding Tax Declaration Nos. 019-6500 and 019-7394, the LBAA declared that Sections 234 and
534(f) of the Local Government Code repealed the provisions in the franchise of MERALCO and Presidential Decree No. 55124
pertaining to the exemption of MERALCO from payment of real property tax on its poles, wires, insulators, transformers, and meters.
The LBAA refused to apply as res judicata its earlier judgment in LBAA-89-2, as affirmed by the CBAA, because it involved collection of
taxes from 1985 to 1989, while the present case concerned the collection of taxes from 1989 to 1997; and LBAA is only an
administrative body, not a court or quasi-judicial body. The LBAA though instructed that the computation of the real property tax for the
machineries should be based on the prevailing 1991 Schedule of Market Values, less the depreciation cost allowed by law. The LBAA
ultimately disposed: WHEREFORE, in view of the foregoing, it is hereby ordered that:

1) MERALCO's appeal be dismissed for lack of merit;

2) MERALCO be required to pay the realty tax on the questioned properties, because they are not exempt by law, same to be based on
the 1991 level of assessment, less depreciation cost allowed by law.

MERALCO went before the CBAA on appeal, which was docketed as CBAA Case No. L-20-98. The CBAA, in its Decision dated May
3, 2001, agreed with the LBAA that MERALCO could no longer claim exemption from real property tax on its machineries with the
enactment of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, thus:

Indeed, the Central Board of Assessment Appeals has had the opportunity of ruling in [MERALCO's] favor in connection with this very
same issue. The matter was settled on April 10, 1991 where this Authority ruled that "wires, insulators, transformers and electric meters
which are mounted on poles and can be separated from the poles and moved from place to place without breaking the material or
causing [the] deterioration of the object, are deemed movable or personal property". The same position of MERALCO would have been
tenable and that decision may have stood firm prior to the enactment of R.A. 7160 but not anymore in this jurisdiction. The Code
provides and now sets a more stringent yet broadened concept of machinery,

The pivotal point where the difference lie between the former and the current case is that by the very wordings of [Section 199(0)], the
ground being anchored upon by MERALCO concerning the properties in question being personal in nature does not hold anymore for
the sole reason that these come now within the purview and new concept of Machineries. The new law has treated these in an
unequivocal manner as machineries in the sense that they are instruments, mechanical contrivances or apparatus though not attached
permanently to the real properties of [MERALCO] are actually, directly and exclusively used to meet their business of distributing
electricity.

Clearly, [Section 234 of the Local Government Code] lists down the instances of exemption in real property taxation and very apparent
is the fact that the enumeration is exclusive in character in view of the wordings in the last paragraph. Applying the maxim "Expressio
Unius est Exclusio Alterius", we can say that "Where the statute enumerates those who can avail of the exemption, it is construed as
excluding all others not mentioned therein". Therefore, the above-named company [had] lost its previous exemptions under its franchise
because of non-inclusion in the enumeration in Section 234. Furthermore, all tax exemptions being enjoyed by all persons, whether
natural or juridical, including all government-owned or controlled corporations are expressly withdrawn, upon effectivity of R.A. 7160.

In the given facts, it has been manifested that the Municipal Board of Lucena passed Resolution No. 108 on July 1, 1957 extending the
franchise of MERALCO to operate in Lucena city an electric light system for thirty-five years, which should have expired on November
9, 1992 and under Resolution No. 2679 passed on June 13, 1972 by the City Council of Lucena City awarding [MERALCO] a franchise
to operate for twenty years an electric light, heat and power system in Lucena City, also to expire in the year 1992. Under those
franchises, they were only bound to pay franchise taxes and nothing more.

Now, granting arguendo that there is no express revocation of the exemption under the franchise of [MERALCO] since, unquestionably
[MERALCO] is a recipient of another franchise granted this time by the National Electrification Commission as evidenced by a
certificate issued on October 28, 1993, such conferment does not automatically include and/or award exemption from taxes, nor does it
impliedly give the franchisee the right to continue the privileges like exemption granted under its previous franchise. It is just a plain and
simple franchise. In countless times, the Supreme Court has ruled that exemption must be clear in the language of the law granting
such exemption for it is strictly construed and favored against the person invoking it. In addition, a franchise though in the form of a
contract is also a privilege that must yield to the sublime yet inherent powers of the state, one of these is the power of taxation.

Looking into the law creating the National Electrification Administration (Commission), P.D. 269 as amended by P.D. 1645, nowhere in
those laws can we find such authority to bestow upon the grantee any tax exemption of whatever nature except those of cooperatives.
This we believe is basically in consonance with the provisions of the Local Government Code more particularly Section 234.

Furthermore, Section 534(f) of R.A. 7160 which is taken in relation to Section 234 thereof states that "All general and special laws, acts,
city charters, decrees, executive orders, proclamations and administrative regulations or part or parts thereof which are inconsistent
with any of the provisions of this Code are hereby repealed or modified accordingly". Anent this unambiguous mandate, P.D. 551 is
mandatorily repealed due to its contradictory and irreconcilable provisions with R.A. 7160. 26

Yet, the CBAA modified the ruling of the LBAA by excluding from the real property tax deficiency assessment the years 1990 to 1991,
considering that:

In the years 1990 and 1991, the exemption granted to MERALCO under its franchise which incidentally expired upon the effectivity of
the Local Government Code of 1991 was very much in effect and the decision rendered by the Central Board of Assessment Appeals
(CBAA) classifying its poles, wires, insulators, transformers and electric meters as personal property was still controlling as the law of
the case. So, from 1990 to 1991, it would be inappropriate and illegal to make the necessary assessment on those properties, much
more to impose any penalty for nonpayment of such.

But, assessments made beginning 1992 until 1997 by the City Government of Lucena is legal, both procedurally and substantially.
When R.A. 7160, which incorporated amended provisions of the Real Property Tax Code, took effect on January 1, 1992, as already
discussed, the nature of the aforecited questioned properties considered formerly as personal metamorphosed to machineries and the
exemption being invoked by [MERALCO] was automatically withdrawn pursuant to the letter and spirit of the law.

Resultantly, the decretal portion of said CBAA Decision reads: WHEREFORE, in view of the foregoing, the Decision appealed from is
hereby modified. The City Assessor of Lucena City is hereby directed to make a new assessment on the subject properties to retroact
from the year 1992 and the City Treasurer to collect the tax liabilities in accordance with the provisions of the cited Section 222 of the
Local Government Code.
The CBAA denied the Motion for Reconsideration of MERALCO in a Resolution29 dated August 16, 2001.

Disgruntled, MERALCO sought recourse from the Court of Appeals by filing a Petition for Review under Rule 43 of the Rules of Court,
which was docketed as CA-G.R. SP No. 67027.

The Court of Appeals rendered a Decision on May 13, 2004 rejecting all arguments proffered by MERALCO. The appellate court found
no deficiency in the Notice of Assessment issued by the City Assessor of Lucena: It was not disputed that [MERALCO] failed to provide
the [City Assessor and City Treasurer of Lucena] with a sworn statement declaring the true value of each of the subject transformer and
electric post, transmission line, insulator and electric meter which should have been made the basis of the fair and current market value
of the aforesaid property and which would enable the assessor to identify the same for assessment purposes. [MERALCO] merely
claims that the assessment made by the [City Assessor and City Treasurer of Lucena] was incorrect but did not even mention in their
pleading the true and correct assessment of the said properties. Absent any sworn statement given by [MERALCO], [the City Assessor
and City Treasurer of Lucena] were constrained to make an assessment based on the materials within [their reach].
The Court of Appeals further ruled that there was no more basis for the real property tax exemption of MERALCO under the Local
Government Code and that the withdrawal of said exemption did not violate the non-impairment clause of the Constitution, thus:

Although it could not be denied that [MERALCO] was previously granted a Certificate of Franchise by the National Electrification
Commission on October 28, 1993, such conferment does not automatically include an exemption from the payment of realty tax, nor
does it impliedly give the franchisee the right to continue the privileges granted under its previous franchise considering that Sec. 534(f)
of the Local Government Code of 1991 expressly repealed those provisions which are inconsistent with the Code.

At the outset, the Supreme Court has held that "Section 193 of the LGC prescribes the general rule, viz., tax exemptions or incentives
granted to or presently enjoyed by natural or juridical persons are withdrawn upon the effectivity of the LGC except with respect to
those entities expressly enumerated. In the same vein, We must hold that the express withdrawal upon effectivity of the LGC of all
exemptions except only as provided therein, can no longer be invoked by MERALCO to disclaim liability for the local tax." (City
Government of San Pablo, Laguna vs. Reyes, 305 SCRA 353, 362-363)

In fine, [MERALCO's] invocation of the non-impairment clause of the Constitution is accordingly unavailing. The LGC was enacted in
pursuance of the constitutional policy to ensure autonomy to local governments and to enable them to attain fullest development as
self-reliant communities. The power to tax is primarily vested in Congress. However, in our jurisdiction, it may be exercised by local
legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to [a] direct authority conferred by Section 5,
Article X of the Constitution. The important legal effect of Section 5 is that henceforth, in interpreting statutory provisions on municipal
fiscal powers, doubts will be resolved in favor of the municipal corporations.

MERALCO similarly failed to persuade the Court of Appeals that the transformers, transmission lines, insulators, and electric meters
mounted on the electric posts of MERALCO were not real properties. The appellate court invoked the definition of "machinery" under
Section 199(o) of the Local Government Code and then wrote that: We firmly believe and so hold that the wires, insulators,
transformers and electric meters mounted on the poles of [MERALCO] may nevertheless be considered as improvements on the land,
enhancing its utility and rendering it useful in distributing electricity. The said properties are actually, directly and exclusively used to
meet the needs of [MERALCO] in the distribution of electricity.
In addition, "improvements on land are commonly taxed as realty even though for some purposes they might be considered personalty.
It is a familiar personalty phenomenon to see things classed as real property for purposes of taxation which on general principle might
be considered personal property." (Caltex (Phil) Inc. vs. Central Board of Assessment Appeals, 114 SCRA 296, 301-302)

Lastly, the Court of Appeals agreed with the CBAA that the new assessment of the transformers, electric posts, transmission lines,
insulators, and electric meters of MERALCO shall retroact to 1992.

Hence, the Court of Appeals adjudged: WHEREFORE, premises considered, the assailed Decision [dated] May 3, 2001 and
Resolution dated August 16, 2001 are hereby AFFIRMED in toto and the present petition is hereby DENIED DUE COURSE and
accordingly DISMISSED for lack of merit.
In a Resolution dated November 18, 2004, the Court of Appeals denied the Motion for Reconsideration of MERALCO.

MERALCO is presently before the Court via the instant Petition for Review on Certiorari grounded on the following lone assignment of
error: THE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN AFFIRMING IN TOTO THE DECISION OF THE
CENTRAL BOARD OF ASSESSMENT APPEALS WHICH HELD THAT THE SUBJECT PROPERTIES ARE REAL PROPERTIES
SUBJECT TO REAL PROPERTY TAX; AND THAT ASSESSMENT ON THE SUBJECT PROPERTIES SHOULD BE MADE TO TAKE
EFFECT RETROACTIVELY FROM 1992 UNTIL 1997, WITH PENALTIES; THE SAME BEING UNJUST, WHIMSICAL AND NOT IN
ACCORD WITH THE LOCAL GOVERNMENT CODE.
MERALCO argues that its transformers, electric posts, transmission lines, insulators, and electric meters are not subject to real property
tax, given that: (1) the definition of "machinery" under Section 199(o) of the Local Government Code, on which real property tax is
imposed, must still be within the contemplation of real or immovable property under Article 415 of the Civil Code because it is axiomatic
that a statute should be construed to harmonize with other laws on the same subject matter as to form a complete, coherent, and
intelligible system; (2) the Decision dated April 10, 1991 of the CBAA in CBAA Case No. 248, which affirmed the Decision dated July 5,
1989 of the LBAA in LBAA-89-2, ruling that the transformers, electric posts, transmission lines, insulators, and electric meters of
MERALCO are movable or personal properties, is conclusive and binding; and (3) the electric poles are not exclusively used to meet
the needs of MERALCO alone since these are also being utilized by other entities such as cable and telephone companies.

MERALCO further asserts that even if it is assumed for the sake of argument that the transformers, electric posts, transmission lines,
insulators, and electric meters are real properties, the assessment of said properties by the City Assessor in 1997 is a patent nullity.
The collection letter dated October 16, 1997 of the City Treasurer of Lucena, Notice of Assessment dated October 20, 1997 of the City
Assessor of Lucena, the Property Record Form dated October 20, 1997, and Tax Declaration No. 019-6500 simply state a lump sum
market value for all the transformers, electric posts, transmission lines, insulators, and electric meters covered and did not provide an
inventory/list showing the actual number of said properties, or a schedule of values presenting the fair market value of each property or
type of property, which would have enabled MERALCO to verify the correctness and reasonableness of the valuation of its properties.
MERALCO was not furnished at all with a copy of Tax Declaration No. 019-7394, and while it received a copy of Tax Declaration No.
019-6500, said tax declaration did not contain the requisite information regarding the date of operation of MERALCO and the original
cost, depreciation, and market value for each property covered. For the foregoing reasons, the assessment of the properties of
MERALCO in 1997 was arbitrary, whimsical, and without factual basis - in patent violation of the right to due process of MERALCO.
MERALCO additionally explains that it cannot be expected to make a declaration of its transformers, electric posts, transmission lines,
insulators, and electric meters, because all the while, it was of the impression that the said properties were personal properties by virtue
of the Decision dated July 5, 1989 of the LBAA in LBAA-89-2 and the Decision dated April 10, 1991 of the CBAA in CBAA Case No.
248.

Granting that the assessment of its transformers, electric posts, transmission lines, insulators, and electric meters by the City Assessor
of Lucena in 1997 is valid, MERALCO alternatively contends that: (1) under Sections 22135 and 22236 of the Local Government Code,
the assessment should take effect only on January 1, 1998 and not retroact to 1992; (2) MERALCO should not be held liable for
penalties and interests since its nonpayment of real property tax on its properties was in good faith; and (3) if interest may be legally
imposed on MERALCO, it should only begin to run on the date it received the Notice of Assessment on October 29, 1997 and not all
the way back to 1992.

At the end of its Petition, MERALCO prays:WHEREFORE, it is respectfully prayed of this Honorable Court that the appealed Decision
dated May 13, 2004 of the Court of Appeals, together with its Resolution dated November 18, 2004 be reversed and set aside, and
judgment be rendered nullifying and cancel[l]ing the Notice of Assessment, dated October 20, 1997, issued by respondent City
Assessor, and the collection letter dated October 16, 1997 of respondent City Treasurer.

Petitioner also prays for such other relief as may be deemed just and equitable in the premises.

The City Assessor and City Treasurer of Lucena counter that: (1) MERALCO was obliged to pay the real property tax due, instead of
posting a surety bond, while its appeal was pending, because Section 231 of the Local Government Code provides that the appeal of
an assessment shall not suspend the collection of the real property taxes; (2) the cases cited by MERALCO can no longer be applied to
the case at bar since they had been decided when Presidential Decree No. 464, otherwise known as the Real Property Tax Code, was
still in effect; (3) under the now prevailing Local Government Code, which expressly repealed the Real Property Tax Code, the
transformers, electric posts, transmission lines, insulators, and electric meters of MERALCO fall within the new definition of
"machineries," deemed as real properties subject to real property tax; and (4) the Notice of Assessment dated October 20, 1997
covering the transformers, electric posts, transmission lines, insulators, and electric meters of MERALCO only retroacts to 1992, which
is less than 10 years prior to the date of initial assessment, so it is in compliance with Section 222 of the Local Government Code, and
since MERALCO has yet to pay the real property taxes due on said assessment, then it is just right and appropriate that it also be held
liable to pay for penalties and interests from 1992 to present time. Ultimately, the City Assessor and City Treasurer of Lucena seek
judgment denying the instant Petition and ordering MERALCO to pay the real property taxes due.

The Petition is partly meritorious.

The Court finds that the transformers, electric posts, transmission lines, insulators, and electric meters of MERALCO are no longer
exempted from real property tax and may qualify as "machinery" subject to real property tax under the Local Government Code.
Nevertheless, the Court declares null and void the appraisal and assessment of said properties of MERALCO by the City Assessor in
1997 for failure to comply with the requirements of the Local Government Code and, thus, violating the right of MERALCO to due
process.

By posting a surety bond before filing its appeal of the assessment with the LBAA, MERALCO substantially complied
with the requirement of payment under protest in Section 252 of the Local Government Code.

Section 252 of the Local Government Code mandates that "[n]o protest shall be entertained unless the taxpayer first pays the tax." It is
settled that the requirement of "payment under protest" is a condition sine qua non before an appeal may be entertained.38 Section 231
of the same Code also dictates that "[a]ppeal on assessments of real property shall, in no case, suspend the collection of the
corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent
adjustment depending upon the final outcome of the appeal." Clearly, under the Local Government Code, even when the assessment
of the real property is appealed, the real property tax due on the basis thereof should be paid to and/or collected by the local
government unit concerned.

In the case at bar, the City Treasurer of Lucena, in his letter dated October 16, 1997, sought to collect from MERALCO the amount of
P17,925,l 17.34 as real property taxes on its machineries, plus penalties, for the period of 1990 to 1997, based on Tax Declaration Nos.
019-6500 and 019-7394 issued by the City Assessor of Lucena. MERALCO appealed Tax Declaration Nos. 019-6500 and 019-7394
with the LBAA, but instead of paying the real property taxes and penalties due, it posted a surety bond in the amount of PI
7,925,117.34.

By posting the surety bond, MERALCO may be considered to have substantially complied with Section 252 of the Local Government
Code for the said bond already guarantees the payment to the Office of the City Treasurer of Lucena of the total amount of real
property taxes and penalties due on Tax Declaration Nos. 019-6500 and 019-7394. This is not the first time that the Court allowed a
surety bond as an alternative to cash payment of the real property tax before protest/appeal as required by Section 252 of the Local
Government Code. In Camp John Hay Development Corporation v. Central Board of Assessment Appeals 39 the Court affirmed the
ruling of the CBAA and the Court of Tax Appeals en bane applying the "payment under protest" requirement in Section 252 of the Local
Government Code and remanding the case to the LBAA for "further proceedings subject to a full and up-to-date payment, either in
cash or surety, of realty tax on the subject properties.

Accordingly, the LBAA herein correctly took cognizance of and gave due course to the appeal of Tax Declaration Nos. 019-6500 and
019-7394 filed by MERALCO.

Beginning January 1, 1992, MERALCO can no longer claim exemption from real property tax of its transformers, electric
posts, transmission lines, insulators, and electric meters based on its franchise.

MERALCO relies heavily on the Decision dated April 10, 1991 of the CBAA in CBAA Case No. 248, which affirmed the Decision dated
July 5, 1989 of the LBAA in LBAA-89-2. Said decisions of the CBAA and the LBAA, in turn, cited Board of Assessment Appeals v.
Manila Electric Co.,40 which was decided by the Court way back in 1964 (1964 MERALCO case). The decisions in CBAA Case No. 248
and the 1964 MERALCO case recognizing the exemption from real property tax of the transformers, electric posts, transmission lines,
insulators, and electric meters of MERALCO are no longer applicable because of subsequent developments that changed the factual
and legal milieu for MERALCO in the present case.

In the 1964 MERALCO case, the City Assessor of Quezon City considered the steel towers of MERALCO as real property and required
MERALCO to pay real property taxes for the said steel towers for the years 1952 to 1956. MERALCO was operating pursuant to the
franchise granted under Ordinance No. 44 dated March 24, 1903 of the Municipal Board of Manila, which it acquired from the original
grantee, Charles M. Swift. Under its franchise, MERALCO was expressly granted the following tax exemption privilege:

Par 9. The grantee shall be liable to pay the same taxes upon its real estate, buildings, plant (not including poles, wires, transformers,
and insulators), machinery and personal property as other persons are or may be hereafter required by law to pay. Said percentage
shall be due and payable at the times stated in paragraph nineteen of Part One hereof, and shall be in lieu of all taxes and
assessments of whatsoever nature, and by whatsoever authority upon the privileges, earnings, income, franchise, and poles, wires,
transformers, and insulators of the grantee from which taxes and assessments the grantee is hereby expressly exempted,

Given the express exemption from taxes and assessments of the "poles, wires, transformers, and insulators" of MERALCO in the
aforequoted paragraph, the sole issue in the 1964 MERALCO case was whether or not the steel towers of MERALCO qualified as
"poles" which were exempted from real property tax. The Court ruled in the affirmative, ratiocinating that:

Along the streets, in the City of Manila, may be seen cylindrical metal poles, cubical concrete poles, and poles of the PLDT Co. which
are made of two steel bars joined together by an interlacing metal rod. They are called "poles" notwithstanding the fact that they are not
made of wood. It must be noted from paragraph 9, above quoted, that the concept of the "poles" for which exemption is granted, is not
determined by their place or location, nor by the character of the electric current it carries, nor the material or form of which it is made,
but the use to which they are dedicated. In accordance with the definitions, a pole is not restricted to a long cylindrical piece of wood or
metal, but includes "upright standards to the top of which something is affixed or by which something is supported." As heretofore
described, respondent's steel supports consist of a framework of four steel bars or strips which are bound by steel cross-arms atop of
which are cross-arms supporting five high voltage transmission wires (See Annex A) and their sole function is to support or carry such
wires.

The conclusion of the CTA that the steel supports in question are embraced in the term "poles" is not a novelty. Several courts of last
resort in the United States have called these steel supports "steel towers", and they have denominated these supports or towers, as
electric poles. In their decisions the words "towers" and "poles" were used interchangeably, and it is well understood in that jurisdiction
that a transmission tower or pole means the same thing.

It is evident, therefore, that the word "poles", as used in Act No. 484 and incorporated in the petitioner's franchise, should not be given a
restrictive and narrow interpretation, as to defeat the very object for which the franchise was granted. The poles as contemplated
thereon, should be understood and taken as a part of the electric power system of the respondent Meralco, for the conveyance of
electric current from the source thereof to its consumers,

Similarly, it was clear that under the 20-year franchise granted to MERALCO by the Municipal Board of Lucena City through Resolution
No. 2679 dated June 13, 1972, the transformers, electric posts, transmission lines, insulators, and electric meters of MERALCO were
exempt from real property tax. Paragraph 13 of Resolution No. 2679 is quoted in full below:

13. The grantee shall be liable to pay the same taxes upon its real estate, building, machinery, and personal property (not including
poles, wires, transformers, and insulators) as other persons are now or may hereafter be required by law to pay. In consideration of
the franchise and rights hereby granted, the grantee shall pay into the City Treasury of Lucena a tax equal to FIVE (5%) PER
CENTUM of the gross earnings received from electric current sold or supplied under this franchise. Said tax shall be due and payable
quarterly and shall be in lieu of any and all taxes of any kind, nature or description levied, established, or collected by any
authority whatsoever, municipal, provincial, or national, now or in the future, on its poles, wires, insulators, switches, transformers
and structures, installations, conductors, and accessories, placed in and over and under all the private and/or public property,
including public streets and highways, provincial roads, bridges, and public squares, and on its franchise rights, privileges, receipts,
revenues and profits, from which taxes the grantee is hereby expressly exempted.

In CBAA Case No. 248 (and LBAA-89-2), the City Assessor assessed the transformers, electric posts, transmission lines, insulators,
and electric meters of MERALCO located in Lucena City beginning 1985 under Tax Declaration No. 019-6500. The CBAA in its
Decision dated April 10, 1991 in CBAA Case No. 248 sustained the exemption of the said properties of MERALCO from real property
tax on the basis of paragraph 13 of Resolution No. 2679 and the 1964 MERALCO case.

Just when the franchise of MERALCO in Lucena City was about to expire, the Local Government Code took effect on January 1, 1992,
Sections 193 and 234 of which provide:

Section 193. Withdrawal of Tax Exemption Privileges. - Unless otherwise provided in this Code, tax exemptions or incentives granted
to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or controlled corporations, except local
water districts, cooperatives duly registered under R.A. No. 6938, non-stock and nonprofit hospitals and educational institutions, are
hereby withdrawn upon the effectivity of this Code.

Section 234. Exemptions from Real Property Tax. - The following are exempted from payment of the real property tax:

(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has
been granted, for consideration or otherwise, to a taxable person;

(b) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, nonprofit or religious cemeteries and all
lands, buildings, and improvements actually, directly, and exclusively used for religious, charitable or educational purposes;
(c) All machineries and equipment that are actually, directly and exclusively used by local water districts and government-owned or
controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power;
(d) All real property owned by duly registered cooperatives as provided for under R.A. No. 6938; and
(e) Machinery and equipment used for pollution control and environmental protection.

Except as provided herein, any exemption from payment of real property tax previously granted to, or presently enjoyed by, all persons,
whether natural or juridical, including all government-owned or controlled corporations are hereby withdrawn upon the effectivity of this
Code.

The Local Government Code, in addition, contains a general repealing clause under Section 534(f) which states that "[a]ll general and
special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which
are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly."

Taking into account the above-mentioned provisions, the evident intent of the Local Government Code is to withdraw/repeal all
exemptions from local taxes, unless otherwise provided by the Code. The limited and restrictive nature of the tax exemption privileges
under the Local Government Code is consistent with the State policy to ensure autonomy of local governments and the objective of the
Local Government Code to grant genuine and meaningful autonomy to enable local government units to attain their fullest development
as self-reliant communities and make them effective partners in the attainment of national goals. The obvious intention of the law is to
broaden the tax base of local government units to assure them of substantial sources of revenue. 43

Section 234 of the Local Government Code particularly identifies the exemptions from payment of real property tax, based on the
ownership, character, and use of the property, viz.:

(a) Ownership Exemptions. Exemptions from real property taxes on the basis of ownership are real properties owned by: (i) the
Republic, (ii) a province, (iii) a city, (iv) a municipality, (v) a barangay, and (vi) registered cooperatives.

(b) Character Exemptions. Exempted from real property taxes on the basis of their character are: (i) charitable institutions, (ii) houses
and temples of prayer like churches, parsonages or convents appurtenant thereto, mosques, and (iii) nonprofit or religious cemeteries.

(c) Usage exemptions. Exempted from real property taxes on the basis of the actual, direct and exclusive use to which they are devoted
are: (i) all lands, buildings and improvements which are actually directly and exclusively used for religious, charitable or educational
purposes; (ii) all machineries and equipment actually, directly and exclusively used by local water districts or by government-owned or
controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power; and (iii) all
machinery and equipment used for pollution control and environmental protection.

To help provide a healthy environment in the midst of the modernization of the country, all machinery and equipment for pollution
control and environmental protection may not be taxed by local governments.

2. Other Exemptions Withdrawn. All other exemptions previously granted to natural or juridical persons including government-owned or
controlled corporations are withdrawn upon the effectivity of the Code. 4

The last paragraph of Section 234 had unequivocally withdrawn, upon the effectivity of the Local Government Code, exemptions from
payment of real property taxes granted to natural or juridical persons, including government-owned or controlled corporations, except
as provided in the same section.

MERALCO, a private corporation engaged in electric distribution, and its transformers, electric posts, transmission lines, insulators, and
electric meters used commercially do not qualify under any of the ownership, character, and usage exemptions enumerated in Section
234 of the Local Government Code. It is a basic precept of statutory construction that the express mention of one person, thing, act, or
consequence excludes all others as expressed in the familiar maxim expressio unius est exclusio alterius.45 Not being among the
recognized exemptions from real property tax in Section 234 of the Local Government Code, then the exemption of the transformers,
electric posts, transmission lines, insulators, and electric meters of MERALCO from real property tax granted under its franchise was
among the exemptions withdrawn upon the effectivity of the Local Government Code on January 1, 1998.

It is worthy to note that the subsequent franchises for operation granted to MERALCO, i.e., under the Certificate of Franchise dated
October 28, 1993 issued by the National Electrification Commission and Republic Act No. 9209 enacted on June 9, 2003 by Congress,
are completely silent on the matter of exemption from real property tax of MERALCO or any of its properties.

It is settled that tax exemptions must be clear and unequivocal. A taxpayer claiming a tax exemption must point to a specific provision
of law conferring on the taxpayer, in clear and plain terms, exemption from a common burden. Any doubt whether a tax exemption
exists is resolved against the taxpayer.46 MERALCO has failed to present herein any express grant of exemption from real property tax
of its transformers, electric posts, transmission lines, insulators, and electric meters that is valid and binding even under the Local
Government Code.

The transformers, electric posts,

transmission lines, insulators, and electric
meters of MERALCO may qualify as
"machinery" under the Local Government
Code subject to real property tax.

Through the years, the relevant laws have consistently considered "machinery" as real property subject to real property tax. It is the
definition of "machinery" that has been changing and expanding, as the following table will show:

Real Property
Incidence of Real Property Tax
Tax Law
The Assessment Law Section 2. Incidence of real property tax. - Except in
(Commonwealth Act No. chartered cities, there shall be levied, assessed, and
470) collected, an annual ad valorem tax on real property,
including land, buildings, machinery, and other
Effectivity: January 1, improvements not hereinafter specifically exempted.
1940
Definition of Machinery47
Section 3. Property exempt from tax. - The
exemptions shall be as follows: (f) Machinery, which
term shall embrace machines, mechanical
contrivances, instruments, appliances, and
apparatus attached to the real estate, used for
industrial agricultural or manufacturing purposes,
during the first five years of the operation of the
machinery.
 Real Property Section 38. Incidence of Real Property Tax. - There
Tax Code shall be levied, assessed and collected in all
provinces, cities and municipalities an annual ad
Effectivity: June 1, 1974 valorem tax on real property, such as land, buildings,
machinery and other improvements affixed or
attached to real property not hereinafter specifically
exempted.
Real Property Section 38. Incidence of Real Property Tax. - There
Tax Code, as amended shall be levied, assessed and collected in all
by provinces, cities and municipalities an annual ad
Presidential valorem tax on real property, such as land, buildings,
Decree No. 1383 machinery and other improvements affixed or
attached to real property not hereinafter specifically
Effectivity: May 25, 1978 exempted.
Local Section 232. Power to Levy Real Property Tax. — A
Government province or city or a municipality within the
Code Metropolitan Manila Area may levy an annual ad
valorem tax on real property such as land, building,
Effectivity: machinery, and other improvement not hereinafter
January 1, 1992 specifically exempted.
Section 3. Definition of Terms. -
When used in this Code -
(m) Machinery - shall embrace machines,
mechanical contrivances, instruments, appliances
and apparatus attached to the real estate. It includes
the physical facilities available for production, as well
as the installations and appurtenant service facilities,
together with all other equipment designed for or
essential to its manufacturing, industrial or
agricultural purposes.
Section 3. Definition of Terms.
When used in this Code -
(m) Machinery - shall embrace machines, equipment,
mechanical contrivances, instruments, appliances
and apparatus attached to the real estate. It shall
include the physical facilities available for production,
as well as the installations and appurtenant service
facilities, together with all those not permanently
attached to the real estate but are actually, directly
and essentially used to meet the needs of the
particular industry, business, or works, which by their
very nature and purpose are designed for, or
essential to manufacturing, commercial, mining,
industrial or agricultural purposes.
Section 199. Definitions. - When used in this Title:
(o) "Machinery" embraces machines, equipment,
mechanical contrivances, instruments, appliances or
apparatus which may or may not be attached,
permanently or temporarily, to the real property.
It includes the physical facilities for production, the
installations and appurtenant service facilities, those
which are mobile, self-powered or self- propelled,
and those not permanently attached to the real
property which are actually, directly, and exclusively
used to meet the needs of the particular industry,
business or activity and which by their very nature
and purpose are designed for, or necessary to its
manufacturing, mining, logging, commercial,
industrial or agricultural purposes

MERALCO is a public utility engaged in electric distribution, and its transformers, electric posts, transmission lines, insulators, and
electric meters constitute the physical facilities through which MERALCO delivers electricity to its consumers. Each may be considered
as one or more of the following: a "machine,"48 "equipment,"49 "contrivance,"50 "instrument,"51 "appliance,"52 "apparatus,"53 or
"installation."54

The Court highlights that under Section 199(o) of the Local Government Code, machinery, to be deemed real property subject to real
property tax, need no longer be annexed to the land or building as these "may or may not be attached, permanently or temporarily to
the real property," and in fact, such machinery may even be "mobile."55 The same provision though requires that to be machinery
subject to real property tax, the physical facilities for production, installations, and appurtenant service facilities, those which are mobile,
self-powered or self-propelled, or not permanently attached to the real property (a) must be actually, directly, and exclusively used to
meet the needs of the particular industry, business, or activity; and (2) by their very nature and purpose, are designed for, or necessary
for manufacturing, mining, logging, commercial, industrial, or agricultural purposes. Thus, Article 290(o) of the Rules and Regulations
Implementing the Local Government Code of 1991 recognizes the following exemption:

Machinery which are of general purpose use including but not limited to office equipment, typewriters, telephone equipment,
breakable or easily damaged containers (glass or cartons), microcomputers, facsimile machines, telex machines, cash dispensers,
furnitures and fixtures, freezers, refrigerators, display cases or racks, fruit juice or beverage automatic dispensing machines which are
not directly and exclusively used to meet the needs of a particular industry, business or activity shall not be considered within the
definition of machinery under this Rule.

The 1964 MERALCO case was decided when The Assessment Law was still in effect and Section 3(f) of said law still required that the
machinery be attached to the real property. Moreover, as the Court pointed out earlier, the ruling in the 1964 MERALCO case - that the
electric poles (including the steel towers) of MERALCO are not subject to real property tax - was primarily based on the express
exemption granted to MERALCO under its previous franchise. The reference in said case to the Civil Code definition of real property
was only an alternative argument:
Granting for the purpose of argument that the steel supports or towers in question are not embraced within the term poles,
the logical question posited is whether they constitute real properties, so that they can be subject to a real property tax. The
tax law does not provide for a definition of real property; but Article 415 of the Civil Code does, by stating the following are immovable
property:

(1) Land, buildings, roads, and constructions of all kinds adhered to the soil;

(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the
material or deterioration of the object;

(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be
carried in a building or on a piece of land, and which tends directly to meet the needs of the said industry or works;
The steel towers or supports in question, do not come within the objects mentioned in paragraph 1, because they do not constitute
buildings or constructions adhered to the soil. They are not constructions analogous to buildings nor adhering to the soil. As per
description, given by the lower court, they are removable and merely attached to a square metal frame by means of bolts, which when
unscrewed could easily be dismantled and moved from place to place. They can not be included under paragraph 3, as they are not
attached to an immovable in a fixed manner, and they can be separated without breaking the material or causing deterioration upon the
object to which they are attached. Each of these steel towers or supports consists of steel bars or metal strips, joined together by
means of bolts, which can be disassembled by unscrewing the bolts and reassembled by screwing the same. These steel towers or
supports do not also fall under paragraph 5, for they are not machineries or receptacles, instruments or implements, and even if they
were, they are not intended for industry or works on the land. Petitioner is not engaged in an industry or works on the land in which the
steel supports or towers are constructed.

The aforequoted conclusions of the Court in the 1964 MERALCO case do not hold true anymore under the Local Government Code.

While the Local Government Code still does not provide for a specific definition of "real property," Sections 199(o) and 232 of the said
Code, respectively, gives an extensive definition of what constitutes "machinery" and unequivocally subjects such machinery to real
property tax. The Court reiterates that the machinery subject to real property tax under the Local Government Code "may or may not be
attached, permanently or temporarily to the real property;" and the physical facilities for production, installations, and appurtenant
service facilities, those which are mobile, self-powered or self-propelled, or are not permanently attached must (a) be actually, directly,
and exclusively used to meet the needs of the particular industry, business, or activity; and (2) by their very nature and purpose, be
designed for, or necessary for manufacturing, mining, logging, commercial, industrial, or agricultural purposes.

Article 415, paragraph (1) of the Civil Code declares as immovables or real properties "[l]and, buildings, roads and constructions of all
kinds adhered to the soil." The land, buildings, and roads are immovables by nature "which cannot be moved from place to place,"
whereas the constructions adhered to the soil are immovables by incorporation "which are essentially movables, but are attached to an
immovable in such manner as to be an integral part thereof." 57 Article 415, paragraph (3) of the Civil Code, referring to "[ejverything
attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or
deterioration of the object," are likewise immovables by incorporation. In contrast, the Local Government Code considers as real
property machinery which "may or may not be attached, permanently or temporarily to the real property," and even those which are
"mobile."

Article 415, paragraph (5) of the Civil Code considers as immovables or real properties "[machinery, receptacles, instruments or
implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land,
and which tend directly to meet the needs of the said industry or works." The Civil Code, however, does not define "machinery."

The properties under Article 415, paragraph (5) of the Civil Code are immovables by destination, or "those which are essentially
movables, but by the purpose for which they have been placed in an immovable, partake of the nature of the latter because of the
added utility derived therefrom."58 These properties, including machinery, become immobilized if the following requisites concur: (a)
they are placed in the tenement by the owner of such tenement; (b) they are destined for use in the industry or work in the tenement;
and (c) they tend to directly meet the needs of said industry or works. 59 The first two requisites are not found anywhere in the Local
Government Code.

MERALCO insists on harmonizing the aforementioned provisions of the Civil Code and the Local Government Code. The Court
disagrees, however, for this would necessarily mean imposing additional requirements for classifying machinery as real property for real
property tax purposes not provided for, or even in direct conflict with, the provisions of the Local Government Code.

As between the Civil Code, a general law governing property and property relations, and the Local Government Code, a special law
granting local government units the power to impose real property tax, then the latter shall prevail. As the Court pronounced in
Disomangcop v. The Secretary of the Department of Public Works and Highways Simeon A. Datumanong .

It is a finely-imbedded principle in statutory construction that a special provision or law prevails over a general one. Lex specialis
derogant generali. As this Court expressed in the case of Leveriza v. Intermediate Appellate Court, "another basic principle of statutory
construction mandates that general legislation must give way to special legislation on the same subject, and generally be so interpreted
as to embrace only cases in which the special provisions are not applicable, that specific statute prevails over a general statute and that
where two statutes are of equal theoretical application to a particular case, the one designed therefor specially should prevail."
The Court also very clearly explicated in Vinzons-Chato v. Fortune Tobacco Corporation61 that:

A general law and a special law on the same subject are statutes in pah materia and should, accordingly, be read together and
harmonized, if possible, with a view to giving effect to both. The rule is that where there are two acts, one of which is special and
particular and the other general which, if standing alone, would include the same matter and thus conflict with the special act, the
special law must prevail since it evinces the legislative intent more clearly than that of a general statute and must not be taken as
intended to affect the more particular and specific provisions of the earlier act, unless it is absolutely necessary so to construe it in order
to give its words any meaning at all.

The circumstance that the special law is passed before or after the general act does not change the principle. Where the special law is
later, it will be regarded as an exception to, or a qualification of, the prior general act; and where the general act is later, the special
statute will be construed as remaining an exception to its terms, unless repealed expressly or by necessary implication.

Furthermore, in Caltex (Philippines), Inc. v. Central Board of Assessment Appeals,62 the Court acknowledged that "[i]t is a familiar
phenomenon to see things classed as real property for purposes of taxation which on general principle might be considered personal
property[.]"

Therefore, for determining whether machinery is real property subject to real property tax, the definition and requirements under the
Local Government Code are controlling.

MERALCO maintains that its electric posts are not machinery subject to real property tax because said posts are not being exclusively
used by MERALCO; these are also being utilized by cable and telephone companies. This, however, is a factual issue which the Court
cannot take cognizance of in the Petition at bar as it is not a trier of facts. Whether or not the electric posts of MERALCO are actually
being used by other companies or industries is best left to the determination of the City Assessor or his deputy, who has been granted
the authority to take evidence under Article 304 of the Rules and Regulations Implementing the Local Government Code of 1991.

Nevertheless, the appraisal and assessment of the transformers, electric posts, transmission lines, insulators, and electric
meters of MERALCO as machinery under Tax Declaration Nos. 019-6500 and 019-7394 were not in accordance with the Local
Government Code and in violation of the right to due process of MERALCO and, therefore, null and void.

The Local Government Code defines "appraisal" as the "act or process of determining the value of property as of a specific date for a
specific purpose." "Assessment" is "the act or process of determining the value of a property, or proportion thereof subject to tax,
including the discovery, listing, classification, and appraisal of the properties[.]" 63 When it comes to machinery, its appraisal and
assessment are particularly governed by Sections 224 and 225 of the Local Government Code, which read:

Section 224. Appraisal and Assessment of Machinery. - (a) The fair market value of a brand-new machinery shall be the acquisition
cost. In all other cases, the fair market value shall be determined by dividing the remaining economic life of the machinery by its
estimated economic life and multiplied by the replacement or reproduction cost.

(b) If the machinery is imported, the acquisition cost includes freight, insurance, bank and other charges, brokerage, arrastre and
handling, duties and taxes, plus cost of inland transportation, handling, and installation charges at the present site. The cost in foreign
currency of imported machinery shall be converted to peso cost on the basis of foreign currency exchange rates as fixed by the Central
Bank.

Section 225. Depreciation Allowance for Machinery. - For purposes of assessment, a depreciation allowance shall be made for
machinery at a rate not exceeding five percent (5%) of its original cost or its replacement or reproduction cost, as the case may be, for
each year of use: Provided, however, That the remaining value for all kinds of machinery shall be fixed at not less than twenty percent
(20%) of such original, replacement, or reproduction cost for so long as the machinery is useful and in operation.

It is apparent from these two provisions that every machinery must be individually appraised and assessed depending on its acquisition
cost, remaining economic life, estimated economic life, replacement or reproduction cost, and depreciation.

Article 304 of the Rules and Regulations Implementing the Local Government Code of 1991 expressly authorizes the local assessor or
his deputy to receive evidence for the proper appraisal and assessment of the real property:

Article 304. Authority of Local Assessors to Take Evidence. - For the purpose of obtaining information on which to base the market
value of any real property, the assessor of the province, city, or municipality or his deputy may summon the owners of the properties to
be affected or persons having legal interest therein and witnesses, administer oaths, and take deposition concerning the property, its
ownership, amount, nature, and value.

The Local Government Code further mandates that the taxpayer be given a notice of the assessment of real property in the following
manner:

Section 223. Notification of New or Revised Assessment. - When real property is assessed for the first time or when an existing
assessment is increased or decreased, the provincial, city or municipal assessor shall within thirty (30) days give written notice of such
new or revised assessment to the person in whose name the property is declared. The notice may be delivered personally or by
registered mail or through the assistance of the punong barangay to the last known address of the person to served.

A notice of assessment, which stands as the first instance the taxpayer is officially made aware of the pending tax liability, should be
sufficiently informative to apprise the taxpayer the legal basis of the tax. 64 In Manila Electric Company v. Barlis,65 the Court described
the contents of a valid notice of assessment of real property and differentiated the same from a notice of collection:

A notice of assessment as provided for in the Real Property Tax Code should effectively inform the taxpayer of the value of a specific
property, or proportion thereof subject to tax, including the discovery, listing, classification, and appraisal of properties. The September
3, 1986 and October 31, 1989 notices do not contain the essential information that a notice of assessment must specify, namely, the
value of a specific property or proportion thereof which is being taxed, nor does it state the discovery, listing, classification and appraisal
of the property subject to taxation. In fact, the tenor of the notices bespeaks an intention to collect unpaid taxes, thus the reminder to
the taxpayer that the failure to pay the taxes shall authorize the government to auction off the properties subject to taxes

Although the ruling quoted above was rendered under the Real Property Tax Code, the requirement of a notice of assessment has not
changed under the Local Government Code.

A perusal of the documents received by MERALCO on October 29, 1997 reveals that none of them constitutes a valid notice of
assessment of the transformers, electric posts, transmission lines, insulators, and electric meters of MERALCO.

The letter dated October 16, 1997 of the City Treasurer of Lucena (which interestingly precedes the purported Notice of Assessment
dated October 20, 1997 of the City Assessor of Lucena) is a notice of collection, ending with the request for MERALCO to settle the
payable amount soon in order to avoid accumulation of penalties. It only presented in table form the tax declarations covering the
machinery, assessed values in the tax declarations in lump sums for all the machinery, the periods covered, and the taxes and
penalties due again in lump sums for all the machinery.

The Notice of Assessment dated October 20, 1997 issued by the City Assessor gave a summary of the new/revised assessment of the
"machinery" located in "Quezon Avenue Ext., Brgy. Gulang-Gulang, Lucena City," covered by Tax Declaration No. 019-7394, with total
market value of P98,173,200.00 and total assessed value of P78,538,560.00. The Property Record Form basically contained the same
information. Without specific description or identification of the machinery covered by said tax declaration, said Notice of Assessment
and Property Record Form give the false impression that there is only one piece of machinery covered.

In Tax Declaration No. 019-6500, the City Assessor reported its findings under "Building and Improvements" and not "Machinery." Said
tax declaration covered "capital investment-commercial," specifically: (a) Transformer and Electric Post; (b) Transmission Line, (c)
Insulator, and (d) Electric Meter, with a total market value of P81,811,000.00, assessment level of 80%, and assessed value of
£65,448,800.00. Conspicuously, the table for "Machinery" - requiring the description, date of operation, replacement cost, depreciation,
and market value of the machinery - is totally blank.

MERALCO avers, and the City Assessor and the City Treasurer of Lucena do not refute at all, that MERALCO has not been furnished
the Owner's Copy of Tax Declaration No. 019-7394, in which the total market value of the machinery of MERALCO was increased by
PI6,632,200.00, compared to that in Tax Declaration No. 019-6500.

The Court cannot help but attribute the lack of a valid notice of assessment to the apparent lack of a valid appraisal and assessment
conducted by the City Assessor of Lucena in the first place. It appears that the City Assessor of Lucena simply lumped together all the
transformers, electric posts, transmission lines, insulators, and electric meters of MERALCO located in Lucena City under Tax
Declaration Nos. 019-6500 and 019-7394, contrary to the specificity demanded under Sections 224 and 225 of the Local Government
Code for appraisal and assessment of machinery. The City Assessor and the City Treasurer of Lucena did not even provide the most
basic information such as the number of transformers, electric posts, insulators, and electric meters or the length of the transmission
lines appraised and assessed under Tax Declaration Nos. 019-6500 and 019-7394. There is utter lack of factual basis for the
assessment of the transformers, electric posts, transmission lines, insulators, and electric meters of MERALCO.

The Court of Appeals laid the blame on MERALCO for the lack of information regarding its transformers, electric posts, transmission
lines, insulators, and electric meters for appraisal and assessment purposes because MERALCO failed to file a sworn declaration of
said properties as required by Section 202 of the Local Government Code. As MERALCO explained, it cannot be expected to file such
a declaration when all the while it believed that said properties were personal or movable properties not subject to real property tax.
More importantly, Section 204 of the Local Government Code exactly covers such a situation, thus: Section 204. Declaration of Real
Property by the Assessor. -When any person, natural or juridical, by whom real property is required to be declared under Section 202
hereof, refuses or fails for any reason to make such declaration within the time prescribed, the provincial, city or municipal assessor
shall himself declare the property in the name of the defaulting owner, if known, or against an unknown owner, as the case may be, and
shall assess the property for taxation in accordance with the provision of this Title. No oath shall be required of a declaration thus made
by the provincial, city or municipal assessor.

Note that the only difference between the declarations of property made by the taxpayer, on one hand, and the provincial/city/municipal
assessor, on the other, is that the former must be made under oath. After making the declaration of the property himself for the owner,
the provincial/city/municipal assessor is still required to assess the property for taxation in accordance with the provisions of the Local
Government Code.
It is true that tax assessments by tax examiners are presumed correct and made in good faith, with the taxpayer having the burden of
proving otherwise.66 In this case, MERALCO was able to overcome the presumption because it has clearly shown that the assessment
of its properties by the City Assessor was baselessly and arbitrarily done, without regard for the requirements of the Local Government
Code.

The exercise of the power of taxation constitutes a deprivation of property under the due process clause, and the taxpayer's right to due
process is violated when arbitrary or oppressive methods are used in assessing and collecting taxes. 67 The Court applies by analogy
its pronouncements in Commissioner of Internal Revenue v. United Salvage and Towage (Phils.), Inc.,68 concerning an assessment
that did not comply with the requirements of the National Internal Revenue Code:

On the strength of the foregoing observations, we ought to reiterate our earlier teachings that "in balancing the scales between the
power of the State to tax and its inherent right to prosecute perceived transgressors of the law on one side, and the constitutional rights
of a citizen to due process of law and the equal protection of the laws on the other, the scales must tilt in favor of the individual, for a
citizen's right is amply protected by the Bill of Rights under the Constitution." Thus, while "taxes are the lifeblood of the government,"
the power to tax has its limits, in spite of all its plenitude. Even as we concede the inevitability and indispensability of taxation, it is a
requirement in all democratic regimes that it be exercised reasonably and in accordance with the prescribed procedure.
II The appraisal and assessment of the transformers, electric posts, transmission lines, insulators, and electric meters of
MERALCO under Tax Declaration Nos. 019-6500 and 019-7394, not being in compliance with the Local Government Code, are
attempts at deprivation of property without due process of law and, therefore, null and void.

WHEREFORE, premises considered, the Court PARTLY GRANTS the instant Petition and AFFIRMS with MODIFICATION the
Decision dated May 13, 2004 of the Court of Appeals in CA-G.R. SP No. 67027, affirming in toto the Decision dated May 3, 2001 of the
Central Board of Assessment Appeals in CBAA Case No. L-20-98. The Court DECLARES that the transformers, electric posts,
transmission lines, insulators, and electric meters of Manila Electric Company are NOT EXEMPTED from real property tax under the
Local Government Code. However, the Court also DECLARES the appraisal and assessment of the said properties under Tax
Declaration Nos. 019-6500 and 019-7394 as NULL and VOID for not complying with the requirements of the Local Government Code
and violating the right to due process of Manila Electric Company, and ORDERS the CANCELLATION of the collection letter dated
October 16, 1997 of the City Treasurer of Lucena and the Notice of Assessment dated October 20, 1997 of the City Assessor of
Lucena, but WITHOUT PREJUDICE to the conduct of a new appraisal and assessment of the same properties by the City Assessor of
Lucena in accord with the provisions of the Local Government Code and guidelines issued by the Bureau of Local Government
Financing.

G. R. No. 185124 January 25, 2012

REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL IRRIGATION ADMINISTRATION (NIA), Petitioner,
vs.RURAL BANK OF KABACAN, INC., LITTIE SARAH A. AGDEPPA, LEOSA NANETTE AGDEPPA and MARCELINO VIERNES,
MARGARITA TABOADA, PORTIA CHARISMA RUTH ORTIZ, represented by LINA ERLINDA A. ORTIZ and MARIO ORTIZ, JUAN
MAMAC and GLORIA MATAS, Respondents.

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking the reversal of the 12 August 2008
Court of Appeals (CA) Decision and 22 October 2008 Resolution in CA-G.R. CV No. 65196.

The assailed issuances affirmed with modification the 31 August 1999 "Judgment" promulgated by the Regional Trial Court (RTC),
Branch 22, Judicial Region, Kabacan, Cotabato. The RTC had fixed the just compensation for the value of the land and improvements
thereon that were expropriated by petitioner, but excluded the value of the excavated soil. Petitioner Republic of the Philippines is
represented in this case by the National Irrigation Authority (NIA).

The Facts NIA is a government-owned-and-controlled corporation created under Republic Act No. (R.A.) 3601 on 22 June 1963. It is
primarily responsible for irrigation development and management in the country. Its charter was amended by Presidential Decree (P.D.)
552 on 11 September 1974 and P.D. 1702 on 17 July 1980. To carry out its purpose, NIA was specifically authorized under P.D. 552 to
exercise the power of eminent domain.1

NIA needed some parcels of land for the purpose of constructing the Malitubog-Marigadao Irrigation Project. On 08 September 1994, it
filed with the RTC of Kabacan, Cotabato a Complaint for the expropriation of a portion of three (3) parcels of land covering a total of
14,497.91 square meters.2 The case was docketed as Special Civil Case No. 61 and was assigned to RTC-Branch 22. The affected
parcels of land were the following:

1) Lot No. 3080 – covered by Transfer Certificate of Title (TCT) No. T-61963 and registered under the Rural Bank of Kabacan
2) Lot No. 455 – covered by TCT No. T-74516 and registered under the names of RG May, Ronald and Rolando, all surnamed Lao
3) Lot No. 3039 – registered under the name of Littie Sarah Agdeppa3

On 11 July 1995, NIA filed an Amended Complaint to include Leosa Nanette A. Agdeppa and Marcelino Viernes as registered owners
of Lot No. 3039.4
On 25 September 1995, NIA filed a Second Amended Complaint to allege properly the area sought to be expropriated, the exact
address of the expropriated properties and the owners thereof. NIA further prayed that it be authorized to take immediate possession of
the properties after depositing with the Philippine National Bank the amount of ₱ 19,246.58 representing the provisional value thereof.5

On 31 October 1995, respondents filed their Answer with Affirmative and Special Defenses and Counterclaim. 6 They alleged, inter alia,
that NIA had no authority to expropriate portions of their land, because it was not a sovereign political entity; that it was not necessary
to expropriate their properties, because there was an abandoned government property adjacent to theirs, where the project could pass
through; that Lot No. 3080 was no longer owned by the Rural Bank of Kabacan; that NIA’s valuation of their expropriated properties
was inaccurate because of the improvements on the land that should have placed its value at ₱ 5 million; and that NIA never negotiated
with the landowners before taking their properties for the project, causing permanent and irreparable damages to their properties valued
at ₱ 250,000.7

On 11 September 1996, the RTC issued an Order forming a committee tasked to determine the fair market value of the expropriated
properties to establish the just compensation to be paid to the owners. The committee was composed of the Clerk of Court of RTC
Branch 22 as chairperson and two (2) members of the parties to the case.8

On 20 September 1996, in response to the expropriation Complaint, respondents-intervenors Margarita Tabaoda, Portia Charisma Ruth
Ortiz, Lina Erlinda Ortiz, Mario Ortiz, Juan Mamac and Gloria Matas filed their Answer-in-Intervention with Affirmative and Special
Defenses and Counter-Claim. They essentially adopted the allegations in the Answer of the other respondents and pointed out that
Margarita Tabaoda and Portia Charisma Ruth Ortiz were the new owners of Lot No. 3080, which the two acquired from the Rural Bank
of Kabacan. They further alleged that the four other respondents-intervenors were joint tenants-cultivators of Lot Nos. 3080 and 3039.9

On 10 October 1996, the lower court issued an Order stating it would issue a writ of possession in favor of NIA upon the determination
of the fair market value of the properties, subject of the expropriation proceedings. 10 The lower court later amended its ruling and, on 21
October 1996, issued a Writ of Possession in favor of NIA. 11

On 15 October 1996, the committee submitted a Commissioners’ Report12 to the RTC stating the following observations:

In the process of ocular inspection, the following were jointly observed:

1) The area that was already occupied is 6x200 meters which is equivalent to 1,200 square meters;
2) The area which is to be occupied is 18,930 square meters, more or less;
3) That the area to be occupied is fully planted by gmelina trees with a spacing of 1x1 meters;
4) That the gmelina tress found in the area already occupied and used for [the] road is planted with gmelina with spacing of
2x2 and more or less one (1) year old;
5) That the gmelina trees found in the area to be occupied are already four (4) years old;
6) That the number of banana clumps (is) two hundred twenty (220);
7) That the number of coco trees found (is) fifteen (15). 13

The report, however, stated that the committee members could not agree on the market value of the subject properties and
recommended the appointment of new independent commissioners to replace the ones coming from the parties only.14 On 22 October
1996, the RTC issued an Order15 revoking the appointments of Atty. Agdeppa and Engr. Mabang as members of the committee and, in
their stead, appointed Renato Sambrano, Assistant Provincial Assessor of the Province of Cotabato; and Jack Tumacmol, Division
Chief of the Land Bank of the Philippines–Kidapawan Branch.16

On 25 November 1996, the new committee submitted its Commissioners’ Report to the lower court. The committee had agreed that the
fair market value of the land to be expropriated should be ₱ 65 per square meter based on the zonal valuation of the Bureau of Internal
Revenue (BIR). As regards the improvement on the properties, the report recommended the following compensation:
a. ₱ 200 for each gmelina tree that are more than four (4) years old
b. ₱ 150 for each gmelina tree that are more than one (1) year old
c. ₱ 164 for each coco tree
d. ₱ 270 for each banana clump17

On 03 December 1997, the committee submitted to the RTC another report, which had adopted the first Committee Report, as well as
the former’s 25 November 1996 report. However, the committee added to its computation the value of the earthfill excavated from
portions of Lot Nos. 3039 and 3080.18 Petitioner objected to the inclusion of the value of the excavated soil in the computation of the
value of the land.19

The Ruling of the Trial Court On 31 August 1999, the RTC promulgated its "Judgment," 20 the dispositive portion of which reads:

WHEREFORE, IN VIEW of all the foregoing considerations, the court finds and so holds that the commissioners have arrived at and
were able to determine the fair market value of the properties. The court adopts their findings, and orders:

1. That 18,930 square meters of the lands owned by the defendants is hereby expropriated in favor of the Republic of the Philippines
through the National Irrigation Administration;
2. That the NIA shall pay to the defendants the amount of ₱ 1,230,450 for the 18,930 square meters expropriated in proportion to the
areas so expropriated;
3. That the NIA shall pay to the defendant-intervenors, owners of Lot No. 3080, the sum of ₱ 5,128,375.50, representing removed
earthfill;
4. That the NIA shall pay to the defendants, owners of Lot No. 3039, the sum of P1,929,611.30 representing earthfill;
5. To pay to the defendants the sum of ₱ 60,000 for the destroyed G-melina trees (1 year old);
6. To pay to the defendants the sum of ₱ 3,786,000.00 for the 4-year old G-melina trees;
7. That NIA shall pay to the defendants the sum of ₱ 2,460.00 for the coconut trees;
8. That all payments intended for the defendant Rural Bank of Kabacan shall be given to the defendants and intervenors who have
already acquired ownership over the land titled in the name of the Bank. 21

NIA, through the Office of the Solicitor General (OSG), appealed the Decision of the RTC to the CA, which docketed the case as CA-
G.R. CV No. 65196. NIA assailed the trial court’s adoption of the Commissioners’ Report, which had determined the just compensation
to be awarded to the owners of the lands expropriated. NIA also impugned as error the RTC’s inclusion for compensation of the
excavated soil from the expropriated properties. Finally, it disputed the trial court’s Order to deliver the payment intended for the Rural
Bank of Kabacan to defendants-intervenors, who allegedly acquired ownership of the land still titled in the name of the said rural bank. 22

The Ruling of the Court of Appeals On 12 August 2008, the CA through its Twenty-First (21st) Division, promulgated a Decision23
affirming with modification the RTC Decision. It ruled that the committee tasked to determine the fair market value of the properties and
improvements for the purpose of arriving at the just compensation, properly performed its function. The appellate court noted that the
committee members had conducted ocular inspections of the area surrounding the expropriated properties and made their
recommendations based on official documents from the BIR with regard to the zonal valuations of the affected properties.24 The CA
observed that, as far as the valuation of the improvements on the properties was concerned, the committee members took into
consideration the provincial assessor’s appraisal of the age of the trees, their productivity and the inputs made. 25 The appellate court
further noted that despite the Manifestation of NIA that it be allowed to present evidence to rebut the recommendation of the committee
on the valuations of the expropriated properties, NIA failed to do so. 26

The assailed CA Decision, however, deleted the inclusion of the value of the soil excavated from the properties in the just
compensation. It ruled that the property owner was entitled to compensation only for the value of the property at the time of the taking. 27
In the construction of irrigation projects, excavations are necessary to build the canals, and the excavated soil cannot be valued
separately from the land expropriated. Thus, it concluded that NIA, as the new owner of the affected properties, had the right to enjoy
and make use of the property, including the excavated soil, pursuant to the latter’s objectives.28

Finally, the CA affirmed the trial court’s ruling that recognized defendants-intervenors Margarita Tabaoda and Portia Charisma Ruth
Ortiz as the new owners of Lot No. 3080 and held that they were thus entitled to just compensation. The appellate court based its
conclusion on the non-participation by the Rural Bank of Kabacan in the expropriation proceedings and the latter’s Manifestation that it
no longer owned Lot No. 3080.29

On 11 September 2008, the NIA through the OSG filed a Motion for Reconsideration of the 12 August 2008 Decision, but that motion
was denied.30

Aggrieved by the appellate court’s Decision, NIA now comes to this Court via a Petition for Review on Certiorari under Rule 45.

The Issues The Court of appeals seriously erred in affirming the trial court’s finding of just compensation of the land and the
improvements thereon based on the report of the commissioners.

The court of appeals erred in ruling that the payment of just compensation for lot no. 3080 should be made to respondents margarita
taboada and Portia charisma ruth Ortiz.31

The Court’s Ruling On the first issue, the Petition is not meritorious.

In expropriation proceedings, just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. The measure is not the taker's gain, but the owner's loss. The word "just" is used to intensify the meaning of the word
"compensation" and to convey thereby the idea that the equivalent to be rendered for the property to be taken shall be real, substantial,
full and ample.32 The constitutional limitation of "just compensation" is considered to be a sum equivalent to the market value of the
property, broadly defined as the price fixed by the seller in open market in the usual and ordinary course of legal action and
competition; or the fair value of the property; as between one who receives and one who desires to sell it, fixed at the time of the actual
taking by the government.33

In the instant case, we affirm the appellate court’s ruling that the commissioners properly determined the just compensation to be
awarded to the landowners whose properties were expropriated by petitioner.

The records show that the trial court dutifully followed the procedure under Rule 67 of the 1997 Rules of Civil Procedure when it formed
a committee that was tasked to determine the just compensation for the expropriated properties. The first set of committee members
made an ocular inspection of the properties, subject of the expropriation. They also determined the exact areas affected, as well as the
kinds and the number of improvements on the properties. 34 When the members were unable to agree on the valuation of the land and
the improvements thereon, the trial court selected another batch of disinterested members to carry out the task of determining the value
of the land and the improvements.

The new committee members even made a second ocular inspection of the expropriated areas. They also obtained data from the BIR
to determine the zonal valuation of the expropriated properties, interviewed the adjacent property owners, and considered other factors
such as distance from the highway and the nearby town center. 35 Further, the committee members also considered Provincial
Ordinance No. 173, which was promulgated by the Province of Cotabato on 15 June 1999, and which provide for the value of the
properties and the improvements for taxation purposes. 36

We can readily deduce from these established facts that the committee members endeavored a rigorous process to determine the just
compensation to be awarded to the owners of the expropriated properties. We cannot, as petitioner would want us to, oversimplify the
process undertaken by the committee in arriving at its recommendations, because these were not based on mere conjectures and
unreliable data.

In National Power Corporation v. Diato-Bernal,37 this Court emphasized that the "just"-ness of the compensation could only be attained
by using reliable and actual data as bases for fixing the value of the condemned property. The reliable and actual data we referred to in
that case were the sworn declarations of realtors in the area, as well as tax declarations and zonal valuation from the BIR. In
disregarding the Committee Report assailed by the National Power Corporation in the said case, we ruled thus:

It is evident that the above conclusions are highly speculative and devoid of any actual and reliable basis. First, the market values of the
subject property’s neighboring lots were mere estimates and unsupported by any corroborative documents, such as sworn declarations
of realtors in the area concerned, tax declarations or zonal valuation from the Bureau of Internal Revenue for the contiguous residential
dwellings and commercial establishments. The report also failed to elaborate on how and by how much the community centers and
convenience facilities enhanced the value of respondent’s property. Finally, the market sales data and price listings alluded to in the
report were not even appended thereto.

As correctly invoked by NAPOCOR, a commissioners’ report of land prices which is not based on any documentary evidence is
manifestly hearsay and should be disregarded by the court.

The trial court adopted the flawed findings of the commissioners hook, line, and sinker. It did not even bother to require the submission
of the alleged "market sales data" and "price listings." Further, the RTC overlooked the fact that the recommended just compensation
was gauged as of September 10, 1999 or more than two years after the complaint was filed on January 8, 1997. It is settled that just
compensation is to be ascertained as of the time of the taking, which usually coincides with the commencement of the expropriation
proceedings. Where the institution of the action precedes entry into the property, the just compensation is to be ascertained as of the
time of the filing of the complaint. Clearly, the recommended just compensation in the commissioners’ report is unacceptable. 38

In the instant case, the committee members based their recommendations on reliable data and, as aptly noted by the appellate court,
considered various factors that affected the value of the land and the improvements. 39

Petitioner, however, strongly objects to the CA’s affirmation of the trial court’s adoption of Provincial Ordinance No. 173. The OSG, on
behalf of petitioner, strongly argues that the recommendations of the committee formed by the trial court were inaccurate. The OSG
contends that the ordinance reflects the 1999 market values of real properties in the Province of Cotabato, while the actual taking was
made in 1996.40

We are not persuaded. We note that petitioner had ample opportunity to rebut the testimonial, as well as documentary evidence
presented by respondents when the case was still on trial. It failed to do so, however. The issue raised by petitioner was adequately
addresses by the CA’s assailed Decision in this wise:

A thorough scrutiny of the records reveals that the second set of Commissioners, with Atty. Marasigan still being the Chairperson and
Mr. Zambrano and Mr. Tomacmol as members, was not arbitrary and capricious in performing the task assigned to them. We note that
these Commissioners were competent and disinterested persons who were handpicked by the court a quo due to their expertise in
appraising the value of the land and the improvements thereon in the province of Cotabato. They made a careful study of the area
affected by the expropriation, mindful of the fact that the value of the land and its may be affected by many factors. The duly appointed
Commissioners made a second ocular inspection of the subject area on 4 September 1997; went to the BIR office in order to get the
BIR zonal valuation of the properties located in Carmen, Cotabato; interviewed adjacent property owners; and took into consideration
various factors such as the location of the land which is just less than a kilometer away from the Poblacion and half a kilometer away
from the highway and the fact that it is near a military reservation. With regard to the improvements, the Commissioners took into
consideration the valuation of the Provincial Assessor, the age of the trees, and the inputs and their productivity.

Thus, it could not be said that the schedule of market values in Ordinance No. 173 was the sole basis of the Commissioners in arriving
at their valuation. Said ordinance merely gave credence to their valuation which is comparable to the current price at that time. Besides,
Mr. Zambrano testified that the date used as bases for Ordinance No. 173 were taken from 1995 to 1996. 41
Moreover, factual findings of the CA are generally binding on this Court. The rule admits of exceptions, though, such as when the
factual findings of the appellate court and the trial court are contradictory, or when the findings are not supported by the evidence on
record.42 These exceptions, however, are not present in the instant case.

Thus, in the absence of contrary evidence, we affirm the findings of the CA, which sustained the trial court’s Decision adopting the
committee’s recommendations on the just compensation to be awarded to herein respondents.

We also uphold the CA ruling, which deleted the inclusion of the value of the excavated soil in the payment for just compensation.
There is no legal basis to separate the value of the excavated soil from that of the expropriated properties, contrary to what the trial
court did. In the context of expropriation proceedings, the soil has no value separate from that of the expropriated land. Just
compensation ordinarily refers to the value of the land to compensate for what the owner actually loses. Such value could only be that
which prevailed at the time of the taking.

In National Power Corporation v. Ibrahim, et al., 43 we held that rights over lands are indivisible, viz:

[C]onsequently, the CA’s findings which upheld those of the trial court that respondents owned and possessed the property and that its
substrata was possessed by petitioner since 1978 for the underground tunnels, cannot be disturbed. Moreover, the Court sustains the
finding of the lower courts that the sub-terrain portion of the property similarly belongs to respondents. This conclusion is drawn from
Article 437 of the Civil Code which provides:

ART. 437. The owner of a parcel of land is the owner of its surface and of everything under it, and he can construct thereon any works
or make any plantations and excavations which he may deem proper, without detriment to servitudes and subject to special laws and
ordinances. He cannot complain of the reasonable requirements of aerial navigation.

Thus, the ownership of land extends to the surface as well as to the subsoil under it.

Registered landowners may even be ousted of ownership and possession of their properties in the event the latter are reclassified as
mineral lands because real properties are characteristically indivisible. For the loss sustained by such owners, they are entitled to just
compensation under the Mining Laws or in appropriate expropriation proceedings.

Moreover, petitioner’s argument that the landowners’ right extends to the sub-soil insofar as necessary for their practical interests
serves only to further weaken its case. The theory would limit the right to the sub-soil upon the economic utility which such area offers
to the surface owners. Presumably, the landowners’ right extends to such height or depth where it is possible for them to obtain some
benefit or enjoyment, and it is extinguished beyond such limit as there would be no more interest protected by law.

Hence, the CA correctly modified the trial court’s Decision when it ruled thus: We agree with the OSG that NIA, in the construction of
irrigation projects, must necessarily make excavations in order to build the canals. Indeed it is preposterous that NIA will be made to
pay not only for the value of the land but also for the soil excavated from such land when such excavation is a necessary phase in the
building of irrigation projects. That NIA will make use of the excavated soil is of no moment and is of no concern to the landowner who
has been paid the fair market value of his land. As pointed out by the OSG, the law does not limit the use of the expropriated land to the
surface area only. Further, NIA, now being the owner of the expropriated property, has the right to enjoy and make use of the property
in accordance with its mandate and objectives as provided by law. To sanction the payment of the excavated soil is to allow the
landowners to recover more than the value of the land at the time when it was taken, which is the true measure of the damages, or just
compensation, and would discourage the construction of important public improvements. 44

On the second issue, the Petition is meritorious. The CA affirmed the ruling of the trial court, which had awarded the payment of just
compensation – intended for Lot No. 3080 registered in the name of the Rural Bank of Kabacan – to the defendants-intervenors on the
basis of the non-participation of the rural bank in the proceedings and the latter’s subsequent Manifestation that it was no longer the
owner of that lot. The appellate court erred on this matter.

It should be noted that eminent domain cases involve the expenditure of public funds. 45 In this kind of proceeding, we require trial courts
to be more circumspect in their evaluation of the just compensation to be awarded to the owner of the expropriated property. 46 Thus, it
was imprudent for the appellate court to rely on the Rural Bank of Kabacan’s mere declaration of non-ownership and non-participation
in the expropriation proceeding to validate defendants-intervenors’ claim of entitlement to that payment.

The law imposes certain legal requirements in order for a conveyance of real property to be valid. It should be noted that Lot No. 3080
is a registered parcel of land covered by TCT No. T-61963. In order for the reconveyance of real property to be valid, the conveyance
must be embodied in a public document47 and registered in the office of the Register of Deeds where the property is situated.48

We have scrupulously examined the records of the case and found no proof of conveyance or evidence of transfer of ownership of Lot
No. 3080 from its registered owner, the Rural Bank of Kabacan, to defendants-intervenors. As it is, the TCT is still registered in the
name of the said rural bank. It is not disputed that the bank did not participate in the expropriation proceedings, and that it manifested
that it no longer owned Lot No. 3080. The trial court should have nevertheless required the rural bank and the defendants-intervenors to
show proof or evidence pertaining to the conveyance of the subject lot. The court cannot rely on mere inference, considering that the
payment of just compensation is intended to be awarded solely owner based on the latter’s proof of ownership.

The trial court should have been guided by Rule 67, Section 9 of the 1997 Rules of Court, which provides thus:

SEC. 9. Uncertain ownership; conflicting claims. — If the ownership of the property taken is uncertain, or there are conflicting claims to
any part thereof, the court may order any sum or sums awarded as compensation for the property to be paid to the court for the benefit
of the person adjudged in the same proceeding to be entitled thereto. But the judgment shall require the payment of the sum or sums
awarded to either the defendant or the court before the plaintiff can enter upon the property, or retain it for the public use or purpose if
entry has already been made.

Hence, the appellate court erred in affirming the trial court’s Order to award payment of just compensation to the defendants-
intervenors. There is doubt as to the real owner of Lot No. 3080. Despite the fact that the lot was covered by TCT No. T-61963 and was
registered under its name, the Rural Bank of Kabacan manifested that the owner of the lot was no longer the bank, but the defendants-
intervenors; however, it presented no proof as to the conveyance thereof. In this regard, we deem it proper to remand this case to the
trial court for the reception of evidence to establish the present owner of Lot No. 3080 who will be entitled to receive the payment of just
compensation.

WHEREFORE, the Petition is PARTLY GRANTED. The 12 August 2008 CA Decision in CA-G.R. CV No. 65196, awarding just
compensation to the defendants as owners of the expropriated properties and deleting the inclusion of the value of the excavated soil,
is hereby AFFIRMED with MODIFICATION. The case is hereby REMANDED to the trial court for the reception of evidence to establish
the present owner of Lot No. 3080. No pronouncements as to cost.

G.R. No. 155076 January 13, 2009

LUIS MARCOS P. LAUREL, Petitioner, vs. HON. ZEUS C. ABROGAR, Presiding Judge of the Regional Trial Court, Makati City,
Branch 150, PEOPLE OF THE PHILIPPINES & PHILIPPINE LONG DISTANCE TELEPHONE COMPANY Respondents.

On February 27, 2006, this Court’s First Division rendered judgment in this case as follows:

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed Orders of the Regional Trial Court and the Decision of
the Court of Appeals are REVERSED and SET ASIDE. The Regional Trial Court is directed to issue an order granting the motion of the
petitioner to quash the Amended Information. By way of brief background, petitioner is one of the accused in Criminal Case No. 99-
2425, filed with the Regional Trial Court of Makati City, Branch 150. The Amended Information charged the accused with theft under
Article 308 of the Revised Penal Code, committed as follows:

On or about September 10-19, 1999, or prior thereto in Makati City, and within the jurisdiction of this Honorable Court, the accused,
conspiring and confederating together and all of them mutually helping and aiding one another, with intent to gain and without the
knowledge and consent of the Philippine Long Distance Telephone (PLDT), did then and there willfully, unlawfully and feloniously take,
steal and use the international long distance calls belonging to PLDT by conducting International Simple Resale (ISR), which is a
method of routing and completing international long distance calls using lines, cables, antenae, and/or air wave frequency which
connect directly to the local or domestic exchange facilities of the country where the call is destined, effectively stealing this business
from PLDT while using its facilities in the estimated amount of P20,370,651.92 to the damage and prejudice of PLDT, in the said
amount.

Petitioner filed a "Motion to Quash (with Motion to Defer Arraignment)," on the ground that the factual allegations in the Amended
Information do not constitute the felony of theft. The trial court denied the Motion to Quash the Amended Information, as well
petitioner’s subsequent Motion for Reconsideration.

Petitioner’s special civil action for certiorari was dismissed by the Court of Appeals. Thus, petitioner filed the instant petition for review
with this Court.

In the above-quoted Decision, this Court held that the Amended Information does not contain material allegations charging petitioner
with theft of personal property since international long distance calls and the business of providing telecommunication or telephone
services are not personal properties under Article 308 of the Revised Penal Code.

Respondent Philippine Long Distance Telephone Company (PLDT) filed a Motion for Reconsideration with Motion to Refer the Case to
the Supreme Court En Banc. It maintains that the Amended Information charging petitioner with theft is valid and sufficient; that it states
the names of all the accused who were specifically charged with the crime of theft of PLDT’s international calls and business of
providing telecommunication or telephone service on or about September 10 to 19, 1999 in Makati City by conducting ISR or
International Simple Resale; that it identifies the international calls and business of providing telecommunication or telephone service of
PLDT as the personal properties which were unlawfully taken by the accused; and that it satisfies the test of sufficiency as it enabled a
person of common understanding to know the charge against him and the court to render judgment properly.
PLDT further insists that the Revised Penal Code should be interpreted in the context of the Civil Code’s definition of real and personal
property. The enumeration of real properties in Article 415 of the Civil Code is exclusive such that all those not included therein are
personal properties. Since Article 308 of the Revised Penal Code used the words "personal property" without qualification, it follows that
all "personal properties" as understood in the context of the Civil Code, may be the subject of theft under Article 308 of the Revised
Penal Code. PLDT alleges that the international calls and business of providing telecommunication or telephone service are personal
properties capable of appropriation and can be objects of theft.

PLDT also argues that "taking" in relation to theft under the Revised Penal Code does not require "asportation," the sole requisite being
that the object should be capable of "appropriation." The element of "taking" referred to in Article 308 of the Revised Penal Code means
the act of depriving another of the possession and dominion of a movable coupled with the intention, at the time of the "taking," of
withholding it with the character of permanency. There must be intent to appropriate, which means to deprive the lawful owner of the
thing. Thus, the term "personal properties" under Article 308 of the Revised Penal Code is not limited to only personal properties which
are "susceptible of being severed from a mass or larger quantity and of being transported from place to place."

PLDT likewise alleges that as early as the 1930s, international telephone calls were in existence; hence, there is no basis for this
Court’s finding that the Legislature could not have contemplated the theft of international telephone calls and the unlawful transmission
and routing of electronic voice signals or impulses emanating from such calls by unlawfully tampering with the telephone device as
within the coverage of the Revised Penal Code.

According to respondent, the "international phone calls" which are "electric currents or sets of electric impulses transmitted through a
medium, and carry a pattern representing the human voice to a receiver," are personal properties which may be subject of theft. Article
416(3) of the Civil Code deems "forces of nature" (which includes electricity) which are brought under the control by science, are
personal property.

In his Comment to PLDT’s motion for reconsideration, petitioner Laurel claims that a telephone call is a conversation on the phone or a
communication carried out using the telephone. It is not synonymous to electric current or impulses. Hence, it may not be considered as
personal property susceptible of appropriation. Petitioner claims that the analogy between generated electricity and telephone calls is
misplaced. PLDT does not produce or generate telephone calls. It only provides the facilities or services for the transmission and
switching of the calls. He also insists that "business" is not personal property. It is not the "business" that is protected but the "right to
carry on a business." This right is what is considered as property. Since the services of PLDT cannot be considered as "property," the
same may not be subject of theft.

The Office of the Solicitor General (OSG) agrees with respondent PLDT that "international phone calls and the business or service of
providing international phone calls" are subsumed in the enumeration and definition of personal property under the Civil Code hence,
may be proper subjects of theft. It noted that the cases of United States v. Genato,3 United States v. Carlos4 and United States v.
Tambunting,5 which recognized intangible properties like gas and electricity as personal properties, are deemed incorporated in our
penal laws. Moreover, the theft provision in the Revised Penal Code was deliberately couched in broad terms precisely to be all-
encompassing and embracing even such scenario that could not have been easily anticipated.

According to the OSG, prosecution under Republic Act (RA) No. 8484 or the Access Device Regulations Act of 1998 and RA 8792 or
the Electronic Commerce Act of 2000 does not preclude prosecution under the Revised Penal Code for the crime of theft. The latter
embraces unauthorized appropriation or use of PLDT’s international calls, service and business, for personal profit or gain, to the
prejudice of PLDT as owner thereof. On the other hand, the special laws punish the surreptitious and advanced technical means
employed to illegally obtain the subject service and business. Even assuming that the correct indictment should have been under RA
8484, the quashal of the information would still not be proper. The charge of theft as alleged in the Information should be taken in
relation to RA 8484 because it is the elements, and not the designation of the crime, that control.

Considering the gravity and complexity of the novel questions of law involved in this case, the Special First Division resolved to refer the
same to the Banc.

We resolve to grant the Motion for Reconsideration but remand the case to the trial court for proper clarification of the Amended
Information.

Art. 308. Who are liable for theft. – Theft is committed by any person who, with intent to gain but without violence against, or
intimidation of persons nor force upon things, shall take personal property of another without the latter’s consent.

The elements of theft under Article 308 of the Revised Penal Code are as follows: (1) that there be taking of personal property; (2) that
said property belongs to another; (3) that the taking be done with intent to gain; (4) that the taking be done without the consent of the
owner; and (5) that the taking be accomplished without the use of violence against or intimidation of persons or force upon things.

Prior to the passage of the Revised Penal Code on December 8, 1930, the definition of the term "personal property" in the penal code
provision on theft had been established in Philippine jurisprudence. This Court, in United States v. Genato, United States v. Carlos, and
United States v. Tambunting, consistently ruled that any personal property, tangible or intangible, corporeal or incorporeal, capable of
appropriation can be the object of theft.
Moreover, since the passage of the Revised Penal Code on December 8, 1930, the term "personal property" has had a generally
accepted definition in civil law. In Article 335 of the Civil Code of Spain, "personal property" is defined as "anything susceptible of
appropriation and not included in the foregoing chapter (not real property)." Thus, the term "personal property" in the Revised Penal
Code should be interpreted in the context of the Civil Code provisions in accordance with the rule on statutory construction that where
words have been long used in a technical sense and have been judicially construed to have a certain meaning, and have been adopted
by the legislature as having a certain meaning prior to a particular statute, in which they are used, the words used in such statute
should be construed according to the sense in which they have been previously used. 6 In fact, this Court used the Civil Code definition
of "personal property" in interpreting the theft provision of the penal code in United States v. Carlos.

Cognizant of the definition given by jurisprudence and the Civil Code of Spain to the term "personal property" at the time the old Penal
Code was being revised, still the legislature did not limit or qualify the definition of "personal property" in the Revised Penal Code.
Neither did it provide a restrictive definition or an exclusive enumeration of "personal property" in the Revised Penal Code, thereby
showing its intent to retain for the term an extensive and unqualified interpretation.1avvphi1.zw+ Consequently, any property which is
not included in the enumeration of real properties under the Civil Code and capable of appropriation can be the subject of theft under
the Revised Penal Code.

The only requirement for a personal property to be the object of theft under the penal code is that it be capable of appropriation. It need
not be capable of "asportation," which is defined as "carrying away." 7 Jurisprudence is settled that to "take" under the theft provision of
the penal code does not require asportation or carrying away. 8

To appropriate means to deprive the lawful owner of the thing.9 The word "take" in the Revised Penal Code includes any act intended to
transfer possession which, as held in the assailed Decision, may be committed through the use of the offenders’ own hands, as well as
any mechanical device, such as an access device or card as in the instant case. This includes controlling the destination of the property
stolen to deprive the owner of the property, such as the use of a meter tampering, as held in Natividad v. Court of Appeals, 10 use of a
device to fraudulently obtain gas, as held in United States v. Tambunting, and the use of a jumper to divert electricity, as held in the
cases of United States v. Genato, United States v. Carlos, and United States v. Menagas. 11

As illustrated in the above cases, appropriation of forces of nature which are brought under control by science such as electrical energy
can be achieved by tampering with any apparatus used for generating or measuring such forces of nature, wrongfully redirecting such
forces of nature from such apparatus, or using any device to fraudulently obtain such forces of nature. In the instant case, petitioner
was charged with engaging in International Simple Resale (ISR) or the unauthorized routing and completing of international long
distance calls using lines, cables, antennae, and/or air wave frequency and connecting these calls directly to the local or domestic
exchange facilities of the country where destined.

As early as 1910, the Court declared in Genato that ownership over electricity (which an international long distance call consists of), as
well as telephone service, is protected by the provisions on theft of the Penal Code. The pertinent provision of the Revised Ordinance of
the City of Manila, which was involved in the said case, reads as follows:

Injury to electric apparatus; Tapping current; Evidence. – No person shall destroy, mutilate, deface, or otherwise injure or tamper with
any wire, meter, or other apparatus installed or used for generating, containing, conducting, or measuring electricity, telegraph or
telephone service, nor tap or otherwise wrongfully deflect or take any electric current from such wire, meter, or other apparatus.

No person shall, for any purpose whatsoever, use or enjoy the benefits of any device by means of which he may fraudulently obtain any
current of electricity or any telegraph or telephone service; and the existence in any building premises of any such device shall, in the
absence of satisfactory explanation, be deemed sufficient evidence of such use by the persons benefiting thereby.

It was further ruled that even without the above ordinance the acts of subtraction punished therein are covered by the provisions on
theft of the Penal Code then in force, thus:

Even without them (ordinance), the right of the ownership of electric current is secured by articles 517 and 518 of the Penal Code; the
application of these articles in cases of subtraction of gas, a fluid used for lighting, and in some respects resembling electricity, is
confirmed by the rule laid down in the decisions of the supreme court of Spain of January 20, 1887, and April 1, 1897, construing and
enforcing the provisions of articles 530 and 531 of the Penal Code of that country, articles 517 and 518 of the code in force in these
islands.

The acts of "subtraction" include: (a) tampering with any wire, meter, or other apparatus installed or used for generating, containing,
conducting, or measuring electricity, telegraph or telephone service; (b) tapping or otherwise wrongfully deflecting or taking any electric
current from such wire, meter, or other apparatus; and (c) using or enjoying the benefits of any device by means of which one may
fraudulently obtain any current of electricity or any telegraph or telephone service.

In the instant case, the act of conducting ISR operations by illegally connecting various equipment or apparatus to private respondent
PLDT’s telephone system, through which petitioner is able to resell or re-route international long distance calls using respondent
PLDT’s facilities constitutes all three acts of subtraction mentioned above.
The business of providing telecommunication or telephone service is likewise personal property which can be the object of theft under
Article 308 of the Revised Penal Code. Business may be appropriated under Section 2 of Act No. 3952 (Bulk Sales Law), hence, could
be object of theft:

Section 2. Any sale, transfer, mortgage, or assignment of a stock of goods, wares, merchandise, provisions, or materials otherwise than
in the ordinary course of trade and the regular prosecution of the business of the vendor, mortgagor, transferor, or assignor, or any
sale, transfer, mortgage, or assignment of all, or substantially all, of the business or trade theretofore conducted by the vendor,
mortgagor, transferor or assignor, or all, or substantially all, of the fixtures and equipment used in and about the business of the vendor,
mortgagor, transferor, or assignor, shall be deemed to be a sale and transfer in bulk, in contemplation of the Act.

In Strochecker v. Ramirez this Court stated: With regard to the nature of the property thus mortgaged which is one-half interest in the
business above described, such interest is a personal property capable of appropriation and not included in the enumeration of real
properties in article 335 of the Civil Code, and may be the subject of mortgage.

Interest in business was not specifically enumerated as personal property in the Civil Code in force at the time the above decision was
rendered. Yet, interest in business was declared to be personal property since it is capable of appropriation and not included in the
enumeration of real properties. Article 414 of the Civil Code provides that all things which are or may be the object of appropriation are
considered either real property or personal property. Business is likewise not enumerated as personal property under the Civil Code.
Just like interest in business, however, it may be appropriated. Following the ruling in Strochecker v. Ramirez, business should also be
classified as personal property. Since it is not included in the exclusive enumeration of real properties under Article 415, it is therefore
personal property.13

As can be clearly gleaned from the above disquisitions, petitioner’s acts constitute theft of respondent PLDT’s business and service,
committed by means of the unlawful use of the latter’s facilities. In this regard, the Amended Information inaccurately describes the
offense by making it appear that what petitioner took were the international long distance telephone calls, rather than respondent
PLDT’s business.

A perusal of the records of this case readily reveals that petitioner and respondent PLDT extensively discussed the issue of ownership
of telephone calls. The prosecution has taken the position that said telephone calls belong to respondent PLDT. This is evident from its
Comment where it defined the issue of this case as whether or not "the unauthorized use or appropriation of PLDT international
telephone calls, service and facilities, for the purpose of generating personal profit or gain that should have otherwise belonged to
PLDT, constitutes theft."14

In discussing the issue of ownership, petitioner and respondent PLDT gave their respective explanations on how a telephone call is
generated.15 For its part, respondent PLDT explains the process of generating a telephone call as follows:

38. The role of telecommunication companies is not limited to merely providing the medium (i.e. the electric current) through which the
human voice/voice signal of the caller is transmitted. Before the human voice/voice signal can be so transmitted, a telecommunication
company, using its facilities, must first break down or decode the human voice/voice signal into electronic impulses and subject the
same to further augmentation and enhancements. Only after such process of conversion will the resulting electronic impulses be
transmitted by a telecommunication company, again, through the use of its facilities. Upon reaching the destination of the call, the
telecommunication company will again break down or decode the electronic impulses back to human voice/voice signal before the
called party receives the same. In other words, a telecommunication company both converts/reconverts the human voice/voice signal
and provides the medium for transmitting the same.

39. Moreover, in the case of an international telephone call, once the electronic impulses originating from a foreign telecommunication
company country (i.e. Japan) reaches the Philippines through a local telecommunication company (i.e. private respondent PLDT), it is
the latter which decodes, augments and enhances the electronic impulses back to the human voice/voice signal and provides the
medium (i.e. electric current) to enable the called party to receive the call. Thus, it is not true that the foreign telecommunication
company provides (1) the electric current which transmits the human voice/voice signal of the caller and (2) the electric current for the
called party to receive said human voice/voice signal.

40. Thus, contrary to petitioner Laurel’s assertion, once the electronic impulses or electric current originating from a foreign
telecommunication company (i.e. Japan) reaches private respondent PLDT’s network, it is private respondent PLDT which decodes,
augments and enhances the electronic impulses back to the human voice/voice signal and provides the medium (i.e. electric current) to
enable the called party to receive the call. Without private respondent PLDT’s network, the human voice/voice signal of the calling party
will never reach the called party.16

In the assailed Decision, it was conceded that in making the international phone calls, the human voice is converted into electrical
impulses or electric current which are transmitted to the party called. A telephone call, therefore, is electrical energy. It was also held in
the assailed Decision that intangible property such as electrical energy is capable of appropriation because it may be taken and carried
away. Electricity is personal property under Article 416 (3) of the Civil Code, which enumerates "forces of nature which are brought
under control by science."17
Indeed, while it may be conceded that "international long distance calls," the matter alleged to be stolen in the instant case, take the
form of electrical energy, it cannot be said that such international long distance calls were personal properties belonging to PLDT since
the latter could not have acquired ownership over such calls. PLDT merely encodes, augments, enhances, decodes and transmits said
calls using its complex communications infrastructure and facilities. PLDT not being the owner of said telephone calls, then it could not
validly claim that such telephone calls were taken without its consent. It is the use of these communications facilities without the
consent of PLDT that constitutes the crime of theft, which is the unlawful taking of the telephone services and business.

Therefore, the business of providing telecommunication and the telephone service are personal property under Article 308 of the
Revised Penal Code, and the act of engaging in ISR is an act of "subtraction" penalized under said article. However, the Amended
Information describes the thing taken as, "international long distance calls," and only later mentions "stealing the business from PLDT"
as the manner by which the gain was derived by the accused. In order to correct this inaccuracy of description, this case must be
remanded to the trial court and the prosecution directed to amend the Amended Information, to clearly state that the property subject of
the theft are the services and business of respondent PLDT. Parenthetically, this amendment is not necessitated by a mistake in
charging the proper offense, which would have called for the dismissal of the information under Rule 110, Section 14 and Rule 119,
Section 19 of the Revised Rules on Criminal Procedure. To be sure, the crime is properly designated as one of theft. The purpose of
the amendment is simply to ensure that the accused is fully and sufficiently apprised of the nature and cause of the charge against him,
and thus guaranteed of his rights under the Constitution.

ACCORDINGLY, the motion for reconsideration is GRANTED. The assailed Decision dated February 27, 2006 is RECONSIDERED
and SET ASIDE. The Decision of the Court of Appeals in CA-G.R. SP No. 68841 affirming the Order issued by Judge Zeus C. Abrogar
of the Regional Trial Court of Makati City, Branch 150, which denied the Motion to Quash (With Motion to Defer Arraignment) in
Criminal Case No. 99-2425 for theft, is AFFIRMED. The case is remanded to the trial court and the Public Prosecutor of Makati City is
hereby DIRECTED to amend the Amended Information to show that the property subject of the theft were services and business of the
private offended party.

G.R. No. 137705 August 22, 2000

SERG'S PRODUCTS, INC., and SERGIO T. GOQUIOLAY, petitioners, vs. PCI LEASING AND FINANCE, INC., respondent.

After agreeing to a contract stipulating that a real or immovable property be considered as personal or movable, a party is estopped
from subsequently claiming otherwise. Hence, such property is a proper subject of a writ of replevin obtained by the other contracting
party.

The Case Before us is a Petition for Review on Certiorari assailing the January 6, 1999 Decision 1 of the Court of Appeals (CA)2 in CA-
GR SP No. 47332 and its February 26, 1999 Resolution 3 denying reconsideration. The decretal portion of the CA Decision reads as
follows:

"WHEREFORE, premises considered, the assailed Order dated February 18, 1998 and Resolution dated March 31, 1998 in Civil Case
No. Q-98-33500 are hereby AFFIRMED. The writ of preliminary injunction issued on June 15, 1998 is hereby LIFTED."4

In its February 18, 1998 Order,5 the Regional Trial Court (RTC) of Quezon City (Branch 218)6 issued a Writ of Seizure.7 The March 18,
1998 Resolution8 denied petitioners’ Motion for Special Protective Order, praying that the deputy sheriff be enjoined "from seizing
immobilized or other real properties in (petitioners’) factory in Cainta, Rizal and to return to their original place whatever immobilized
machineries or equipments he may have removed."9

"On February 13, 1998, respondent PCI Leasing and Finance, Inc. ("PCI Leasing" for short) filed with the RTC-QC a complaint for [a]
sum of money (Annex ‘E’), with an application for a writ of replevin docketed as Civil Case No. Q-98-33500.

"On March 6, 1998, upon an ex-parte application of PCI Leasing, respondent judge issued a writ of replevin (Annex ‘B’) directing its
sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary
expenses.

"On March 24, 1998, in implementation of said writ, the sheriff proceeded to petitioner’s factory, seized one machinery with [the] word
that he [would] return for the other machineries.

"On March 25, 1998, petitioners filed a motion for special protective order (Annex ‘C’), invoking the power of the court to control the
conduct of its officers and amend and control its processes, praying for a directive for the sheriff to defer enforcement of the writ of
replevin.

"This motion was opposed by PCI Leasing (Annex ‘F’), on the ground that the properties [were] still personal and therefore still subject
to seizure and a writ of replevin.

"In their Reply, petitioners asserted that the properties sought to be seized [were] immovable as defined in Article 415 of the Civil Code,
the parties’ agreement to the contrary notwithstanding. They argued that to give effect to the agreement would be prejudicial to innocent
third parties. They further stated that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in
which the alleged agreement [were] embodied [were] totally sham and farcical.

"On April 6, 1998, the sheriff again sought to enforce the writ of seizure and take possession of the remaining properties. He was able
to take two more, but was prevented by the workers from taking the rest.

"On April 7, 1998, they went to [the CA] via an original action for certiorari."

Ruling of the Court of Appeals Citing the Agreement of the parties, the appellate court held that the subject machines were personal
property, and that they had only been leased, not owned, by petitioners. It also ruled that the "words of the contract are clear and leave
no doubt upon the true intention of the contracting parties." Observing that Petitioner Goquiolay was an experienced businessman who
was "not unfamiliar with the ways of the trade," it ruled that he "should have realized the import of the document he signed." The CA
further held:

"Furthermore, to accord merit to this petition would be to preempt the trial court in ruling upon the case below, since the merits of the
whole matter are laid down before us via a petition whose sole purpose is to inquire upon the existence of a grave abuse of discretion
on the part of the [RTC] in issuing the assailed Order and Resolution. The issues raised herein are proper subjects of a full-blown trial,
necessitating presentation of evidence by both parties. The contract is being enforced by one, and [its] validity is attacked by the other –
a matter which respondent court is in the best position to determine."Hence, this Petition.

In their Memorandum, petitioners submit the following issues for our consideration:

A. Whether or not the machineries purchased and imported by SERG’S became real property by virtue of immobilization.
B. Whether or not the contract between the parties is a loan or a lease

In the main, the Court will resolve whether the said machines are personal, not immovable, property which may be a proper subject of a
writ of replevin. As a preliminary matter, the Court will also address briefly the procedural points raised by respondent.

The Court’s Ruling The Petition is not meritorious.

Preliminary Matter:Procedural Questions Respondent contends that the Petition failed to indicate expressly whether it was being filed
under Rule 45 or Rule 65 of the Rules of Court. It further alleges that the Petition erroneously impleaded Judge Hilario Laqui as
respondent.

There is no question that the present recourse is under Rule 45. This conclusion finds support in the very title of the Petition, which is
"Petition for Review on Certiorari."13

While Judge Laqui should not have been impleaded as a respondent, 14 substantial justice requires that such lapse by itself should not
warrant the dismissal of the present Petition. In this light, the Court deems it proper to remove, motu proprio, the name of Judge Laqui
from the caption of the present case.

Main Issue: Nature of the Subject Machinery Petitioners contend that the subject machines used in their factory were not proper
subjects of the Writ issued by the RTC, because they were in fact real property. Serious policy considerations, they argue, militate
against a contrary characterization.

Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only. 15 Section 3 thereof
reads:

"SEC. 3. Order. -- Upon the filing of such affidavit and approval of the bond, the court shall issue an order and the corresponding writ of
replevin describing the personal property alleged to be wrongfully detained and requiring the sheriff forthwith to take such property into
his custody."

On the other hand, Article 415 of the Civil Code enumerates immovable or real property as follows: "ART. 415. The following are
immovable property: (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or
works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or
works;

In the present case, the machines that were the subjects of the Writ of Seizure were placed by petitioners in the factory built on their
own land. Indisputably, they were essential and principal elements of their chocolate-making industry. Hence, although each of them
was movable or personal property on its own, all of them have become "immobilized by destination because they are essential and
principal elements in the industry."16 In that sense, petitioners are correct in arguing that the said machines are real, not personal,
property pursuant to Article 415 (5) of the Civil Code.17
Be that as it may, we disagree with the submission of the petitioners that the said machines are not proper subjects of the Writ of
Seizure.

The Court has held that contracting parties may validly stipulate that a real property be considered as personal. 18 After agreeing to such
stipulation, they are consequently estopped from claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein.

Hence, in Tumalad v. Vicencio,19 the Court upheld the intention of the parties to treat a house as a personal property because it had
been made the subject of a chattel mortgage. The Court ruled:

Although there is no specific statement referring to the subject house as personal property, yet by ceding, selling or transferring a
property by way of chattel mortgage defendants-appellants could only have meant to convey the house as chattel, or at least, intended
to treat the same as such, so that they should not now be allowed to make an inconsistent stand by claiming otherwise."

Applying Tumalad, the Court in Makati Leasing and Finance Corp. v. Wearever Textile Mills20 also held that the machinery used in a
factory and essential to the industry, as in the present case, was a proper subject of a writ of replevin because it was treated as
personal property in a contract. Pertinent portions of the Court’s ruling are reproduced hereunder:

If a house of strong materials, like what was involved in the above Tumalad case, may be considered as personal property for purposes
of executing a chattel mortgage thereon as long as the parties to the contract so agree and no innocent third party will be prejudiced
thereby, there is absolutely no reason why a machinery, which is movable in its nature and becomes immobilized only by destination or
purpose, may not be likewise treated as such. This is really because one who has so agreed is estopped from denying the existence of
the chattel mortgage."

In the present case, the Lease Agreement clearly provides that the machines in question are to be considered as personal property.
Specifically, Section 12.1 of the Agreement reads as follows:"12.1 The PROPERTY is, and shall at all times be and remain, personal
property notwithstanding that the PROPERTY or any part thereof may now be, or hereafter become, in any manner affixed or attached
to or embedded in, or permanently resting upon, real property or any building thereon, or attached in any manner to what is
permanent."

Clearly then, petitioners are estopped from denying the characterization of the subject machines as personal property. Under the
circumstances, they are proper subjects of the Writ of Seizure.

It should be stressed, however, that our holding -- that the machines should be deemed personal property pursuant to the Lease
Agreement – is good only insofar as the contracting parties are concerned.22 Hence, while the parties are bound by the Agreement,
third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal.23 In any event,
there is no showing that any specific third party would be adversely affected.

Validity of the Lease Agreement In their Memorandum, petitioners contend that the Agreement is a loan and not a lease. 24 Submitting
documents supposedly showing that they own the subject machines, petitioners also argue in their Petition that the Agreement suffers
from "intrinsic ambiguity which places in serious doubt the intention of the parties and the validity of the lease agreement itself."25 In
their Reply to respondent’s Comment, they further allege that the Agreement is invalid. 26

These arguments are unconvincing. The validity and the nature of the contract are the lis mota of the civil action pending before the
RTC. A resolution of these questions, therefore, is effectively a resolution of the merits of the case. Hence, they should be threshed out
in the trial, not in the proceedings involving the issuance of the Writ of Seizure.

Indeed, in La Tondeña Distillers v. CA,27 the Court explained that the policy under Rule 60 was that questions involving title to the
subject property – questions which petitioners are now raising -- should be determined in the trial. In that case, the Court noted that the
remedy of defendants under Rule 60 was either to post a counter-bond or to question the sufficiency of the plaintiff’s bond. They were
not allowed, however, to invoke the title to the subject property. The Court ruled:

"In other words, the law does not allow the defendant to file a motion to dissolve or discharge the writ of seizure (or delivery) on ground
of insufficiency of the complaint or of the grounds relied upon therefor, as in proceedings on preliminary attachment or injunction, and
thereby put at issue the matter of the title or right of possession over the specific chattel being replevied, the policy apparently being
that said matter should be ventilated and determined only at the trial on the merits." 28

Besides, these questions require a determination of facts and a presentation of evidence, both of which have no place in a petition for
certiorari in the CA under Rule 65 or in a petition for review in this Court under Rule 45. 29

Reliance on the Lease Agreement It should be pointed out that the Court in this case may rely on the Lease Agreement, for nothing on
record shows that it has been nullified or annulled. In fact, petitioners assailed it first only in the RTC proceedings, which had ironically
been instituted by respondent. Accordingly, it must be presumed valid and binding as the law between the parties.
Makati Leasing and Finance Corporation 30 is also instructive on this point. In that case, the Deed of Chattel Mortgage, which
characterized the subject machinery as personal property, was also assailed because respondent had allegedly been required "to sign
a printed form of chattel mortgage which was in a blank form at the time of signing." The Court rejected the argument and relied on the
Deed, ruling as follows:

Moreover, even granting that the charge is true, such fact alone does not render a contract void ab initio, but can only be a ground for
rendering said contract voidable, or annullable pursuant to Article 1390 of the new Civil Code, by a proper action in court. There is
nothing on record to show that the mortgage has been annulled. Neither is it disclosed that steps were taken to nullify the same.

Alleged Injustice Committed on the Part of Petitioners Petitioners contend that "if the Court allows these machineries to be seized, then
its workers would be out of work and thrown into the streets."31 They also allege that the seizure would nullify all efforts to rehabilitate
the corporation.

Petitioners’ arguments do not preclude the implementation of the Writ. As earlier discussed, law and jurisprudence support its propriety.
Verily, the above-mentioned consequences, if they come true, should not be blamed on this Court, but on the petitioners for failing to
avail themselves of the remedy under Section 5 of Rule 60, which allows the filing of a counter-bond. The provision states:

"SEC. 5. Return of property. -- If the adverse party objects to the sufficiency of the applicant’s bond, or of the surety or sureties thereon,
he cannot immediately require the return of the property, but if he does not so object, he may, at any time before the delivery of the
property to the applicant, require the return thereof, by filing with the court where the action is pending a bond executed to the applicant,
in double the value of the property as stated in the applicant’s affidavit for the delivery thereof to the applicant, if such delivery be
adjudged, and for the payment of such sum to him as may be recovered against the adverse party, and by serving a copy bond on the
applicant." WHEREFORE, the Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED. Costs against
petitioners.

G.R. No. L-50008 August 31, 1987

PRUDENTIAL BANK, petitioner, vs. HONORABLE DOMINGO D. PANIS, Presiding Judge of Branch III, Court of First Instance of
Zambales and Olongapo City; FERNANDO MAGCALE & TEODULA BALUYUT-MAGCALE, respondents.

This is a petition for review on certiorari of the November 13, 1978 Decision * of the then Court of First Instance of Zambales and
Olongapo City in Civil Case No. 2443-0 entitled "Spouses Fernando A. Magcale and Teodula Baluyut-Magcale vs. Hon. Ramon Y.
Pardo and Prudential Bank" declaring that the deeds of real estate mortgage executed by respondent spouses in favor of petitioner
bank are null and void.

... on November 19, 1971, plaintiffs-spouses Fernando A. Magcale and Teodula Baluyut Magcale secured a loan in the sum of
P70,000.00 from the defendant Prudential Bank. To secure payment of this loan, plaintiffs executed in favor of defendant on the
aforesaid date a deed of Real Estate Mortgage over the following described properties:
l. A 2-STOREY, SEMI-CONCRETE, residential building with warehouse spaces containing a total floor area of 263 sq. meters, more or
less, generally constructed of mixed hard wood and concrete materials, under a roofing of cor. g. i. sheets; declared and assessed in
the name of FERNANDO MAGCALE under Tax Declaration No. 21109, issued by the Assessor of Olongapo City with an assessed
value of P35,290.00. This building is the only improvement of the lot.
2. THE PROPERTY hereby conveyed by way of MORTGAGE includes the right of occupancy on the lot where the above property is
erected, and more particularly described and bounded, as follows:
A first class residential land Identffied as Lot No. 720, (Ts-308, Olongapo Townsite Subdivision) Ardoin Street, East Bajac-Bajac,
Olongapo City, containing an area of 465 sq. m. more or less, declared and assessed in the name of FERNANDO MAGCALE under
Tax Duration No. 19595 issued by the Assessor of Olongapo City with an assessed value of P1,860.00; bounded on the

NORTH: By No. 6, Ardoin Street

SOUTH: By No. 2, Ardoin Street
EAST: By 37 Canda Street, and
WEST: By Ardoin Street.

All corners of the lot marked by conc. cylindrical monuments of the Bureau of Lands as visible limits. ( Exhibit "A, " also Exhibit "1" for
defendant). Apart from the stipulations in the printed portion of the aforestated deed of mortgage, there appears a rider typed at the
bottom of the reverse side of the document under the lists of the properties mortgaged which reads, as follows:
AND IT IS FURTHER AGREED that in the event the Sales Patent on the lot applied for by the Mortgagors as herein stated is released
or issued by the Bureau of Lands, the Mortgagors hereby authorize the Register of Deeds to hold the Registration of same until this
Mortgage is cancelled, or to annotate this encumbrance on the Title upon authority from the Secretary of Agriculture and Natural
Resources, which title with annotation, shall be released in favor of the herein Mortgage.
From the aforequoted stipulation, it is obvious that the mortgagee (defendant Prudential Bank) was at the outset aware of the fact that
the mortgagors (plaintiffs) have already filed a Miscellaneous Sales Application over the lot, possessory rights over which, were
mortgaged to it.
Exhibit "A" (Real Estate Mortgage) was registered under the Provisions of Act 3344 with the Registry of Deeds of Zambales on
November 23, 1971.
On May 2, 1973, plaintiffs secured an additional loan from defendant Prudential Bank in the sum of P20,000.00. To secure payment of
this additional loan, plaintiffs executed in favor of the said defendant another deed of Real Estate Mortgage over the same properties
previously mortgaged in Exhibit "A." (Exhibit "B;" also Exhibit "2" for defendant). This second deed of Real Estate Mortgage was
likewise registered with the Registry of Deeds, this time in Olongapo City, on May 2,1973.

On April 24, 1973, the Secretary of Agriculture issued Miscellaneous Sales Patent No. 4776 over the parcel of land, possessory rights
over which were mortgaged to defendant Prudential Bank, in favor of plaintiffs. On the basis of the aforesaid Patent, and upon its
transcription in the Registration Book of the Province of Zambales, Original Certificate of Title No. P-2554 was issued in the name of
Plaintiff Fernando Magcale, by the Ex-Oficio Register of Deeds of Zambales, on May 15, 1972.

For failure of plaintiffs to pay their obligation to defendant Bank after it became due, and upon application of said defendant, the deeds
of Real Estate Mortgage (Exhibits "A" and "B") were extrajudicially foreclosed. Consequent to the foreclosure was the sale of the
properties therein mortgaged to defendant as the highest bidder in a public auction sale conducted by the defendant City Sheriff on
April 12, 1978 (Exhibit "E"). The auction sale aforesaid was held despite written request from plaintiffs through counsel dated March 29,
1978, for the defendant City Sheriff to desist from going with the scheduled public auction sale (Exhibit "D")."

Respondent Court, in a Decision dated November 3, 1978 declared the deeds of Real Estate Mortgage as null and void

On December 14, 1978, petitioner filed a Motion for Reconsideration, opposed by private respondents on January 5, 1979 (Ibid., pp.
54-62), and in an Order dated January 10, 1979, the Motion for Reconsideration was denied for lack of merit. Hence, the instant petition

The first Division of this Court, in a Resolution dated March 9, 1979, resolved to require the respondents to comment which order was
complied with the Resolution dated May 18,1979, (Ibid., p. 100), petitioner filed its Reply on June 2,1979

Thereafter, in the Resolution dated June 13, 1979, the petition was given due course and the parties were required to submit
simultaneously their respective memoranda.

On July 18, 1979, petitioner filed its Memorandum while private respondents filed their Memorandum on August 1, 1979. In a
Resolution dated August 10, 1979, this case was considered submitted for decision (Ibid., P. 158). In its Memorandum, petitioner
raised the following issues:

1. WHETHER OR NOT THE DEEDS OF REAL ESTATE MORTGAGE ARE VALID; AND
2. WHETHER OR NOT THE SUPERVENING ISSUANCE IN FAVOR OF PRIVATE RESPONDENTS OF MISCELLANEOUS SALES
PATENT NO. 4776 ON APRIL 24, 1972 UNDER ACT NO. 730 AND THE COVERING ORIGINAL CERTIFICATE OF TITLE NO. P-
2554 ON MAY 15,1972 HAVE THE EFFECT OF INVALIDATING THE DEEDS OF REAL ESTATE MORTGAGE. (Memorandum for
Petitioner, Rollo, p. 122).

This petition is impressed with merit. The pivotal issue in this case is whether or not a valid real estate mortgage can be constituted
on the building erected on the land belonging to another.

The answer is in the affirmative. In the enumeration of properties under Article 415 of the Civil Code of the Philippines, this Court
ruled that, "it is obvious that the inclusion of "building" separate and distinct from the land, in said provision of law can only mean that a
building is by itself an immovable property."

Thus, while it is true that a mortgage of land necessarily includes, in the absence of stipulation of the improvements thereon, buildings,
still a building by itself may be mortgaged apart from the land on which it has been built. Such a mortgage would be still a real estate
mortgage for the building would still be considered immovable property even if dealt with separately and apart from the land (Leung Yee
vs. Strong Machinery Co., 37 Phil. 644). In the same manner, this Court has also established that possessory rights over said
properties before title is vested on the grantee, may be validly transferred or conveyed as in a deed of mortgage.

Coming back to the case at bar, the records show, as aforestated that the original mortgage deed on the 2-storey semi-concrete
residential building with warehouse and on the right of occupancy on the lot where the building was erected, was executed on
November 19, 1971 and registered under the provisions of Act 3344 with the Register of Deeds of Zambales on November 23, 1971.
Miscellaneous Sales Patent No. 4776 on the land was issued on April 24, 1972, on the basis of which OCT No. 2554 was issued in the
name of private respondent Fernando Magcale on May 15, 1972. It is therefore without question that the original mortgage was
executed before the issuance of the final patent and before the government was divested of its title to the land, an event which takes
effect only on the issuance of the sales patent and its subsequent registration in the Office of the Register of Deeds (Visayan Realty
Inc. vs. Meer, 96 Phil. 515; Director of Lands vs. De Leon, 110 Phil. 28; Director of Lands vs. Jurado, L-14702, May 23, 1961; Pena
"Law on Natural Resources", p. 49). Under the foregoing considerations, it is evident that the mortgage executed by private respondent
on his own building which was erected on the land belonging to the government is to all intents and purposes a valid mortgage.

As to restrictions expressly mentioned on the face of respondents' OCT No. P-2554, it will be noted that Sections 121, 122 and 124 of
the Public Land Act, refer to land already acquired under the Public Land Act, or any improvement thereon and therefore have no
application to the assailed mortgage in the case at bar which was executed before such eventuality. Likewise, Section 2 of Republic Act
No. 730, also a restriction appearing on the face of private respondent's title has likewise no application in the instant case, despite its
reference to encumbrance or alienation before the patent is issued because it refers specifically to encumbrance or alienation on the
land itself and does not mention anything regarding the improvements existing thereon.

But it is a different matter, as regards the second mortgage executed over the same properties on May 2, 1973 for an additional loan of
P20,000.00 which was registered with the Registry of Deeds of Olongapo City on the same date. Relative thereto, it is evident that such
mortgage executed after the issuance of the sales patent and of the Original Certificate of Title, falls squarely under the prohibitions
stated in Sections 121, 122 and 124 of the Public Land Act and Section 2 of Republic Act 730, and is therefore null and void.

Petitioner points out that private respondents, after physically possessing the title for five years, voluntarily surrendered the same to the
bank in 1977 in order that the mortgaged may be annotated, without requiring the bank to get the prior approval of the Ministry of
Natural Resources beforehand, thereby implicitly authorizing Prudential Bank to cause the annotation of said mortgage on their title.

However, the Court, in recently ruling on violations of Section 124 which refers to Sections 118, 120, 122 and 123 of Commonwealth
Act 141, has held: ... Nonetheless, we apply our earlier rulings because we believe that as in pari delicto may not be invoked to defeat
the policy of the State neither may the doctrine of estoppel give a validating effect to a void contract. Indeed, it is generally considered
that as between parties to a contract, validity cannot be given to it by estoppel if it is prohibited by law or is against public policy (19 Am.
Jur. 802). It is not within the competence of any citizen to barter away what public policy by law was to preserve.

This pronouncement covers only the previous transaction already alluded to and does not pass upon any new contract between the
parties (Ibid), as in the case at bar. It should not preclude new contracts that may be entered into between petitioner bank and private
respondents that are in accordance with the requirements of the law. After all, private respondents themselves declare that they are not
denying the legitimacy of their debts and appear to be open to new negotiations under the law. Any new transaction, however, would be
subject to whatever steps the Government may take for the reversion of the land in its favor.

PREMISES CONSIDERED, the decision of the Court of First Instance of Zambales & Olongapo City is hereby MODIFIED, declaring
that the Deed of Real Estate Mortgage for P70,000.00 is valid but ruling that the Deed of Real Estate Mortgage for an additional loan of
P20,000.00 is null and void, without prejudice to any appropriate action the Government may take against private respondents.

II. Ownership - Arts. 427-483; Art. 712; “Jura Regalia”; Sec. 2, Art. XII, 1987 Phil. Constitution; Sec. 14, Ch. 4, Title I, Book III,
RAC of 1987; Sec. 14 (1), PD 1529 in rel. to Sec. 11(4) & 48 (b) CA 141 (Public Land Act); Sec. 14 (2) PD 1529 in rel. to NCC
(Arts. 420, 421, 422; Arts. 1106, 1113, 1134, 1136); Tax Declaration; Art. 1410
Case 1 and 2 – Original cases print out

G.R. No. 199239

PERCY MALONESIO in his capacity as General Manager of AIR TRANSPORTATION OFFICE (ATO), Petitioner vs. ARTURO M.
JIZMUNDO, Respondent

This Petition for Review on Certiorari1 under Rule of the Rules of Court seeks tyo set aside the Decision 2 dated November 30, 2010 and
the Resolution3 dated October 7, 2011 of the Court of Appeals in CA-G.R. CEB-SP. No. 02831.

On July 4, 2006, respondent Arturo M. Jizmundo (Jizmundo) filed an action for Unlawful Detainer with Preliminary Injunction against
petitioner Percy Malonesio, in the latter's capacity as General Manager of the Air Transportation Office (ATO). The case was docketed
as Civil Case No. 2735 in the Municipal Trial Court (MTC) of Kalibo, Aklan.

The property subject of the case is a parcel of land designated as Lot 4857-B of the Kalibo Cadastre situated in Barangay·Pook, Kalibo,
Aklan and covered by Transfer Certificate of Title (TCT) No. T-18445.

[T]here is no question that the subject property is registered and declared for taxation purposes in the name of the heirs of the late
Barto la Marquez, one of whom is [Jizmundo] in his capacity as one of the grandchildren of the said deceased. It is shown that since
1985 up to the present, defendant Air Transportation Office has been, and is still occupying and utilizing the land as airport parking area
without any formal agreement or payment of rentals to [ Jizmundo] or any of his co-heirs. [ Jizmundo] and his coowners appear to have
tolerated [the ATO's] long occupation of the lot in question because of its promise to them that they will be paid the reasonable value of
their land. Taking this fact into account, it appears that when [the ATO] occupied [Jizmundo's] subject property sometime in 1985,
[Jizmundo] was already aware that the [ATO] intended to acquire not only the physical possession of the land but also the legal right to
• possess and ultimately to own the subject property, shown by its promise to pay the just compensation therefor. Disconsolately, said
promise was not made good by the [ATO].

[Jizmundo ], for himself and in behalf of his other co-owners, now seeks to eject the [ATO] from the land, alleging that the [ATO] has
become a deforciant illegally withholding from [Jizmundo] the possession thereof when it refused to vacate the premises after
[Jizmundo's] last demand (Annex "C"), which it received on June 5, 2006 (Annex "D"). [Jizmundo] filed the instant case on July 4, 2006,
very well within one year from the date he made the last demand to vacate. 5
The ATO belatedly filed its answer to the complaint, raising special and affirmative defenses such as the failure to implead the Republic
of the Philippines as an indispensable party and the doctrine of estoppel by laches. Jizmundo, thereafter, filed a Motion to Render
Judgment, which the MTC granted in its Order dated August 23, 2006.

In the above-quoted Decision dated September 11, 2006, the MTC, however, dismissed Jizmundo' s complaint. The MTC ruled that the
named defendant was Malonesio, who was sued in his capacity as the General Manager of the ATO. As such, any claim against him or
the ATO is in reality a claim against the Republic of the Philippines as it is the public in general who has a direct interest over the
subject matter of this case. Thus, the Republic of the Philippines is an indispensable party and Jizmundo' s failure to implead it as a
party defendant in the complaint gave the MTC no authority to validly and effectively grant the reliefs prayed for.

Jizmundo appealed the MTC ruling to the Regional Trial Court (R TC) of Kalibo, Aklan, Branch 4, which appeal was docketed as Civil
Case No. 7925. Jizmundo argued that the failure to imp lead an indispensable party is not a ground for the dismissal of the complaint.
In such a case, it is the duty of the MTC to stop the trial and order the inclusion of the indispensable party. Jizmundo also averred that
the ATO is not immune from suit as it is performing proprietary functions.

In a Decision6 dated April 17, 2007, the RTC affirmed the judgment of the MTC. The trial court brushed aside the argument of
Jizmundo on non-joinder of parties, ruling that the same was inapplicable under the Rule on Summary Procedure given that there is a
limited period of time for such proceedings. The RTC also ruled that the ATO is immune from suit as it is an instrumentality of the
Republic of the Philippines.

Jizmundo sought the reversal of the above RTC ruling in a Petition for Review under Rule 42 of the Rules of Court filed before the
Court of Appeals. The petition was docketed as CA-G.R. CEB-SP. No. 02831.

While the petition was pending before the appellate court, the Civil .Aviation Authority Act of 2008 7 was passed on March 4, 2008. In
accordance therewith, the ATO was abolished and all its powers were transferred to the Civil Aviation Authority of the Philippines
(CAAP).

On November 30, 2010, the Court of Appeals. rendered its assailed decision, which decreed: WHEREFORE, premises considered, the
instant Petition for Review is hereby GRANTED. The Decision dated 17 April 2007 of the Regional Trial Court, Branch 4, Kalibo, Aldan
in Civil Case No. 7925, affirming in toto the Decision dated 11 September 2006 of the Municipal Trial Court of Kalibo, Aldan in Civil
Case No.2735 for Unlawful Detainer With Preliminary Injunction, is hereby REVERSED and SET ASIDE.The respondent is ordered to
restore to petitioner possession of the property.

The appellate court cited the ruling of the Court in Civil Aeronautics Administration v. Court of Appeals,9 which declared that "as the
CAA was created to undertake the management of airport operations which primarily involve proprietary functions, it cannot avail of the
immunity from suit accorded to government agencies performing strictly governmental functions." Being the successor-in-interest of the
CAA, thus inheriting its functions, the Court of Appeals ruled that the ATO was also not immune from suit. Thus, there was no reason to
hold that the Republic of the Philippines was an indispensable party in the case at bar.

The Court of Appeals further ruled that if possession is by tolerance, such possession becomes illegal upon demand to vacate should
the possessor refuse to comply with such demand. When Jizmundo made a demand on the ATO to vacate the subject property, the
forbearance ceased and the occupancy of ATO became unlawful. Jizmundo's act of filing the ejectment suit was, thus, a proper remedy
against the ATO. The Court of Appeals also denied for being uncorroborated the claim of Jizmundo of ₱20,000.00 per month as rental
or reasonable compensation for the use and occupation of the subject property.

Malonesio filed a motion for reconsideration but the same was denied in the assailed Resolution dated October 7, 2011.

Malonesio, thus, filed this petition for review on certiorari, arguing that the Court of Appeals erred: (1) in ordering the ATO to
surrender possession of the subject property that is presently used for the operation of the Kalibo, Aldan Domestic and International
Airport; and (2) in reversing the dismissal of the case, which dismissal was grounded on the fact that the Republic of the Philippines
was not impleaded as an indispensable party.

Malonesio insists that the ATO (now CAAP) is an institution without a personality that is separate and distinct from the government such
that any action against the ATO must be brought against the government and not the ATO alone. Thus, the action should have been
brought against the real party-in-interest - the Republic of the Philippines. Malonesio posits that the joinder of indispensable parties is
mandatory and a complaint may be dismissed if an indispensable party is not imp leaded in the complaint.

Malonesio further avers that the Court of Appeals judgment of ordering the restoration of the possession of the subject property to
Jizmundo is contrary to public policy and existing jurisprudence as the property is where the ATO's (now CAAP) existing facilities and
structures are located. Said facilities and structures are vital to the country's civil aviation and airport operation as they are used by the
public for international and domestic travel, which is a public purpose.
Lastly, Jizmundo was arguably estopped from questioning the CAAP's occupation and possession over the subject property since for
more than 20 years, Jizmundo neither bothered to question the said possession nor did he raise his objections when the ATO
constructed clearly visible permanent improvements.

In his comment tb the petition, Jizmundo pointed out that the courts a quo found that the ATO's possession of the subject property was
by mere tolerance and had never been adverse. Jizmundo claims that Malonesio failed to present any evidence to prove that Jizmundo
was guilty of laches. Jizmundo also argues that he cannot be deprived of his property for the sake

of public convenience. He insists that in Air Transportation Office v. Ramos, 10 the Court ruled that the ATO could be sued without the
State's consent.

Finally, Jizmundo pleads that the continued occupation of the subject property by the ATO without the payment of rental or just
compensation despite the income derived therefrom is unjustly causing grave and irreparable damage to the lawful owners of the
subject property. Thus, it is necessary that the Court of Appeals' order to restore the possession of the subject property be immediately
executed.

The Court grants the petition. Firstly, the Court agrees with Jizmundo that the ATO may not claim immunity from suit such that there
would be a need to implead the Republic of the Philippines as the real party-in-interest. Indeed, in Air Transportation Office v. Ramos, 11
the Court definitively ruled on this issue in this wise:

In our view, the [Court of Appeals] thereby correctly appreciated the juridical character of the A TO as an agency of the Government not
performing a purely governmental or sovereign function, but was instead involved in the management and maintenance of the Loakan
Airport, an activity that was not the exclusive prerogative of the State in its sovereign capacity. Hence, the ATO had no claim to the
State's immunity from suit.

Moreover, the Court also held in the above case that the issue of whether the ATO could be sued without the State's consent had been
rendered moot by the passage of the Civil Aviation Authority Act of 2008, 12 which abolished the ATO and transferred all its powers,
duties and rights to the CAAP. Under Section 23(a) of Republic Act No. 9497, 13 one of the corporate powers vested in the CAAP was
the power to sue and be sued.

In Deutsche Gesellschaft Fur Technische Zusammenarbeit v. Court of Appeals, 14 we declared that:

State immunjty from suit may be waived by general or special law. The special law can take the form of the original charter of the
incorporated government agency. Jurisprudence is replete with examples of incorporated government agencies which were ruled not
entitled to invoke immunity from suit, owing to provisions in their charters manifesting their consent to be sued. These include the
National Irrigation Administration, the former Central Bank, and the National Power Corporation. In SSS v. Court of Appeals, the Court
through Justice Melencio-Herrera explained that by virtue of an express provision in its charter allowing it to sue and be sued, the
Social Security System did not enjoy immunity from suit

Therefore, by virtue of the express provision of Section 23(a) of Republic Act No. 9497, the CAAP also does not enjoy immunity from
suit.

Secondly, we cannot uphold Malonesio's contention that Jizmundo and his co-heirs may no longer question the ATO's ownership or
possession of the subject property on the ground of !aches or estoppel. Time and again, we have held that the owner of registered land
does not lose his rights over the property on the ground of !aches as long as the opposing claimant's possession was merely tolerated
by the owner. In Ocampo v. Heirs of Bernardino Dionisio, we explained:

Equally untenable is the petitioners' claim that the respondents' right to recover the possession of the subject property is already barred
by laches. As owners of the subject property, the respondents have the right to recover the possession thereof from any person illegally
occupying their property. This right is imprescriptible. Assuming arguendo that the petitioners indeed have been occupying the subject
property for a considerable length of time, the respondents, as lawful owners, have the right to demand the return of their property at
any time as long as• the possession was unauthorized or merely tolerated, if at all.

Jurisprudence consistently holds that "prescription and laches can not apply to registered land covered by the Torrens system" because
"under the Property Registration Decree, no title to registered land in derogation to that of the registered owner shall be acquired by
prescription or adverse possession."

We find no reason to disturb the MTC 's factual finding, which was affirmed by the Court of Appeals, that the ATO's possession of the
subject property was, and continues to be, by mere tolerance of the heirs of the registered owner.

Be that as it may, we find that, contrary to the ruling of the Court of Appeals, Jizmundo no longer has the right to recover the
possession of the subject property, through an action for ejectment, given that the same is now devoted to public use as it forms part of
the Kalibo, Aldan Domestic and International Airport. Instead, Jizmundo and his co-heirs, as lawful owners, have the right to be
compensated for the value thereof.
To recall, the courts a quo found that since 1985, the ATO occupied and possessed the subject property as an airport parking area
without any formal agreement or the payment of rentals to Jizmundo or his co-heirs. Jizmundo and his co-heirs tolerated the ATO's
possession in view of the latter's promise that the heirs would be paid the value of their property.

However, said promise was not fulfilled. Demands were made for the ATO to vacate · the subject property, but the same went
unheeded. After Jizmundo's final demand for the ATO to vacate the subject property in June 2006, he filed the case for unlawful
detainer.

Clearly, the ATO occupied and possessed the subject property from 1985 up to present without first undertaking the process of
expropriating the same or entering into a similar agreement with its rightful owners.

In the very case relied upon by petitioner, Forfom Development Corporation v. Philippine National Railways, 16 the Court cited cases
that involved the taking of private property without the benefit of expropriation proceedings, the conversion thereof to public use, the
failure of the landowner to question the taking after such conversion, and the remedy of the landowner in such a situation. Thus -

In Manila Railroad Co. v. Paredes, the first case in this jurisdiction in which there was an attempt to compel a public service corporation,
endowed with the power of eminent domain, to vacate the property it had occupied without first acquiring title thereto by amicable
purchase or expropriation proceedings, we said: whether the railroad company has the capacity to acquire the land in dispute by virtue
of its delegated power of eminent domain, and, if so, whether the company occupied the land with the express or implied consent or
acquiescence of the owner. If these questions of fact be decided in the affirmative, it is uniformly held that an action of
ejectment or trespass or injunction will not lie against the railroad company, but only an action for damages, that is, recovery
of the value of the land taken, and the consequential damages, if any. The primary reason for thus denying to the owner the
remedies usually

afforded to him against usurpers is the irremedial injury which would result to the railroad company and to the public in general. It will
readily be seen that the interruption of the transportation service at any point on the right of way impedes the entire service of
the company and causes loss and inconvenience to all passengers and shippers using the line. Under these circumstances,
public policy, if not public necessity, demands that the owner of the land be denied the ordinarily remedies of ejectment and
injunction.There is also something akin to equitable estoppel in the conduct of one who stands idly by and watches the construction of
the railroad without protest. But the real strength of the rule lies in the fact that it is against public policy to permit a property owner,
under such circumstances, to interfere with the service rendered to the public by the railroad company. (I)f a landowner, knowing that a
railroad company has entered upon his land and is engaged in constructing its road without having complied with a statute requiring
either payment by agreement or proceedings to condemn, remains inactive and permits it to go on and expend large sums in the work,
he is estopped from maintaining either trespass or ejectment for the entry, and will be regarded as having acquiesced therein, and will
be restricted to a suit for damages.

Further, in De Ynchausti v. Manila Electric Railroad & Light Co., we ruled: The owner of land, who stands by, without objection, and
sees a public railroad constructed over it, can not, after the road is completed, or large expenditures have been made thereon upon the
faith of his apparent acquiescence, reclaim the land, or enjoin its use by the railroad company. In such a case there can only remain to
the owner a right of compensation.

One who permits a railroad company to occupy and use his land and construct its roads thereon without remonstrance or complaint,
cannot afterwards reclaim it free from the servitude he has permitted to be imposed upon it. His acquiescence in the company's taking
possession and constructing its works under circumstances which made imperative his resistance, if he ever intended to set up
illegality, will be considered a waiver. But while this presumed waiver is a bar to his action to dispossess the company, he is not
deprived of his action for damages for the value of the land, or for injuries done him by the construction or operation of the road.

We conclude that the complaint in this action praying for possession and for damages for the alleged unlawful detention of the land in
question, should be dismissed but that such dismissal should be without prejudice to the right of the plaintiff to institute the appropriate
proceedings to recover the value of the lands actually taken, or to compel the railroad corporation to take the necessary steps to secure
the condemnation of the land and to pay the amount of the compensation and damages assessed in the condemnation proceedings.

In Ansaldo v. Tantuico, Jr., a case involving the takeover by the Government of two private lots to be used for the widening of a road
without the benefit of an action for expropriation or agreement with its owners, we held that the owners therein, having been silent for
more than two decades, were deemed to have consented to such taking - although they knew that there had been no expropriation
case commenced - and therefore had no reason to impugn the existence of the power to expropriate or the public purpose for which
that power had been exercised. In said case, we directed the expropriator to forthwith institute the appropriate expropriation
action over the land, so that just compensation due the owners may be determined in accordance with the Rules of Court.

In the instant case, it had been more or less thirty-one (31) years since the ATO occupied and possessed the subject property without
first expropriating the same. Jizmundo and his co-heirs Were well aware of this fact for, as the courts a quo found, it is the nonpayment
of the value of the subject property that caused them to file ejectment proceedings.

As things now stand, the property still forms part of the Kalibo, Aldan Domestic and International Airport. In the instant petition,
Malonesio states that:
It bears stressing that the property sought to be restored to Jizmundo is exactly where the ATO's (how CAAP) existing facilities and
structures are presently located. These facilities and structures are vital to the country's civil aviation and airport operation as they are
used by the public for international and domestic travel and transportation, undoubtedly a public purpose.

As the country's premier agency in charge of implementing policies on civil aviation, air safety and promotion of air travel in the
Philippines and abroad, [the] ATO has the right to remain in peaceful possession over the property, not only by reason of public policy,
'but by public necessity as well. 17

Under the circumstances, an action for ejectment would not be proper. Verily, it is not farfetched to presume that the grant of the
unlawful detainer case against the CAAP and the transfer of the possession of the subject property in favor of Jizmundo would result in
the interruption of the services provided by the CAAP and would lead to the inconvenience of the passengers and personnel that makes
use of the said airport.

In accordance with Forform, the recovery of possession of Jizmundo can no longer be allowed so as not to hamper the said airport’s
services to the public. The remedy left to Jizmundo and his co-heirs is the right to be compensated the reasonable value of the subject
property, which the CAAP admittedly still uses for what it deems to be a vital public purpose. The CAAP must now institute the required
action for expropriation over the subject property for the proper determination of the just compensation due to the owners thereof. 18

WHEREFORE, the Decision dated November 30, 2010 and the Resolution dated October 7, 2011 of the Court of Appeals in CA-G.R.
CEBSP. No. 02831 are hereby SET ASIDE. The Civil Aviation Authority of the Philippines is DIRECTED to institute the appropriate
expropriation action over the property subject of this case within fifteen (15) days from finality of this Decision, in order that the just
compensation due to its proper owners may be determined. No costs.

G.R. No. 166890 REPUBLIC OF THE PHILIPPINES, Petitioner, vs. APOLONIO BAUTISTA, JR., Respondent.

The applicant for judicial confirmation of imperfect title must trace his possession of the subject land to June 12, 1945, or earlier. Any
length of possession that does not comply with the requirement cannot support the application, which must be then dismissed for failure
to comply with Commonwealth Act No. 141 (Public Land Act) and Presidential Decree No. 1529 (Property Registration Decree).

The Case The Government appeals the adverse judgment promulgated on September 30, 2004, 1 whereby the Court of Appeals (CA)
affirmed the decision of the Municipal Trial Court (MTC) of Subic, Zambales rendered on November 17, 1998 in LRC Case No. N-12-
10-96 entitled In Re: Application for Land Registration of Lot 17078 of Cad. 547-D, Subic Cadastre2granting the application of
respondent Apolonio Bautista, Jr. for the judicial confirmation of title of Lot 17078 of Cad. 547-0, Subic Cadastre.

Antecedents After acquiring Lot 17078 of Cad. 547-D, Subic Cadastre, located in Capisanan, Subic, Zambales from Mario Jardin on
February 15, 1971 and Cornelia Villanueva on May 25, 1973, Apolonio, Sr. had the property declared for taxation purposes. He had
been the sole and exclusive possessor and occupant from the time of acquisition until his death, with no party questioning his
possession and ownership, or staking any adverse claim against him thereon.3 He died in 1987, and was succeeded by his children,
namely: respondent Apolonio, Jr. and his siblings. Apolonio, Sr.'s children executed an extra-judicial settlement of their father's estate,
whereby Apolonio, Jr.'s brothers and sisters waived their rights in his favor. Thus, the property was declared for taxation purposes in
Apolonio, Jr.'s name under Tax Declaration No. 014-0432A of the Municipality of Subic, Zambales. There were no arrears in real estate
taxes.4 The declared value was ₱73,040.00. 5

On October 21, 1996, Apolonio Jr. commenced LRC Case No. N-12-10-96 in the MTC. He later on testified that his father had been in
actual possession since 1969, and had eventually acquired the land from Jardin and Villanueva through the notarized Deeds of
Absolute Sale dated February 15, 1971, and May 25, 1973; and that his father had paid taxes on the land.

The Government did not interpose any timely objection to the testimony of Apolonia, Jr. It did not also object to the documentary
evidence (i.e., the deeds of absolute sale and tax declarations) offered by him. Hence, the MTC admitted all the evidence presented by
Apolonia, Jr.

In due course, the MTC granted Apolonia, Jr.'s application, and declared him as the owner in fee simple of the land,6 and confirmed his
ownership thereof. 7

The Government appealed the decision to the Court of Appeals (CA), which, on September 30, 2004, promulgated its assailed decision
affirming the ruling of the MTC.8 The CA pointed out that the Government did not present evidence against the claim of Apolonio Jr.;
and that the Government did not timely object to his testimony on the ground of its being hearsay. 9

Issue In this appeal, the Government reiterates that the testimony of Apolonio, Jr. on possession, being hearsay, had no probative
value; that the alienation of public land should always undergo careful scrutiny; and that the Court should carefully re-examine the
factual issues that could alter the result of the case. 10

The Government points out that Apolonio, Jr. had given only general statements pertaining to the open, continuous, exclusive and
notorious possession of his father since 1971; that such statements were mere conclusions of law, and did not prove the alleged
possession; that because the application for judicial confirmation of imperfect title was filed on October 21, 1996, the applicable law was
Section 48(b) of Commonwealth Act No. 141 (Public land Act), as amended by Presidential Decree No. 1073; that, accordingly, the
required period of possession must be "since June 12, 1945 or earlier," as stated in Republic v. Doldol, 11 a more stringent requirement
the non-compliance with which was fatal to his cause. 12

Lastly, the Government points out that tax declarations or tax receipts did not suffice to prove ownership of land in fee simple; that
although it was the State's policy to encourage and promote distribution of alienable public lands as an ideal of social justice, stringent
safeguards must be adopted and applied to prevent the lands from going to the wrong hands; and that Apolonio, Jr.'s reliance on
hearsay evidence showed his unfitness to own the land. 13

In response, Apolonio Jr. insists that he had duly established his lawful occupation of the land as owner in fee simple; that the
Government did not timely object to his testimony, and did not also controvert his evidence; that the property had been properly
identified; and that the lower courts had observed the legal safeguards and guidelines in granting his application for judicial confirmation
of his ownership in fee simple. 14

Ruling of the Court We reverse. The Government has correctly insisted that the requisite period of possession of the property should
conform to that provided for in Section 48(b) of the Public Land Act, as amended by Presidential Decree No. 1073, which has limited
the right to apply for judicial confirmation to citizens of the Philippines "who by themselves or through their predecessors in interest
have been in open, continuous, exclusive, and notorious possession and occupation of alienable and disposable lands of the public
domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the
application for confirmation of title except when prevented by war or force majeure.The provision is reprised by Section 14(1) of
Presidential Decree No. 1529 (Property Registration Decree), adopting the length of possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

We note that in its amendment of the Public Land Act that took effect on January 25, 1977, Presidential Decree No. 1073 changed the
length of the requisite possession from "thirty (30) years immediately preceding the filing of the application" to possession "since June
12, 1945, or earlier." Republic v. Naguit15has explained this change thusly:

When the Public Land Act was first promulgated in 1936, the period of possession deemed necessary to vest the right to register their
title to agricultural lands of the public domain commenced from July 26, 1894. However, this period was amended by R.A. No. 1942,
which provided that the bona fide claim of ownership must have been for at least thirty (30) years. Then in 1977, Section 48(b) of the
Public Land Act was again amended, this time by P.D. No. 1073, which pegged the reckoning date at June 12, 1945. xxx

Based on the records before us, Apolonia, Jr. presented only himself to establish the possession and ownership of his father, Apolonia,
Sr., who was his immediate predecessor-in-interest. He did not present as witnesses during the trial either of the transferors of
Apolonia, Sr. - that is, Mario Jardin or Cornelia Villanueva - to establish the requisite length of the possession of the predecessors-in-
interest of the applicant that would be tacked to his own. His personal incompetence to attest to the possession of the property within
the time required by law underscored the weakness of the evidence on possession, particularly as it has not been denied that the
applicant had arrived in the Philippines only on November 28, 1987. Considering that the possession and occupation of the property in
question by Apolonia, Jr. and his predecessors-in-interest were not shown in the records to have been "since June 12, 1945, or earlier,"
the application must be rejected.

We should stress that only the title of those who had possessed and occupied alienable and disposable lands of the public domain
within the requisite period could be judicially confirmed. Indeed, alienable public land held by a possessor, either personally or through
his predecessors-in-interest, openly, continuously and exclusively during the prescribed statutory period is converted to private property
by the mere lapse or completion of the period. 16

That the Government did not timely object to the admission of the testimony of Apolonia, Jr., or of the other evidence presented by him
was of no consequence to the success of the application. If he had no personal knowledge of the facts establishing the possession of
property for the requisite period, no court can give any value to his assertion, particularly as it was conceded by him no less that he had
no personal or direct competence to know the truth of his assertion. It was one thing for the trial court to admit the evidence, but quite
another to give it any worth for purposes of judicial adjudication.

WHEREFORE, the Court GRANTS the petition for review on certiorari; REVERSES and SETS ASIDE the decision promulgated on
September 30, 2004; DISMISSES the application of respondent Apolonia Bautista, Jr. for the judicial confirmation of his imperfect title
in LRC Case No. N-12-10-96; and ORDERS Apolonia Bautista, Jr. to pay the costs of suit.

G.R. No. 198774, April 04, 2016

TEOFILO ALOLINO, Petitioner, v. FORTUNATO FLORES AND ANASTACIA MARIE FLORES, Respondents.

This is a petition for review on certiorari filed from the July 8, 2011 decision of the Court of Appeals (CA) in CA-G.R. CV No. 94524.1
The CA reversed the Regional Trial Court's (RTC) decision 2 in Civil Case No. 693203 and dismissed petitioner Teofilo Alolino's
complaint against the respondents for the removal of their illegally constructed structure.
Antecedents Alolino is the registered owner of two (2) contiguous parcels of land situated at No. 47 Gen. Luna Street, Barangay
Tuktukan, Taguig, covered by Transfer Certificate of Title (TCT) Nos. 784 and 976. TCT No. 784 was issued on August 30, 1976
covering an area of 26 square meters; while TCT No. 976 was issued on August 29, 1977, with an area of 95 square meters.

Alolino initially constructed a bungalow-type house on the property. In 1980, he added a second floor to the structure. He also extended
his two-storey house up to the edge of his property. There are terraces on both floors. There are also six (6) windows on the perimeter
wall: three (3) on the ground floor and another three (3) on the second floor.

In 1994, the respondent spouses Fortunato and Anastacia (Marie) Flores constructed their house/sari sari store on the vacant
municipal/barrio road immediately adjoining the rear perimeter wall of Alolino's house. Since they were constructing on a municipal
road, the respondents could not secure a building permit. The structure is only about two (2) to three (3) inches away from the back of
Alolino's house, covering five windows and the exit door. The respondents' construction deprived Alolino of the light and ventilation he
had previously enjoyed and prevented his ingress and egress to the municipal road through the rear door of his house.

Alolino demanded that the respondent spouses remove their structure but the latter refused. Thus, he complained about the illegal
construction to the Building Official of the Municipality of Taguig. He also filed a complaint with the Barangay of Tuktukan.

Acting on Alolino's complaint, the Building Official issued a Notice of Illegal Construction against the respondents on February 15, 1995,
directing them to immediately stop further construction.4

Sometime in 2001 or 2002, the respondents began constructing a second floor to their structure, again without securing a building
permit. This floor was to serve as residence for their daughter, Maria Teresa Sison. The construction prompted Alolino to file another
complaint with the Building Official of Taguig.

The building official issued a second Notice of Illegal Construction against the respondents on May 6, 2002, directing the respondents
to desist from their illegal construction.5

On May 17, 2002, the Office of the Barangay Council of Tuktukan issued a certification that no settlement was reached between the
parties relative to Alolino's 1994 complaint.6

The respondents did not comply with the directive from the building official. This prompted Alolino to send them a letter dated January
23, 2003, demanding the removal of their illegally constructed structure.

Despite receipt of the demand letter, the respondents refused to comply. Thus, on February 14, 2003, Alolino filed a complaint against
the respondents with the RTC praying for: (1) the removal of the encroaching structure; (2) the enforcement of his right to easement of
light and view; and (3) the payment of damages. Alolino claimed that the respondents' encroaching structure deprived him of his light
and view and obstructed the air ventilation inside his house. The complaint was docketed as Civil Case No. 69320.

In their answer,7 the respondent spouses denied that Alolino had a cause of action against them. They alleged that they had occupied
their lot where they constructed their house in 1955, long before the plaintiff purchased his lot in the 70s. They further alleged that
plaintiff only has himself to blame because he constructed his house up to the very boundary of his lot without observing the required
setback. Finally, they emphasized that the wall of their house facing Alolino's does not violate the latter's alleged easement of light and
view because it has no window.

The respondents also admitted to them that they did not secure a building permit because the property was constructed on a
municipal/barrio road. They claimed, however, that on March 1, 2004, the Sangguniang Bayan of Taguig (the Sanggunian) reclassified
the property as a residential lot from its prior classification as a barrio/municipal road.8

During the trial, both parties moved for an ocular inspection of the premises. Consequently, on November 19, 2007, the RTC ordered
the branch clerk of court, the deputy sheriff, and the stenographer to conduct the inspection. The ocular inspection was conducted on
December 6, 2007.

In their report dated January 30, 2008,9 the inspection team confirmed that the respondents' property blocked the entry of light and air
to Alolino's house.

On April 20, 2009, the RTC rendered a judgment ordering the respondents to remove their illegal structure obstructing Alolino's right to
light and view.

The RTC found that Alolino had already previously acquired an easement of light and view and that the respondents subsequently
blocked this easement with their construction. It held that the respondents' illegal construction was a private nuisance with respect to
Alolino because it prevented him from using the back portion of his property and obstructed his free passage to the barrio/municipal
road. The court farther held that the respondents' house was a public nuisance, having been illegally constructed on a barrio road - a
government property - without a building permit.

The respondents appealed the decision to the CA and was docketed as CA-G.R. CV No. 94524.

On July 8, 2011, the CA reversed the RTC decision and dismissed the complaint for lack of merit.

The CA held (1) that Alolino had not acquired an easement of light and view because he never gave a formal prohibition against the
respondents pursuant to Article 66810 of the Civil Code; (2) that Alolino was also at fault, having built his fyouse up to the edge of the
property line in violation of the National Building Code; 11 (3) that Alolino had not acquired an easement of right of way to the barrio
Road; and (4) that the respondents' house was not a public nuisance because it did not endanger the safety of its immediate
surroundings.

The CA concluded that the Government had already abandoned the barrio road pursuant to the 2004 Sanggunian resolution. It further
held that the respondents' property could not be demolished, citing Section 28 of the Urban Development and Housing Act. 12 Alolino
moved for reconsideration on July 28, 2011.

On September 28, 2011, the CA denied the motion for reconsideration and maintained that Alolino had not acquired an easement of
light and view. Thus, on November 15, 2011, Alolino filed the present petition for review on certiorari.

The Petition Alolino insists (1) that he acquired an easement of light and view by virtue of a title because the respondents constructed
their house on a barrio road; (2) that the provision of Sec. 708 of the National Building Code and Article 670 of the Civil Code
prescribing the setbacks is inapplicable because the property is adjacent to a barrio road; (3) that he has a right of way over the lot
occupied by the respondents because it is a barrio road; and (4) that the respondents' house/sari sari store is a nuisance per se.

In its comment, the respondent counters (1) that Alolino has not acquired an easement of light and view or an easement of right of way,
by either prescription or title; (2) that Alolino is at fault for constructing his house up to the edge of his property line without observing
the setbacks required in Article 670 of the Civil Code and Section 702 of the National Building Code; and (3) that their house/sari sari
store is not a nuisance because it is not a serious threat to public safety and the Sanggunian has already reclassified the lot as
residential.

Our Ruling We find the petition meritorious.

There is no dispute that respondents built their house/sari sari store on government property. Properties of Local Government Units
(LGUs) are classified as either property for public use or patrimonial property. 13 Article 424 of the Civil Code distinguishes between the
two classifications:

Article 424. Property for public use, in the provinces, cities, and municipalities, consist of the provincial roads, city streets,
municipal streets, the squares, fountains, public waters, promenades, and public works for public service paid for by said provinces,
cities, or municipalities.

All other property possessed by any of them is patrimonial and shall be governed by this Code, without prejudice to the provisions of
special laws.
From the foregoing, the barrio road adjacent to Alolino's house is property of public dominion devoted to public use.

We find no merit in the respondents' contention that the Local Government of Taguig had already withdrawn the subject barrio road
from public use and reclassified it as a residential lot. The Local Government Code 15 (LGC) authorizes an LGU to withdraw a local road
from public use under the folio wing conditions:

Section 21. Closure and Opening of Roads. -

(a) A local government unit may, pursuant to an ordinance, permanently or temporarily close or open any local road, alley,
park, or square falling within its jurisdiction; Provided, however, That in case of permanent closure, such ordinance must
be approved by at least two-thirds (2/3) of all the members of the Sanggunian, and when necessary, an adequate substitute for
the. public facility that is subject to closure is provided.

(b) No such way or place or any part thereof shall be permanently closed without making provisions for the maintenance of public
safety therein. A property thus permanently withdrawn from public use may be used or conveyed for any purpose for
which other real property belonging to the local government unit concerned may be lawfully used or conveyed.
To convert a barrio road into patrimonial property, the law requires the LGU to enact an ordinance, approved by at least two-thirds (2/3)
of the Sanggunian members, permanently closing the road.

In this case, the Sanggunian did not enact an ordinance but merely passed a resolution. The difference between an ordinance and a
resolution is settled in jurisprudence: an ordinance is a law but a resolution is only a declaration of sentiment or opinion of the legislative
body.16

Properties of the local government that are devoted to public service are deemed public and are under the absolute control of
Congress.17 Hence, LGUs cannot control or regulate the use of these properties unless specifically authorized by Congress, as is the
case with Section 21 of the LGC.18 In exercising this authority, the LGU must comply with the conditions and observe the limitations
prescribed by Congress. The Sanggunian's failure to comply with Section 21 renders ineffective its reclassification of the barrio road.

As a barrio road, the subject lot's purpose is to serve the benefit of the collective citizenry. It is outside the commerce of man and as a
consequence: (1) it is not alienable or disposable;19 (2) it is not subject to registration under Presidential Decree No. 1529 and cannot
be the subject of a Torrens title;20 (3) it is not susceptible to prescription;21 (4) it cannot be leased, sold, or otherwise be the object of
a contract;22 (5) it is not subject to attachment and execution;23 and (6) it cannot be burdened by any voluntary easements.24

An easement is an encumbrance imposed upon an immovable for the benefit of another immovable belonging to a different owner or
for the benefit of a community, or of one or more persons to whom the encumbered estate does not belong. 25Continuous and
apparent easements may be acquired by virtue of a title or by prescription of ten years. 26 Meanwhile, continuous but non-apparent
easements and discontinuous ones can only be acquired by virtue of a title.27 Used in this sense, title refers to a juridical justification
for the acquisition of a right. It may refer to a law, a will, a donation, or a contract.

We must distinguish between the respondents' house and the land it is built on. The land itself is public property devoted to public use.
It is not susceptible to prescription and cannot be burdened with voluntary easements. On the other hand, the respondents' house is
private property, albeit illegally constructed on public property. It can be the object of prescription and can be burdened with voluntary
easements. Nevertheless, it is indisputable that the respondents have not voluntarily burdened their property with an easement in favor
of Alolino.

An easement of a right of way is discontinuous and cannot be acquired through prescription. 28 On the other hand, an easement of light
and view can be acquired through prescription counting from the time when the owner of the dominant estate formally prohibits the
adjoining lot owner from blocking the view of a window located within the dominant estate.29

Notably, Alolino had not made (and could not have made) a formal prohibition upon the respondents prior to their construction in 1994;
Alolino could not have acquired an easement of light and view through prescription. Thus, only easements created by law can burden
the respondents' property.

The provisions on legal easements are found in Book II, Title VII, Chapter 2 of the Civil Code whose specific coverage we list and recite
below for clarity and convenience.

Section 3 (Articles 649-657) governs legal easements of right of way. Article 649 creates a legal easement in favor of an owner or any
person entitled to use any immovable, which is landlocked by other immovables pertaining to other persons without an adequate
access to a public highway. Article 652 creates a legal easement in favor of an isolated piece of land acquired by sale, exchange,
partition, or donation when it is surrounded by other estates of the vendor, exchanger, co-owner, or donor. Article 653 grants the same
right of way. in favor of the vendor, exchanger, co-owner, or donor when his property is the one that becomes isolated. Article 656
grants the owner of an estate, after payment of indemnity, a right of way to carry materials through the estate of another when it.is
indispensable for the construction or repair of a building in his estate. Finally, Article 657 governs right of way easements for the
passage of livestock.

None of these provisions are applicable to Alolino's property with respect to the barrio road where the respondents' house stands on.

On the other hand, Section 5 of Book II, Title VII, Chapter 2 of the Civil Code (Articles 667-673) governs legal easements of light and
view. These seven provisions are:
SECTION 5
Easement of Light and View

Article 667. No part-owner may, without the consent of the others, open through the party wall any window or aperture of any kind.

Article 668. The period of prescription for the acquisition of an easement of light and view shall be counted: (1) From the time of the
opening of the window, if it is through a party wall; or (2) From the time of the formal prohibition ipon the proprietor of the adjoining land
or tenement, if the window is through a wall on the dominant estate.

Article 669. When the distances in article 670 are not observed, the owner of a wall which is not party wall, adjoining a tenement or
piece of land belonging to another, c^n make in it openings to admit light at the height of the ceiling joints or immediately under the
ceiling, and of the size of thirty centimeters square, and, in every case, with an iron grating imbedded in|the wall and with a wire screen.

Nevertheless, the owner of the tenement or property adjoining the wall in which the openings are made can close them should he
acquire part-ownership thereof, if there be no stipulation to the contrary.

He can also obstruct them by constructing a building on his land or by raising a wall thereon contiguous to that having such openings,
unless an easement of light has been acquired.

Article 670. No windows, apertures, balconies, or other similar projections which afford a direct view upon or towards an adjoining land
or tenement can be made, without leaving a distance of two meters between the wall in which they are made and such contiguous
property.

Neither can side or oblique views upon or towards such conterminous property be had, unless there be a distance of sixty centimeters.

The nonobservance of these distances does not give rise to prescription.

Article 671. The distance referred to in the preceding article shall be measured in cases of direct views from the outer line of the wall
when the openings do not project, from the outer line of the latter when they do, and, in cases of oblique view, from the dividing line
between the two properties.
Article 672. The provisions of article 670 are not applicable to buildings separated by a public way or alley, which is not less than three
meters wide, subject to special regulations and local ordinances.

Article 673. Whenever by any title a right has been acquired to have direct views, balconies or belvederes overlooking an adjoining
property, the owner of the servient estate cannot build thereon at less than a distance of three meters to be measured in the manner
provided in article 671. Any stipulation permitting distances less than those prescribed in article 670 is void.
However, none of these provisions actually create a legal easement of light and view which can only be acquired through prescription
or a by virtue of a voluntary title.

From the foregoing, we agree with the respondents that Alolino does not have an easement of light and view or an easement of right of
way over the respondents' property or the barrio road it stands on. This does not mean, however, that the respondents are entitled to
continue occupying the barrio road and blocking the rear of Alolino's house. Every building is subject to the easement which prohibits
the proprietor or possessor from committing nuisance. 30 Under Article 694 of the Civil Code, the respondents' house is evidently a
nuisance:

Art. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else which:

(1) Injures or endangers the health or safety of others; or

(2) Annoys or offends the senses; or
(3) Shocks, defies or disregards decency or morality; or
(4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; or
(5) Hinders or impairs the use of property,
A barrio road is designated for the use of the general public who are entitled to free and unobstructed passage thereon. Permanent
obstructions on these roads, such as the respondents' illegally constructed house, are injurious to public welfare and convenience. The
occupation and use of private individuals of public places devoted to public use constitute public and private nuisances and nuisance
per se.31

The CA clearly erred when it invoked Section 28 of the Urban Development and Housing Act as a ground to.deny the demolition of
respondents' illegal structure. The invoked provision reads:

Sec. 28. Eviction and Demolition. - Eviction or demolition as a practice shall be discouraged. Eviction or demolition, however, may be
allowed under the following situations:

(a) When persons or entities occupy danger -areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines,
waterways, and other public places such as sidewalks, roads, parks, and playgrounds;

(c) When there is a court order for eviction and demolition.

The invoked provision itself allows the demolition of illegal structures on public roads and sidewalks because these nuisances are
injurious to public welfare. Evidently, the respondents have no right to maintain their occupation and permanent obstruction of the barrio
road. The interests of the few do not outweigh the greater interest of public health, public safety, good order, and general welfare.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals in CA-G.R. CV No. 94524 is REVERSED and SET
ASIDE and the decision of the Regional Trial Court, Pasig City, Branch 153 in Civil Case No. 69320 is REINSTATED.

The respondents, and all persons claiming rights under them, are ORDERED to remove and demolish their illegal structure. The
respondents are also ORDERED to pay the petitioner the sum of One Hundred Thousand Pesos (P100,000.00) as attorney's fees.
Costs against the respondents.

G.R. No. 195026

CENTRAL MINDANAO UNIVERSITY, represented by its President, DR. MARIA LUISA R. SO LIVEN, Petitioner, vs. REPUBLIC
OF THE PHILIPPINES, represented by the Department of Environment and Natural Resources, Respondent.

For this Court's resolution is a petition for review on certiorari dated January 14, 2011 filed by petitioner Central Mindanao University
(CMU), seeking to reverse and set aside the Decision1 dated December 30, 2010 of the Court of Appeals (CA), which annulled the
Decision2 dated December 22, 1971, the Amended Decision3 dated October 7, 1972 and the Second Amended Decision 4 dated
September 12, 1974 rendered by the then Court of First Instance (CFI), 15th Judicial District, Branch II of Bukidnon and annulled the
Decrees No. N-154065, N-154066 and N-154067 issued in favor of petitioner and the Original Certificate of Title (OCT) No. 0-160, OCT
No. 0-161 and OCT No. 0-162 registered in petitioner's name on January 29, 1975.

Petitioner Central Mindanao University (CMU) is an agricultural educational institution owned and run by the State established by virtue
of Republic Act No. 4498.5 It is represented by its President, Dr. Maria Luisa R. So liven in accordance with CMU Board of Regents
Resolution No. 02, s. 2011.6
The subjects of the controversy are two parcels of land situated at Musuan, Maramag, Bukidnon identified as "Sheet 1, Lot 1 of Ir-1031-
D" consisting of 20,619, 175 square meters, and "Sheet 2, Lot 2 of Ir-1031-D" consisting of 13,391,795 square meters, more or less. 7

In 1946, CMU took possession of the subject parcels of land and started construction for the school site upon the confirmation of the
Secretary of Public Instruction. 8 However, during the final survey in 1952, CMU discovered that there were several adverse claimants,
holders, possessors and occupants of the portions of lots identified as school sites. 9

On January 16, 1958, upon the recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the provisions
of Section 8310 of Commonwealth Act (C.A.) No. 141, otherwise known as Public Land Act, President Carlos P. Garcia issued
Proclamation No. 47611 which reserved certain portions of the public domain in Musuan, Maramag, Bukidnon for petitioner CMU's
(formerly Mindanao Agricultural College) site purposes. 12 The said parcels of land were withdrawn from sale or settlement and
reserved for CMU's school site purposes, "subject to private rights, if any there be."

In a letter dated October 27, 1960, the Director of Lands Zoilo Castrillo formally requested the Secretary of Agriculture and Natural
Resources that he be authorized under Section 87 of C.A. No. 141, to file in the CFI of Bukidnon an application for the compulsory
registration of the parcels of land reserved by President Garcia under Proclamation No. 476 as CMU's school site purposes. 13

In the first indorsement dated November 9, 1960, the Office of the Secretary of Agriculture and Natural Resources, through its
Undersecretary Salvador F. Cunanan, forwarded to the Executive Secretary a recommendation that the Director of Lands be authorized
to file the said application.14

Thereafter, the Office of the President, through the Assistant Executive Secretary Enrique C. Quema, in the second indorsement dated
December 12, 1960, authorized and directed the Director of Lands to file the necessary petition in the CFI of Bukidnon for the
compulsory registration of the parcels of land reserved for CMU. 15

Department Legal Counsel Alejandro V. Recto, in the indorsement dated December 28, 1960, communicated the said directive and
authority granted to the Director of Lands to file the application for compulsory registration. 16

On January 31, 1961, the Director of Lands filed a petition with the then Court of First Instance of Bukidnon for the settlement and
adjudication of the title of the parcels of land reserved in favor of CMU, and for the determination of the rights of adverse claimants in
relation to the reservation of the land. 17

The cadastral court, in its Decision dated December 22, 1971 in Land Registration Case Cadastral Rec. No. 414, declared that the
subject parcels of land as public land included in the reservation for CMU, and be registered in its name, except for specified portions
adjudicated to other persons. 18 The court also gave the other 18 claimants an opportunity to acquire full ownership in the subject
parcels of land. 19 Hence, the court reduced the claim of CMU to 3,041 hectares of total land area. 20 The dispositive portion of the
decision reads:

In view of the foregoing considerations, judgment is hereby rendered declaring Lot No. 1 containing an approximate area of 20,619,175
square meters and Lot No. 2 containing an area of 13,391,795 square meters, both situated in the barrio of Musuan, municipality of
Maramag, Bukidnon, as described in the survey plans and technical descriptions approved by the Director of Lands as IR-1031-D,
marked as Exhibits "D" and "D-1" of the Central Mindanao University, as public land included in the reservation in favor of said
University by virtue of Proclamation No. 476, series of 1958, of the President of the Philippines, which may be registered in its name,
except such portions hereinbelow specified which are adjudicated in favor of the following:

1. Venancio Olohoy, married, and Esmeralda Lauga, married to Julio Sagde, both of legal ages and residents of Valencia, Bukidnon-
17.75 hectares of Lot No.1 as shown in the survey plan (Exh. "D");
2. Martina Songkit, of legal age, married to Martin Binanos and resident of Maramag, Bukidnon - 3 hectares of Lot No. 2 as shown in
the plan Exh. "D-1 ";
3. Pablo Saldivar, widower, of legal age and resident of Dologon, Maramag, Bukidnon- 12 hectares of Lot No. 2 as indicated in the
survey plan Exh. "D-1" abovementioned;
4. Fernando Bungcas, married to Feliciana Gayonan and resident of Dologon, Maramag- 6 hectares of Lot No. 2;
5. Cerilo Salicubay, married to Valentina Bento, and Virginia Salicubay, married to Ricardo Tunasan, both of legal ages and residents of
Panalsalan, Maramag, Bukidnon, share and share alike, -4 hectares of Lot No. 2
6. Rosita Lupiahan, of legal age, married to Simplicio Alba and resident of Maramag, Bukidnon - 4 hectares of Lot No. 2.

The areas herein adjudicated to the above-named private individuals should be surveyed and each lot given a separate number with
their corresponding technical descriptions. Considering, however, that the Court rejected most of the claim due to the dubious nature of
the occupation of the claimants prior to the take-over by the College, now University, in 1946 but most of them remained on the land up
to the present time, in order to avoid possible injustice and in line with the national objective of providing land for the landless, it is
hereby recommended that the claimants enumerated hereunder who filed answers and presented evidence which, nevertheless, was
found short of the requirements for a decree of registration, be given the opportunity to acquire full ownership thereof through a
homestead, or free patent application if they are landless persons, otherwise by means of a sales application if they are already owners
of other pieces of real estate, after a corresponding amendment of the Executive Proclamation through the avenues allowed by law.
The following claimants may be considered for that purpose, namely:
1. Geronimo Aniceto and his sister Francisca Aniceto- 12 hectares of Lot No. 2;
2. Bonifacio Aniceto- 6 hectares of Lot No. 2;
3. Julita Aniceto- 12 hectares of Lot No. 2;
4. Maximo Nulo- 5 hectares of Lot No. 2;
5. Magno Sepada- 3 hectares of Lot No. 1;
6. Eulogio Guimba- 12 hectares of Lot No. 2;
7. Mario Baguhin and his wife, Treponia Dagoplo 18 hectares of Lot No. 2;
8. Aniceto Nayawan- 12 hectares of Lot No. 2;
9. Eduardo Saloay-ay- 13 hectares of Lot No. 2;
10. Arcadio Belmis and his wife Beatriz Lauga- 24 hectares of Lot No. 1;
11. Vitaliano Lauga- 24 hectares of Lot No. 1;
12. Procopio Abellar- 12 hectares of Lot No. 1;
13. Rufino Dador- 12 hectares of Lot No. l;
14. Roque Larayan- 12 hectares of Lot No. 1;
15. Benito Lutad- 12 hectares of Lot No. l;
16. Juliana Pasamonte- 11 hectares of Lot No. 1;
17. Tirso Pimentel- 19 hectares of Lot No. 1; and
18. Dativa P. Velez- 18 hectares of Lot No. 1.

Should the above recommendation be given due course, it is further suggested that those claimants included in the said
recommendation who are now occupying portions of Lot No. 2 situated above the university grounds on the hillside which they have
already denuded, should be transferred to the lower portions of the land near or along the Pulangi river in order to enable the University
to reforest the hillside to protect the watershed of its irrigation system and water supply.

After this decision become final and the portions adjudicated to private persons have been segregated and their corresponding
technical descriptions provided, the order of the issuance of the corresponding decree and the certificates of title shall be issued.

Upon the submission of the parties of the compromise agreement through a Joint Manifestation, the cadastral court rendered its
Amended Decision dated October 7, 1972 adjudicating in full ownership of some portions of the subject lots to the 29 groups of
claimants.22 A portion of the fallo of the amended decision reads:

WHEREFORE, pursuant to the evidence presented and the compromise agreement submitted by the parties, the decision rendered by
this Court on December 22, 1971 is hereby AMENDED and another one entered ADJUDICATING in full ownership to the claimants
hereinbelow specified the following portions of the lots in questions, to wit:The remaining portions of Lots 1 and 2 not otherwise
adjudicated to any of the above-named private claimants are hereby ADJUDICATED in full ownership to the Central Mindanao State
University. It is hereby directed that the different portions of Lots 1 and 2 hereinabove granted to private claimants must [be segregated]
by a competent surveyor and given their technical descriptions and corresponding lot numbers for purposes of the issuance of
certificates of title in their favor.

It is, however, ordered that the area adjacent and around or near the watersheds or sources of Lot No. 2 adjudicated to any of the
private claimants specified in the foregoing paragraph may be replaced or substituted to the Central Mindanao State University with
other areas of equal extent in either Lot 1 or 2, should said University desire to do so in order to protect and conserve the watersheds.

The findings and resolutions made by the Court in its original decision not affected by the amendments incorporated elsewhere herein
shall stand. The petition from relief from judgment presented by Lucio Butad which the Court finds without merit is hereby denied.

Once the decision becomes final and the subdivision directed in the preceding paragraph has been accomplished, the order for the
issuance of the corresponding decree of registration and the certificates of title in favor of each and every adjudicatee shall likewise
issue.

Based on the Order made by the court that those portions of the private claimants in the area adjacent and around, or near the
watersheds of Lot No. 2 may be replaced or substituted by CMU with areas of equal extent, the 16 grantees entered into an agreement
with CMU for the replacement of the areas adjudicated to them with those outside the watershed vicinity or beyond the area necessary
for the proper development, administration, supervision and utilization of the portion adjudicated to CMU. 24

Thereafter, the cadastral court, in its second amendment of the Decision dated September 12, 1974, ordered that the specific portions
of the subject lots be adjudicated to the 33 claimants as indicated in their agreement. 25 It also awarded to CMU Lot 1-S (18,531,671
square meters), Lot 2-A (10,001 square meters), and Lot 2-Q (12,266,524 square meters).26 On January 25, 1975, the court issued
Decrees No. N-154065, N-154066, and N-154067 in favor of CMU.27 Consequently, OCT Nos. 0-160, 0-161 and 0-162 were registered
in the name of CMU on January 29, 1975. 28 The decretal portion of the decision reads:

WHEREFORE, finding said manifestation and agreement of the parties in order, the dispositive portions of the amended decision
rendered by this Court on October 7, 1972 aforementioned is further amended such that the lots specified hereunder and more
particularly indicated in the revised plans and technical descriptions above-mentioned are hereby adjudicated as follows:
1. To Roque Larayan, Lot 1-A with an area of 120.001 square meters;
2. To Fernanda Bungcas, Lot 1-B with an area of 60.00 square meters;
3. To Tirso Pimentel, Lot 1-C with an area of 190.000 square meters;
4. To Juliana Pasamonte, Lot 1-D with an area of 109.999 square meters;
5. To Dativa Velez, Lot 1-E with an area of 180.00 square meters;
6. To Mario Bagubin, Lot 1-F with an area of 60.00 square meters;
7. To Triponia Dagoplo, Lot 1-G with an area of 60.001 square meters;
8. To Mario Baguhin, Lot 1-H with an area of 60.001 square meters;
9. To Celerina Guimba, Lot 1-1 with an area of 30.001 square meters;
10. To Constantino Baston, Lot 1-J with an area of 30.001 square meters;
11. To Maximo Nulo, Lot 1-K with an area of 49.999 square meters;
12. To Beatriz Lauga, Lot 1-L with an area of 100.00 square meters;
13. To Evorcio Olohoy, Lot 1-M with an area of 177.500 square meters;
14. To Arcadia Belmis, Lot 1-N with an area of 140.000 square meters;
15. To Luciano Namuag, Lot 1-0 with an area of 240.000 square meters;
16. To Vitaliano Lauga, Lot 1-P with an area of 240.000 square meters;
17. To Rufino Dador, Lot 1-Q with an area of 120.00 square meters;
18. To Procopio Abellar, Lot 1-B with an area of 120.001 square meters;
19. To Eduardo Saloay-ay, Lot 2-B with an area of 130.000 square meters;
20. To Francisco Anecito, Lot 2-C with an area of 120.000 square meters;
21. To Julita Anecito, Lot 2-D with an area of 60.000 square meters;
22. To Vicente Buntan, Lot 2-E with an area of 30.000 square meters;
23. To Victoria.no Lacorda, Lot 2-F with an area of 130.000 square meters;
24. To Cerilo Salicubay, Lot 2-G with an area of 40.000 square meters;
25. To Julita Anecito, Lot 2-H with an area of 60.000 square meters;
26. To Benito Butad, Lot 2-I with an area of 120.000 square meters;
27. To Pablo Zaldivar, Lot 2-J with an area of 120.000 square meters;
28. To Magno Sepada, Lot 2-K with an area of 30.000 square meters;
29. To Anecito Nayawan, Lot 2-L with an area of 120.000 square meters;
30. To Bonifacio Anecito, Lot 2-M with an area of 60.001 square meters;
31. To Eulogio Guimba, Lot 2-N with an area of 120.001 square meters;
32. To Martina Songkit, Lot 2-0 with an area of 30.000 square meters;
33. To Rosita Lapianan, Lot 2-P with an area of 40.000 square meters;
34. To Central Mindanao State University; Lot 1-S with an area of 18,531.671 square meters;
35. To Central Mindanao State University; Lot 2-A with an area of 10.001 square meters;
36. To Central Mindanao State University, Lot 2-Q with an area of 12,266,524 square meters;

The findings and resolutions made by this Court in its original decision not affected by the amendments incorporated herein shall
remain in force.

Once this decision becomes final, the order for the issuance of the corresponding decrees of registration and the certification of title in
favor of each and every adjudicates shall likewise issue.

On December 15, 2003, the Republic of the Philippines, represented by the Department of Environment and Natural Resources through
the Office of the Solicitor General (OSG), filed before the CA a petition for annulment of the Decision dated September 12, 1974 by the
cadastral court granting in favor of CMU the title to the subject parcels of land.

The Republic argued that the cadastral court should have summarily dismissed the registration proceedings since the Solicitor General
did not sign or file the petition for compulsory registration of the parcels of I as provided in Sections 53 30 and 8731 of Commonwealth Act
No. 141. 32 It also alleged that the subject parcels of land are inalienable lands of public domain. 33 It maintained that the cadastral court
did not acquire jurisdiction over the res; hence, the entire proceedings of the case should be null and void.

Accordingly, the CA ruled in favor of the respondent. The dispositive portion of the decision reads: ACCORDINGLY, the instant petition
is GRANTED. The 1) Decision dated December 22, 1971, 2) Amended Decision dated October 7, 1972 and 3) Second Amended
Decision dated September 12, 197 4, all rendered by the Court of First Instance, 15 th Judicial District, Branch II, Bukidnon Province, in
"L.R.C. Cad. Rec. No. 414, Sec. 87 of Commonwealth Act 141, Ir-1031-D (Lots 1 & 2), Maramag, Bukidnon, insofar as they adjudicated
a portion of the land covered by Proclamation No. 476 to the Central Mindanao University, are declared NULL and VOID.
Consequently, 1) Decrees No. N-154065, N-154066 and N-154067 issued in favor of the University on January 24, 1975; and 2)
Original Certificates of Title (OCT) No. 0-160 (covering Lot 1-S), No. 0-161 (for Lot 2-A) and No. 0-162 (for Lot 2-Q) registered in the
University's name on January 29, 1975, are likewise declared NULL AND VOID.

The CA ruled that there was no sufficient proof of a positive act by the government, such as presidential proclamation, executive order,
administrative action, investigation reports of Bureau of Lands investigators, or a legislative act or statute, which declared the land of
the public domain alienable and disposable.35 The documents adduced by CMU did not expressly declare that the covered land is
already alienable and disposable and that one of such documents was merely signed by the Assistant Executive Secretary. 36
According to the CA, CMU was unable to prove that the subject land ceased to have the status of a reservation. 37 However, the CA
clarified that despite nullification of the titles in its favor, CMU is still the rightful possessor of the subject property by virtue of
Proclamation No. 476. Hence, the petitioner CMU filed the present petition before this Court raising the sole issue:

Whether or not the Court of Appeals:

1. committed a serious and grave error and gravely abused its discretion on a question of law, and

2. ruled and decided a question of substance in a way and manner not in accord with law and applicable decisions of this Honorable
Court

in granting the petition for annulment of judgment filed by respondent on the ground that the cadastral court has no jurisdiction over the
subject matter or the specific res of the subject matter of the petition below for the reason that the subject lands are inalienable and
non-disposable lands of the public domain.39

CMU maintains that the CA has completely misconstrued the facts of the cadastral proceedings since the documents it presented
showed that the subject property has already been declared, classified, and certified by the Office of the President as alienable and
disposable lands.40

Particularly, CMU alleges that the specific and express authorization and the directive, as embodied in the Second Indorsement 41 dated
December 12, 1960, from the President, through the then Assistant Executive Secretary Enrique C. Quema, authorizing the Director of
Lands to file the necessary petition in the CFI of Bukidnon for compulsory registration of the parcels of land reserved for CMU's site
purposes is equivalent to a declaration and certification by the Office of the President that the subject parcels of land are alienable and
disposable.42

CMU has cited the case of Republic v. Judge De la Rosa43 wherein the then President Quirino issued on June 22, 1951 a directive
authorizing the Director of Lands to file the necessary petition in the CFI of Isabela for the settlement and adjudication of the titles to the
tract of land involved in the Gamu Public Lands Subdivision, Pls-62, Case 5. This Court held that the said presidential directive was
equivalent to a declaration and certification that the subject land area is alienable and disposable. 44

This Court finds the instant petition without merit. Under the Regalian doctrine, all lands of the public domain belong to the State,
and that the State is the source of any asserted right to ownership of land and charged with the conservation of such patrimony.45 Also,
the doctrine states that all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State.46
Consequently, the person applying for registration has the burden of proof to overcome the presumption of ownership of lands of the
public domain.47

To prove that a land is alienable, the existence of a positive act of the government, such as presidential proclamation or an executive
order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute declaring the
land as alienable and disposable must be established. 48 Hence, a public land remains part of the inalienable public domain unless it is
shown to have been reclassified and alienated by the State to a private person. 49

As noted, Proclamation No. 476 issued by then President Garcia, decreeing certain portions of the public domain in Musuan, Maramag,
Bukidnon for CMU's site purposes, was issued pursuant to Section 83 of C.A. No. 141. Being reserved as CMU' s school site, the said
parcels of land were withdrawn from sale and settlement, and reserved for CMU. Under Section 88 of the same Act, the reserved
parcels of land would ordinarily be inalienable and not subject to occupation, entry, sale, lease or other disposition, subject to an
exception, viz.:

Section 88. The tract or tracts of land reserved under the provisions of section eighty-three shall be non-alienable and shall not be
subject to occupation, entry, sale, lease, or other disposition until again declared alienable under the provisions of this Act or by
proclamation of the President.

In the case of Navy Officers' Village Association, Inc. v. Republic, 50 it was held that parcels of land classified as reservations for public
or quasi-public uses: (1) are non-alienable and non-disposable in view of Section 88 (in relation with Section 8) of C.A. No. 141,
specifically declaring them as non-alienable and not subject to disposition; and (2) they remain public domain lands until they are
actually disposed of in favor of private persons. 51 In other words, lands of the public domain classified as reservations remain to be
property of the public dominion until withdrawn from the public or quasi-public use for which they have been reserved, by act of
Congress or by proclamation of the President, or otherwise positively declared to have been converted to patrimonial property. 52

In the case at bar, CMU relies on the Court's ruling in the De la Rosa53 case that the directive from the President authorizing the
Director of Lands to file the necessary petition for the compulsory registration of the parcels of land so reserved is the equivalent of the
declaration and certification that the subject land is alienable and disposable. As such, CMU avows that the subject lots, as declared
alienable and disposable, are properly registered in its name.

This Court finds that the De la Rosa case does not apply in the instant petition because of the varying factual settings, to wit:
a. In De la Rosa, the Mallig Plains Reservation was reserved by the President for settlement purposes under the administration of
National Land Settlement Administration (NLSA), later replaced by Land Settlement and Development Corporation (LASEDECO), while
the subject lots in the present case was reserved for educational purposes, e.g. as CMU's school site, under the administration of the
Board of Trustees of CMU.
b. The National Resettlement and Rehabilitation Administration, when it replaced LASEDECO, excluded the Mallig Plains Reservation
among the properties it needed in carrying out the purposes and objectives of Republic Act No. 1160, 54 thus, the Reservation eventually
reverted to and became public agricultural land. There was no evidence that CMU ceased to use and occupy the reserved lots in
Musuan, Maramag, Bukidnon as its school site or that its public purpose is abandoned, for the lots to revert to and become public
agricultural land.
c. At the time that President Quirino issued the directive, the Gamu Public Land Subdivision in the Mallig Plains Reservation was not
reserved for public or quasi-public purpose or has ceased to be so. On the other hand, the subject lots in Bukidnon are reserved for
public purpose when the President, through the Assistant Executive Secretary, issued the said directive.
d. In the De la Rosa case, the private respondent was a qualified private claimant with the requisite period of possession of the subject
residential lot in his favor.1avvphi1 Meanwhile, CMU is not a private claimant of the land so reserved.

It was explicated in De la Rosa55 that the authority of the President to issue such a directive, held as equivalent to a declaration and
certification that the subject land area is alienable and disposable, finds support in Section 7 of C.A. No. 141, to wit:

Sec. 7. For 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.

However, the said directive by the President is limited to those enumerated in Section 8 of C.A. No.141, which provides that:

Section 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. However, the President may, for reasons of public interest, declare lands of the public domain open to disposition
before the same have had their boundaries established or been surveyed, or may, for the same reason, suspend their concession or
disposition until they are again declared open to concession or disposition by proclamation duly published or by Act of the National
Assembly.

As can be gleaned from the above provision, the lands which can be declared open to disposition or concession are those which have
been officially delimited and classified, or when practicable surveyed; those not reserved for public or quasi-public purpose; those not
appropriated by the Government; those which have not become private property in any manner; those which have no private right
authorized and recognized by C.A. No. 141 or any other valid law may be claimed; or those which have ceased to be reserved or
appropriated.

For the said President's directive to file the necessary petition for compulsory registration of parcels of land be considered as an
equivalent of a declaration that the land is alienable and disposable, the subject land, among others, should not have been reserved for
public or quasi-public purposes.

Therefore, the said directive on December 12, 1960 cannot be considered as a declaration that said land is alienable and disposable.
Unlike in De la Rosa, the lands, having been reserved for public purpose by virtue of Proclamation No. 476, have not ceased to be so at
the time the said directive was made. Hence, the lots did not revert to and become public agricultural land for them to be the subject of
a declaration by the President that the same are alienable and disposable.

We have ruled in the case of CMU v. DARAB56 that the CMU land reservation is not alienable and disposable land of public domain,
viz.: It is our opinion that the 400 hectares ordered segregated by the DARAB and affirmed by the Court of Appeals in its Decision
dated August 20, 1990, is not covered by the [Comprehensive Agrarian Reform Program] CARP because:

(1) It is not alienable and disposable land of the public domain;

(2) The CMU land reservation is not in excess of specific limits as determined by Congress;
(3) It is private land registered and titled in the name of its lawful owner, the CMU;
(4) It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually, directly and exclusively used and found to
be necessary for school site and campus, including experimental farm stations for educational purposes, and for establishing seed and
seedling research and pilot production centers.

The inalienable character of the lands as part of the long term functions of autonomous agricultural educational institution is reiterated
in CMU v. Executive Secretary: 57

It did not matter that it was President Arroyo who, in this case, attempted by proclamation to appropriate the lands for distribution to
indigenous peoples and cultural communities. As already stated, the lands by their character have become inalienable from the
moment President Garcia dedicated them for CMU's use in scientific and technological research in the field of agriculture. They
have ceased to be alienable public lands.58

This Court is not unmindful of its earlier pronouncement in CMU v. DARAB that the land reservation is a private land registered and
titled in the name of its lawful owner, the CMU. This pronouncement, which is now being argued by CMU as one of its bases in
convincing this Court that the subject property is owned by it and already alienable, is specious. The 1992 CMU case merely
enumerated the reasons why the said portion of the property is beyond the coverage of CARP. Moreover, the fact that the Court had
already settled the inalienable character of the subject property as part of the long term functions of the autonomous agricultural
educational institution in the case of CMU v. DARAB and reiterated in CMU v. Executive Secretary, belies CMU's contention that this
Court has recognized that the said land is a private property or that the land is alienable and disposable.

As to what constitutes alienable and disposable land of the public domain, this Court expounds in its pronouncements in Secretary of
the Department of Environment and Natural Resources v. Yap: 59

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, declassifying
inalienable public land into disposable land for agricultural or other purposes. In fact, Section 8 of CA No. 141 limits alienable or
disposable lands only to those lands which have been "officially delimited and classified."

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. To overcome this
presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable.
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. 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. 60

In the case at bar, CMU failed to establish, through incontrovertible evidence, that the land reservations registered in its name are
alienable and disposable lands of public domain. Aside from the series of indorsements regarding the filing of the application for the
compulsory registration of the parcels of land and the said directive from the President, CMU did not present any proof of a positive act
of the government declaring the said lands alienable and disposable.

For lack of proof that the said land reservations have been reclassified as alienable and disposable, the said lands remain part of
inalienable public domain, hence; they are not registrable under Torrens system.

This Court will not discuss the other issue raised by CMU, e.g., the filing of the petition for cadastral proceeding was pursuant to the
written consent, authorization and directive of the OSG, as the same was not discussed in the assailed Decision of the CA. This Court
also dismisses the other issue raised - that the titles in CMU's name were singled out by respondent - for lack of evidence.

WHEREFORE, the petition for review on certiorari dated January 14, 2011 filed by petitioner Central Mindanao University is hereby
DENIED. The Decision dated December 30, 2010 of the Court of Appeals in CA-G.R. SP No. 81301 is hereby AFFIRMED. The
proceedings in the Court of First Instance, 15th Judicial District, Branch II of Bukidnon is NULL and VOID. Accordingly, Original
Certificate of Title Nos. 0-160, OCT No. 0-161 and OCT No. 0-162 issued in the name of petitioner, are CANCELLED. Sheet 1, Lot 1 of
Ir-1031-D and Sheet 2, Lot 2 of Ir-1031-D are ORDERED REVERTED to the public domain.
G.R. No. 175760

REPUBLIC OF THE PHILIPPINES, Petitioner, vs.SOGOD DEVELOPMENT CORPORATION, Respondent.

For a judicial confirmation of title under Section 48(b) of the Public Land Act, the land subject of the application needs only to be
alienable and disposable as of the time of the application, provided the applicant's possession and occupation of the land dates back to
June 12, 1945, or earlier.

This Petition for Review on Certiorari 1 seeks to annul and set aside the Decision2 dated August 25, 2005 and Resolution3 dated
November 7, 2006 of the Court of Appeals Cebu City in CA-G.R. CV No. 72389.4 The Court of Appeals affirmed5 the Decision dated
May 10, 2001 of the Municipal Circuit Trial Court of Catmon-Carmen-Sogod, Cebu, which granted respondent Sogod Development
Corporation’s (Sogod) application for original registration of title over Lot No. 2533, Cadastre 827-D, situated in Tabunok, Sogod, Cebu.6

On December 9, 1999, Sogod filed an application for registration and confirmation of land title over Lot No. 2533, Cad. 827-D with an
area of 23,896 square meters and situated in Brgy. Tabunok, Municipality of Sogod, Province of Cebu. 7 The case was docketed as
Land Registration Case No. 016-SO.8
Sogod claimed that it purchased the land "from Catalina Rivera per deed of absolute sale dated Oct[ober] 28, 1996[.]" 9 It also averred
that "by itself and through its predecessors-in-interest[,] [it had] been in open, continuous, exclusive[,] and notorious possession and
occupation of [the land] since June 12, 1945[.]"10

On February 11, 2000, the Office of the Solicitor General moved to dismiss the Petition 11 on the ground that Sogod was disqualified
from applying for original registration of title to alienable lands pursuant to Article XII, Section 3 of the 1987 Constitution.12

The trial court issued an Order dated June 15, 2000 pronouncing a "general default against all persons except against the Solicitor
General[.]"13

On September 19, 2000, the Regional Executive Director of the Department of Environment and Natural Resources, Region VII,
Banilad, Mandaue City filed an Opposition on the ground that the land was previously forest land and "was certified and released as
alienable and disposable only on January 17, 1986." 14 Thus, it could not be registered without violating Section 48, paragraph (b) of
Commonwealth Act No. 141, otherwise known as the Public Land Act, as amended by Republic Act No. 6940. 15

Apart from presenting documentary evidence, Sogod also presented witnesses Celedonio Campos, Jr., Bonifacia Sugarol, and Ranito
Quadra to prove its ownership and possession of the land. 16 According to their testimonies, the land "was originally in the possession of
Ignacia Rivera, the mother of Catalina."17 "Catalina inherited this land from her mother[.]"18 On October 28, 1996, Catalina sold the land
to Sogod.19 "A tax clearance dated July 30, 1999 was issued by the Office of the Municipal Treasurer, certifying that all taxes over the
land covered by Tax Declaration No. 043-6156 had been paid."20 "Thereafter, Tax Declaration No. 11096 A was issued in the name of
[Sogod]."21

The Office of the Solicitor General did not present any controverting evidence. On May 10, 2001, the trial court rendered the Decision 23
granting the application.24 The Decision stated, in part:

The facts presented show that the applicant corporation and its predecessor-in-interest have been in open, continuous, exclusive,
notorious and undisturbed possession of the land, subject of this application for registration of title for not less than fifty (50) years or
since time immemorial. The state did not present evidence to controvert these facts.

WHEREFORE, from all the foregoing undisputed facts which are supported by oral and documentary evidence, the court finds and so
holds that the applicant, Sogod Development Corporation represented by Celedonio Campos, Jr. has a registrable title to the land
sought to be registered, hereby confirming the same and ordering its registration under Act 494, as amended by Presidential Decree
No. 1529 over Lot 2533, Cad 827-D, situated in Tabunok, Sogod, Cebu, Island of Cebu, Philippines, as described in Plan As-07-
001393, and strictly in line with its Technical Description, upon the finality of this decision. 25

The Office of the Solicitor General appealed to the Court of Appeals. 26 According to the Office of the Solicitor General, the trial court
erred in allowing the titling of Lot No. 2533 because:

(1) Sogod failed to prove its open, continuous, exclusive, and notorious possession and occupation of the land since June 12, 1945 or
earlier;27
(2) The tax declarations presented by Sogod "are of recent vintage" 28 and are "not accompanied by proof of actual possession . . . since
June 12, 1945[;]"29
(3) The land was only declared alienable and disposable on January 17, 1986, pursuant to Forestry Administrative Order No. 4-1611,30
"making it impossible for [Sogod] and its predecessor-sin-interest to have possessed the land in concept of an owner since June 12,
1945 or earlier[;]"31 and
(4) "Article XII, Section 3 of the 1987 Constitution disqualifies private corporations from applying for original registration of title to
alienable lands."

On August 25, 2005, the Court of Appeals rendered its Decision affirming the Decision of the 6 th Municipal Circuit Trial Court of Catmon-
Carmen-Sogod, Cebu.33 It ruled that Sogod was able to prove that "it and its predecessors-in-interest ha[d] been in possession of [Lot
No. 2533] since June 12, 1945 or earlier and the land sought to be registered is an agricultural land[.]"34 Upholding the corporation’s
right to file the application before the court a quo, the Court of Appeals held that lands possessed in the manner and for the period
required by Section 48 of Commonwealth Act No. 141 become ipso jure private lands.35 Judicial confirmation in this case would only be
a formality to confirm "the earlier conversion of the land into private land[.]" 36

The Office of the Solicitor General moved for reconsideration37 of the Court of Appeals Decision. In the Resolution dated November 7,
2006, the Court of Appeals denied the Motion for Reconsideration for lack of merit. 38 Hence, the present Petition for Review was filed.
Respondent Sogod Development Corporation assigns the following errors:

I THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT ALLOWED THE TITLING OF
LOT NO. 2533 DESPITE RESPONDENT’S FAILURE TO SHOW THAT IT AND ITS PREDECESSORS-ININTEREST HAVE BEEN IN
OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION AND OCCUPATION OF ALIENABLE AND DISPOSABLE
LANDS OF THE PUBLIC DOMAIN UNDER A BONAFIDE CLAIM OF OWNERSHIP SINCE JUNE 12, 1945 OR PRIOR THERETO.
II THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN AFFIRMING THE TRIAL COURT’S DECISION,
GRANTING RESPONDENT’S APPLICATION FOR REGISTRATION OF LOT NO. 2533 IN VIEW OF THE OPPOSITION DATED
SEPTEMBER 13, 2000 OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES (DENR) STATING THAT SAID
PROPERTY WAS ONLY DECLARED ALIENABLE AND DISPOSABLE ON JANUARY 17, 1986.
III THE HONORABLE COURT OF APPEALS ERRED IN GRANTING RESPONDENT’S APPLICATION FOR REGISTRATION OF
TITLE SINCE ARTICLE XII, SECTION 3 OF THE 1987 CONSTITUTION DISQUALIFIES PRIVATE CORPORATIONS FROM
APPLYING FOR ORIGINAL REGISTRATION OF ALIENABLE LANDS.
IV THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE TRIAL COURT’S DECISION DATED AUGUST 2,
2001, GRANTING THE APPLICATION FOR REGISTRATION OF TITLE OF THE RESPONDENT ON THE BASES OF TAX
DECLARATIONS WHICH ARE OF RECENT VINTAGE.

Respondent filed its Comment,40 to which petitioner filed its Reply.41 On May 30, 2011, the court gave due course to the Petition and
required the parties to submit their respective memoranda.42

Petitioner and respondent filed their memoranda on January 4, 2012 43 and October 15, 2014,44 respectively.

Petitioner raises the following issues in its Memorandum:

First, "whether the occupation of forest land prior to its classification as alienable and disposable land may be considered for purposes
of complying with the requirements for judicial confirmation of title[;]" 45 and

Second, "whether [respondent] and its predecessors-in-interest have possessed the property in the manner and length of time required
by law."46

Petitioner contends that since the "application for registration was filed on December 9, 1999, respondent could only be considered in
bona fide possession for a period of 13 years from the time [the land] was classified as alienable and disposable [in 1986]." 47 It adds
that any possession or occupation of the land prior to its declaration as "alienable and disposable cannot be counted for purposes of
acquisitive prescription because forest lands are not susceptible of [private appropriation]." 48 It further argues that Section 48(b) of
Commonwealth Act No. 141, as amended, "applies exclusively to alienable and disposable public agricultural land[,] [and] [f]orest lands
are excluded.

Moreover, petitioner contends that possession in good faith "is important in the consideration of whether the applicant has acquired a
grant of registrable title from the government." 50 "The alienable nature of the land is essential to the bona fide claim of ownership and
possession since June 12, 1945.

Even if the court’s ruling in Heirs of Mario Malabanan v. Republic52 is applied, respondent’s possession would allegedly be short of the
length of time required by law.53 The earliest tax declaration presented by respondent is 1947, which was "short of the June 12, 1945
requirement of [the] law."54 According to petitioner, "[a] statement that a tax declaration for the year 1945 existed does not equate to
clear and convincing proof of possession required by law considering further that the person who declared the property [could not] be
precisely determined."55 Petitioner also "point[s] out that the total area . . . declared by respondent’s predecessor’s-in-interest [sic] [was]
at most 21,000 square meters as opposed to the area of 23,456 56 [square] meters [that was] sought to be registered."57 Finally,
according to petitioner, "it does not appear that respondent submitted a document proving that Catalina Rivera inherited the property
from her mother."58

On the other hand, respondent’s application, even when considered under Section 14(2) of Presidential Decree No. 1529, "must still be
dismissed for failure to prove the existence of an express government manifestation that the property is already patrimonial."59

Respondent counters that factual issues could not be raised in a petition for review on certiorari, and the findings of the trial court and
the Court of Appeals "that the respondent and its predecessor-in-interest have been in open, continuous, exclusive, notorious, and
adverse possession of the . . . land since 12 June 1945 or earlier"60 must be respected.

Respondent contends that it sufficiently complied with the requirements of the law. First, the land applied for was alienable and
disposable when it filed its application in 1999.62 Citing Republic v. Court of Appeals and Naguit,63 respondent contends that "it [was]
enough that the land [was] declared as alienable and disposable prior to the filing of the application for registration and not at the start of
possession[.]"64 Second, it and its predecessor-in-interest "occupied and possessed the land openly, continuously, exclusively, and
adversely under a bona fide claim of ownership since [June 12,] 1945 or earlier.

Contrary to petitioner’s claim, respondent stresses that it was able to present the tax declaration for 1945. 66 Moreover, "the various tax
declarations, which prove continuity and without intermission, and the tax clearance all in the name of Catalina Rivera[,] support the
claim that [she] was in possession of the . . . land since 1945 and even earlier[.]" 67 Respondent adds that "both the trial court and the
Court of Appeals found that the . . . land was planted with corn. "[P]lanting of corn requires cultivation and fostering[,] which proves that
the possession by Catalina Rivera was actual, open and continuous.
We deny the Petition. The main issue revolves around the proper interpretation of Section 48(b) of Commonwealth Act No. 141, as
amended,70 otherwise known as the Public Land Act, which requires possession under a bona fide claim of ownership since June 12,
1945 for a judicial confirmation of title:

SECTION 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the
province where the land is located for confirmation of their claims and the issuance of a certificate of title thereafter, under the Land
Registration Act, to wit: (b) Those who by themselves or through their predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of
acquisition or ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title,
except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to
a Government grant and shall be entitled to a certificate of title under the provisions of this chapter.

A similar provision is found in Section 14(1) of Presidential Decree No. 1529, otherwise known as the Property Registration Decree,
which reads: SECTION 14. Who May Apply. — The following persons may file in the proper Court of First Instance an application for
registration of title to land, whether personally or through their duly authorized representatives: (1) Those who by themselves or through
their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and
disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

This court in Heirs of Mario Malabanan v. Republic71 has clarified that the fixed date of June 12, 1945 qualifies possession and
occupation, not land classification, as alienable and disposable. 72 The agricultural land subject of the application needs only to be
classified as alienable and disposable as of the time of the application, provided the applicant's possession and occupation of the land
dates back to June 12, 1945, or earlier.73 Thus:

The dissent stresses that the classification or reclassification of the land as alienable and disposable agricultural land should likewise
have been made on June 12, 1945 or earlier, because any possession of the land prior to such classification or reclassification
produced no legal effects. It observes that the fixed date of June 12, 1945 could not be minimized or glossed over by mere judicial
interpretation or by judicial social policy concerns, and insisted that the full legislative intent be respected.

We find, however, that the choice of June 12, 1945 as the reckoning point of the requisite possession and occupation was the sole
prerogative of Congress, the determination of which should best be left to the wisdom of the lawmakers. Except that said date qualified
the period of possession and occupation, no other legislative intent appears to be associated with the fixing of the date of June 12,
1945. Accordingly, the Court should interpret only the plain and literal meaning of the law as written by the legislators.1avvphi1

Moreover, an examination of Section 48 (b) of the Public Land Act indicates that Congress prescribed no requirement that the land
subject of the registration should have been classified as agricultural since June 12, 1945, or earlier. As such, the applicant’s imperfect
or incomplete title is derived only from possession and occupation since June 12, 1945, or earlier. This means that the character of the
property subject of the application as alienable and disposable agricultural land of the public domain determines its eligibility for land
registration, not the ownership or title over it. Alienable public land held by a possessor, either personally or through his predecessors-
in-interest, openly, continuously and exclusively during the prescribed statutory period is converted to private property by the mere lapse
or completion of the period. In fact, by virtue of this doctrine, corporations may now acquire lands of the public domain for as long as the
lands were already converted to private ownership, by operation of law, as a result of satisfying the requisite period of possession
prescribed by the Public Land Act. It is for this reason that the property subject of the application of Malabanan need not be classified as
alienable and disposable agricultural land of the public domain for the entire duration of the requisite period of possession.

To be clear, then, the requirement that the land should have been classified as alienable and disposable agricultural land at the time of
the 0application for registration is necessary only to dispute the presumption that the land is inalienable.

The ruling in Heirs of Malabanan adopted the earlier interpretation in Republic v. Court of Appeals and Naguit75 that Section 14(1) of the
Property Registration Decree "merely requires the property sought to be registered as already alienable and disposable at the time the
application for registration of title is filed." 76 This court also emphasized in Naguit the absurdity that would result in interpreting Section
14(1) as requiring that the public land should have already been characterized as alienable by June 12, 1945. 77

Besides, we are mindful of the absurdity that would result if we adopt petitioner's position. Absent a legislative amendment, the rule
would be, adopting the OSG’s view, that all lands of the public domain which were not declared alienable or disposable before June 12,
1945 would not be susceptible to original registration, no matter the length of unchallenged possession by the occupant. Such
interpretation renders paragraph (1) of Section 14 virtually inoperative and even precludes the government from giving it effect even as
it decides to reclassify public agricultural lands as alienable and disposable. The unreasonableness of the situation would even be
aggravated considering that before June 12, 1945, the Philippines was not yet even considered an independent state.

Instead, the more reasonable interpretation of Section 14(1) is that it merely requires the property sought to be registered as already
alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has
not yet deemed it proper to release the property for alienation or disposition, the presumption is that the government is still reserving the
right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession even
if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is
already an intention on the part of the State to abdicate its exclusive prerogative over the property. 78

Untenable is petitioner’s reliance on Republic v. Diloy,79 which pronounced that the period of possession before the declaration that land
is alienable and disposable agricultural land should be excluded in the computation of possession for purposes of confirmation of
imperfect title.80 Diloy was based on Republic v. Herbieto,81 which was expressly declared in Heirs of Malabanan to be incorrect and
without precedental value with respect to Section 14(1). The court declared that:

[T]he correct interpretation of Section 14(1) is that which was adopted in Naguit. The contrary pronouncement in Herbieto, as pointed
out in Naguit, absurdly limits the application of the provision to the point of virtual inutility since it would only cover lands actually
declared alienable and disposable prior to 12 June 1945, even if the current possessor is able to establish open, continuous, exclusive
and notorious possession under a bona fide claim of ownership long before that date.

Moreover, the Naguit interpretation allows more possessors under a bona fide claim of ownership to avail of judicial confirmation of their
imperfect titles than what would be feasible under Herbieto. This balancing fact is significant, especially considering our forthcoming
discussion on the scope and reach of Section 14(2) of the Property Registration Decree.

Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any precedental value with respect to Section 14(1). On the
other hand, the ratio of Naguit is embedded in Section 14(1), since it precisely involved [a] situation wherein the applicant had been in
exclusive possession under a bona fide claim of ownership prior to 12 June 1945. The Court’s interpretation of Section 14(1) therein
was decisive to the resolution of the case. Any doubt as to which between Naguit or Herbieto provides the final word of the Court on
Section 14(1) is now settled in favor of Naguit.82

Petitioner’s claim that "[t]he alienable nature of the land is essential to the bona fide claim of ownership and possession since June 12,
1945"83 is likewise untenable. In AFP Retirement and Separation Benefits System (AFP-RSBS) v. Republic:84

Although adverse, open, continuous, and notorious possession in the concept of an owner is a conclusion of law to be determined by
courts, it has more to do with a person’s belief in good faith that he or she has just title to the property that he or she is occupying. It is
unrelated to the declaration that land is alienable or disposable. A possessor or occupant of property may, therefore, be a possessor in
the concept of an owner prior to the determination that the property is alienable and disposable agricultural land. His or her rights,
however, are still to be determined under the law. 85

We proceed to the second issue relating to the sufficiency of evidence showing the nature and length of respondent’s possession over
the land. As a rule, factual findings of both the trial court and the Court of Appeals are binding on this court. Petitioner did not show the
existence of any exceptions for us to depart from this rule.

The trial court and the Court of Appeals found that respondent applicant had sufficiently proved its and its predecessors-in-interest’s
continuous possession of the land tracing back to June 12, 1945 or earlier. Possession since 1945 was established through testimonies
of respondents’ witnesses, the unbroken chain of tax declarations in the name of Catalina Rivera, the person from whom respondent
bought the property in 1996,86 and a certification from the municipal treasurer that all previous taxes had been paid.87 Tax declarations
or realty tax payments constitute at least proof that the holder has a sincere and honest claim of title over the property. 88 Moreover,
witness Bonifacia Sugarol, the owner of the adjoining land, stated that the land was owned by Ignacia Rivera and inherited by Catalina;
and the land was planted with corn and had many tenants.89

Contrary to petitioner’s claim, respondent was able to present in evidence the tax declaration for 1945. What were not presented were
tax declarations before 1945 because as testified by a representative from the Office of the Municipal Assessor of Sogod, all its records
before the war were destroyed. This was discussed by the Court of Appeals, thus:

The applicant also presented a representative from the Office of the Municipal Assessor of Sogod in the person Ranito Quadra relative
to the tax declaration history of Lot 2533. The oldest tax declaration on file in the said government office was TD 04024 (marked and
submitted as Exh. "CC") for the year 1945. In the said tax declaration, a notation was placed in the entry –

I (a) Land (Agricultural/Mineral)

ASSESSOR’S FINDINGS

Kind Area Class Unit Value Market Value

Cornland 4.0000 3a P800.00

Maguey 2.0000 1a 120.00

Pasture 4.0169 120.50

 Total 10.0169 P1040.50

As can be gleaned from the face of this evidence, the land was already devoted to the planting of corn, maguey and the rest was
pastureland. Also, i[t] appears that TD 04024 cancelled the previous tax declaration with number TD 1417. A testimony was also
adduced by the same witness that the previous tax declarations covering the property cannot be produced anymore because all of their
records prior to the Second World War were destroyed.

Analyzing the above-quoted testimony as well as the documentary evidence submitted, it can be clearly surmised that the land was
devoted to agriculture in 1945 and even prior to that year. Based on human experience, the area planted with corn and maguey is a
considerable tract of land that it presupposes that the land ceased to be a forest land. Such that, even if the land was declared to be
alienable and disposable only in the year 1986, the actual use of Catalina Rivera of this tract of land was already agriculture.

Thus, respondent had established (by itself and through its predecessor-in-interest) its possession in the concept of owner of the
property since 1945. It is further undisputed that the property was declared alienable and disposable in 1986 prior to respondent's filing
of its application in 1999.91 The Court of Appeals, therefore, did not err in affirming the Municipal Circuit Trial Court Decision granting
respondent's application for original registration of title.

WHEREFORE, the Petition is DENIED and the Court of Appeals Decision dated August 25, 2005 and Resolution dated November 7,
2006 are AFFIRMED.

G.R. No. 199537

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. ANDREA TAN, Respondent.

This is a petition for review on certiorari filed by the Republic of the Philippines (Republic) from the May 29, 2009 decision1 and October
18, 2011 resolution2 of the Court of Appeals (CA) in CA-G.R. CEB-CV No. 00702. The CA denied the Republic's appeal from LRC Case
No. N-1443 wherein the Municipal Trial Court in Consolacion, Cebu, granted respondent Andrea Tan's application for land title
registration.

Antecedents On October 2, 2002, Tan applied for the original registration of title of Lot No. 4080, Cad. 545-D (new) situated in Casili,
Consolacion, Cebu (the subject lot). She alleged that she is the absolute owner in fee simple of the said 7,807 square-meter parcel of
residential land she purchased from a certain Julian Gonzaga on September 17, 1992. Her application was docketed as LRC Case No.
N-144.

After complying with the jurisdictional requirements, the land registration court issued an order of general default, excepting the State
which was duly represented by the Solicitor General.

During the trial, Tan proved the following facts:

1. The subject lot is within Block 1, Project No. 28, per LC Map No. 2545 of Consolacion, Cebu;
2. The subject lot was declared alienable and disposable on September 1, 1965, pursuant to Forestry Administrative Order No. 4-1063;
3. Luciano Gonzaga who was issued Tax Declaration Nos. 01465 in 1965 and 02983 in 1972 initially possessed the subject lot.
4. After Luciano’s death, Julian Gonzaga inherited the subject lot;
5. Andrea Tan purchased the subject lot from Julian Gonzaga on September 17, 1992;
6. She, through her predecessors, had been in peaceful, open, continuous, exclusive, and notorious possession of the subject lot in the
concept of an owner for over thirty (30) years.

On 28 April 2004, the land registration court granted Tan’s application. The court confirmed her title over the subject lot and ordered its
registration.

The Republic appealed the case to the CA, arguing that Tan failed to prove that she is a Filipino citizen who has been in open,
continuous, exclusive, and notorious possession and occupation of the subject lot, in the concept of an owner, since June 12, 1945, or
earlier, immediately preceding the filing of her application. The appeal was docketed as CA-G.R. CEB-CV No. 00702.
On May 29, 2009, the CA denied the appeal. The CA observed that under the Public Land Act, there are two kinds of applicants for
original registration: (1) those who had possessed the land since June 12, 1945; and (2) those who already acquired the property
through prescription. The respondent’s application fell under the second category.

The CA noted that before land of the public domain can be acquired by prescription, it must have been declared alienable and
disposable agricultural land. The CA pointed to the certification issued by the Community Environment and Natural Resources Office
(CENRO) as evidence that the subject was classified as alienable and disposable on September 1, 1965, pursuant to Land
Classification Project No. 28. The CA concluded that Tan had already acquired the subject lot by prescription.

On July 2, 2009, the Republic moved for reconsideration. Citing Republic v. Herbieto,4 it argued that an applicant for judicial
confirmation of title must have been in possession and occupation of the subject land since June 12, 1945, or earlier, and that the
subject land has been likewise already declared alienable and disposable since June 12, 1945, or earlier.5

On October 18, 2011, the CA denied the motion for reconsideration citing the then recent case of Heirs of Mario Malabanan v. Rep. of
the Philippines6 which abandoned the ruling in Herbieto. Malabanan declared that our law does not require that the property should
have been declared alienable and disposable since June 12, 1945, as long as the declaration was made before the application for
registration is filed.7

On January 5, 2012, the Republic filed the present petition for review on certiorari.

The Petition The Republic argues: (1) that the CA misapplied the doctrine in Malabanan; and (2) that the CENRO certification and tax
declarations presented were insufficient to prove that the subject lot was no longer intended for public use.

Meanwhile, the respondent insists that she has already proven her title over the subject lot. She maintains that the classification of the
subject lot as alienable and disposable public land by the DENR on September 1, 1965, per Land Classification Project No. 28,
converted it into patrimonial property of the State.

From the submissions, the lone issue is whether a declaration that Government-owned land has become alienable and disposable
sufficiently converts it into patrimonial property of the State, making it susceptible to acquisitive prescription.

Our Ruling We find the petition meritorious.

All lands of the public domain belong to the State. It is the fountain from which springs any asserted right of ownership over land.
Accordingly, the State owns all lands that are not clearly within private ownership. This is the Regalian Doctrine which has been
incorporated in all of our Constitutions and repeatedly embraced in jurisprudence.8 Under the present Constitution, lands of the public
domain are not alienable except for agricultural lands.9

The Public Land Act10 (PLA) governs the classification, grant, and disposition of alienable and disposable lands of the public domain. It
is the primary substantive law on this matter. Section 11 thereof recognizes judicial confirmation of imperfect titles as a mode of
disposition of alienable public lands.11 Relative thereto, Section 48(b) of the PLA identifies who are entitled to judicial confirmation of
their title:

(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since June
12, 1945, immediately preceding the filing of the application for confirmation of title, except when prevented by war or force majeure.
Those shall be conclusively presumed to have performed all the conditions essential to a government grant and shall be entitled to a
certificate of title under the provisions of this chapter. (As amended by PD 1073.)

The Property Registration Decree12 (PRD) complements the PLA by prescribing how registrable lands, including alienable public lands,
are brought within the coverage of the Torrens system. Section 14 of the PRD enumerates the qualified applicants for original
registration of title:

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

(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12,
1945, or earlier;
(2) Those who have acquired ownership of private lands by prescription under the provision of existing laws;
(3) Those who have acquired ownership of private lands or abandoned river beds by right of accession or accretion under the existing
laws;
(4) Those who have acquired ownership of land in any other manner provided for by law.
The PRD also recognizes prescription as a mode of acquiring ownership under the Civil Code.14 Nevertheless, prescription under
Section 14(2) must not be confused with judicial confirmation of title under Section 14(1). Judicial confirmation of title requires:

1. That the applicant is a Filipino citizen;

2. That the applicant, by himself or through his predecessors-ininterest, has been in open, continuous, exclusive and notorious
possession and occupation of the property since June 12, 1945;
3. That the property had been declared alienable and disposable as of the filing of the application.

Only private property can be acquired by prescription. Property of public dominion is outside the commerce of man.18 It cannot be the
object of prescription 19 because prescription does not run against the State in its sovereign capacity.20 However, when property of
public dominion is no longer intended for public use or for public service, it becomes part of the patrimonial property of the State. 21
When this happens, the property is withdrawn from public dominion and becomes property of private ownership, albeit still owned by the
State.22 The property is now brought within the commerce of man and becomes susceptible to the concepts of legal possession and
prescription.1avvphi1

In the present case, respondent Tan’s application is not anchored on judicial confirmation of an imperfect title because she does not
claim to have possessed the subject lot since June 12, 1945. Her application is based on acquisitive prescription on the claim that: (1)
the property was declared alienable and disposable on September 1, 1965; and (2) she had been in open continuous, public, and
notorious possession of the subject lot in the concept of an owner for over thirty (30) years.

In our 2009 decision and 2013 resolution23 in Malabanan, we already held en banc that a declaration that property of the public
dominion is alienable and disposable does not ipso facto convert it into patrimonial property. We said:

Accordingly, there must be an express declaration by the State that the public dominion property is no longer intended for public service
or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration,
the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus
incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be
no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to
run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the
President is duly authorized by law.24

While a prior declaration that the property has become alienable and disposable is sufficient in an application for judicial confirmation of
title under Section 14(1) of the PRD, it does not suffice for the purpose of prescription under the Civil Code.25 Before prescription can
even begin to run against the State, the following conditions must concur to convert the subject into patrimonial property:

1. The subject lot must have been classified as agricultural land in compliance with Sections 2 and 3 of Article XII of the Constitution;
2. The land must have been classified as alienable and disposable;26
3. There must be a declaration from a competent authority that the subject lot is no longer intended for public use, thereby converting it
to patrimonial property.

Only when these conditions are met can applicants begin their public and peaceful possession of the subject lot in the concept of an
owner.

In the present case, the third condition is absent. Even though it has been declared alienable and disposable, the property has not been
withdrawn from public use or public service. Without this, prescription cannot begin to run because the property has not yet been
converted into patrimonial property of the State. It remains outside the commerce of man and the respondent’s physical possession and
occupation thereof do not produce any legal effect. In the eyes of the law, the respondent has never acquired legal possession of the
property and her physical possession thereof, no matter how long, can never ripen into ownership.WHEREFORE, we hereby GRANT
the petition. The May 29, 2009 decision and October 18, 2011 resolution of the Court of Appeals in CA- G.R. CEB-CV No. 00702 are
REVERSED and SET ASIDE. The respondent's application for Land Registration is DENIED for lack of merit. No pronouncement as to
costs.

G.R. No. 169710, August 19, 2015

REPUBLIC OF THE PHILIPPINES, Petitioner, v. JOSE ALBERTO ALBA, REPRESENTED BY HIS ATTORNEY-IN-FACT, MANUEL
C. BLANCO, JR., Respondent.

Under appeal is the decision promulgated on September 8, 2005,1 whereby the Court of Appeals (CA) upheld the judgment rendered
on January 31, 2001 by the 7th Municipal Circuit Trial Court (MCTC) of Ibajay-Nabas, stationed in Ibajay, Aklan granting the application
of the respondent for the registration of five parcels of land with a total area of 213,037 square meters, more or less, all situated in
Barangay Rizal, Municipality of Nabas, Province of Aklan.2
Antecedents The respondent was the purchaser for value of the parcel of land known as Lot No. 9100 situated in Barangay Rizal,
Municipality of Nabas, Province of Aklan, and subdivided and designated in the approved survey plan as Lot No. 9100-A, with an area
of 50,000 square meters, more or less; Lot No. 9100-B, with an area of 49,999 square meters, more or less; Lot No. 9100-C, with an
area of 50,000 square meters, more or less; Lot No. 9100-D, with an area of 35,001 square meters, more or less; and Lot No. 9100-E,
with an area of 28,037 square meters, more or less. He applied for the original registration of title over the parcels of land in the MCTC.3

The Office of the Solicitor General (OSG), in behalf of the Republic of the Philippines, opposed the application for original registration of
title, contending that the respondent and his predecessors-in-interest had not been in open, continuous, exclusive and notorious
possession and occupation of the lands in question since June 12, 1945.4

After trial, the MCTC rendered judgment on the application on January 31, 2001, disposing:
WHEREFORE, premises considered, judgment is hereby rendered GRANTING the application for registration of the parcel of land
designated in the approved Survey Plan (Exhibit "C") known as Lot No. 9100, Cad.758-D, Nabas Cadastre and described in the
Technical Description (Exhibit "D") with an area of FIFTY THOUSAND (50,000) square meters, more or less, Exhibit "D-l" with an area
of FORTY NINE THOUSAND NINE HUNDRED NINETY NINE (49,999) Exhibit "D-2" with an area of FIFTY THOUSAND (50,000)
square meters, more or less, Exhibit "D-3" with an area of THIRTY FIVE THOUSAND ONE (35,001) square meters, more or less, and
Exhibit "D-4" with an area of TWENTY EIGHT THOUSAND THIRTY SEVEN (28,037) square meters, more or less, or a total area of
TWO HUNDRED THIRTEEN THOUSAND THIRTY SEVEN (213,037) SQUARE METERS, more or less, situated at Barangay Rizal,
Municipality of Nabas, Province of Aldan, Island of Panay, Philippines, under the Property Registration Decree (PD 1529), and title
thereto registered and confirmed in the name of JOSE ALBERTO ALBA, of legal age, married to Maria Beatris Morales, Filipino citizen,
and presently residing at 34 Derby, White Plains, Quezon City, Metro Manila, and herein represented by his attorney-in-fact Manual C.
Blanco, whose residence is at Viscarra Subdivision, Andagao, Kalibo, Aldan.

After this decision shall have become final and executory, an order for the issuance of Decree of Registration of Title shall issue in favor
of the applicant.

The OSG appealed the judgment to the CA upon the following errors, to wit:

1. That the lower court did not acquire jurisdiction over the application for registration due to the following:
a. applicant-appellee's failure to show that the land subject of the application falls under the jurisdiction of the MCTC;
b. applicant-appellee's failure to adduce the Official Gazette as evidence;
c. applicant-appellee's failure to submit the original tracing cloth plan of the land subject of the application; and

2. That the lower court erred in granting the application for registration when the applicant-appellee failed to prove possession of
an alienable and disposable land of the public domain for the period and in the concept required by law.6

Decision of the CA On September 8, 2005,7 the CA, finding that the trial court did not disregard evidence that affected the results of
the case, and that there was no cogent reason to disturb its factual findings, decreed thusly: WHEREFORE, in view of the foregoing
premises, judgment is hereby rendered by us DISMISSING the appeal filed in this case and AFFIRMING the Decision dated January
31, 2001 rendered by the lower court in LRC Case No. N-057, LRA Record No. N-69758.

Issues
I. THE COURT A QUO DID NOT ACQUIRE JURISDICTION OVER THE SUBJECT APPLICATION FOR REGISTRATION OF TITLE
FOR FAILURE OF RESPONDENT TO SUBMIT THE ORIGINAL TRACING CLOTH PLAN OR SEPIA OF THE LAND APPLIED FOR
REGISTRATION
II. RESPONDENT FAILED TO PROVE POSSESSION OVER THE PROPERTY APPLIED FOR REGISTRATION IN THE CONCEPT
REQUIRED BY LAW.9

Ruling The appeal is meritorious.

I Requirement for the submission of the approved tracing cloth plan may be excused if other competent means of proving
identity and location of the lands subject of the application are available and produced in court

Although conceding the mandatory requirement for the tracing cloth plan, the CA nonetheless ruled in favor of the respondent upon the
authority of jurisprudence, including Director of Lands v. Court of Appeals,10 wherein the Court, citing the purpose for the requirement of
submitting the tracing cloth plan to be the establishment of the true identity and location of the land subject of the application for
registration in order to avoid boundary overlaps with adjacent lands,11 held that the respondent satisfied this purpose by submitting the
approved plan and the technical descriptions of Lot No. 9100 (and its derivative lots); 12 that the approved plan and the technical
descriptions settled the identity and location of Lot No. 9100;13 and that considering that there was no glaring and irreconcilable
discrepancy,14 the purpose of submitting the tracing cloth plan was fully served.

The OSG maintains, however, that the submission of the tracing cloth plan was a statutory requirement of mandatory character,
rendering the non-submission fatal to the application;15 that the submission could not be waived expressly or impliedly; 16 that to fix the
exact or definite identity of the land as shown in the approved plan and technical descriptions was the primary purpose of the
submission;17 and that upon the respondent's failure to "actually" present the tracing cloth plan, the trial court did not acquire jurisdiction
over the res, rendering the proceedings a nullity.18

Section 17 of Presidential Decree No. 1529 (The Property Registration Decree of 1978) provides:
Section 17. What and where to file.-The application for land registration shall be filed with the Court of First Instance of the province or
city where the land is situated. The applicant shall file, together with the application, all original muniments of titles or copies thereof and
a survey plan of the land approved by the Bureau of Lands.

The clerk of court shall not accept any application unless it is shown that the applicant has furnished the Director of Lands with a copy
of the application and all annexes

Section 17 shows, indeed, that it is mandatory for the applicant for original registration to submit to the trial court not only the original or
duplicate copies of the muniments of title but also the copy of the duly approved survey plan of the land sought to be registered. The
survey plan is crucial because it provides reference of the property's exact identity and location.

Did the respondent's submission of the approved plan and technical description, both of which had been approved by Regional
Technical Director of the Land Management Services, satisfy the requirement?

The answer is in the affirmative. In Republic v. Guinto-Aldana,19 this Court has relaxed the requirement for the submission of the tracing
cloth plan by holding that:

Yet if the reason for requiring an applicant to adduce in evidence the original tracing cloth plan is merely to provide a convenient and
necessary means to afford certainty as to the exact identity of the property applied for registration and to ensure that the same does not
overlap with the boundaries of the adjoining lots, there stands to be no reason why a registration application must be denied for failure
to present the original tracing cloth plan, especially where it is accompanied by pieces of evidence—such as a duly executed blueprint
of the survey plan and a duly executed technical description of the property—which may likewise substantially and with as much
certainty prove the limits and extent of the property sought to be registered.

To the same effect were the rulings in Republic v. Court of Appeals,20Recto v. Republic21 and Republic v. Hubilla22 where the Court has
pointed out that although the best means to identify a piece of land for registration purposes is the original tracing cloth plan approved
by the Bureau of Lands (now the Lands Management Services of the Department of Environment and Natural Resources), other
evidence could provide sufficient identification. In particular, the Court has said in Hubilla, citing Recto:

While the petitioner correctly asserts that the submission in evidence of the original tracing cloth plan, duly approved by the Bureau of
Lands, is a mandatory requirement, this Court has recognized instances of substantial compliance with this rule. In previous cases, this
Court ruled that blueprint copies of the original tracing cloth plan from the Bureau of Lands and other evidence could also provide
sufficient identification to identify a piece of land for registration purposes.

Here, the submission of the approved plan and technical description of Lot No. 9100 constituted a substantial compliance with the legal
requirement of ascertaining the identity or location of the lands subject of the application for registration. The plan and technical
description had been approved by the Regional Technical Director of the Land Management Services, 24 and were subsequently
identified, marked, and offered in evidence during the trial. Verily, no error can be attributed to the CA when it declared that:

It is our view that the original tracing cloth plan need not be presented in evidence because the identity and location of Lot No. 9100
were clearly established by the approved plan and the technical description thereof It must be noted that, during the hearing of the
case, no person appeared and answered within the time allowed by the trial court to oppose the application filed by the applicant-
appellee except the oppositor-appellant. As a result thereof, the testimonial and documentary evidence submitted and offered by the
applicant-appellee were admitted as unrebutted and unopposed.

Another point to consider is the fact that there is no glaring and irreconcilable discrepancy of the actual area of Lot No. 9100. Thus,
there is no need to present in evidence the original tracing cloth plan.

II Respondent did not establish his required possession

The CA upheld the finding of the MCTC that the respondent had established his title through documentary evidence like the tax
declarations and the deed of sale from his predecessors-in-interest; and through evidence showing possession in the concept of an
owner for over 50 years. It observed that although the tax declarations or realty tax payments relevant to the lands were not conclusive
evidence of ownership, they were good indicia of his possession in the concept of owner, for "no one in his right mind would be paying
taxes for a property that is not in his actual or at least constructive possession."26

The OSG counters that the CA should not have upheld the application for registration on the basis of mere tax declarations and the
testimonies of respondent's attorney-in-fact Manuel Blanco and Atty. Gideon de Pedro; and that their testimonies of possession since
time immemorial did not meet the standard required by law to warrant the grant of the application. 27 Essentially, the OSG contends that
in order for the respondent as the applicant for the original registration of title to prove possession of alienable public land for the period
prescribed by law that was open, exclusive and uninterrupted, 28 he should not simply declare such possession as his and that of his
predecessor-in-interest;29 that general statements or phrases were nothing more than conclusions of law that were not evidence of
possession;30 that instead the respondent as the applicant should present specific acts showing the nature of the alleged possession; 31
and that, accordingly, he did not discharge his burden of substantiation of his application.32

We agree with the insistence of the OSG.

Section 14(1) of P.D. No. 1529 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 of alienable and disposable lands of the public domain under a bonafide claim of ownership since June
12, 1945, or earlier.

There are three requisites for the filing of an application for registration of title under Section 14(1) of PD 1529, namely: (1) that the
property in question is alienable and disposable land of the public domain; (2) that the applicant by himself or through his predecessors-
in-interest have been in open, continuous, exclusive and notorious possession and occupation; and (3) that such possession is under a
bona fide claim of ownership since June 12, 1945, or earlier. In short, the right to file the application for original registration derives from
a bona fide claim of ownership dating back to June 12, 1945, or earlier, by reason of the claimant's open, continuous, exclusive and
notorious possession of alienable and disposable land of the public domain.

Anent the aforecited requisites, the OSG controverted only the second, that is, that the respondent did not sufficiently prove his and his
predecessors-in-interest's open, continuous, exclusive and notorious possession and occupation of the lands.

The respondent did not satisfactorily demonstrate that his or his predecessors-in-interest's possession and occupation were of the
nature and character contemplated by the law. None of his witnesses testified about any specific acts of ownership exercised by him or
his predecessors-in-interest on the lands. The general statements of his witnesses on the possession and occupation were mere
conclusions of law that did not qualify as competent and sufficient evidence of his open, continuous, exclusive and notorious
possession and occupation. As we see it, the OSG has correctly observed that his witnesses did not testify on the specific acts of
possession of the respondent or of his predecessors-in-interest.

In Republic v. Alconaba,33 this Court has explained that the intent behind the law's use of the terms possession and occupation is to
emphasize the need for actual and not just constructive or fictional possession, thus:

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 Court reverses the CA. The respondent did not competently account for any act of occupation, development, cultivation or
maintenance of the lands subject of his application, either on his part or on the part of his predecessors-in-interest for the entire time
that they were supposedly in possession of the lands. Witnesses Manuel Blanco and Atty. Gideon de Pedro only testified of their
possession since time immemorial but did not offer any details of specific acts indicative of possession and occupation. To prove
possession, the offer of general statements or phrases is a merely self-serving, unsubstantiated assertion. Atty. de Pedro alleged that
his uncle, Basilio de Pedro, had once possessed the lands that were cogonal, and used them for pasture and planting of coconut trees,
but did not adduce any specific details indicating such activities as manifestations of ownership or possession that could be ultimately
attributed to the respondent. That the lands were cogonal or planted with coconut trees did not conclusively disclose that the lands had
been actively and regularly, not merely casually or occasionally, cultivated and maintained.

The respondent's claim of ownership on the basis of the tax declarations alone did not also suffice. In Cequeña v. Bolante,35 the Court
has pointed out that only when tax declarations were coupled with proof of actual possession of the property could they become the
basis of a claim of ownership.36 Indeed, in the absence of actual public and adverse possession, the declaration of the land for tax
purposes did not prove ownership.37 It is well-settled that tax declarations are not conclusive proof of possession or ownership, and
their submission will not lend support in proving the nature of the possession required by the law.

In sum, the respondent did not prove that he and his predecessors-in-interest have been in continuous, exclusive, and adverse
possession and occupation thereof in the concept of owners. Hence, his application for original land registration fails.

WHEREFORE, the Court GRANTS the petition for review on certiorari ; REVERSES and SETS ASIDE the decision promulgated on
September 8, 2005; DISMISSES the application for land registration of the respondent; and ORDERS the respondent to pay the costs
of suit.

G.R. No. 194617, August 05, 2015

LA TONDEÑA, INC., Petitioner, v. REPUBLIC OF THE PHILIPPINES Respondent.

La Tonde 164a, Inc. (La Tondeña) applied for registration of a 14,286- square-meter parcel of land, with La Tondeña alleging
acquisition and possession even before the Second Wor1d War. It argues the inadmissibility of the Department of Environment and
Natural Resources-Community Environment and Natural Resources Office's (DENR-CENRO) Report on the land's classification as
alienable and disposable only on January 21, 1987 as this Report was not formally offered as evidence before the trial court.

This case involves an application of Section 14(1) of Property Registration Decree in relation to Section 48(b) of Commonwealth Act
No. 141, as amended, on the requisites for judicial confirmation of imperfect title. 1 This Petition for Review on Certiorari2 assails the
Court of Appeals August 10, 2010 Decision3 that reversed and set aside the Municipal Trial Court December 15, 2005 Decision 4
granting La Tondeña's application for land registration. 5 La Tondeña prays that this court reverse and set aside the Court of Appeals
Decision and Resolution,6 then affirm in toto the Municipal Trial Court Decision or, in the altemative, remand the case for further
reception of evidence.

On September 28, 2004, La Tondeña, through its Vice President Rosendo A. Bautista, 8 filed an Application9 for the registration of a
14,286- square-meter parcel of land in Central West, Bauang, La Union.

La Tondeña alleged obtaining title or ownership by purchase from one Pablo Rimorin and attached the following documents with its
application: "(a) original tracing plan together with its print copies; (b) technical description of the land; (c) certification, in lieu of lost
Surveyor's Certificate for registration; (d) certificate of tax assessment from 1948 up to the present; (e) copy of Tax Declaration No.
27726; and (f) copy of the Secretary's Certificate authorizing Rosendo A. Bautista.

On October 15, 2004, the Land Registration Authority Administrator forwarded the entire records to the Municipal Trial Court. 12 On
December 17, 2004, the trial court sent a Notice of Initial Hearing to the Office of the Solicitor General.
On March 21, 2005, during the initial hearing, the trial court entered an Order of Special Default against the whole world except against
the Republic of the Philippines that filed a formal written opposition to the application.
The trial court scheduled the hearing for marking of exhibits on April 12, 2005. 15 Rosendo A. Bautista testified and identified the
documents submitted with the application for registration. 16 He alleged that all records showing La Tondeña's purchase of the land from
one Pablo Rimorin were burned, thus, applicant can only present tax declarations in its name for years 1948, 1953, 1964, 1974, 1980,
1985, 1994, and 1999.

On May 30, 2005, La Tondeña's property administrator Victor Dumuk testified that from the time his father, Juan Dumuk, was property
administrator before the Second World War up to Victor Dumuk's present administration, La Tondeña's ownership ofthe land was
uncontested, and its possession was peaceful, continuous, open, and public. 18 He testified that property taxes were paid from 1994 to
2005, and that mango trees and a basketball court can be found on the land.
DENR-CENRO Land Investigator Wilfredo Valera submitted a Report dated May 31, 2005 to the trial court, stating that the land was
declared alienable and disposable only on January 21, 1987.20 The trial court summarized the Report's contents in its Decision:

In the investigation report submitted by Special Investigator Wilfreda B. Valera of the DENR, CENRO, San Fernando City, La Union, the
land is covered by Survey Plan No. AP-01-004436 approved by the Regional Land District/Land Management Bureau, Region I,
pursuant to P.D. No. 239 dated September 1973; that it consists of 14,286 square meters and is located in Brgy. Central West, Bauang,
La Union; that the entire area is within the alienable and disposable zone as classified under Project No. 9, LC No. 3330 and
released as well as certified as such on January 21, 1987; that this parcel of land is not within any civil or military reservations, and
is outside of any forest zone and watershed reservations; that it is not covered by any previously issued land patent, decree or title; that
this land was declared for the first time in the year 1948 under Tax declaration No. 1745 in the name of La Tondeña Distilleries with an
area of 13,292 square meters; that this land is now covered by Tax declaration No. 27726 in the name of La Tondeña Distilleria
Incorporada; that the corresponding realty taxes as per record of the Municipal Treasurer of Bauang, La Union have been paid since
1948; that this lot has not been earmarked for public use and not reserved for any future government projects; that this lot is flat in
terrain, presently for agricultural purposes, with bamboos and some fruit trees planted in it and about .00365 kilometers from the
poblacion; that this lot was found to be free from adverse claims and conflicts during the inspection; that La Tondeña Distilleria
Incorporada is in actual occupation and possession of the land; that this lot does not encroach upon any bodies of water, Right of Way,
and park sites that are devoted to the public; and that during the investigation and ocular inspection of the area, applicant La Tondeña
Inc. thru its authorized representative, presented the following documents, to wit: Print copy of AP-01-004436 and tax declarations from
the year 1948 up to the present?

La Tondeña alleged that this Report was not presented and formally offered during the proceedings, and it only learned of its existence
during appeal.

The Municipal Trial Court, in its Decision dated December 15, 2005, approved La Tondeña's application for registration:

Considering that the government represented by the Asst. Provincial Prosecutor, Bauang, La Union for and in behalf of the Solicitor
General (SOLGEN) is not presenting any evidence, documentary or testimonial to substantiate the formal written opposition which was
filed, the said formal written opposition is hereby ordered dismissed for lack of merit.

Wherefore, this Court, confirming the Order of Special Default, hereby approves the application and orders the adjudication and
registration of the land described in Survey Plan No. AP-01-004436 (Exh. "J") and the Technical description of said lot, Lot 4551, CAD
474-D, Bauang Cadastre (Exh. "K") containing an area of Fourteen thousand two hundred eighty-six (14,286) square meters situated at
Brgy. Central West, Bauang, La Union. Once this decision becomes final and executory, let the corresponding decree be issued.

The Republic of the Philippines filed a Notice of Appeal24 before the Court of Appeals on the ground that the trial court's Decision was
"contrary to law and evidence."25 It raised the Report dated May 31, 2005 on the land's classification as alienable and disposable only
on January 21, 1987, thus, the land cannot be the subject matter of an application for judicial confirmation of imperfect title under
Commonwealth Act No. 141 that requires possession from June 12, 1945 or earlier.

Instead of filing its Memorandum, La Tondeña filed a Manifestation with Motion to Remand Case27 dated January 29, 2007 to present
further evidence that the land was private land at the time of its acquisition. 28 The Court of Appeals noted the Comment of the Republic
of the Philippines, and denied the Motion of La Tondeña.
La Tondeña filed a Motion for Reconsideration 30 dated December 18, 2008 attaching as newly discovered evidence the "Plan of Private
Land as surveyed for Pablo Rimonin" under Psu-67458 duly approved on March 5, 1930.31 The Court of Appeals denied
reconsideration.
The Court of Appeals, in its Decision dated August 10, 2010, reversed and set aside the Municipal Trial Court December 15, 2005
Decision, and dismissed La Tondeña's application for registration. 33 It also denied reconsideration.Hence, La Tondeña filed this
Petition.

La Tondeña submits that the Report dated May 31, 2005 should not have been considered by the trial court since it was not identified
and formally offered as evidence.35 Wilfredo Valera was never presented in court, thus, he was never cross-examined in violation of La
Tondeña's right to due process.36 La Tondeña alleges that it only saw a copy of the Report when the case was on appeal.

In any event, La Tondeña raises the survey plan notation confirming that the land was "inside alienable and disposable area as per
Project No. 09, L.C. Map No. 0333 as certified on Aug. 12, 1934." 38 The survey plan was approved by the Department of Environment
and Natural Resources in the performance of its official function that carries the presumption of regularity.39 La Tondeña argues that the
Republic of the Philippines did not controvert this evidence, and Wilfredo Valera's Report dated May 31, 2005 that was not formally
offered as evidence cannot prevail over the survey plan that the trial court duly admitted as evidence.

Assuming the land was only reclassified on January 21, 1987, La Tondeña argues that it acquired a vested right over the land under the
1935 Constitution that allows a private corporation to acquire alienable and disposable land of public domain:

With due indulgence, the Honorable Court of Appeals failed to consider that petitioner has acquired a vested right over the land sought
to be registered under the 1935 Philippine Constitution and prior to the effectivity of the 1973 and 1987 Philippine Constitutions. As a
general rule, constitutional provisions are given prospective application, not retroactive, unless retroactivity is expressly provided or
necessarily implied (People vs. Isagani, et al., 63 SCRA 4). Hence, due to the prospective application of the 1973 and 1987
Constitutions, it is the provisions of the 1935 Constitution that should apply to petitioner's application for registration. Undoubtedly,
under the 1935 Philippine Constitution, private corporations are allowed in acquiring alienable and disposable land of the public domain.

Interestingly, the original reckoning point for the required length of possession under the Public Land Act (C.A. 141) is possession since
July 26, 1894. The period of possession was shortened to thirty (30) years by Republic Act No. 1942, which was enacted on June 22,
1957. Then, on January 25, 1977, Presidential Decree No. 1073 was enacted pegging the reckoning point of possession to June 12,
1945. Hence, until 1972, prior to the effectivity of the 1973 Philippine Constitution, the required possession of alienable public land that
would qualify to judicial confirmation under C.A. 141 is at least thirty (30) years, or at least from the year 1942. If reckoned from 1972,
the latest date when private corporations are allowed to acquire alienable public lands. Therefore, petitioner already acquired a vested
right over the subject property in 1972.42

La Tondeña submits that "its possession was open, continuous, uninterrupted for more than thirty (30) years until 1972 prior to the
effectivity of the 1973 and 1987 Philippine Constitution[,] [t]hus, the land became a private property by acquisitive prescription in
accordance with the doctrine that open, exclusive and undisputed possession of alienable land for the period prescribed by law creates
the legal fiction whereby the land, upon completion of the requisite period, ipso jure and without the need of judicial order or other
sanction ceases to be public land and becomes private property."

La Tondeña contends that it presented sufficient evidence for approval of its application for registration. Alternatively, a remand would
allow it to cross-examine Wilfredo Valera on his Report, and La Tondeña can present additional evidence to show that the land was
private land as early as March 5, 1930 as stated in the "Plan of Private Land as Surveyed for Pablo Rimorin" approved by the
Department of Agriculture and Natural Resources.

The Republic of the Philippines counters that Section 29 of Presidential Decree No. 1529 provides that courts are "duty-bound to
consider not only the evidence presented by the [parties,] but also the reports of the Commissioner of Land Registration and the
Director of Lands[.]"

Assuming the Report dated May 31, 2005 is inadmissible in evidence, La Tondeña still failed to present proof that the land was
declared alienable and disposable on or before June 12, 1945. 46 La Tondeña cannot rely on the notation on the Sephia Plan of AP-01-
004436 and its blueprint copy since this is not the proof required by law.47 Neither can La Tondeña invoke the 30-year prescriptive
period under Republic Act No. 1942 since Presidential Decree No. 1073, already applicable when La Tondeña filed its application for
registration in 2004, requires possession from June 12, 1945 or earlier.48 The Republic of the Philippines quoted at length Heirs of
Mario Malabanan v. Republic49 and Republic v. Rizalvo, Jr.50 on the 30-year rule on land registration.51 Lastly, La Tondeña cannot
invoke Article 1113 of the Civil Code since it did not present evidence that the. state declared the land "no longer intended for public
service or for the development of the national wealth."

The issues for resolution are: First, whether petitioner La Tondeña, Inc. complied with all the requirements for land registration under
Section 48(b) of Commonwealth Act No. 141, as amended, in relation to Section 14(1) of Presidential Decree No. 1529;

Second, whether petitioner La Tondeña, Inc. acquired a vested right under the 1935 Constitution that allows a private corporation to
acquire alienable and disposable land of public domain; and

Finally, whether the Court of Appeals can consider the Report dated May 31, 2005 that was not marked, identified, and formally offered
as evidence before the trial court.
We deny the Petition.

I Commonwealth Act No. 141 known as The Public Land Act covers matters such as "what lands are open to disposition or
concession[.]"53 Section 48(b), as amended, governs judicial confirmation of imperfect title:
SEC. 48. The following-described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or
an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province
where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration
Act, to wit:

(b)Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious
possession and occupation of alienable and disposable lands of the public domain, under a bona fide claim of acquisition or
ownership, since June 12, 1945, or earlier, immediately preceding the filing of the applications for confirmation of title except when
prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the provisions of this chapter.

Section 14(1) of Presidential Decree No. 1529 known as the Property

Registration Decree similarly reads:

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 fide claim of ownership since
June 12, 1945, or earlier.

Based on Section 48(b) of the Public Land Act in relation to Section 14(1) of the Property Registration Decree, an applicant for
land registration must comply with the following requirements:
1. The applicant, by himself or through his predecessor-in interest, has been in possession and occupation of the property
subject of the application;
2. The possession and occupation must be open, continuous, exclusive, and notorious;
3. The possession and occupation must be under a bona fide claim of acquisition of ownership;
4. The possession and occupation must have taken place since June 12, 1945, or earlier; and
5. The property subject of the application must be an agricultural land of the public domain. 55

Petitioner argues that the survey plan notation stating that the land was confirmed as alienable and disposable on August 12, 1934
should prevail over the Report dated May 31, 2005 stating that the land was reclassified as alienable and disposable only on January
21, 1987 since this Report was not formally offered as evidence before the trial court.

Respondent counters that Section 29 of Presidential Decree No. 1529 mandates the court to consider the Report dated May 31,
2005,57 and even assuming this Report is inadmissible, petitioner still failed to prove that the land was declared alienable and
disposable on or before June 12, 1945.58 Section 29 reads:

SEC. 29. Judgment confirming title.-All conflicting claims of ownership and interest in the land subject of the application shall be
determined by the court. If the court, after considering the evidence and the reports of the Commissioner of Land Registration and the
Director of Lands, finds that the applicant or the oppositor has sufficient title proper for registration, judgment shall be rendered
confirming the title of the applicant, or the oppositor, to the land or portions thereof.

The parties' arguments on the admissibility of the Report dated May 31, 2005 as evidence on when the land was classified as alienable
and disposable are mooted by this court's ruling in Heirs of Mario Malabanan v. Republic.

Heirs of Mario Malabanan clarified that the June 12, 1945 reckoning point refers to date of possession and not to date of land
classification as alienable and disposable.

This court held that "the agricultural land subject of the application needs only to be classified as alienable and disposable as of the
time of the application, provided the applicant's possession and occupation of the land dated back to June 12, 1945, or earlier.'

Petitioner filed the application for registration on September 28, 2004. All dates claimed as dates of classification of the land as
alienable and disposable-August 12, 1934 as stated in the survey plan notation that petitioner relies upon; January 21, 1987 as stated
in the Report dated May 31, 2005 that petitioner argues to be inadmissible; and March 5, 1930 as stated in the "Plan of Private Land as
Surveyed for Pablo Rimorin" that petitioner would like to present as additional evidence if the court remands the case-were all prior to
the September 28, 2004 application date, in compliance with the Heirs of Mario Malabanan ruling.

II
Petitioner's vested-right argument based on the 1935 Constitution that allows a private corporation to acquire alienable and disposable
land of public domain62 must also fail.

Under the 1935 Constitution, private corporations can still acquire public agricultural lands within the limited area prescribed.63 In The
Director of Lands v. Intermediate Appellate Court,64 "the land was already private land when Acme acquired it from its owners in 1962
and, thus, Acme acquired a registrable title.

In Republic v. TA.N. Properties, Inc.66 this court found The Director of Lands inapplicable since respondent corporation "acquired the
land on 8 August 1997 from Porting, who, along with his predecessors-in-interest, has not shown to have been, as of that date, in open,
continuous, and adverse possession of the land for 30 years since 12 June 1945[,] [i]n short, when respondent acquired the land from
Porting, the land was not yet private property.

Similarly, petitioner has not shown any proof of its purchase of the land, alleging that all records of this transaction were burned.68
Without evidence on the exact acquisition date, or the character of its predecessor's occupation or possession of the land,69 no proof
exists that the property was already private land at the time of petitioner's acquisition.

Survey notations are not considered substantive evidence of the land's classification as alienable and disposable. Republic v. T.A.N
Properties, Inc. discussed the required proof:

Further, it is not enough for the PENRO or CENRO to certify that a land is alienable and disposable. The applicant for land registration
must prove that the DENR Secretary had approved the land classification and released the land of the public domain as alienable and
disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by
the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the original classification approved by the
DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts must be established to prove that
the land is alienable and disposable. Respondent failed to do so because the certifications presented by respondent do not, by
themselves, prove that the land is alienable and disposable.

Petitioner's contention-that it acquired a vested right over the land in 1972 since Republic Act No. 1942 was enacted on June 22, 1957
shortened the required possession to 30 years, thus, until 1972 or prior to the 1973 Constitution and Presidential Decree No. 1073, the
required possession for judicial confirmation is at least 30 years or at least from 194271-also fails to convince.

Heirs of Mario Malabanan discussed that the 30-year-period rule in Republic Act No. 1942 was repealed by Presidential Decree No.
1073 in 1977, thus, only applications for registration filed prior to 1977 may invoke Republic Act No. 1942.72 Since petitioner only filed
for registration on September 28, 2004, the June 12, 1945 reckoning date under Presidential Decree No. 1073 applies.

III

Petitioner failed to prove possession and occupation since June 12, 1945 or earlier.

Petitioner's evidence consisted of tax declarations, and the testimonies of Rosendo Bautista and Victor Dumuk.

The trial court granted the application, despite lack of records showing petitioner's purchase and possession of the land prior to June
12, 1945, by relying on Rosendo Bautista's testimony:

Based on the evidences [sic] presented, testimonial and documentary as well, it is appearing that the applicant company, La Tondeña
Inc., thru its representative has established a satisfactory proof that it has a registrable title over the subject property, it being a
corporation duly organized and existing under the law of the Philippines with principal address at CPJ Bldg., 105 Carlos Palanca, Jr.
St., Legaspi Village, Makati City, Metro Manila, and qualified to own, acquire and possess land in the Philippines, it being established
that its possession dates back to 1948 when it was first declared for the first time but before that, said applicant La Tondei'ia Inc. has
owned the land subject of this case before the Second World War since the oldest tax declaration recorded which is Tax declaration
No. 1745 series of 1948 cancelled Tax declaration No. 6590. Besides, this Court believes the testimony of Rosendo Bautista to be
trustworthy being given in the ordinary course of business when he stated that La Tondeña Inc. acquired this property by
purchase from a certain Pablo Rimorin but he had no records about that transaction and all that the company has are tax
declarations as early as 1948 and tax receipt. Hence, applicant La Tondeña Inc. has established a satisfactory proof that it has a
reg[i]strable title to the said land subject of this case since it has owned it for more than fifty-seven (57) years or more.74

The Court of Appeals did not err in reversing and setting aside the trial court's Decision, and dismissing petitioner's application for
registration. It discussed the insufficiency of proof regarding petitioner's acquisition of the land and, consequently, the character of the
alleged possession by its predecessor-in-interest:LawlibraryofCRAlaw

The OSG correctly points out the property is incapable of being the subject matter of an application for judicial confirmation of imperfect
title under C.A. 141, as amended, even by a natural person because of the requirement that the period of possession must be from
June 12, 1945 or earlier. Confronted with the DENR-CENRO Report dated May 31, 2005, appellee did not present proof to establish its
claim that the property was already alienable and disposable from the time it acquired the same in 1948, let alone, its allegation that it
acquired the property by purchase. Even Appellee's exact date of acquisition as purported buyer was not shown with clarity.
Neither did it show how its predecessor-in-interest himself got hold of the property, the character of his possession or
occupation, and how long a time did he exercise the same on the land, if at all.
On the tax declarations, the oldest recorded one presented by petitioner was for year 1948. 76 This does not prove possession on or
before June 12, 1945.

In Republic v. Heirs of Dorotea Montoya,78 the only evidence presented to prove occupation and possession from 1940 was a tax
declaration for year 1947 with notation that realty tax payments were paid since 1940.79 This court discussed that "[a] tax declaration,
much less a tax declaration the existence of which is proved by means of an annotation, is not a conclusive evidence of ownership,
which is, at best, only a basis for inferring possession.

Petitioner claims possession even before the Second World War, yet petitioner only produced nine (9) tax declarations. 81 This court has
held that "intermittent and sporadic assertion of alleged ownership does not prove open, continuous, exclusive and notorious
possession and occupation.

This court has also held that "it is only when these tax declarations are coupled with proof of actual possession of the property that they
may become the basis of a claim of ownership."
On property administrator Victor Dumuk's testimony, he mentioned that his father was property administrator before the Second World
War until he died in 1984 after which his mother, Felicidad Dumuk, took over. 84 While the tax declarations indicated his father as
property administrator,85 again, none of these were issued on or before June 12, 1945.

The letter dated March 23, 199486 of petitioner's VP Treasurer Amando C. Ramat, Jr. to Victor Dumuk confirming Victor Dumuk as
caretaker of all petitioner's properties in Bauang, La Union effective January 1, 199487 also does not prove possession on or before
June 12, 1945.

Since petitioner failed to comply with all the requisites for registration as provided by law, the Court of Appeals did not err in reversing
the trial court, and dismissing petitioner's application for registration. WHEREFORE, the Petition is DENIED.

G.R. No. 177168, August 03, 2015

NAVY OFFICERS' VILLAGE ASSOCIATION, INC. (NOVAI), Petitioner, v. REPUBLIC OF THE PHILIPPINES, Respondent.

We resolve the present petition for review on certiorari1 assailing the December 28, 2006 decision2 and March 28, 2007 resolution3 of
the Court of Appeals (CA) in CA-G.R. CV No. 85179.

The CA reversed and set aside the August 20, 2004 decision 4 of the Regional Trial Court (RTC) Branch 67, Pasig City, that dismissed
the complaint filed by the Republic of the Philippines (respondent or the Republic) for the cancellation of Transfer Certificate of Title
(TCT) No. T-15387 issued in the name of Navy Officers' Village Association, Inc. or NOVAI (petitioner).

The Factual Antecedents

TCT No. T-15387,5 issued in NOVAI's name, covers a 475,009 square-meter parcel of land (the property)6 situated inside the former
Fort Andres Bonifacio Military Reservation (FBMR) in Taguig, Metro Manila.

The property previously formed part of a larger 15,812,684 square-meter parcel of land situated at the former Fort William McKinley,
Rizal, which was covered by TCT No. 61524 issued in the name of the Republic of the Philippines.

On July 12, 1957, then President Carlos P. Garcia issued Proclamation No. 4237 "reserving for military purposes certain parcels of the
public domain situated in the municipalities of Pasig, Taguig, Parañaque, province of Rizal, and Pasay City," which included the
15,812,684 square-meter parcel of land covered by TCT No. 61524.

On September 29, 1965, then Pres. Diosdado Macapagal issued Proclamation No. 4618 which excluded from Fort McKinley "a certain
portion of land embraced therein, situated in the municipalities of Taguig and Parañaque, Province of Rizal, and Pasay City," with an
area of 2,455,310 square meters, and declared the excluded area as "AFP Officers' Village" to be disposed of under the provisions of
Republic Act Nos. 2749 and 730.
Barely a month after, or on October 25, 1965, Pres. Macapagal issued Proclamation No. 47811 "reserving for the veterans
rehabilitation, medicare and training center site purposes" an area of 537,520 square meters of the land previously declared as AFP
Officers' Village under Proclamation No. 461, and placed the reserved area under the administration of the Veterans Federation of the
Philippines (VFP).

The property is within the 537,520 square-meter parcel of land reserved in VFP's favor.

On November 15, 1991, the property was the subject of a Deed of Sale12between the Republic of the Philippines, through former
Land Management Bureau (LMB) Director Abelardo G. Palad, Jr., (Dir. Palad) and petitioner NOVAI. The deed of sale was
subsequently registered and from which TCT No. T-15387 was issued in NOVAI's name.

The Republic's Complaint for Cancellation of Title

In its complaint13 filed with the RTC on December 23, 1993, the Republic sought to cancel NOVAFs title based on the following
grounds: (a) the land covered by NOVAFs title is part of a military reservation; (b) the deed of sale conveying the property to NOVAI,
which became the basis for the issuance of TCT No. 15387, is fictitious; (c) the LMB has no records of any application made by NOVAI
for the purchase of the property, and of the NOVAFs alleged payment of P14,250,270.00 for the property; and (d) the presidential
proclamation, i.e., Proclamation No. 2487, claimed to have been issued by then President Corazon C. Aquino in 1991 that authorized
the transfer and titling of the property to NOVAI, is fictitious.

NOVAI's Answer to the Complaint

In its answer (which was later amended) to the Republic's complaint, NOVAI counter-argued that the property was no longer part of the
public dominion, as the land had long been segregated from the military reservation pursuant to Proclamation No. 461.

NOVAI claimed that, contrary to the Republic's contention that there were no records of the sale, it had actually filed a letter-application
for a sales patent over the property with the LMB which prepared, verified and approved the property's plan and technical description;
and that the LMB delivered to it a copy of the deed of sale, signed and executed by Dir. Palad, after it had paid a portion of the
P14,250,270.00 purchase price, corresponding taxes, and other charges, with the balance to be paid in installments.

Also, NOVAI contended that, since any alleged irregularities that may have attended the sale pertained only to formalities, the proper
remedy for the Republic was to file an action for reformation of instrument, not for cancellation of title. In any event, it added that the
Republic's cause of action had prescribed because its title to the property had already become indefeasible.

The RTC's decision

The RTC narrowed down the issues to: (a) the character of the property in question, i.e., whether the property in question was part of
the FBMR, and hence, inalienable; and (b) the validity of the deed of sale conveying the property to NOVAI, i.e., whether the title over
the property was acquired by NOVAI through fraud. The RTC resolved both issues in NOVAI's favor.

In its decision, the RTC ruled that: (a) the property is alienable and disposable in character, as the land falls within the area segregated
from the FBMR pursuant to Proclamation No. 461; (b) the subject deed of sale should be presumed valid on its face, as it was executed
with all the formalities of a notarial certification; (c) notwithstanding the claims of forgery, the signature of Dir. Palad on the deed of sale
appeared genuine and authentic; and (d) NOVAI's title to the property had attained indefeasibility since the Republic's action for
cancellation of title was filed close to two (2) years from the issuance of the title.

The CA's decision

The CA reversed and set aside the RTC's decision. It ruled that the property is inalienable land of the public domain; thus, it cannot
be disposed of or be the subject of a sale. It pointed out that, since NOVAI failed to discharge its burden of proving the existence of
Proclamation No. 2487 - the positive governmental act that would have removed the property from the public domain — the property
remained reserved for veterans rehabilitation purposes under Proclamation No. 478, the latest executive issuance affecting the
property.

Since the property is inalienable, the CA held that the incontestability and indefeasibility generally accorded to a Torrens title cannot
apply because the property, as in this case, is unregistrable land; that a title issued by reason or on account of any sale, alienation, or
transfer of an inalienable property is void and a patent nullity; and that, consequently, the Republic's action for the cancellation of
NOVAI's title cannot be barred by prescription.

Also, the CA held that there can be no presumption of regularity in the execution of the subject deed of sale given the questionable
circumstances that surrounded the alleged sale of the property to NOVAI, 14e.g., NOVAI's failure to go through the regular process in the
Department of Environment and Natural Resources (DENR) or the LMB Offices in the filing of an application for sales patent and in the
conduct of survey and investigation; the execution of the deed of sale without payment of the full purchase price as required by policy;
and the appearances of forgery and falsification of Dir. Palad's signature on the deed of sale and on the receipts issued to NOVAI for its
installment payments on the property, among others.

Lastly, the CA held that the Court's observations and ruling in Republic of the Philippines v. Southside Homeowners Association, Inc
(Southside)15 is applicable to the present case. In Southside, the Republic similarly sought the cancellation of title - TCT No. 15084 -
issued in favor of Southside Homeowners Association, Inc. (SHAI) over a 39.99 hectare area of land situated in what was known as the
Joint U.S. Military Assistance Group (JUSMAG) housing area in Fort Bonifacio. The Court cancelled the certificate of title issued to
SHAI, as the latter failed to prove that the JUSMAG area had been withdrawn from the military reservation and had been declared open
for disposition. The Court therein ruled that, since the JUSMAG area was still part of the FBMR, its alleged sale to SHAI is necessarily
void and of no effect.

NOVAI sought reconsideration of the CA's decision, which the CA denied in its March 28, 2007 resolution; 16 hence, this petition.

The Petition

NOVAI alleges that the CA erred in declaring that: (a) the property is inalienable land of the public domain, (b) the deed of sale and
Proclamation No. 2487 were void and nonexistent, respectively, (c) the Republic's action for cancellation of title was not barred by
prescription, and (d) the ruling in Southside was applicable to the present case.

In support of its petition, NOVAI raises the following arguments:

(a)The property is no longer part of the public domain because, by virtue of Proclamation No. 461, s. of 1965, the property was
excluded from the FBMR and made available for disposition to qualified persons, subject to the provisions of R.A. Nos. 274 and 720
in relation to the Public Land Act;

(b)The deed of sale was, in all respects, valid and enforceable, as it was shown to have been officially executed by an authorized public
officer under the provisions of the Public Land Act, and celebrated with all the formalities of a notarial certification;

(c) Proclamation No. 2487 is to be presumed valid until proven otherwise; that the Republic carried the burden of proving that
Proclamation No. 2487 was a forgery, and that it failed to discharge this burden;

(d)The CA should not have considered as evidence the testimony of Senator Franklin Drilon on the nonexistence of Proclamation No.
2487 because such testimony was given by Senator Drilon in another case 17 and was not formally offered in evidence by the
Republic during the trial of the present case before the RTC;

(e)The action for cancellation of title filed by the Republic is already barred by prescription because it was filed only on December 23,
1993, or close to two (2) years from the issuance of NOVAI's title on January 9, 1992; and

(f) The case of Southside is not a cognate or companion case to the present case because the two cases involve completely dissimilar
factual and doctrinal bases; thus, the Court's observations and ruling in Southside should not be applied to the present case.

The Republic's Comment to the Petition

Procedurally, the Republic assails the propriety of the issues raised by NOVAI, such as "whether Proclamation No. 2487 and the
signature of LMB Director Palad on the assailed deed of sale are forged or fictitious," and "whether the Republic had presented
adequate evidence to establish the spuriousness of the subject proclamation," which are factual in nature and not allowed in a Rule 45
petition.

On the petition's substance, the Republic counters that:

(a)The property is inalienable public land incapable of private appropriation because, while the property formed part of the area
segregated from the FBMR under Proclamation No. 461, it was subsequently reserved for a specific public use or purpose under
Proclamation No. 478;

(b)Proclamation No. 2487, which purportedly revoked Proclamation No. 478, does not legally exist and thus cannot be presumed valid
and constitutional unless proven otherwise; the presumption of validity and constitutionality of a law applies only where there is no
dispute as to the authenticity and due execution of the law in issue;

(c) The deed of sale executed by NOVAI and by Dir. Palad was undeniably forged, as Dir. Palad categorically denied having signed the
deed of sale, and a handwriting expert from the National Bureau of Investigation (NBI) confirmed that Dir. Palad's signature was
indeed a forgery;18

(d)NOVAI, a private corporation, is disqualified from purchasing the property because R.A. Nos. 274 and 730, and the Public Land Act
only allow the sale of alienable and disposable public lands to natural persons, not juridical persons; and

(e)The Court's decision in Southside applies to the present case because of the strong factual and evidentiary relationship between the
two cases.

BCDA's Comment-in-Intervention

On December 28, 2007, and while the case was pending before this Court, the Bases Conversion Development Authority (BCDA) filed
a motion for leave to file comment-in-intervention and to admit the attached comment-in-intervention.

In a resolution dated February 18, 2008,20 the Court allowed the BCDA's intervention.

As the Republic has done, the BCDA contends that NOVAI is disqualified from acquiring the property given the constitutional and
statutory provisions that prohibit the acquisition of lands of the public domain by a corporation or association; that any sale of land in
violation of the Constitution or of the provisions of R.A. Nos. 274 and 730, and the Public Land Act are null and void; and that any title
which may have been issued by mistake or error on the part of a public official can be cancelled at any time by the State.

The BCDA further contends that NOVAI miserably failed to comply with the legal requirements for the release of the property from the
military reservation. More specifically, (1) the Director of Lands did not cause the property's subdivision, including the determination of
the number of prospective applicants and the area of each subdivision lot which should not exceed one thousand (1,000) square
meters for residential purposes; (2) the purchase price for the property was not fixed by the Director of Lands as approved by the DENR
Secretary; (3) NOVAI did not pay the purchase price or a portion of it to the LMB; and (4) the Deed of Sale was not signed by the
President of the Republic of the Philippines or by the Executive Secretary, but was signed only by the LMB Director.

Also, the BCDA observed that NOVAI was incorporated only on December 11, 1991, while the deed of sale was purportedly executed
on November 15, 1991, which shows that NOVAI did not yet legally exist at the time of the property's purported sale.
 OUR RULING

We resolve to DENY NOVAI's petition for review on certiorari as we find no reversible error committed by the CA in issuing its
December 28, 2006 decision and March 28, 2007 resolution.

I. Procedural Objections

A. In the filing of the present petition before this Court

Under Section 1, Rule 45 of the Rules of Court, a party desiring to appeal from a judgment or final order of the CA shall raise only
questions of law which must be distinctly set forth.

A question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence on a certain state of
facts.21 The issue does not call for an examination of the probative value of the evidence presented, the truth or falsehood of the facts
being admitted.22 In contrast, a question of fact exists when a doubt or difference arises as to the truth or falsehood of facts or when the
query invites the calibration of the whole evidence considering mainly the credibility of the witnesses; the existence and relevancy of
specific surrounding circumstances, as well as their relation to each other and to the whole; and the probability of the situation.

The rule that only questions of law may be the subject of a Rule 45 Petition before this Court, however, has exceptions. 24 Among these
exceptions is when there is conflict between the factual findings of the RTC and that of the CA.

In this case, the CA totally reversed the RTC on the nature and character of the land, in question, and on the,validity of the deed of sale
between the parties. Due to the conflicting findings of the RTC and the CA on these issues, we are allowed to reexamine the facts and
the parties' evidence in order to finally resolve the present controversy.

B. On BCD A's Intervention

In its reply25cralawred to the BCDA's comment-in-intervention, NOVAI primarily objects to the BCDA's intervention because it was made
too late.

Intervention is a proceeding in a suit or action by which a third person is permitted by the court to make himself a party, either joining
the plaintiff or defendant, or demanding something adverse to both of them. 26 Its purpose is to enable such third party to protect or
preserve a right or interest which may be affected by the proceeding,27 such interest being actual, material, direct and immediate, not
simply contingent and expectant.

As a general rule, intervention cannot be made at the appeal stage. Section 2, Rule 19 of the Rules of Court, governing interventions,
provides that "the motion to intervene may be filed at any time before rendition of judgment by the trial court." This rule notwithstanding,
intervention may be allowed after judgment where it is necessary to protect some interest which cannot otherwise be protected, and
may be allowed for the purpose of preserving the intervenor's right to appeal. 29 "The rule on intervention, like all other rules of
procedure, is intended to make the powers of the Court fully and completely available for justice and aimed to facilitate a
comprehensive adjudication of rival claims overriding technicalities on the timeliness of the filing thereof."

Thus, in exceptional cases, the Court may allow intervention although the trial court has already rendered judgment. In fact, the Court
had allowed intervention in one case even when the petition for review was already submitted for decision before it.
In the present case, the BCDA is indisputably the agency specifically created under R.A. No. 722732 to own, hold and/or administer
military reservations including, among others, those located inside the FBMR. If we are to affirm the CA's decision, the BCDA stands to
benefit as a favorable ruling will enable it to pursue its mandate under R.A. No. 7227. On the other hand, if we reverse the CA's
decision, it stands to suffer as the contrary ruling will greatly affect the BCDA's performance of its legal mandate as it will lose the
property without the opportunity to defend its right in court.

Indeed, the BCDA has such substantial and material interest both in the outcome of the case and in the disputed property that a final
adjudication cannot be made in its absence without affecting such interest. Clearly, the BCDA's intervention is necessary; hence, we
allow the BCDA's intervention although made beyond the period prescribed under Section 2, Rule 19 of the Rules of Court.

II. Substantive Issues

A. The property is non-disposable land of the public domain reserved for public or quasi-public use or purpose

We agree with the CA that the property remains a part of the public domain that could not have been validly disposed of in NOVAI's
favor. NOVAI failed to discharge its burden of proving that the property was withdrawn from the intended public or quasi-public use or
purpose.

While the parties disagree on the character and nature of the property at the time of the questioned sale, they agree, however, that the
property formed part of the FBMR - a military reservation belonging to the public domain. We note that the FBMR has been the subject
of several presidential proclamations and statues issued subsequent to Proclamation No. 423, which either removed or reserved for
specific public or quasi-public use or purpose certain of its portions.

On the one hand, NOVAI argues that Proclamation No. 461 had already transferred the property from the State's "public domain" to its
"private domain." On the other hand, the respondents argue that Proclamation No. 478, in relation with RA 7227 and EO No. 40, had
reverted the property to the inalienable property of the "public domain."

The classification and disposition of lands of the public domain are governed by Commonwealth Act (C.A.) No. 141 or the Public Land
Act, the country's primary law on the matter.

Under Section 6 of C.A. No. 141, the President of the Republic of the Philippines, upon the recommendation of the Secretary of
Agriculture and Natural Resources, may, from time to time, classify lands of the public domain into alienable or disposable, timber and
mineral lands, and transfer these lands from one class to another for purposes of their administration and disposition.

Under Section 7 of C.A. No. 141, the President may, from time to time, upon recommendation of the Secretary of Agriculture and
Natural Resources and for purposes of the administration and disposition of alienable and disposable public lands, declare what lands
are open to disposition or concession under the Acts' provisions.
Section 8 of C.A. No. 141 sets out the public lands open to disposition or concession and the requirement that they have been officially
delimited and classified, and when practicable, surveyed. Section 8 excludes (by implication) from disposition or concession, public
lands which have been reserved for public or quasi-public uses; appropriated by the Government; or in any manner have become
private property, or those on which a private right authorized and recognized by the Act or any other valid law may be claimed. Further,
Section 8 authorizes the President to suspend the concession or disposition of lands previously declared open to disposition, until again
declared open to disposition by his proclamation or by act of Congress.

Lands of the public domain classified as alienable and disposable are further classified, under Section 9 of C.A. No. 141, according to
their use or purpose into: (1) agricultural; (2) residential, commercial, industrial, or for similar productive purposes; (3) educational,
charitable, or other similar purposes; and (4) reservations for townsites and for public and quasi-public uses. Section 9 also authorizes
the President to make the classifications and, at any time, transfer lands from one class to another.

Section 83 of C.A. No. 141 defines public domain lands classified as reservations for public and quasi-public uses as "any tract
or tracts of land of the public domain" which the President, by proclamation and upon recommendation of the Secretary of Agriculture
and Natural Resources, may designate "as reservations for the use of the Republic of the Philippines or any of its branches, or of the
inhabitants thereof or "for quasi-public uses or purposes when the public interest requires it." 34 Under Section 88 of the same Act, these
"reserved tract or tracts of lands shall be non-alienable and shall not be subject to occupation, entry, sale, lease or other
disposition until again declared alienable under the provisions of [CA No. 141] or by proclamation of the President."
As these provisions operate, the President may classify lands of the public domain as alienable and disposable, mineral or timber land,
and transfer such lands from one class to another at any time.

Within the class of alienable and disposable lands of the public domain, the President may further classify public domain lands,
according to the use or purpose to which they are destined, as agricultural: residential, commercial, industrial, etc.; educational,
charitable, etc.; and reservations for townsites and for public and quasi-public uses; and, he may transfer such lands from one class to
the other at any time.

Thus, the President may, for example, transfer a certain parcel of land from its classification as agricultural (under Section 9 [a]), to
residential, commercial, industrial, or for similar purposes (under Section 9 [b]) and declare it available for disposition under any of the
modes of disposition of alienable and disposable public lands available under C.A. No. 141, as amended.

The modes of disposition of alienable and disposable lands available under C.A. No. 141 include: (1) by homestead settlement
(Chapter IV), by sale (Chapter V), by lease (Chapter VI) and by confirmation of imperfect or incomplete titles (Chapters VII and VIII) for
agricultural lands under Title II of C.A. No. 141 as amended; (2) by sale or by lease for residential, commercial, or industrial lands under
Title III of C.A. No. 141, as amended; (3) by donation, sale, lease, exchange or any other form for educational and charitable lands
under Title IV of C.A. No. 141, as amended; and (4) by sale by public auction for townsite reservations under Chapter XI, Title V of C.A.
No. 141, as amended.

Once these parcels of lands are actually acquired by private persons, either by sale, grant, or other modes of disposition, they are
removed from the mass of land of the public domain and become, by operation of law, their private property.

With particular regard, however, to parcels of land classified as reservations for public and quasi-public uses (under Section 9 [d]),
when the President transfers them to the class of .alienable and disposable public domain lands destined for residential, commercial,
industrial, or for similar purposes (under Section 9 [b]), or some other class under Section 9, these reserved public domain lands
become available for disposition under any of the available modes of disposition under C.A. No. 141, as provided above. Once these
re-classified lands (to residential purposes from reservation for public and quasi-public uses) are actually acquired by private persons,
they become private property.

In the meantime, however, and until the parcels of land are actually granted to, acquired, or purchased by private persons, they remain
lands of the public domain which the President, under Section 9 of C.A. No. 141, may classify again as reservations for public and
quasi-public uses. The President may also, under Section 8 of C.A. No. 141, suspend their concession or disposition.

If these parcels of land are re-classified as reservations before they are actually acquired by private persons, or if the President
suspends their concession or disposition, they shall not be subject to occupation, entry, sale, lease, or other disposition until again
declared open for disposition by proclamation of the President pursuant to Section 88 in relation with Section 8 of C.A. No. 141.

Thus, in a limited sense, parcels of land classified as reservations for public or quasi-public uses under Section 9 (d) of C.A. No. 141
are still non-alienable and non-disposable, even though they are, by the general classification under Section 6, alienable and
disposable lands of the public domain. By specific declaration under Section 88, in relation with Section 8, these lands classified as
reservations are non-alienable and non-disposable.

In short, parcels of land classified as reservations for public or quasi-public uses: (1) are non-alienable and non-disposable in view of
Section 88 (in relation with Section 8) of CA No. 141 specifically declaring them as non-alienable and not subject to disposition; and (2)
they remain public domain lands until they are actually disposed of in favor of private persons.

Complementing and reinforcing this interpretation - that lands designated as reservations for public and quasi-public uses are non-
alienable and non-disposable and retain their character as land of the public domain is the Civil Code with its provisions on Property
that deal with lands in general. We find these provisions significant to our discussion and interpretation as lands are property, whether
they are public lands or private lands.

In this regard, Article 419 of the Civil Code classifies property as either of public dominion or of private ownership. Article 42037 defines
property of the public dominion as those which are intended for public use or, while not intended for public use, belong to the State and
are intended for some public service. Article 421, on the other hand, defines patrimonial property as all other property of the State which
is not of the character stated in Article 420. While Article 422 states that public dominion property which is no longer intended for public
use or service shall form part of the State's patrimonial property.

Thus, from the perspective of the general Civil Code provisions on Property, lands which are intended for public use or public service
such as reservations for public or quasi-public uses are property of the public dominion and remain to be so as long as they remain
reserved.

As property of the public dominion, public lands reserved for public or quasi-public uses are outside the commerce of man.38 They
cannot be subject to sale, disposition or encumbrance; any sale, disposition or encumbrance of such property of the public dominion is
void for being contrary to law and public policy.

To be subject to sale, occupation or other disposition, lands of the public domain designated as reservations must first be withdrawn, by
act of Congress or by proclamation of the President, from the public or quasi-public use for which it has been reserved or otherwise
positively declared to have been converted to patrimonial property, pursuant to Sections 8 and 88 of C.A. No. 141 and Article 422 of the
Civil Code.40 Without such express declaration or positive governmental act, the reserved public domain lands remain to be public
dominion property of the State.

To summarize our discussion:

(1) Lands of the public domain classified as reservations for public or quasi-public uses are non-alienable and shall not be subject to
disposition, although they are, by the general classification under Section 6 of C.A. No. 141, alienable and disposable lands of the
public domain, until declared open for disposition by proclamation of the President; and

(2) Lands of the public domain classified as reservations are property of the public dominion; they remain to be property of the public
dominion until withdrawn from the public or quasi-public use for which they have been reserved, by act of Congress or by proclamation
of the President, or otherwise positively declared to have been converted to patrimonial property.

Based on these principles, we now examine the various issuances affecting the property in order to determine the property's character
and nature, i.e., whether the property remains public domain property of the State or has become its private property.

For easier reference, we reiterate the various presidential proclamations and statutes affecting the property:cralawlawlibrary
(1)Proclamation No. 423, series of 1957 - established the FBMR, a military reservation; the property falls within the FBMR;

(2)Proclamation No. 461, series of (September) 1965 - segregated, from the FBMR, a portion of Parcel 3, plan Psd-2031, which
includes the property, for disposition in favor of the AFPOVAI;

(3)Proclamation No. 478, series of (October) 1965 — reserved the property in favor of the Veterans Rehabilitation and Medical Training
Center (VRMTC); and

(4)RA No. 7227 (1992), as implemented by EO No. 40, series of 1992 - subject to certain specified exemptions, transferred the military
camps within Metro Manila, among others, to the BCDA.
1. Proclamation No. 461 was not the legal basis for the property's sale in favor of NOVAI

We agree with the respondents that while Proclamation No. 461, issued in September 1965, removed from the FBMR a certain parcel
of land that includes the property, Proclamation No. 478, issued in October 1965, in turn segregated the property from the area made
available for disposition under Proclamation No. 461, and reserved it for the use of the VRMTC.

We find it clear that Proclamation No. 478 was issued after, not before, Proclamation No. 461. Hence, while Proclamation No. 461
withdrew a certain area or parcel of land from the FBMR and made the covered area available for disposition in favor of the AFPOVAI,
Proclamation No. 478 subsequently withdrew the property from the total disposable portion and reserved it for the use of the VRMTC.
With the issuance of Proclamation No. 478, the property was transferred back to that class of public domain land reserved for public or
quasi-public use or purpose which, consistent with Article 420 of the Civil Code, is property of the public dominion, not patrimonial
property of the State.
Even under the parties' deed of sale, Proclamation No. 2487, not Proclamation No. 461, was used as the authority for the transfer and
sale of the property to NOVAI. The subject deed of sale pertinently reads:cralawlawlibrary
"This DEED OF SALE, made and executed in Manila, Philippines, by the Director of Lands, Pursuant to Batas Pambansa Blg. 878 and
in representation of the Republic of the Philippines, hereinafter referred to as the Vendor, in favor of THE NAVY OFFICERS VILLAGE
ASSOCIATION (NOVA) and residing in Fort Bonifacio, Metro Manila, referred to as the Vendee, WITNESSETH:

WHEREAS, pursuant to Presidential proclamation No. 478 as amended by proclamation No. 2487 in relation to the provision of
Act No. 3038 and similar Acts supplemented thereto, the Vendee applied for the purchase of a portion of the above-described Property
which portion is identical to Lot 3, Swo-000183 and more particularly described on page two hereof;

WHEREAS, the Vendee has complied with all other conditions required by Act No. 3038 in relation to Commonwealth Act No. 141, as
amended, and the rules and regulation promulgated thereunder.
Clearly, the legal basis of the property's sale could not have been Proclamation No. 461.

2. Proclamation No. 2487 which purportedly revoked Proclamation No. 478 does not legally exist; hence, it did not withdraw the
property from the reservation or from the public dominion

Neither can Proclamation No. 2487 serve as legal basis for the property's sale in NOVAI's favor. Proclamation No. 2487 purportedly
revoked Proclamation No. 478 and declared the property open for disposition in favor of NOVAI.

The Republic and the BCD A (now respondents) argue that Proclamation No. 2487 does not legally exist; it could not have served to
release the property from the mass of the non-alienable property of the State.

Hence, even if NOVAI relies on Proclamation No. 2487 - on which it did not as it relied on Proclamation No. 4.61 - the sale and NOVAI's
title are still void. NOVAI, on the other hand, claims in defense that Proclamation No. 2487 is presumed valid and constitutional, and the
burden of proving otherwise rests on the respondents.

In insisting on the presumptive validity of law, NOVAI obviously failed to grasp and appreciate the thrust of the respondents' arguments,
including the impact of the evidence which they presented to support the question they raised regarding the authenticity of Proclamation
No. 2487.

Rather than the validity or constitutionality of Proclamation No. 2487, what the respondents assailed was its legal existence, not
whether it was constitutional or not. Put differently, they claimed that Proclamation No. 2487 was never issued by former Pres. Aquino;
hence, the presumptive validity and constitutionality of laws cannot apply.

Accordingly, after the respondents presented their evidence, it was NOVAI's turn to present its own evidence sufficient to rebut that of
the respondents. On this point, we find the Republic's evidence sufficiently convincing to show that Proclamation No. 2487 does not
legally exist. These pieces of evidence include:

First, the October 26, 1993 letter of the Solicitor General to the Office of the President inquiring about the existence of Proclamation No.
2487.

Second, the November 12, 1993 letter-reply of the Office of the President informing the Solicitor General that Proclamation No. 2487 "is
not among the alleged documents on file with [its] Office."

Third, the testimony of the Assistant Director of the Records Office in Malacañang confirming that indeed, after verifying their records or
of the different implementing agencies, "[t]here is no existing document(s) in [their] possession regarding that alleged Proclamation No.
2487;"44 and

Fourth and last, the October 11, 1993 Memorandum of then Department of Justice Secretary Frahklin M. Drilon (DOJ Secretary Drilon)
to the NBI to investigate, among others, the circumstances surrounding the issuance of Proclamation No. 2487. 45 Notably, this October
11, 1993 Memorandum of DOJ Secretary Drilon stated that: "Proclamation No. 2487 is null and void. It does not exist in the official
records of the Office of the President [and] could riot have been issued by the former President since the last Proclamation issued
during her term was proclamation No. 932 dated 19 June 1992."

In this regard, we quote with approval the CA's observations in its December 28, 2006 decision:
Cast against this backdrop, it stands to reason enough that the defendant-appellee NOVAI was inevitably duty bound to prove and
establish the very existence, as well as the genuineness or authenticity, of this Presidential Proclamation No. 2487. For certain
inexplicable reasons, however, the defendant-appellee did not do so, but opted to build up and erect its case upon Presidential
Proclamation No. 461.

To be sure, the existence of Presidential Proclamation No. 2487 could be easily proved, and established, by its publication in
the Official Gazette. But the defendant-appellee could not, as it did not, submit or present any copy or issue of the Official
Gazette mentioning or referring to this Presidential Proclamation No. 2487, this even in the face of the Government's determined
and unrelenting claim that it does not exist at all.
A final point, we did not fail to notice the all too obvious and significant difference between the proclamation number of Proclamation
No. 2487 and the numbers of the proclamations actually issued by then President Corazon C. Aquino on or about that time.
We take judicial notice that on September 25, 1991 - the very day when Proclamation No. 2487 was supposedly issued - former Pres.
Aquino issued Proclamation No. 80048 and Proclamation No. 801.49 Previously, on September 20, 1991, Pres. Aquino issued
Proclamation No. 799;50 and thereafter, on September 27, 1991, she issued Proclamation No. 802.

Other proclamations issued around or close to September 25, 1991, included the following:
1. Proclamation No. 750 issued on July 1, 1991;
2. Proclamation No. 760 issued on July 18, 1991;
3. Proclamation No. 770 issued on August 12, 1991;
4. Proclamation No. 780 issued on August 26, 1991;
5. Proclamation No. 790 issued on September 3, 1991;
6. Proclamation No. 792 issued on September 5, 1991;
7. Proclamation No. 797 issued on September 11, 1991;
8. Proclamation No. 798 issued on September 12, 1991;
9. Proclamation No. 804 issued on September 30, 1991;
10. Proclamation No. 805 issued on September 30, 1991;
11. Proclamation No. 806 issued on October 2, 1991;
12. Proclamation No. 810 issued on October 7, 1991;
13. Proclamation No. 820 issued on October 25, 1991;
14. Proclamation No. 834 issued on November 13, 1991; 65 and
15. Proclamation No. 840 issued on November 26, 1991. 66
This list shows that the proclamations issued by former Pres. Aquino followed a series or sequential pattern with each succeeding
issuance bearing a proclamation number one count higher than the proclamation number of the preceding Presidential Proclamation. It
also shows that on or about the time Proclamation No. 2487 was purportedly issued, the proclamation numbers of the proclamations
issued by President Aquino did not go beyond the hundreds series.

It is highly implausible that Proclamation No. 2487 was issued on September 25, 1991, or on any day close to September 25, 1991,
when the proclamations issued for the same period were sequentially numbered and bore three-digit proclamation numbers.

As Proclamation No. 2487 does not legally exist and therefore could not have validly revoked Proclamation No. 478, we find, as the CA
also correctly did, that Proclamation No. 478 stands as the most recent manifestation of the State's intention to reserve the property
anew for some public or quasi-public use or purpose. Thus, consistent with Sections 88, in relation with Section 8, of C.A. No. 141 and
Article 420 of the Civil Code, as discussed above, the property which was classified again as reservation for public or quasi-public use
or purpose is non-alienable and not subject to disposition; it also remains property of the public dominion; hence, non-alienable and
non-disposable land of the public domain.

As a consequence, when R.A. No. 7227 took effect in 1992, the property subject of this case, which does not fall among the areas
specifically designated as exempt from the law's operation 67 was, by legal fiat, transferred to the BCDA's authority.

B. As the property remains a reserved public domain land, its sale and the title issued pursuant to the sale are void

As the property remains a reserved public domain land, it is outside the commerce of man. Property which are intended for public or
quasi- public use or for some public purpose are public dominion property of the State 68 and are outside the commerce of man. NOVAI,
therefore, could not have validly purchased the property in 1991.

We reiterate and emphasize that property which has been reserved for public or quasi-public use or purpose are non-alienable and
shall not be subject to sale or other disposition until again declared alienable by law or by proclamation of the President. 69 Any sale or
disposition of property of the public dominion is void for being contrary to law and public policy.

Since the sale of the property, in this case, is void, the title issued to NOVAI is similarly void ab initio. It is a well-settled doctrine that
registration under the Torrens System does not, by itself, vest title as it is not a mode of acquiring ownership; 71 that registration under
the Torrens System merely confirms the registrant's already existing title.

Accordingly, the indefeasibility of a Torrens title does not apply in this case and does not attach to NOVAI's title. The principle of
indefeasibility does not apply when the sale of the property and the title based thereon are null and void. Hence, the Republic's action
to declare the nullity of NOVAI's void title has not prescribed.

NOVAI insists that the deed of sale carries the presumption of regularity in the performance of official duties as it bears all the earmarks
of a valid deed of sale and is duly notarized.

While we agree that duly notarized deeds of sale carry the legal presumption of regularity in the performance of official duties, 73 the
presumption of regularity in the performance of official duties, like all other disputable legal presumptions, applies only in the absence of
clear and convincing evidence establishing the contrary.

When, as in this case, the evidence on record shows not only that the property was reserved for public use or purpose, and thus, non-
disposable - a fact that on its own defeats all the evidence which the petitioner may have had to support the validity of the sale - but
also shows that the sale and the circumstances leading to it are void in form and in substance, the disputable presumption of regularity
in the performance of official duties certainly cannot apply.

C. Even assuming that Proclamation No. 2487 legally exists, the sale of the property to NOVAI is illegal.
1. Dir. Palad did not have the authority to sell and convey the property.

The subject deed of sale points to Proclamation No. 2487, purportedly amending Proclamation No. 478, in relation with Act No.
3038,75 as legal basis for authorizing the sale.

Section 176 of Act No. 3038 authorizes the sale or lease only: (i) of land of the private domain, not land of the public domain; and (ii) by
the Secretary of Agriculture and Natural Resources, not by the LMB Director. Section 277 of the said Act, in fact, specifically exempts
from its coverage "land necessary for the public service." As the sale was executed by the LMB Director covering the property that was
reserved for the use of the VRMTC, it, therefore, clearly violated the provisions of Act No. 3038.

2. The area subject of the sale far exceeded the area that the Director of Lands is authorized to convey.

Batas Pambansa (B.P.) Blg. 87878 which, per the Deed of Sale, purportedly authorized the Director of Lands, representing the Republic,
to sell the property in favor of NOVAI, limits the authority of the Director of Lands to sign patents or certificates covering lands to ten
(10) hectares.

In this case, the subject deed of sale covers a total area of 475,009 square meters or 47.5009 hectares. Obviously, the area covered by
the deed of sale and which NOVAI purportedly purchased, far exceeds the area that the Director of Lands is authorized to convey
under B.P. Blg. 878.

3. The evidence on record and the highly suspect circumstances surrounding the sale fully supports the conclusion that the property's
sale to NOVAI is fictitious, thus, void.

We note the following irregularities that attended the sale of the property to NOVAI:
a. The absence, on file with the LMB, of any request for approval of any survey plan or of an approved survey plan in NOVAI's name
covering the property.79 The approved survey plan relating to Lot 3, SWO-13-000183 subject of NOVAI's TCT No. 15387 pertains
to the AFPOVAI under Proclamation No. 461;
b. The technical description, which the DENR prepared for the property as covered by TCT No. T-15387, was issued upon NOVAI's
request only for purposes of reference, not for registration of title, and was based on the approved survey plan of the AFPOVAI;
c. There is no record of any public land application filed by NOVAI with the LMB or with the DENR Office for the purchase of the
property or of any parcel of land in Metro Manila;
d. LMB Dir. Palad categorically denied signing and executing the deed of sale;
e. The findings of the NBI handwriting; expert, detailed in the Questioned Documents Report No. 815-1093 dated October 29, 1993,84
revealed that the, signature of LMB Director Palad as it appeared on the Deed of Sale and his standard/sample signature as they
appeared on the submitted comparison documents "were not written by one and the same person," 85 and concluded that "[t]he
questioned signature of 'ABELARDG G. PALAD, JR.' xxx is a TRACED FORGERY by carbon process;" 86 and
f. Lastly, the LMB Cashier's Office did not receive the amount of P14,250,270.00 allegedly paid by NOVAI as consideration for the
property. The receipts87 - O.R. No. 8282851 dated November 28, 1991, for P160,000.00 and O.R. No. 317024 dated December 23,
1992, for P200,000.00 - which NOVAI presented as evidence of its alleged payment bore official receipt numbers which were not
among the series of official receipts issued by the National Printing Office to the LMB, and in fact, were not among the series used
by the LMB on the pertinent dates.

In sum, we find - based on the facts, the law, and jurisprudence - that the property, at the time of the sale, was a reserved public
domain land. Its sale, therefore, and the corresponding title issued in favor of petitioner NOVAI, is void.

WHEREFORE, we hereby DENY the present petition for review on certiorari. No reversible error attended the decision dated December
28, 2006, and the resolution dated March 28, 2007, of the Court of Appeals in CA-G.R. CV No. 85179.

G.R. No. 210341 July 1, 2015

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. JOSEFINO O. ALORA and OSCAR O. ALORA, Respondents.

Before this Court is a petition for review under Rule 45 of the Rules of Court assailing the 5 December 2013 Decision 1 of the Court of
Appeals (CA) in CA-G.R.CV No. 99280, which denied the appeal of the Republic of the Philippines (petitioner) and affirmed the 3 July
2012 Resolution of the Regional Trial Court, Branch 31 of San Pedro, Laguna (RTC) in LRC Case No.SPL-0697-10.

The Facts On 6 May 1969, spouses Pedro and Rafaela Alora sold a parcel of land with an area of 12, 710 square meters, located in
Barangay San Vicente, San Pedro, Laguna to their sons Josefino 0. Alora and Oscar 0. Alora (respondents) for ₱5,000.00. 2 This
parcel of land is more particularly described under Plan Psu-119876, and covered by Tax Declaration No. 24-0017-00507.3 The parties
to the sale executed a Deed of Conveyance dated 8 May 1969.

On 6 June 2010, respondents filed a verified application for registration of title before the RTC, which was docketed as LRC Case No.
SPL-0697-10. Oscar, who was in the United States, authorized his brother Josefino to represent him in the proceedings, under a
Special Power of Attorney dated 26 November 2010.
In the application, respondents claimed that they purchased the parcel of land, and that they had no knowledge of any mortgag e or
encumbrance or any person having any interest over the same property. 4 they further claimed that they had been planting crops on the
parcel of land from 1969 to 2010.

The approved plan showed six lots which respondents in tended to develop as a commercial property.5

The respondents further claimed that they paid all taxes on the property and registered the Deed of Conveyance with the Registry of
Deeds and Assessor’s Office, and had traced back the tax declarations of their predecessors-in-interest from 1935. The parcel of land
originally belonged to Colegio de San Jose, Inc., and was transferred to Pedro Salandanan. Subsequently, Salandanan conveyed the
property to Pedro Alora, respondents’ father.

In order to prove that the parcel of land was disposable and alienable, respondents submitted the following as evidence:
1. Certification dated 17 May 2010 issued by Jovito Oandasan, Chief of Forest Management Service of the Community Environment
and Natural Resources Office (CENRO) of the Department of Environment and Natural Resources (DENR) which stated that the parcel
of land is part of "Alienable and Disposable (A & D) land under Project No. 10-A, per BFD Land Classification Map No. 3004 certified
and declared as such on September 28, 1981.";6
2. Land certification mark 304 consisting of sheets 1 and 2 from the National Mapping Resource Information Authority (NAMRIA) which
bears a certification that the areas set aside are alienable and disposable for cropland and fishpond development under Forestry
Administrative Order No. 4-1627 dated 28 September 1981;7
3. Certified copy of the polyester film copy (SEPIA) of approved Plan Psu-119876 dated 20 April 1949;8
4. Certified technical description of Plan Psu-119876;9 and
5. Certification in lieu of Geode tic Engineer’s Certificate for Registration Purposes. 10
Respondents were also able to present the following documents:
1. Certified photocopies of Tax Declaration Nos.1794, 2206 (dated 28 December 1950), 2352 (dated 22 January 1952) and 2381 (dated
28 January 1952) issued to Colegio de San Jose, Inc.;
2. Affidavit of Transfer of Real Property executed by Colegio de San Jose, Inc. in favor of Pedro Salandanan and N.V. Sinclair;
3. Certified photocopy of Tax Declaration No. 2466 issued to Pedro Salandanan on 17 December 1952;
4. Certified copy of the Deed of Absolute Sale executed by Pedro Salandanan in favor of Pedro Alora dated 22 September 1953;
5. Certified photocopy of Tax Declaration No. 2946 issued to Pedro Alora on 21 December 1964;
6. Official Receipt No. 3820443 dated 18 March 2010;
7. Copy of the Deed of Conveyance dated 8 May 1969 executed by Pedro Alora in favor of respondents;
8. Certified photocopy of Tax Declaration No. 8707 issued to respondents in 1985;
9. Official Receipt No. 8594515 dated 14 September 2010;
10. Duplicate original copy of Tax Declaration No. 017-0592 issued to respondents in 2000;
11. Certified photocopy of Tax Declaration No. 0017-000507 issued to respondents in 2006; and
12. Official Receipt No. 9454614 dated 9 February 2010. 11
The following persons also testified to support respondents’ claim:
1. Jovito Oandasan, Chief of Forest Management Service of CENRO;
2. Rodolfo Gonzales, Special Investigator I of the DENR, Provincial Environment and Natural Resources Office (PENRO), Los Baños,
Laguna;
3. Engineer Marlon Climaco, a licensed Geodetic Engineer;
4. Rolando Rosal, one of re spondents’ helpers; and
5. Respondent Josefino Alora.

Oandasan testified that as chief of CENRO, his professional duties included issuing certifications as to th e status of lands. He also
claimed that the subject parcel of land is alienable and disposable under BFD Land Classification No. P004 released on 28 September
1981, and that he was able to secure a land certification mark 304 from the NAMRIA which bears a certification stating that the areas
set aside are alienable and disposable for cropland and fishpond development under Forestry Administrative Order No. 4-1627 also
dated 28 September 1981.13

Gonzales testified that he was tasked with investigating public land applications. He conducted an ocular inspection of the property as
well as examined documentary evidence relating to respondents’ application. Gonzales’ report stated that the property is "not within a
previously patented title or any public land application or administrative title." 14

15
Petitioner, through Assistant Provincial Prosecutor Jose De Leon, Jr., did not present any evidence to oppose the application.

The Ruling of the RTC The RTC ruled in favor of the respondents. The dispositive portion of the Resolution dated 3 July 2012 reads:

WHEREFORE, and upon previous confirmation of the Order of General Default, the Court hereby adjudicates an d decrees a parcel of
land (subdivided into Lots 1 to 6), as shown on Plan Psu-119876 situated in Barangay San Vicente, San Pedro, Laguna containing an
area of 12,710 square meters in favor of and in the names of Josefino O. Alora and Oscar O. Alora.

The RTC stated that under the Regalian Doctrine, all lands of the public domain belong to the State. Thus, the applicant bears the
burden of proving "through incontrovertible evidence that the land sought to be registered is alienable and disposable based on a
positive act of the government."17
The RTC also cited Sections 14 and 48 of Presidential Decree (P.D.) No. 1529 which provide that an application for land registration
must fulfill three requisites:
(1) The land is alienable public land;
(2) The applicant has been in open, continuous, exclusive, and notorious possession and occupation of the land since 12 June 1945 or
earlier; and
(3) the applicant’s possession must be under a bona fide claim of ownership. 18

The RTC held that while Republic v. T.A.N. Properties, Inc . 19 clearly stated that "the applicant for land registration must present a copy
of the original classification approved by the DENR Secretary and certified as true copy by the legal custodian of the official records,"
the applicable doctrine is that in Republic v. Serrano :

However, in the case of Republic v. Serrano , which is [on] all fours with this case, the Court he ld that a DENR Regional Technical
Director’s certification, which is annotated on the subdivision plan submitted in evidence, constitutes substantial compliance with the
legal requirements. Applying the said precedent, this Court finds that a DENR Regional Technical Director’s Certification annotated on
the subdivision plan and attested to by the CENRO and DENR official representatives declaring under oath that the property subject of
this application is within the areas set aside as alienable and disposable for cropland and fishpond development under Forestry
Administrative Order No. 4-1627 dated 28 September 1981 constitutes sufficient compliance with the above-stated requirements. 21

The RTC also held that the applicants had satisfactorily shown that they and their predecessors-in-interest had been in open,
continuous, exclusive, adverse, and notorious pos session of the property under a bona fide claim of ownership for the period required
by the Property Registration Decree.22

Thus, petitioner, represented by the Office of the Solicitor General, filed an appeal before the CA.

Petitioner argued that the RTC erred in applying the doctrine in Republic v. Serrano, 23 which was decided on 24 February 2010, and
the applicable doctrine is Republic v. T.A.N. Properties, Inc. Which was decided on 26 June 2008 and has been reiterated in
subsequent cases.

The CA, however, denied the appeal. The court a quo cited the case of Republic v. Vega,24 which harmonized the conflicting rulings in
Republic v. Serrano and Republic v. T.A.N. Properties, Inc. In Republic v. Vega, this Court ruled that the doctrine enunciated under
Republic v. Serrano applies pro hac vice and "it does not in any way detract from our rulings in Republic v. T.A.N. Properties, Inc ., and
similar cases which impose a strict requirement to prove that public land is alienable

The CA based its ruling on the express declaration in Republic v. Vega, to wit: As an exception, however, the courts — in their sound
discretion and based solely on the evidence presented on record — may approve the application, pro hac vice, on the ground of
substantial compliance showing that there has been a positive act of the government to show the nature and character of the land an d
an absence of effective opposition from the government. This exception shall only apply to applications for registration currently
pending before the trial court prior to this Decision and shall be inapplicable to all future applications. Hence, the instant petition.

The Issues Petitioner alleges that:

1. The CA erred in holding that respondents were able to substantially establish that the subject parcel of land is alienable and
disposable; and
2. The CA erred in holding that the respondents were able to sufficiently prove that they and their predecessors-in-interest were in
possession of the subject property since 12 June 1945 or earlier.

The Ruling of the Court The petition is granted. To reiterate, under Section 14 of the Property Registration Decree:

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

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

Thus, applicants for registration must prove the following:(1) that the subject land forms part of the disposable and alienable lands of
the public domain; and (2) that they have been in open, continuous, exclusive, and notorious possession and occupation of the land
under a bona fide claim of ownership since 12 June 1945 or earlier.

In order to prove that the parcel of land is part of the disposable and alienable lands of the public domain, respondents rely on the
certification issued by the CENRO. The issue is whether this is sufficient evidence to show that the subject parcel of land falls within the
disposable and alienable lands of the public domain.
Petitioner claims that the CA and the RTC should have applied our ruling in Republic v. T.A.N. Properties, Inc., which was promulgated
on 26 June 2008. In that case, we held that applicants for land registration must present a copy of the original classification approved
by the DENR Secretary and certified as true copy by the legal custodian of the official records. If this standard were to be applied in the
instant case, the CA decision should be overturned because respondents failed to present a certified classification from the DENR
Secretary. Petitioner argues that the standard in Republic v. T.A.N. Properties, Inc. has been applied in more recent decisions of this
Court.

The CA, however, did not follow the ruling in Republic v. T.A.N. Properties, Inc. Instead, it followed Republic v. Serrano (decided on 24
February 2010) and Republic v. Vega (decided on 17 January 2011). In Republic v. Serrano, we allowed the approval of a land
registration application even without the submission of the certification from the DENR Secretary. As this ruling presented an apparent
contradiction with our earlier pronouncement in Republic v. T.A.N. Properties, Inc., we sought to harmonize our previous rulings in
Republic v. Vega. We then said that the applications for land registration may be granted even without the DENR Secretary’s
certification provided that the application was currently pending at the time Republic v. Vega was promulgated. Since respondents’
application was pending before the RTC at the time Republic v. Vega was promulgated, the CA ruled in favor of the respondents,
despite the lack of certification from the DENR Secretary.

Admittedly, we declared in Republic v. Vega that trial courts may grant applications for registration despite the absence of a certification
from the DENR Secretary. It should be emphasized, however, that Republic v. Vega applies on a pro hac vice basis only. After
Republic v. Vega, we pointed out in Republic v. San Mateo 27 that:

In Vega, the Court was mindful of the fact that the trial court rendered its decision on November 13, 2003, way before the rule on strict
compliance was laid down in T.A.N Properties on June 26, 2008. Thus, the trial court was merely applying the rule prevailing at the
time, which was substantial compliance. Thus, even if the case reached the Supreme Court after the promulgation of T.A.N Properties,
the Court allowed the application of substantial compliance, because there was no opportunity for the registrant to comply with the
Court's ruling in T.A.N Properties, the trial court and the CA already having decided the case prior to the promulgation of T.A.N
Properties.

In the case here, however, the RTC Decision was only handed down on November 23, 2010, when the rule on strict compliance was
already in effect. Thus, there was ample opportunity for the respondents to comply with the new rule, and present before the RTC
evidence of the DENR Secretary's approval of the DENR-South CENRO Certification. This, they failed to do.

In the instant case, the RTC Resolution was issued on 3 July 2012, after the promulgation of Republic v. T.A.N Properties, Inc. Thus,
following our ruling in Republic v. San Mateo, the rule requiring certification from the DENR Secretary should be applied. It is important
to emphasize that the more recent case of Republic v. Spouses Castuera, 28 decided on 14 January 2015, applied the rule in Republic v.
T.A.N Properties, Inc. without any qualification.

WHEREFORE, the petition is GRANTED. The 5 December 2013 Decision of the Court of Appeals in CA-G.R. CV No. 99280 and the 3
July 2012 Resolution of the Regional Trial Court, Branch 31 of San Pedro, Laguna in LRC Case No. SPL-0697-10 are hereby
REVERSED and SET ASIDE.

G.R. No. 203384 January 14, 2015

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. SPS. JOSE CASTUERA PERLA CASTUERA, Respondents.

This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the 26 March 2012 Decision 2 and
14 August 2012 Resolution3 of the Court of Appeals in CA-G.R. CV No. 85015, affirming the 31 January 2005 Decision 4 of the Regional
Trial Court (RTC), Branch 70, Iba, Zambales, in Land Registration Case No. RTC-N-92-I and denying the motion for reconsideration,
respectively.

The Facts Andres Valiente owned a 3,135-square meter land in Barangay Siminublan, San Narciso, Zambales. In 1978, he sold the
property to respondents Jose and Perla Castuera (Spouses Castuera). On 21 May 2003, the Spouses Castuera filed with the RTC an
application5 for original registration of title over the property.

The Spouses Castuera presented three witnesses to support their application. The three witnesses were (1) former barangay captain
and councilman Alfredo Dadural, (2) Senior Police Officer 2 Teodorico Cudal, and (3) Perla Castuera. All witnesses testified that the
Spouses Castuera owned the property.

The Spouses Castuera also presented documentary evidence to support their application. The documents included tax receipts and an
advance plan6 with a notation, "Checked and verified against the cadastral records on file in this office and is for registration purposes.
This survey is within the Alienable and Disposable land proj. No. 3-H certified by Director of Forestry on June 20, 1927 per LC Map No.
669 Sheet 1."

Petitioner Republic of the Philippines (petitioner), through the Office of the Solicitor General, filed an opposition to the application for
original registration.
The RTC’s Ruling In its 31 January 2005 Decision, the RTC granted the application for original registration of title over the property.
The RTC held:

From the evidence submitted by the applicants, they have shown preponderantly that they are the lawful owners in fee simple and the
actual possessors of Lot 6553 of the San Narciso Cadastre. They are entitled therefore to a judicial confirmation of their imperfect title
to the said land pursuant to the provisions of the new Property Registration Decree (PD 1529). 7

Petitioner appealed the RTC Decisionto the Court of Appeals. The Spouses Castuera attached to their appellees’ brief a certification8
from the Community Environment and Natural Resources Office (CENRO), stating:

THIS IS TO CERTIFY that the tract of land situated at Brgy. Siminublan, San Narciso, Zambales containing an area of ONE
THOUSAND EIGHT HUNDRED FORTY SEVEN (1847.00) SQUARE METERS as shown and described in this sketch as verified by
Cart. Nestor L. Delgado for Sps. Jose Castuera and Perla Castuera was found to be within the Alienable or Disposable, Project No. 3-
H, certified by then Director of Forestry, manila [sic] on June 20, 1927 per LC Map No. 669, sheet No. 1.9

The Court of Appeals’ Ruling In its 26 March 2012 Decision, the Court of Appeals affirmed the RTC Decision. The Court of Appeals
held that:

Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides for the instances when a person may file
for an application for registration of title over a parcel of land:

"Section 14. Who May Apply. — The following persons may file in the proper Court of first Instance an application for registration of title
to land, whether personally or through their duly authorized representatives:

Those who by themselves or through their predecessors-in-interest havebeen in open, continuous, exclusive and notorious possession
and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or
earlier." Accordingly, pursuant to the aforequoted provision of law, applicants for registration of title must prove the following: (1) that the
subject land forms part of the disposable and alienable lands of the public domain; and (2) that they have been in open, continuous,
exclusive and notorious possession and occupation of the land under a bona fide claim of ownership since 12 June 1945 or earlier.
Section 14(1) of the law requires that the property sought to be registered is already alienable and disposable at the time the application
for registration is filed.

Applying the foregoing in the present case, We find and so rule that the trial court is correct in granting appellees’ application for original
registration of the subject land. A scrutiny of the records shows that there is substantial compliance with the requirement that the
subject land is alienable and disposable land. It bears to emphasize that the Advance Plan has the following notations:

"Checked and verified against the cadastral records on file in this office and is for registration purposes.["]

"This survey is within the alienable and disposable land proj. no. 3-H certified by Director of Forestry on June 20, 1927 per LC Map No.
669, Sheet 1."

In Republic v. Serrano, the Supreme Court affirmed the findings of the trial court and this Court that the parcel of land subject of
registration was alienable and disposable. It held that a DENR Regional Technical Director’s certification, which is annotated on the
subdivision plan submitted in evidence, constitutes substantial compliance with the legal requirement:

"While Cayetano failed tosubmit any certification which would formally attest tothe alienable and disposable character of the land
applied for, the Certification by DENR Regional Technical Director Celso V. Loriega, Jr., as annotated on the subdivision plan submitted
in evidence by Paulita, constitutes substantial compliance with the legal requirement. It clearly indicates that Lot 249 had been verified
as belonging to the alienable and disposable area as early as July 18, 1925.["]

"The DENR certification enjoys the presumption of regularity absent any evidence to the contrary. It bears noting that no opposition was
filed or registered by the Land Registration Authority or the DENR to contest respondents’ applications on the ground that their
respective shares of the lot are inalienable. There being no substantive rights which stand to be prejudiced, the benefit of the
Certification may thus be equitably extended in favor of respondents."

While in the case of Republic v.T.A.N. Properties, Inc., the Supreme Court overturned the grant bythe lower courts of an original
application for registration over a parcel of land in Batangas and ruled that a CENRO certification is not enough to certify that a land is
alienable and disposable: ["]Further, it is not enoughfor the PENRO or CENRO to certify that a land is alienable and disposable. The
applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the
public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per
verification through survey by the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the original
classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts
must be established to prove that the land is alienable and disposable. Respondent failed to do so because the certifications presented
by respondent do not, by themselves, prove that the land is alienable and disposable."
However, in the recent case of Republic vs. Carlos R. Vega, et al., as an exception to the strict application of the stringent rule imposed
in the above pronouncement that the absence of these twin certifications justifies a denial of an application for registration, the Supreme
Court, in its sound discretion, and based solely on the evidence on record, may approve the application, pro hac vice, on the ground of
substantial compliance showing that there has been a positive act of government to show the nature and character of the land and an
absence of effective opposition from the government. This exception shall only apply to applications for registration currently pending
before the trial court prior to this Decision and shall be inapplicable toall future applications.

It must be noted that the present case was decided by the trial court only on January 31, 2005, prior to the above pronouncement[.] We
believe that the same rule shall apply to the present case allowing the registration of the subject property as there is substantial
compliance with the requirement that the land subject of registration is an alienable and disposable land. Besides, appellees had
attached to their appellees’ brief a Certification from the DENR-CENR Office issued on December 2, 1999, which states the following:

"THIS IS TO CERTIFY that the tract of land situated at Brgy. Siminublan, San Narciso, Zambales containing an area of ONE
THOUSAND EIGHT HUNDRED FORTY SEVEN (1,847) SQUARE METERS as shown and described in this sketch as verified by Cart.
Nestor L. Delgado for Sps. Jose Castuera and Perla Castuera was found to be within the Alienable or Disposable, Project No. 3-H,
certified by then Director of Forestry, Manila on June 20, 1927 per LC Map No 669, Sheet No. 1."10

Petitioner filed a motion for reconsideration. In its 14 August 2012 Resolution, the Court of Appeals denied the motion. Hence, the
present petition.

The Issue. Petitioner raises as issue that the advance plan and the CENRO certification are insufficient proofs of the alienable and
disposable character of the property.

The Court’s Ruling. The petition is meritorious.

The advance plan and the CENRO certification are insufficient proofs of the alienable and disposable character of the property. The
Spouses Castuera, as applicants for registration of title, must present a certified true copy of the Department of Environment and
Natural Resources Secretary’s declaration or classification of the land as alienable and disposable. In Republic of the Philippines v.
Heirs of Juan Fabio,11 citing Republic v. T.A.N. Properties, Inc.,12 the Court held that:

In Republic v. T.A.N. Properties, Inc., we ruled that it is not enough for the Provincial Environment and Natural Resources Office
(PENRO) or CENRO to certify that a land is alienable and disposable. The applicant for land registration must prove that the DENR
Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the
land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO.
In addition, the applicant must present a copy of the original classification of the land into alienable and disposable, as declared by the
DENR Secretary, or as proclaimed by the President. Such copy of the DENR Secretary's declaration or the President's proclamation
must be certified as a true copy by the legal custodian of such official record. These facts must be established to prove that the land is
alienable and disposable.13

WHEREFORE, the Court GRANTS the petition and SETS ASIDE the 26 March 2012 Decision and 14 August 2012 Resolution of the
Court of Appeals in CA-G.R. CV No. 85015. Respondents Jose and Perla Castuera's application for registration is DISMISSED.

G.R. No. 203384 January 14, 2015

REPUBLIC OF THE PHILIPPINES, Petitioner, vs.SPS. JOSE CASTUERA PERLA CASTUERA, Respondents.

This is a petition1 for review on certiorari under Rule 45 of the Rules of Court. The petition challenges the 26 March 2012 Decision 2 and
14 August 2012 Resolution3 of the Court of Appeals in CA-G.R. CV No. 85015, affirming the 31 January 2005 Decision 4 of the Regional
Trial Court (RTC), Branch 70, Iba, Zambales, in Land Registration Case No. RTC-N-92-I and denying the motion for reconsideration,
respectively.

Andres Valiente owned a 3,135-square meter land in Barangay Siminublan, San Narciso, Zambales. In 1978, he sold the property to
respondents Jose and Perla Castuera (Spouses Castuera). On 21 May 2003, the Spouses Castuera filed with the RTC an application5
for original registration of title over the property.

The Spouses Castuera presented three witnesses to support their application. The three witnesses were (1) former barangay captain
and councilman Alfredo Dadural, (2) Senior Police Officer 2 Teodorico Cudal, and (3) Perla Castuera. All witnesses testified that the
Spouses Castuera owned the property.

The Spouses Castuera also presented documentary evidence to support their application. The documents included tax receipts and an
advance plan6 with a notation, "Checked and verified against the cadastral records on file in this office and is for registration purposes.
This survey is within the Alienable and Disposable land proj. No. 3-H certified by Director of Forestry on June 20, 1927 per LC Map No.
669 Sheet 1."
Petitioner Republic of the Philippines (petitioner), through the Office of the Solicitor General, filed an opposition to the application for
original registration.

The RTC’s Ruling

In its 31 January 2005 Decision, the RTC granted the application for original registration of title over the property. The RTC held:

From the evidence submitted by the applicants, they have shown preponderantly that they are the lawful owners in fee simple and the
actual possessors of Lot 6553 of the San Narciso Cadastre. They are entitled therefore to a judicial confirmation of their imperfect title
to the said land pursuant to the provisions of the new Property Registration Decree (PD 1529).7

Petitioner appealed the RTC Decisionto the Court of Appeals. The Spouses Castuera attached to their appellees’ brief a certification8
from the Community Environment and Natural Resources Office (CENRO), stating:

THIS IS TO CERTIFY that the tract of land situated at Brgy. Siminublan, San Narciso, Zambales containing an area of ONE
THOUSAND EIGHT HUNDRED FORTY SEVEN (1847.00) SQUARE METERS as shown and described in this sketch as verified by
Cart. Nestor L. Delgado for Sps. Jose Castuera and Perla Castuera was found to be within the Alienable or Disposable, Project No. 3-
H, certified by then Director of Forestry, manila [sic] on June 20, 1927 per LC Map No. 669, sheet No. 1. 9

The Court of Appeals’ Ruling

In its 26 March 2012 Decision, the Court of Appeals affirmed the RTC Decision. The Court of Appeals held that:

Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides for the instances when a person may file
for an application for registration of title over a parcel of land:

"Section 14. Who May Apply. — The following persons may file in the proper Court of first Instance an application for registration of title
to land, whether personally or through their duly authorized representatives:

Those who by themselves or through their predecessors-in-interest havebeen in open, continuous, exclusive and notorious possession
and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or
earlier." Accordingly, pursuant to the aforequoted provision of law, applicants for registration of title must prove the following: (1) that the
subject land forms part of the disposable and alienable lands of the public domain; and (2) that they have been in open, continuous,
exclusive and notorious possession and occupation of the land under a bona fide claim of ownership since 12 June 1945 or earlier.
Section 14(1) of the law requires that the property sought to be registered is already alienable and disposable at the time the application
for registration is filed.

Applying the foregoing in the present case, We find and so rule that the trial court is correct in granting appellees’ application for original
registration of the subject land. A scrutiny of the records shows that there is substantial compliance with the requirement that the
subject land is alienable and disposable land. It bears to emphasize that the Advance Plan has the following notations:

"Checked and verified against the cadastral records on file in this office and is for registration purposes.["]

"This survey is within the alienable and disposable land proj. no. 3-H certified by Director of Forestry on June 20, 1927 per LC Map No.
669, Sheet 1."

In Republic v. Serrano, the Supreme Court affirmed the findings of the trial court and this Court that the parcel of land subject of
registration was alienable and disposable. It held that a DENR Regional Technical Director’s certification, which is annotated on the
subdivision plan submitted in evidence, constitutes substantial compliance with the legal requirement:

"While Cayetano failed tosubmit any certification which would formally attest tothe alienable and disposable character of the land
applied for, the Certification by DENR Regional Technical Director Celso V. Loriega, Jr., as annotated on the subdivision plan submitted
in evidence by Paulita, constitutes substantial compliance with the legal requirement. It clearly indicates that Lot 249 had been verified
as belonging to the alienable and disposable area as early as July 18, 1925.["]

"The DENR certification enjoys the presumption of regularity absent any evidence to the contrary. It bears noting that no opposition was
filed or registered by the Land Registration Authority or the DENR to contest respondents’ applications on the ground that their
respective shares of the lot are inalienable. There being no substantive rights which stand to be prejudiced, the benefit of the
Certification may thus be equitably extended in favor of respondents."

While in the case of Republic v.T.A.N. Properties, Inc., the Supreme Court overturned the grant bythe lower courts of an original
application for registration over a parcel of land in Batangas and ruled that a CENRO certification is not enough to certify that a land is
alienable and disposable: ["]Further, it is not enoughfor the PENRO or CENRO to certify that a land is alienable and disposable. The
applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the
public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per
verification through survey by the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the original
classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts
must be established to prove that the land is alienable and disposable. Respondent failed to do so because the certifications presented
by respondent do not, by themselves, prove that the land is alienable and disposable."

However, in the recent case of Republic vs. Carlos R. Vega, et al., as an exception to the strict application of the stringent rule imposed
in the above pronouncement that the absence of these twin certifications justifies a denial of an application for registration, the Supreme
Court, in its sound discretion, and based solely on the evidence on record, may approve the application, pro hac vice, on the ground of
substantial compliance showing that there has been a positive act of government to show the nature and character of the land and an
absence of effective opposition from the government. This exception shall only apply to applications for registration currently pending
before the trial court prior to this Decision and shall be inapplicable toall future applications.

It must be noted that the present case was decided by the trial court only on January 31, 2005, prior to the above pronouncement[.] We
believe that the same rule shall apply to the present case allowing the registration of the subject property as there is substantial
compliance with the requirement that the land subject of registration is an alienable and disposable land. Besides, appellees had
attached to their appellees’ brief a Certification from the DENR-CENR Office issued on December 2, 1999, which states the following:

"THIS IS TO CERTIFY that the tract of land situated at Brgy. Siminublan, San Narciso, Zambales containing an area of ONE
THOUSAND EIGHT HUNDRED FORTY SEVEN (1,847) SQUARE METERS as shown and described in this sketch as verified by Cart.
Nestor L. Delgado for Sps. Jose Castuera and Perla Castuera was found to be within the Alienable or Disposable, Project No. 3-H,
certified by then Director of Forestry, Manila on June 20, 1927 per LC Map No 669, Sheet No. 1." 10

Petitioner filed a motion for reconsideration. In its 14 August 2012 Resolution, the Court of Appeals denied the motion. Hence, the
present petition.

The Issue

Petitioner raises as issue that the advance plan and the CENRO certification are insufficient proofs of the alienable and disposable
character of the property.

The Court’s Ruling

The petition is meritorious.

The advance plan and the CENRO certification are insufficient proofs of the alienable and disposable character of the property. The
Spouses Castuera, as applicants for registration of title, must present a certified true copy of the Department of Environment and
Natural Resources Secretary’s declaration or classification of the land as alienable and disposable. In Republic of the Philippines v.
Heirs of Juan Fabio,11 citing Republic v. T.A.N. Properties, Inc.,12 the Court held that:

In Republic v. T.A.N. Properties, Inc., we ruled that it is not enough for the Provincial Environment and Natural Resources Office
(PENRO) or CENRO to certify that a land is alienable and disposable. The applicant for land registration must prove that the DENR
Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the
land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO.
In addition, the applicant must present a copy of the original classification of the land into alienable and disposable, as declared by the
DENR Secretary, or as proclaimed by the President. Such copy of the DENR Secretary's declaration or the President's proclamation
must be certified as a true copy by the legal custodian of such official record. These facts must be established to prove that the land is
alienable and disposable.13

WHEREFORE, the Court GRANTS the petition and SETS ASIDE the 26 March 2012 Decision and 14 August 2012 Resolution of the
Court of Appeals in CA-G.R. CV No. 85015. Respondents Jose and Perla Castuera's application for registration is DISMISSED.

G.R. No. 156205, November 12, 2014

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE REGIONAL EXECUTIVE DIRECTOR, REGION IV, DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES, Petitioner, v. MARJENS INVESTMENT CORPORATION AND PATROCINIO P.
VILLANUEVA, Respondents.

This petition for review on certiorari seeks to reverse the November 19, 2002 Decision [1 of the Court of Appeals in CA-G.R. SP No.
50023, which dismissed petitioner Republic of the Philippines' petition on the ground that the disputed property had already been
segregated and classified as private property and no longer form part of the public domain.

Background The Court of Appeals gave a short background on the subject property.
In Land Registration Case No. 52, G.L.R.O. Rec. No. 3454, entitled, "Hammon H. Buck, et al. vs. Director of Lands," the then Court of
First Instance of Batangas rendered a Decision dated March 30, 1951 granting the application for registration of several parcels of land
in favor of the applicants therein, Hammon H. Buck, et al.

In the said judgment, it was established that the lands described in Plans Psu-118922 and 114430 were originally owned by Rita Vda.
de Ilustre since 1890. In 1923, the parcels of land applied for were purchased by Donato Punzalan. Later, the lots under Plan Psu-
114430 were purchased from Donato Punzalan by Agustin Canoso and Gregorio Decepeda and in consideration of the survey and
registration thereof, Lots 1 and 2, Plan Psu-114430 were ceded to Hammon H. Buck. This was to become the basis of Hammon H.
Buck's application for registration under Land Registration Case No. 52.

As a consequence of the final and executory decision in Land Registration Case No. 52, Decree No. 6610 was awarded to Hammon H.
Buck which finally led to the issuance in his name of Original Certificate of Title No. 0-669 on February 18, 1952.2

The Facts of the Case On December 22, 1998, or almost 46 years after the issuance of Original Certificate of Title (OCT) No. 0-669,
petitioner Republic, represented by the Region IV Regional Executive Director of the Department of Environment and Natural
Resources (DENR), filed a petition before the Court of Appeals for annulment of judgment, cancellation of title, and reversion against
respondents Marjens Investment Corporation (Marjens) and Patrocinio Villanueva (Villanueva), the Register of Deeds for the Province
of Batangas (Tanauan, Batangas), and the Regional Trial Court of LipaCity.

Petitioner, through the Office of the Solicitor General (OSG), alleges that respondents Marjens and Villanueva appear as registered
owners of a land identified as Lot 1 (LRC) Pcs-943, which is a portion of Lots 1 and 2, plan Psu-114430 LRC (G.L.R.O.) Record No. N-
3454, with an area of five thousand (5,000) square meters, covered by Transfer Certificate of Title (TCT) No. T-18592 issued on April 7,
1976 by the Office of the Register of Deeds of Tanauan, Batangas.

The OSG avers that TCT No. T-18592 appears to have emanated from Original Certificate of Title (OCT) No. 0-669 in the name of
Hammon H. Buck issued by virtue of a Decision5 dated March 30, 1951, rendered in Land Registration Case No. 52, G.L.R.O. Record
No. N-3454 of the Court of First Instance (CFI) of Lipa City, Batangas, Eighth Judicial District.

The OSG further alleges that upon verification through a certification7 dated April 30, 1997 issued by the Community Environment and
Natural Resources Office (CENRO) of the DENR in Batangas City, it was ascertained that the land covered by TCT No. T-18592 is
within the unclassified public forest per Land Classification Control Map No. 10 for the Provinces of Batangas and Cavite.

The OSG argues that the land in question cannot be the subject of disposition or registration, and the trial court did not acquire
jurisdiction over said property, much less to decree the same as private property. Therefore, the registration proceedings, the judgment
in the subject case, the OCT No. O-669 issued pursuant thereto, and all subsequent titles are null and void. The land covered by TCT
No. T-18592, not having been legally registered, remains and forms part of the public domain of the State.

In their comment, respondents deny the OSG's allegations. They claim that their titles, their predecessors' titles, and their mother title
are issued in accordance with law, and that the property was registered and brought under the Torrens system. Respondents contend
that the subject property was already private property even before the Spanish Crown ceded sovereignty over the Philippine Islands to
the United States of America.
Respondents assert that the government has lost its rights by laches and estoppel to question the validity of the OCT No. 0-669, the
proceedings in LRC Case No. 52, G.L.R.O. Record No. N-3454, and the corresponding decree (Decree 6610) issued after almost 50
years have lapsed. They maintain that the proceeding for its registration was made in accordance with the requirements of the law,
including the publication of notices addressed to the Solicitor General, the Director of Lands, and the Director of Forestry, among
others, in the Official Gazette. Despite the notices, there was no opposition from the government.

Respondents insist that it will be most unfair and will violate their right to due process if they will again be required to undergo another
trial to establish their long continued, open, public, adverse possession and cultivation of the property in the concept of owners as
against the whole world, now that all their witnesses are long dead, senile, or impossible to locate. They also point out that the subject
property has transferred to various parties who have been regularly assessed and paying realty taxes for several years.

Respondents allege that the government through the Bureau of Lands had presumably issued various free patents over the subject
property that has constrained petitioners to file a petition for annulment based on these free patent titles that overlap with the
respondents' title. They questioned why the government issued free patents over the subject property when it believed that the same is
part of an unclassified public forest. They even suggested to implead the individuals with titles overlapping with their titles for a
complete determination of the issues in the case and to avoid unnecessary and wasteful duplication of valuable time and resources of
the OSG.

To bolster its argument, respondents cited that there are many real estate developments going on near or around the area where the
property is located, one of which is the Splendido Gardens, a resort and golf course. Respondents speculated how the said
developments proceeded if the property covered therein is within the unclassified public forest as the government claims, and that is
assuming all the requisite government approvals have been secured by the developers.

Respondents availed of two modes of discovery, and moved to serve written interrogatories to parties and for the production of
documents.14 The Court of Appeals granted the motions,15 to which the petitioner filed its comments. The Court of Appeals likewise
directed both parties to file their respective memoranda, after which the case was submitted for decision.
The Court of Appeals Decision On November 19, 2002, the Court of Appeals dismissed the petition as follows: IN VIEW OF THE
FOREGOING, the instant petition is ordered DISMISSED. No cost.

The Court of Appeals applied the case of Cariho v. Insular Government of the Philippine Islands,18 which recognized private ownership
of lands already possessed or held by individuals under claim of ownership as far back as testimony or memory goes and therefore
never to have been public land that Spain could bequeath to the United States of America.

Reiterating the CFI Decision, the Court of Appeals held that the subject properties under Plan Psu-114430 were originally owned by
Rita Vda. de Ilustre since 1890 before the Treaty of Paris. Reckoned from such time, under the Cariño ruling, the subject property had
already ceased to be public, had been appropriated into private ownership, and therefore excluded from the "public domain" ceded by
Spain to the United States of America in the Treaty of Paris of 1898. 1

The Court of Appeals pronounced that the CFI of Batangas is unmistakably equipped with jurisdiction and authority to legally adjudicate
the land applied for in Registration Case No. 52 in favor of the applicants. Consequently, Decree 6610, OCT No. O-669, and TCT No.
T-18592, in respondents' name, must be upheld as valid issuances and documents of title.

Further, the Court of Appeals said that there are still other reasons in rejecting the arguments of the petitioner that the controversial lot
and title in this petition still forms part of the public domain. By its own act and admission in the answer to the written interrogatories,
petitioner confessed to have issued several Environmental Compliance Certificates (ECCs) to projects within Land Classification
Control Map (LCCM) No. 10, although identification is not feasible as the issuance of ECCs began in 1982, pursuant to Presidential
Decree No. 1586 dated June 11, 1978, among others.21 The foregoing admissions militate against petitioner's assertion and cast
serious doubts on what the DENR certification contains. The Court of Appeals said that it is inconceivable how petitioner can claim that
the subject land is an inalienable forest land when it had been alienating it by the numerous grants and decrees it had issued.

The Court of Appeals cited Republic v. Court of Appeals and Cosalan,23 wherein the Court declared that despite the general rule that
forest lands cannot be appropriated by private ownership, it had been previously held that while the government has the right to classify
portions of public land, the primary right of a private individual who possessed and cultivated the land in good faith much prior to such
classification must be recognized and should not be prejudiced by after-events which could not have been anticipated.

Moreover, the Court of Appeals observed that LCCM No. 10 is not dated. Petitioner explained that according to the Land Classification
Department of National Mapping and Resource Information Authority (NAMRIA), LCCM No. 10 is not dated because it is used as a
control map or reference in order to determine which land classification map is to be used. When the lot covered by TCT No. T-18592
was plotted based on the given tie point/line, it is covered by LC Map No. 3013 under the land classification for Batangas. LC Map No.
3013 was certified under Forest Administrative Order No. 4-1656 dated March 15, 1982. The Court of Appeals concluded that long
before LC Map No. 3013 was certified, the subject property covered by TCT No. T-18592 had already acquired the character of a
private ownership before the reclassification of the area to an unclassified forest.

As for respondents' affirmative defenses of estoppel and laches, the Court of Appeals ruled that estoppel and laches run against the
State, citing Republic v. Court of Appeals and Santos, as follows:

The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. However, like all general
rules, this is also subject to exceptions, viz.:
Estoppels against the public are little favored. They should not be invoked except in ra[r]e and unusual circumstances, and may not be
invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. They must be applied with
circumspection and should be applied only in those special cases where the interests of justice clearly require it. Nevertheless, the
government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby
thing; and subject to limitations the doctrine of equitable estoppel may be invoked against public authorities as well as against private
individuals.

Unconvinced, the OSG filed this petition for review on certiorari before the Court assigning the following as errors:
1) The Court of Appeals' finding that the property covered by TCT No. T- 18592 had become private property prior to the classification
of the area to an unclassified forest, and

2) The Court of Appeals' ruling that the instant case is an exception to the general rule that laches and estoppel do not run against the
State.

The Court's Ruling The petition is denied.

First Issue: Whether or not the subject property covered by TCT No. T-18592 is a private property or part of the public domain.

The case of Cariño v. Insular Government of the Philippine Islands 27 states that "[prescription is mentioned again in the royal cedula of
October 15, 1754, cited in 3 Philippine, 546; '[w]here such possessors shall not be able to produce title deeds, it shall be sufficient if
they shall show that ancient possession, as a valid title by prescription.' It may be that this means possession from before 1700; but, at
all events, the principle is admitted. As prescription, even against Crown lands, was recognized by the laws of Spain we see no
sufficient reason for hesitating to admit that it was recognized in the Philippines in regard to lands over which Spain had only a paper
sovereignty."

The United States Supreme Court through Mr. Justice Oliver Wendell Holmes pronounced in the Cariño case28 that "every presumption
is and ought to be against the government in a case like the present. It might, perhaps, be proper and sufficient to say that when, as far
back as testimony or memory goes, the land has been held by individuals under a claim of private ownership, it will be presumed to
have been held in the same way from before the Spanish conquest, and never to have been public land."

The records did not categorically state that Rita Vda. de Ilustre had Spanish title over the subject property. But by virtue of her long
continued, open, public, adverse possession and cultivation of the property in the concept of owner as against the whole world she is
deemed to have acquired ownership over the subject property.

As for respondents, it is undisputed that the property covered by TCT No. T-18592 traces its title to the property originally owned by
Rita Vda. de Ilustre since 1890. From her it passed on to several hands until it was transferred to Hammon H. Buck, who successfully
registered it in his name on February 18, 1952. From 1890, respondents' predecessors in interest had been in peaceful, open,
continuous, exclusive, adverse, and notorious possession in the concept of an owner of the subject property including the portion
covered by TCT No. T-18592. Following the Cariño ruling, the subject property had been a private land and excluded from the public
domain since 1890 prior to the signing of the Treaty of Paris on December 10, 1898. Therefore, it is not part of the public domain that
passed on from Spain to the United States of America.

For the same reason, it is also not part of the unclassified public forest as petitioner claims. In Republic v. Court of Appeals and
Cosalan,29 the Court held that "[d]espite the general rule that forest lands cannot be appropriated by private ownership, it has been
previously held that 'while the Government has the right to classify portions of public land, the primary right of a private individual who
possessed and cultivated the land in good faith much prior to such classification must be recognized and should not be prejudiced by
after-events which could not have been anticipated...Government in the first instance 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'"

The map (LC Map No. 3013), which is the basis of petitioner's claim, is inexistent at the time Hammon H. Buck was issued an original
certificate of title. Therefore, the subject property had been a private property before it was classified. Thus, the Court agrees with the
Court of Appeals' findings and upholds the private character of the subject property.

The Court also agrees with the Court of Appeals' observation that petitioner admitted in its answer to the written interrogatories that the
DENR issued several ECCs to projects within LCCM No. 10. The admissions go against petitioner's assertion and cast serious doubts
on what the DENR certification contains. The Court of Appeals said, to which the Court concurs, that it is inconceivable how petitioner
can claim that the subject land is an inalienable forest land when it had been alienating it by the numerous grants and decrees it had
issued. Quoted hereunder are excerpts from petitioner's answer to respondents' written interrogatories.
10. Have you issued any Environmental Clearance Certificate (ECC) for any property or development project of any project situated
within (and/or where any portion of such project is located within) LC Map CM-10 for the Province of Batangas and Cavite mentioned in
Annex "D" of your petition?

ANSWER: Yes.

11. If your answer to the immediately preceding interrogatory is in the affirmative, please identify such ECC and/or the project.

ANSWER: The DENR Region IV had already issued several Environmental Compliance Certificates (ECC) to projects within [the] Land
Classification Control Map (LCCM) 10. Identification of such projects is not feasible considering that the issuance of the ECCs began in
1982 pursuant to Presidential Decree No. 1586 dated June 11, 1978 and the said map covers the two (2) Provinces of Batangas and
Cavite. The issuance of the ECCs in 1982 up to 1992 was previously done by the defunct National Environmental Protection Council
(NEPC), then by the Environmental Management Bureau (EMB) and subsequently, upon the implementation of Executive Order No.
192, the Department of Environment and Natural Resources (DENR) Reorganization Law, it was issued by the DENR-EMB, however,
there were projects within the jurisdiction of the DENR Regional Office and the issuance of the ECCs was devolved to the latter office.

16. Has the government issued any free patents, sales patents, or homestead patents, under the provisions of the Public Land Act (CA
No. 141, as amended), over any property located within (or including within its boundary any portion thereof) the area covered by LC
Map CM-10 for the Province of Batangas and Cavite?

ANSWER: Yes.

17. If your answer to the immediately preceding interrogatory is in the affirmative, please identify such free patents, sales patents and
homestead patents.

ANSWER: It is impossible to identify all the patents issued within the area covered by LCCM-10 considering that thousands were
already issued within the Provinces of Cavite and Batangas since the approval of Commonwealth Act No. 141, as amended, otherwise
known as the Public Land Act on November 7, 1936. 3

From the foregoing, the Court sustains the Court of Appeals' ruling that the CFI of Batangas has jurisdiction and authority to legally
adjudicate the land applied for in Registration Case No. 52 in favor of the applicants. Consequently, Decree 6610, OCT No. 0-669, and
TCT No. T-18592, in respondents' name, must be upheld as valid issuances and documents of title.

Second Issue: Whether or not the government is barred by laches and estoppel.
Laches has been defined as the "failure or neglect for an unreasonable and unexplained length of time to do that which, by ob servance
of due diligence, could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time,
warranting the presumption that the party entitled to assert his right either has abandoned or declined to assert it.

The following elements must be present in order to constitute laches: (a) conduct on the part of the defendant, or of one under whom he
claims, giving rise to the situation complained of; (b) delay in asserting complainant's rights after he had knowledge of defendant's acts
and after he has had the opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right on
which he bases his suit; and (d) injury or prejudice to the defendant in the event the relief is accorded to the complainant.

We find it unnecessary to discuss further this issue in view of our ruling that Decree No. 6610, OCT No. 0-669, and TCT No. T-18592
registered in the name of respondents were validly issued.

WHEREFORE, premises considered, the Court of Appeals Decision dated November 19, 2002 in CA-G.R. SP No. 50023 is
AFFIRMED.

G.R. No.180086 July 2, 2014

AFP RETIREMENT AND SEPARATION BENEFITS SYSTEM [AFP-RSBS], Petitioner, vs. REPUBLIC OF THE PHILIPPINES,
Respondent.

The period of possession prior to the declaration that land is alienable and disposable agricultural land is included in the computation of
possession for purposes of acquiring registration rights over a property if the land has already been declared as such at the time of the
application for registration.

This is a Rule 45 petition of the Court of Appeals' January 10, 2007 decision and October 5, 2007 resolution. The Court of Appeals
reversed the trial court decision approving petitioner's application for registration.

On July 10, 1997, the Armed Forcesof the Philippines Retirement and Separation Benefits System (AFP-RSBS) filed an application for
original registration of parcels of land consisting of 48,151 square meters in Silang, Cavite. 1 The parcels of land were designated as Lot
Nos. 2969-A, 2969-B, and 2969-C, and had a total area of 48,151 square meters.2 These were allegedly acquired from Narciso
Ambrad, Alberto Tibayan, and Restituto Tibayan on March 13, 1997. 3 It was also alleged that their predecessors-ininterest had been in
possession ofthe properties since June 12, 1945.4

In a decision dated July 28, 2001,the Municipal Circuit Trial Court approved AFP-RSBS’s application for original registration.5 The
Register of Deeds was directed to cause the registration of the properties in the name of AFP-RSBS.6

The Republic of the Philippines moved for the reconsideration of the decision. 7 However, the motion was denied in an order dated
February 19, 2003.8

On March 14, 2003, the Republic appealed the decision and order of the trial court, alleging improper identification of the properties,
noncompliance with SC Administrative Circular No. 7-96 dated July 15, 1996 requiring that copies of a list of lots applied for be
furnished to the Bureau of Lands,9 non-submission of a tracing cloth plan, and lack of the Department of Environment and Natural
Resources certification showing that the properties were already declared alienable and disposable at the time of possession by the
predecessors-in-interest.10

On January 10, 2007, the Court ofAppeals reversed the decision of the trial court and dismissed AFP-RSBS’s application.11 The
dispositive portion of the decision reads:

WHEREFORE, the Decision appealed from is REVERSED and SET ASIDE and another one entered DISMISSING the application for
original registration.12

The Court of Appeals found that the properties had no pending land application and that there were no overlapping lots. 13 Hence, no
person needed to be notified of the land registration proceedings. 14 The Court of Appeals also found that AFP-RSBS complied with the
requirement to submit a tracing cloth plan.15

However, according to the Court of Appeals, since Lot 2969 was declared alienable and disposable only on March 15, 1982, the period
of possession of the predecessors-in-interest before that date should be excluded from the computation of the period of possession. 16
Hence, AFPRSBS’s and its predecessors-in-interest’s possessions could not ripen into ownership.17

The Court of Appeals also ruled that AFP-RSBS, as a private corporation or association, may not own alienable lands of the public
domain pursuant to Section 3, Article XII of the Constitution. 18

On February 7, 2007, AFP-RSBS filed a motion for reconsideration of the Court of Appeals’ decision. 19 The Court of Appeals denied
this motion in a resolution promulgated on October 5, 2007. Hence, this petition was filed.
The issue in this case is whether the period of possession before the declaration that land is alienable and disposable agric ultural land
should be excluded from the computation of the period of possession for purposes of original registration.

AFP-RSBS argued that "[w]hat is required is that the property sought to be registered has already been declared to be alienable and
disposable land of the public domain at the time [of]the application for registration . . . before the court." 21 In support of this argument,
AFP-RSBS cited Republic v. CA and Naguit22 and Republic v. Bibonia and Manahan.23 Hence, AFPRSBS and its predecessors-in-
interest’s possession before June 12, 1945 should have ripened into a bonafide claim of ownership. 24 AFP-RSBS also argued that the
land had already been private before its acquisition in 1997 by virtue of the claim of ownership ofits predecessors-in-interest before
1945.25 Therefore, petitioner corporation may acquire the property.

In its comment, the Republic argued that the classification of land as alienable and disposable is required before possession can ripen
into ownership.26 The period of possession before declaration that the land is alienable and disposable cannot be included in computing
the period of adverse possession.27 Hence, before March 15, 1982, there could have been no possession in the concept of an owner. 28
The Republic also argued that there was no sufficient evidence of open, continuous, exclusive, and notorious possession under a bona
fide claim of ownership before June 12, 1945.

We rule for petitioner. The requirements for the application for original registration of land based on a claim of open and continuous
possession of alienable and disposable lands of public domain are provided in Section 14(1) of Presidential Decree No. 1529 or the
Property Registration Decree. It provides:

Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to
land, whether personally orthrough 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 occupationof alienable and disposable lands of the public domainunder a bona fide claim of ownership since June 12,
1945, or earlier.

A similar provision can be found in Commonwealth Act No. 141 or Public Land Act:

Sec. 48. The following-described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or
an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province
where the land is located for confirmation of their claims and the issuance of a certificate of title therefor under the Land Registration
Act, to wit: (b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and
notorious possession and occupationof agricultural lands of the public domain, under a bona fide claim of acquisition or ownership,
since June 12, 1945, immediately preceding the filing of the application for confirmation of title, except when prevented by war or force
majeure. Those shall be conclusively presumed to have performed all the conditions essential to a government grant and shall be
entitled to a certificate of title under the provisions of this chapter. (As amended by Presidential Decree No. 1073)

Based on these provisions, an applicant for original registration based on a claim of exclusive and continuous possession or occupation
must show the existence of the following:
1) Open, continuous, exclusive,and notorious possession, by themselves or through their predecessors-in-interest, of land;
2) The land possessed or occupied musthave been declared alienable and disposable agricultural land of public domain;
3) The possession or occupation was under a bona fide claim of ownership;
4) Possession dates back to June 12, 1945 or earlier.

On one hand, petitioner argued that its and its predecessors-ininterest’s possession before the declaration that the property was
alienable and disposable agricultural land in1982 should be included in the computation of the period of possession for purposes of
registration.29 On the other hand, respondent holds the position that possession before the establishment of alienability of the land
should be excluded in the computation.30

Republic v. Naguit31 involves the similar question.In that case, this court clarified that Section 14(1) of the Property Registration Decree
should be interpreted to includepossession before the declaration of the land’s alienability as long as at the time of the application for
registration, the land has already been declared part of the alienable and disposable agricultural public lands. This court also
emphasized in that case the absurdity that would result in interpreting Section 14(1)as requiring that the alienability of public land
should have already been established by June 12, 1945. Thus, this court said in Naguit:

Besides, we are mindful of the absurdity that would result if we adopt petitioner’s position. Absent a legislative amendment, the rule
would be, adopting the OSG’s view, that all lands of the public domain which were not declared alienable or disposable before June 12,
1945 would not be susceptible to originalregistration, no matter the length of unchallenged possession by the occupant. Such
interpretation renders paragraph (1) of Section 14 virtually inoperative and even precludes the government from giving it effect even as
it decides to reclassify public agricultural lands as alienable and disposable. The unreasonableness of the situation would even be
aggravated considering that before June 12, 1945, the Philippines was not yet even considered an independent state.

Instead, the more reasonable interpretation of Section 14(1) is that it merely requires the property sought tobe registered as already
alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has
not yet deemed it proper to release the property for alienation ordisposition, the presumption is that the government is still reserving the
rightto utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession even
if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is
already an intention on the part of the State to abdicate its exclusive prerogative over the property. 32

However, in the later case of Republic v. Herbieto 33 that was cited by respondent, this court ruled that the period of possession before
the declaration that land is alienable and disposable cannot be included in the computation of the period of possession. This court said:

Section 48(b), as amended, now requires adverse possession of the land since 12 June 1945 or earlier.In the present Petition, the
Subject Lots became alienable and disposable only on 25 June 1963. Any period of possession prior tothe date when the Subject Lots
were classified as alienable and disposable is inconsequential and should be excluded from the computation of the period of
possession; such possession can never ripen into ownership and unless the land had been classified as alienable and disposable, the
rules on confirmation of imperfect title shall not apply thereto. It is very apparent then that respondents could not have complied with the
period of possession required by Section 48(b) of the Public Land Act, as amended, to acquire imperfect or incomplete title to the
Subject Lots that may be judicially confirmed or legalized. 34 This court clarified the role of the date, June 12, 1945, in computing the
period of possession for purposes of registration in Heirs of Mario Malabanan v. Republic of the Philippines. 35 In that case, this court
declared that Naguit and not Herbieto should be followed. Herbieto "has [no] precedental value with respect to Section 14(1)."36 This
court said:

The Court declares that the correct interpretation of Section 14(1) is that which was adopted in Naguit. The contrary pronouncement in
Herbieto, as pointed out in Naguit, absurdly limits the application of the provision to the point of virtual inutility since it would only cover
lands actually declared alienable and disposable prior to 12 June 1945, even if the current possessor is able to establish open,
continuous, exclusive and notorious possession under a bona fideclaim of ownership long before that date.

Moreover, the Naguit interpretation allows more possessors under a bona fideclaim of ownership to avail ofjudicial confirmation of their
imperfect titles than whatwould be feasible under Herbieto. This balancing fact is significant, especially considering our forthcoming
discussion on the scope and reach ofSection 14(2) of the Property Registration Decree.

Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any precedental value with respect to Section 14(1). On the
other hand, the ratio of Naguitis embedded in Section 14(1), since it precisely involved situation wherein the applicant had been in
exclusive possession under a bona fide claim of ownership prior to 12 June 1945. The Court’s interpretation of Section 14(1) therein
was decisive to the resolution of the case. Any doubt as to which between Naguitor Herbieto provides the final word of the Court on
Section 14(1) is now settled in favor of Naguit.37

Moreover, in the resolution of the motions for reconsideration of this court’s 2009 decision in Heirs of Malabanan, 38 this court explained
that there was no other legislative intent that could be associated with the date, June 12, 1945, as written in our registration laws except
that it qualifies the requisite period of possession and occupation. The law imposes no requirement that land should have been
declared alienable and disposable agricultural land as early as June 12, 1945.

Therefore, what is important in computing the period of possession is that the land has already been declared alienable and disposable
at the time of the application for registration. Upon satisfaction of this requirement, the computation of the period may include the period
of adverse possession prior to the declaration that land is alienable and disposable.

Persons are entitled to the registration of their titles upon satisfaction of all the requirements enumerated under our laws. No
presumption or doctrine in favor of state ownership candeprive them of their titles once all the conditions are satisfied.39 Our
Constitution contains no such limit upon our citizens or privilege upon the state. 40 Neither was this doctrine extended to our organic
acts.41

Respondent argued that "[s]ince the land subject of petitioner’s application for registration was classified alienable and disposable only
on March 15, 1982, it follows that petitioner could not have possessed the same in the concept of owner, earlier than the said date."42

Respondent is mistaken. Although adverse, open, continuous, and notorious possession in the concept of an owner is a conclusion of
law to be determined by courts, it has more to do with a person’s belief in good faith that he or she has just title to the property that he
or she is occupying. It is unrelated to the declaration that land is alienable or disposable. A possessor or occupant of property may,
therefore, be a possessor in the concept of an owner prior to the determination that the property is alienable and disposable agricultural
land. His or her rights, however, are still to be determined under the law.

Petitioner’s right to the original registration of title over the property is, therefore, dependent on the existence of: a) a declaration that
the land is alienable and disposable at the time of the application for registration and b) open and continuous possession in the concept
of an owner through itself or through its predecessors-in-interest since June 12, 1945 or earlier.

In this case, there is no dispute that the properties were already declared alienable and disposable land on March 15, 1982. Hence, the
property was already alienable and disposable at the time of petitioner’s application for registration on July 10, 1997.
As to the required period of possession, petitioner was able to show that it, through itself or its predecessors-in-interest, has been in
open, continuous, exclusive, and notorious possession before 1945 through testimonies and documents.

One of petitioner’s predecessors-in-interest, Emilia Amadure, testified that as early as her birth in 1917, her family was already residing
in Barangay Biluso, Silang, Cavite. Her father, Maximo Amadure, was the properties’ previous owner. She was able to describe the lots’
metes and bounds as well as the adjoining properties’ owners. 43 She also testified that "the first time she came to know about said lots
was at the age of reason"44 at which time, she saw her father in possession of the properties. By June 12, 1945, she was already 28
years old.Tax declarations between 1948 to 1998 under Maximo’s name and other previous owners’ names were also presented. 45

Maximo Amadure’s grandson, Rogelio Amadure, corroborated Emilia’s testimony. He testified thathis grandfather owned and tilled the
properties with his five children: Catalino, Dominador, Margarita, Gregonia, and Emelia Amadure. 46 They cultivated banana, corn,
papaya, and palay on the properties.47 Before the war, Rogelio’s father informed him that Maximo owned the properties.48 Maximo’s
children took possession of the properties after Maximo’s death. 49

Based on the testimonies, we can already deduce that petitioner’s predecessors-in-interest had possessed the properties in the
concept of an owner even earlier than 1945.

Petitioner was, therefore, able to prove all the requisites for the grant of an original registration of title under our registration laws.

Respondent argues that although petitioner is a government-owned and -controlled corporation, it cannot acquire title through
acquisitive prescription. This argument is unmeritorious. The type of corporation that petitioner is has nothing to do with the grant of its
application for original registration. Petitioner also acquired title to the property under Section 14(1) of the Property Registration Decree
or Section 48(b) of the Public Land Act, and not through acquisitive prescription.

If respondent’s argument stems from the Court of Appeals’ ruling that petitioner cannot acquire title to the property because of Section
3, Article XII of the Constitution, which prohibits private corporations from acquiring public land, respondent is, again, mistaken. The
prohibition in Section 3, Article XII of the Constitution applies only to private corporations. Petitioner is a government corporation
organized under Presidential Decree No. 361, as amended by Presidential Decree No. 1656.

WHEREFORE, the petition is GRANTED. The Court of Appeals' decision of January 10, 2007 and resolution of October 5, 2007 are
SET ASIDE. The July 28, 2001 trial court decision is REINSTATED.

G.R. No. 202414 June 4, 2014

JOSEPHINE WEE, Petitioner, vs. FELICIDAD MARDO, Respondent.

This is a petition for review on certiorari under Rule 45 assailing the June 26, 2012 Decision of the Court of Appeals (CA), which
reversed and set aside the September 4, 2009 Decision of the Regional Trial Court, Branch XVIII, Tagaytay City, Cavite (RTC),
granting petitioner's "Application for Registration of Title."

Factual and Procedural Antecedents: Respondent Felicidad Gonzales, married to Leopoldo Mardo, was granted a registered Free
Patent No. (IV-2) 15284, dated April 26, 1979, covering Lot No. 8348, situated in Puting Kahoy, Silang, Cavite.

On February 1, 1993, respondent allegedly conveyed to petitioner, Josephine Wee, through a Deed of Absolute Sale,1 a portion of Lot
No. 8348 known as Lot No. 8348-B, for a consideration of ₱250,000.00 which was fully paid. Respondent, however, refused to vacate
and turn over the subject property claiming that the alleged sale was falsified.

On December 22, 1994, petitioner filed an Application for Original Registration of a parcel of land located at Barangay Putting Kahoy,
Silang, Cavite, known as Lot No. 8349. Said application was amended on September 19, 1996, this time covering a parcel of land
known as Lot 8348-B situated in Barangay Puting Kahoy, Silang, Cavite. Petitioner claimed that she is the owner of the said
unregistered land by virtue of a deed of absolute sale.

On September 19, 1997, respondent filed her Opposition to the Amended Application alleging 1] that she is the true and lawful owner of
the parcel of land which is the subject of the amended application; and 2] that petitioner’s deed of absolute sale is surreptitious.

On October 28, 2000, respondent filed a Motion to Dismiss the Application alleging that the land described in the application was
different from the land being claimed for titling. The motion was, however, denied. A motion for reconsideration and second urgent
motion for reconsideration were subsequently filed by respondent, but both were denied by the RTC.

Thereafter, petitioner completed her presentation of evidence and filed a formal offer which was admitted by the RTC.

On June 10, 2003, during the pendency of the case, respondent managed to register the land in her name under Original Certificate of
Title (OCT) No. OP-1840. Petitioner filed a Notice of Lis Pendens with the Registry of Deeds of Cavite on May 10, 2005 which was
annotated on the title. A "Motion for Leave to File Supplemental Pleading and to Admit Attached Supplemental Complaint for
Reconveyance" was filed by petitioner which was denied by the RTC on the ground that a motion for reconveyance was different from
an application for registration of title.

Consequently, respondent presented her own evidence, through the testimony of her counsel, who testified that the parcel of land
subject of the application for registration was the property she bought ten (10) years ago. Respondent, however, did not state from
whom she bought it. As proof of her alleged ownership, she presented copies of tax declarations in the absence of any deed of sale in
her favor.

On September 4, 2009, the RTC rendered a Decision2 granting the application of petitioner. The dispositive portion of said decision
reads: WHEREFORE, judgment is hereby rendered granting the applicant, Josephine Wee, as qualified to register the subject land in
her name, and the Administrator of LRA is hereby directed to issue the corresponding decree in her name based on the plan and
technical description of said land as submitted by the applicant and the Register of Deeds of the Province of Cavite to issue title in her
name.

A motion for reconsideration was filed by respondent which was denied by the RTC. Hence, respondent appealed the decision before
the CA, which case was docketed as CA-G.R. CV No. 96934.

On June 26, 2012, the CA handed down a Judgment3 reversing and setting aside the RTC decision. The decretal portion of the CA
decision reads: WHEREFORE, the appeal is GRANTED. The Decision, dated September 4, 2009, of the Regional Trial Court (Branch
XVIII) of Tagaytay City, Cavite, in LRC No. TG-647 is SET ASIDE.

Accordingly, applicant-appellee’s Application for Original Registration of a parcel of land located at Barangay Putting Kahoy, Silang
Cavite, known as Lot No. 8349, Cad. Lot 042118-011719-D of Silang Cadastre, is hereby DENIED.

The CA held, among others, that petitioner was not able to comply with the requirement of possession and occupation under Sec. 14
(1) of P.D. No. 1529. Her admission that the subject lot was not physically turned over to her due to some objections and oppositions to
her title suggested that she was not exercising any acts of dominion over the subject property, an essential element in the requirement
of possession and occupation contemplated under Sec. 14 (1) of P.D. No. 1529.

A copy of the decision was received by petitioner on July 2, 2012. On August 15, 2012, petitioner filed this subject petition for review
challenging the CA decision. Hence, this petition.

I. The Court of Appeals gravely erred and ruled contrary to law in not finding that petitioner is entitled to register the subject land under
her name. Under the peculiar circumstances of this case, wherein petitioner’s predecessor-in-interest unexpectedly and unjustifiably
continued to be in physical possession of the subject property after the sale thereof to petitioner, the latter must be deemed to be in
possession and occupation thereof through her predecessor-in-interest. Under the Public Land Act and Presidential Decree No. 1529,
the period of possession of an applicant’s predecessor-in-interest benefits and is credited in favor of the applicant.

II.Moreover, petitioner was denied actual possession of the subject land by circumstances amounting to a fortuitous event. By express
provision of Sec. 48(b) of the Public Land Act, such fortuitous event does not affect her vested right to register the property under her
name.

III.The Court of Appeals likewise seriously erred and ruled contrary to the law and to the evidence in not finding that petitioner’s
predecessor-in-interest, respondent Felicidad Mardo, had possession and occupation of the subject parcel of land under a bona fide
claim of ownership since June 12, 1945, or earlier.

IV.In view of the fact that the validity of the sale of the subject parcel of land to petitioner in 1993 was duly established before the trial
court and affirmed by the Court of Appeals and considering further that the registration of the said land under respondents name was
fraudulently secured, in order to avoid multiplicity of suits and to put an end to the long pending dispute between the parties, the Court
of Appeals should have ordered the reconveyance of the subject parcel of land to the petitioner as its rightful owner.

Petitioner presents the theory that she must be deemed to have been in possession and occupation of the subject property through
respondent, her predecessor-in-interest, who after the sale in 1993 and despite demands from her, unexpectedly and unjustifiably
continued to occupy the property and refused to turn over physical possession to her. Petitioner argues that it is not necessary that the
person in possession should himself be the occupant as the occupancy can be held by another in his name.

Moreover, petitioner also seeks reconveyance of the subject property arguing that by virtue of its fraudulent registration, respondent
became a trustee of an implied trust for her benefit, as its real owner, having validly acquired the same from respondent through an
absolute deed of sale.

The Court’s Ruling The petition deserves no merit.

P.D. 1529, otherwise known as Property Registration Decree, governs the original registration proceedings of unregistered land. The
subject application for original registration was filed pursuant to Sec. 14(1) of PD 1529, which provides the condition necessary for
registration. Thus:

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 fide claim of ownership since June 12,
1945, or earlier.

Based on these legal parameters, applicants for registration of title under Section 14(1) must sufficiently establish: (1) that the subject
land forms part of the disposable and alienable lands of the public domain; (2) that the applicant and his predecessors-in-interest have
been in open, continuous, exclusive and notorious possession and occupation of the same; and (3) that it is under a bona fide claim of
ownership since June 12, 1945 or earlier.4

The CA denied the application on the issue of open, continuous, exclusive, and notorious possession and occupation of the subject
land. It was of the view that she could not have complied with the requirement of possession and occupation under Sec. 14 (1) of P.D.
No. 1529 considering that she had admitted that it was not physically turned over to her. As she was not in actual and physical
possession, she could not have exercised any acts of dominion over the subject property which was essential to the requirement of
possession and occupation contemplated under Sec. 14 (1) of P.D. No. 1529.

A more important consideration, however, is that the subject land is already registered under OCT No. OP-1840 (Patent No. 042118-
03-6111) of the Registry of Deeds of Cavite, under the name of respondent Felicidad Gonzales.

In the case of Republic vs. Umali,5 this Court ruled that once a patent is registered and the corresponding certificate of title is issued,
the land ceases to be part of public domain and becomes private property over which the Director of Lands has neither control nor
jurisdiction. A public land patent, when registered in the corresponding Register of Deeds, is a veritable Torrens title, and becomes as
indefeasible upon the expiration of one (1) year from the date of issuance thereof. Said title, like one issued pursuant to a judicial
decree, is subject to review within one (1) year from the date of the issuance of the patent. This rule is embodied in Section 103 of PD
1529, which provides that:

Section 103. Certificates of title pursuant 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. After due registration and issuance of the certificate
of title, such land shall be deemed to be registered land to all intents and purposes under this Decree.

Accordingly, respondent’s registered patent in the corresponding Registry of Deeds is a veritable Torrens title and becomes as
indefeasible as a Torrens title upon the expiration of one (1) year from the date of its issuance. 6

For said reason, the order of the RTC directing the Administrator of LRA to issue a corresponding decree in petitioner’s name is null
and void. A land registration court has no jurisdiction to order the registration of land already decreed in the name of another in an
earlier land registration case. A second decree for the same land would be null and void, since the principle behind the original
registration is to register a parcel of land only once.7

Verily, once a title is registered, as a consequence either of judicial or administrative proceedings, the owner may rest secure, without
the necessity of waiting in the portals of the court sitting in the mirador de su casa to avoid the possibility of losing his land.8 The
certificate of title cannot be defeated by adverse, open and notorious possession. Neither can it be defeated by prescription. As
provided under Sec. 47 of PD 1529, no title to registered land in derogation of the title of the registered owner shall be acquired by
prescription or adverse possession.

A Certificate of Title Not Subject to Collateral Attack

Petitioner argued that the rule on indefeasibility of title does not attach to titles secured by fraud and misrepresentation. In this case,
she alleged that the respondent fraudulently registered the subject property under her name after she (respondent) had already sold a
portion thereof to her (petitioner). By virtue of the deed of sale, petitioner insists that she is considered to be the real owner of the
subject parcel of land.

The Court finds no merit in petitioner’s argument. It is settled in this jurisdiction that the issue of the validity of title can only be assailed
in an action expressly instituted for such purpose.9 A certificate of title cannot be attacked collaterally. This rule is provided under
Section 48 of PD 1529 which states that:

SEC. 48. Certificate not subject to collateral attack. ― A certificate of title shall not be subject to collateral attack. It cannot be altered,
modified, or canceled except in a direct proceeding in accordance with law.
In Lagrosa v. Court of Appeals,10 it was stated that it is a well-known doctrine that the issue as to whether title was procured by
falsification or fraud as advanced by petitioner can only be raised in an action expressly instituted for the purpose. A Torrens title can be
attacked only for fraud, within one year after the date of the issuance of the decree of registration. Such attack must be direct, and not
by a collateral proceeding. The title represented by the certificate cannot be changed, altered, modified, enlarged, or diminished in a
collateral proceeding.

In this case, the petitioner is contesting the indefeasibility of title on the ground of fraud and misrepresentation. Applying the
abovementioned doctrine, even assuming that the petitioner’s allegations are true, the same are considered as collateral attacks, and
such must be raised in an action expressly instituted for such purpose and in a proper proceeding.

Thus, in Carvajal v. Court of Appeals,11 it was ruled that an application for registration of an already titled land constitutes a collateral
attack on the existing title. The title may be challenged only in a proceeding for that purpose, not in an application for registration of a
land already registered in the name of another person. After one year from its registration, the title is incontrovertible and is no longer
open to review.

Remedy of the petitioner is to file a separate proceeding such as an action for specific performance or for reconveyance

Petitioner further argues that considering the registration of the said land under respondent’s name was fraudulently secured, in order
to avoid multiplicity of suits and to put an end to the long pending dispute between the parties, the courts below should have ordered
the reconveyance of the subject land to her as its rightful owner.

Petitioner advances the theory that by virtue of the fraudulent registration of a subject property, respondent is a trustee of an implied
trust for her benefit, being the real owner of the subject property, as she had validly acquired the same from respondent through an
absolute deed of sale.

Petitioner’s argument fails to persuade. The issue of fraudulent alienation raised in the second application for registration of the subject
property is collateral attack which should be directly raised in a separate proceeding filed for such purpose. It cannot be entertained in
this proceeding. In several cases, the Court has ruled that an attack is indirect or collateral when, in an action to obtain a different relief,
an attack on the judgment or proceeding is nevertheless made as an incident thereof. 12

The RTC was, thus, correct in denying petitioner’s "Motion for Leave to File Supplemental Pleading and to Admit Attached
Supplemental Complaint For Reconveyance." Allowing it would not have been permissible because the application for original
registration of title over a parcel of land already registered is a collateral attack itself. It is settled that an application for registration of a
parcel of land already covered by a Torrens title is actually a collateral attack, not permitted under the principle of indefeasibility of a
Torrens title.13

Registration, however, does not deprive an aggrieved party of a remedy in law. What cannot be collaterally attacked is the certificate of
title and not the title or ownership which is represented by such certificate. Ownership is different from a certificate of title. The fact that
a person was able to secure a title in his name did not operate to vest ownership upon him of the subject land. Registration of a piece of
land under the Torrens System does not create or vest title, because it is not a mode of acquiring ownership.

A certificate of title is merely an evidence of ownership or title over the particular property described therein. It cannot be used to protect
a usurper from the true owner; nor can it be used as a shield for the commission of fraud: neither does it permit one to enrich himself at
the expense of others. Its issuance in favor of a particular person does not foreclose the possibility that the real prope1iy may be co-
owned with persons not named in the certificate, or that it may be held in trust for another person by the registered owner.14

The remedy of the petitioner is to file a separate proceeding or action to protect her alleged interest. As she claimed that she bought the
subject property for value from the respondent as evidenced by a deed of sale, she can file an action for specific performance to
compel the respondent to comply with her obligation in the alleged deed of sale and/or an action for reconveyance of the property. She
can also file an action for rescission. Needless to state, petitioner must prove her entitlement because the respondent claims that the
sale was falsified.

Reconveyance is based on Section 55 of Act No. 496, as amended by Act No. 3322, which states that in all cases of registration
procured by fraud the owner may pursue all his legal and equitable remedies against the parties to such fraud, without prejudice,
however, to the rights of any innocent holder for value of a certificate of title.15 It is an action in personam available to a person whose
property has been wrongfully registered under the Torrens system in another's name. 16 It does not seek to set aside the decree but,
respecting it as incontrovertible and no longer open to review, seeks to transfer or reconvey the land from the registered owner to the
rightful owner.17 Reconveyance is always available as long as the property has not passed to an innocent third person for value.
WHEREFORE, the petition is hereby DENIED, without prejudice to any remedial action by the petitioner to protect her claimed interest.

G.R. No. 185092 June 4, 2014

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. CORAZON C. SESE and FE C. SESE, Respondents.
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner Republic of the Philippines, represented
by the Office of the Solicitor General (OSGJ, assailing the November 21, 2007 Decision 1 of the Court of Appeals (CA) in CA-G.R. CV
No. 81439, which dismissed its appeal and affirmed the October 3, 2003 Decision 2 of the Municipal Trial Court of Pulilan, Bulacan
(MTC), in LRC Case No. 026.

Factual and Procedural Antecedents: Records show that on September 17, 2002, Corazon C. Sese and Fe C. Sese (respondents)
filed with the MTC an application for original registration of land over a parcel of land with an area of 10, 792 square meters, situated in
Barangay Sto. Cristo, Municipality of Pulilan, Province of Bulacan, and more particularly described as Lot 11247, Cad. 345, Pulilan
Cadastre, under Plan No. AP-03-004226.

Respondents alleged that on July 22, 1972, they acquired, through a donation inter vivos from their mother, Resurreccion L. Castro
(Resurreccion), the subject agricultural land; that they, through their predecessors-in-interest, had been in possession of the subject
property; and that the property was not within a reservation.

In support of their application, respondents submitted the following documents, namely: (1) Tax Declaration No. 99-19015-01557 "in the
name of Corazon Sese and Fe Sese, minor, representing their mother Resurreccion Castro, as her Natural Guardian"; (2) Certificate of
Technical Description which was approved on December 10, 1998 by the Land Management Service, Region III, of the Department of
Environment and Natural Resources (DENR); (3) Certification in lieu of lost Surveyor’s Certificate issued by the same authority; (4)
Official Receipt of payment of real property tax over the subject property; (5) Certification from the Office of the Municipal Treasurer of
Pulilan, stating that the registered owners of a property under Tax Declaration No. 99-19-015-01557 were Corazon Sese and others;
and (6) Survey plan of Lot 11247, CAD 345,Pulilan Cadastre, approved by the Regional Technical Director of the Land Management
Service, Region III, of the DENR, stating that the land subject of the survey was alienable and disposable land, and as certified to by
the Bureau of Forestry on March 1, 1927, was outside of any civil or military reservation. On the lower portion of the plan, there was a
note stating that a deed of absolute sale over the subject property was executed by a certain Luis Santos and Fermina Santos (the
Santoses) in favor of Resurreccion on October 4, 1950.

On the lower portion of the survey plan, a note stated, among others, that: "This survey is inside the alienable and disposable area as
per Project No. 20 LC Map No. 637 certified by the Bureau of Forestry on March 1, 1927. It is outside any civil or military reservation."
The said plan was approved by the DENR, Land Management Services, Regional Office III, San Fernando, Pampanga, on December
3, 1998.

Finding the application sufficient in form and substance, the MTC issued the Order, dated October 10, 2002, setting the case for
hearing with the corresponding publication. After compliance with all the requirements of the law regarding publication, mailing and
posting, hearing on the merits of the application followed.

During the trial on June 4, 2003, respondent Corazon C. Sese (Corazon) testified on their claim over the subject lot. Thereafter,
respondents submitted their formal offer of evidence, after which the evidence offered were admitted by the MTC in the Order, dated
July 10, 2003, without objection from the public prosecutor.

The OSG did not present any evidence to oppose the application.

On October 3, 2003, the MTC rendered its Decision, 3 ordering the registration of the subject property in the name of respondents. The
dispositive portion of the decision reads:

WHEREFORE, finding the instant application to be sufficient in form and substance and the applicants having established their right of
ownership over the subject parcel of land and are therefore entitled to registration thereof, the Court thereby grants the petition.

Accordingly, the Court hereby orders the registration of the parcel of land subject matter of this petition which is more particularly
described in Plan Ap-03-004226 Pulilan Cadastre and in their corresponding technical descriptions in the name of Resureccion Castro.
Upon this decision becoming final, let an Order for the decree be issued.

The MTC reasoned out that there was evidence to show that the subject lots had been in open, continuous, adverse, and public
possession, either by the applicants themselves or their predecessor-in-interest. Such possession since time immemorial conferred an
effective title on the applicants, whereby the land ceased to be public and became private property. It had been the accepted norm that
open, adverse and continuous possession for at least 30 years was sufficient. The MTC noted that evidence showed that the parcel of
land involved was not covered by land patent or a public land application as certified to by the Community Environment and Natural
Resources of Tabang, Guiguinto, Bulacan. Moreover, it added that the technical descriptions of Lot 11247 were prepared and secured
from the Land Management Sector, DENR, Region III, San Fernando, Pampanga, and were verified and found to be correct by Eriberto
Almazan, In-Charge of the Regional Survey Division.

On December 19, 2003, the OSG interposed an appeal with the CA, docketed as CA-GR. CV No. 81439. In its brief,4 the OSG
presented the following assignment of errors: a) only alienable lands of the public domain occupied and possessed in concept of owner
for a period of at least thirty (30) years is entitled to confirmation of title; and b) respondents failed to prove specific acts of possession.
The OSG argued that there was no proof that the subject property was already segregated from inalienable lands of the public domain.
Verily, it was only from the date of declaration of such lands as alienable and disposable that the period for counting the statutory
requirement of possession would start.

Also, there was absolutely no proof of respondents’ supposed possession of the subject property. Save for the testimony of Corazon
that "at present, the worker of (her) mother is occupying the subject property," there was no evidence that respondents were actually
occupying the subject tract of land or that they had introduced improvement thereon.

On November 21, 2007, the CA rendered a Decision5 affirming the judgment of the MTC ordering the registration of the subject
property in the name of respondents. The decretal portion of which reads: WHEREFORE, the appeal is DISMISSED. The assailed
decision dated October 3, 2003 of the MTC of Pulilan, Bulacan, in LRC Case No. 026 is AFFIRMED.

The CA reasoned out, among others, that the approved survey plan of the subject property with an annotation, stating that the subject
property was alienable and disposable land, was a public document, having been issued by the DENR, a competent authority. Its
contents were prima facie evidence of the facts stated therein. Thus, the evidence was sufficient to establish that the subject property
was indeed alienable and disposable.

With respect to the second issue, the CA was of the view that the doctrine of constructive possession was applicable. Respondents
acquired the subject property through a donation inter vivos executed on July 22, 1972 from their mother. The latter acquired the said
property from the Santoses on October 4, 1950 by virtue of a deed of absolute sale. Further, respondent Corazon testified that a small
hut was built on the said land, which was occupied by the worker of her mother. Moreover, neither the public prosecutor nor any private
individual appeared to oppose the application for registration of the subject property.

The CA also stated that respondents’ claim of possession over the subject property was buttressed by the Tax Declaration No. 99-
19015-01557 "in the name of Corazon Sese and Fe Sese, minor, representing their mother Resurreccion Castro, as her Natural
Guardian"; the official receipt of payment of real property tax over the subject property; and the certificate from the Office of the
Municipal Treasurer of Pulilan, stating that the registered owner of a property under Tax Declaration No. 99-19015-01557 were
respondents.

The CA added that although tax declaration or realty tax payments of property were not conclusive evidence of ownership,
nevertheless, they were good indicia of possession in the concept of owner. Hence, the OSG filed this petition.

I THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN RULING THAT THE APPROVED SURVEY PLAN IDENTIFIED
BY ONE OF THE RESPONDENTS IS PROOF THAT THE SUBJECT LAND IS ALIENABLE AND DISPOSABLE.

II THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN GRANTING THE APPLICATION FOR REGISTRATION.

The OSG argues that unless a piece of land is shown to have been classified as alienable and disposable, it remains part of the
inalienable land of the public domain. In the present case, the CA relied on the approved survey indicating that the survey was inside
alienable and disposable land. It is well-settled, however, that such notation does not suffice to prove that the land sought to be
registered is alienable and disposable. What respondents should have done was to show that the DENR Secretary had approved the
land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application
for registration fell within the approved area per verification through survey by the PENRO or CENRO. In addition, they should have
adduced a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the
official records.

To bolster its argument, the OSG cites the case of Republic of the Philippine v. T.A.N. Properties, Inc., 6 where the Court stated that the
trial court should not have accepted the contents of the certifications as proof of the facts stated therein. Even if the certifications are
presumed duly issued and admissible in evidence, they have no probative value in establishing that the land is alienable and
disposable. Such government certifications do not, by their mere issuance, prove the facts stated therein. As such, the certifications are
prima facie evidence of their due execution and date of issuance but they do not constitute prima facie evidence of the facts stated
therein.

With respect to the second assignment of error, the OSG argues that respondents failed to present specific acts of ownership to prove
open, continuous, exclusive, notorious, and adverse possession in the concept of an owner. Facts constituting possession must be duly
established by competent evidence. As to the tax declaration adduced by respondents, it cannot be said that it clearly manifested their
adverse claim on the property. If respondents genuinely and consistently believed their claim of ownership, they should have regularly
complied with their real estate obligations from the start of their supposed occupation.

Position of Respondents On the other hand, respondents assert that the CA correctly found that the subject land was alienable and
disposable. The approved survey plan of the subject property with an annotation, stating that the subject property is alienable and
disposable land, is a public document, having been issued by the DENR, a competent authority. Its contents are prima facie evidence
of the facts stated therein and are sufficient to establish that the subject property is indeed alienable and disposable.
Respondents cite the case of Republic v. Serrano, 7 where the Court stated that a DENR Regional Technical Director’s certification,
which was annotated on the subdivision plan submitted in evidence, constituted substantial compliance with the legal requirement. The
DENR certification enjoyed the presumption of regularity absent any evidence to the contrary.

Anent the second assignment of error, respondents contend that the CA correctly applied the doctrine of constructive possession
because they acquired the subject land from their mother, Resurreccion, through a donation inter vivos, dated July 22, 1972.Their
mother, in turn, acquired the subject land from the Santoses on October 4, 1950 by virtue of an absolute sale. They claim that a small
hut was built in the said land and was occupied by a worker of her mother. They countered that although tax declarations or realty tax
payment of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of
owner, for no one in his right mind would be paying taxes for a property which is not in his actual or constructive custody.

The Court’s Ruling

The petition is meritorious. The vital issue to be resolved by the Court is whether respondents are entitled to the registration of land
title under Section 14(1) of Presidential Decree (P.D.)No. 1529, or pursuant to Section 14(2) of the same statute. Section 14(1) of P.D.
No. 1529 in relation to Section 48(b) of Commonwealth Act No. 141,8 as amended by Section 4 of P.D. No. 1073,9 provides:

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

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

Section 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands
or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance now Regional
Trial Court of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor,
under the Land Registration Act, to wit: (b) Those who by themselves or through their predecessors in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of
acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title
except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential
to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter.

Based on the above-quoted provisions, applicants for registration of land title must establish and prove: (1) that the subject land forms
part of the disposable and alienable lands of the public domain; (2) that the applicant and his predecessors-in-interest have been in
open, continuous, exclusive and notorious possession and occupation of the same; and (3) that it is under a bona fide claim of
ownership since June 12, 1945, or earlier.10 Compliance with the foregoing requirements is indispensable for an application for
registration of land title, under Section 14(1) of P.D. No. 1529, to validly prosper. The absence of any one requisite renders the
application for registration substantially defective.

Anent the first requisite, respondents presented evidence to establish the disposable and alienable character of the subject land
through a survey plan, where on its lower portion, a note stated, among others, as follows: "This survey is inside the alienable and
disposable area as per Project No. 20 LC Map No. 637 certified by the Bureau of Forestry on March 1, 1927. It is outside any civil or
military reservation." The said plan was approved by the DENR, Land Management Services, Regional Office III, San Fernando,
Pampanga on December 3, 1998. The annotation in the survey plan, however, fell short of the requirement of the law in proving its
disposable and alienable character.

In Republic v. Espinosa,11 citing Republic v. Sarmiento12 and Menguito v. Republic,13 the Court reiterated the rule that that a notation
made by a surveyor-geodetic engineer that the property surveyed was alienable and disposable was not the positive government act
that would remove the property from the inalienable domain and neither was it the evidence accepted as sufficient to controvert the
presumption that the property was inalienable. Thus:

To discharge the onus, respondent relies on the blue print Copy of the conversion and subdivision plan approved by the DENR Center
which bears the notation of the surveyor-geodetic engineer that "this survey is inside the alienable and disposable area, Project No. 27-
B. L.C. Map No. 2623, certified on January 3, 1968 by the Bureau of Forestry."

Menguito v. Republic teaches, however, that reliance on such annotation to prove that the lot is alienable is insufficient and does not
constitute incontrovertible evidence to overcome the presumption that it remains part of the inalienable public domain.

"To prove that the land in question formed part of the alienable and disposable lands of the public domain, petitioners relied on the
printed words which read: ‘This survey plan is inside Alienable and Disposable Land Area, Project No. 27-B as per L.C. Map No. 2623,
certified by the Bureau of Forestry on January 3, 1968,’ appearing on Exhibit "E" (Survey Plan No. Swo-13-000227).
This proof is not sufficient. Section 2, Article XII of the 1987 Constitution, provides: "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..."

For the original registration of title, the applicant (petitioners in this case) must overcome the presumption that the land sought to be
registered forms part of the public domain. Unless public land is shown to have been reclassified or alienated to a private person by the
State, it remains part of the inalienable public domain. Indeed, "occupation thereof in the concept of owner, no matter how long, cannot
ripen into ownership and be registered as a title." To overcome such presumption, incontrovertible evidence must be shown by the
applicant. Absent such evidence, the land sought to be registered remains inalienable.

In the present case, petitioners cite a surveyor geodetic engineer’s notation in Exhibit "E" indicating that the survey was inside alienable
and disposable land. Such notation does not constitute a positive government act validly changing the classification of the land in
question. Verily, a mere surveyor has no authority to reclassify lands of the public domain. By relying solely on the said surveyor’s
assertion, petitioners have not sufficiently proven that the land in question has been declared alienable.

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. To overcome this
presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable.
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; or a legislative act or a statute. 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.14

Republic v. T.A.N. Properties, Inc.15 declared that a CENRO certification was insufficient to prove the alienable and disposable
character of the land sought to be registered. The applicant must also show sufficient proof that the DENR Secretary approved the land
classification and released the land in question as alienable and disposable.

Thus, the present rule is that an application for original registration must be accompanied by (1) a CENRO or PENRO Certification; and
(2) a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official
records.16

Here, the only evidence presented by respondents to prove the disposable and alienable character of the subject land was an
annotation by a geodetic engineer in a survey plan. Although this was certified by the DENR, it clearly falls short of the requirements for
original registration.

With regard to the third requisite, it must be shown that the possession and occupation of a parcel of land by the applicant, by himself or
through his predecessors-in-interest, started on June 12, 1945 or earlier.17 A mere showing of possession and occupation for 30 years
or more, by itself, is not sufficient.18

In this regard, respondents likewise failed. As the records and pleadings of this case will reveal, the earliest that respondents and their
predecessor-in-interest can trace back possession and occupation of the subject land was only in the year 1950,when their mother,
Resurreccion, acquired the subject land from the Santoses on October 4, 1950 by virtue of an absolute sale. Evidently, their possession
of the subject property commenced roughly five (5) years beyond June 12, 1945, the reckoning date expressly provided under Section
14(1) of P.D. No. 1529. Thus, their application for registration of land title was legally infirm.

The respondents cannot invoke Section 14 (2) of P.D. No. 1529 which 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: (2) Those who have acquired ownership of private lands by
prescription under the provisions of existing laws.1avvphi1 The case of Malabanan v. Republic19 gives a definitive clarity to the
applicability and scope of original registration proceedings under Section 14(2) of the Property Registration Decree. In the said case,
the Court laid down the following rules:

We synthesize the doctrines laid down in this case, as follows: (2) In complying with Section 14(2) of the Property Registration Decree,
consider that under the Civil Code, prescription is recognized as a mode of acquiring ownership of patrimonial property. However,
public domain lands become only patrimonial property not only with a declaration that these are alienable or disposable. There must
also be an express government manifestation that the property is already patrimonial or no longer retained for public service or the
development of national wealth, under Article 422 of the Civil Code. And only when the property has become patrimonial can the
prescriptive period for the acquisition of property of the public dominion begin to run.

(a) Patrimonial property is private property of the government. The person acquires ownership of patrimonial property by prescription
under the Civil Code is entitled to secure registration thereof under Section 14(2) of the Property Registration Decree.
(b) There are two kinds of prescription by which patrimonial property may be acquired, one ordinary and other extraordinary. Under
ordinary acquisitive prescription, a person acquires ownership of a patrimonial property through possession for at least ten (10) years,
in good faith and with just title. Under extraordinary acquisitive prescription, a person’s uninterrupted adverse possession of patrimonial
property for at least thirty (30) years, regardless of good faith or just title, ripens into ownership.

Accordingly, there must be an express declaration by the State that the public dominion property is no longer intended for public service
or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration,
the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and, thus,
incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be
no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to
run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the
President is duly authorized by law.20

Thus, under Section 14(2) of P.D. No. 1529, for acquisitive prescription to commence and operate against the State, the classification
of land as alienable and disposable alone is not sufficient. The applicant must be able to show that the State, in addition to the said
classification, expressly declared through either a law enacted by Congress or a proclamation issued by the President that the subject
land is no longer retained for public service or the development of the national wealth or that the property has been converted into
patrimonial. Consequently, without an express declaration by the State, the land remains to be a property of public dominion and,
hence, not susceptible to acquisition by virtue of prescription.21 The classification of the subject property as alienable and disposable
land of the public domain does not change its status as property of the public dominion under Article 420(2) of the Civil Code. It is still
insusceptible to acquisition by prescription.22

For the above reasons, the respondents cannot avail of either Section 14 (1) or 14 (2) of P.O. No. 1529. Under Section 14 (1),
respondents failed to prove (a) that the property is alienable and disposable; and (b) that their possession of the property dated back to
June 12, 1945 or earlier. Failing to prove the alienable and disposable nature of the subject land, respondents all the more cannot apply
for registration by way of prescription pursuant to Section 14 (2) which requires possession for 30 years to acquire or take. Not only did
respondents need to prove the classification of the subject land as alienable and disposable, but also to show that it has been
converted into patrimonial. As to whether respondents were able to prove that their possession and occupation were of the character
prescribed by law, the resolution of this issue has been rendered unnecessary by the foregoing considerations.

In fine, the Court holds that the ruling of the CA lacks sufficient factual or legal justification. Hence, the Court is constrained to reverse
the assailed CA decision and resolution and deny the application for registration of land title of respondents.

WHEREFORE, the petition is GRANTED. The November 21, 2007 Decision and the October 8, 2008 Resolution of the Court of
Appeals, in CA-G.R. CV No. 81439, are REVERSED and SET ASIDE. Accordingly, the Application for Registration of Title of
Respondents Corazon C. Sese and Fe C. Sese in Land Registration Case No. 026 is DENIED.

G.R. No. 186639 February 5, 2014

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. EMMANUEL C. CORTEZ, Respondent.

Before this Court is a petition for review on certiorari 1 under Rule 45 of the Rules of Court seeking to annul and set aside the Decision2
dated February 17, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 87505. The CA affirmed the Decision3 dated February 7,
2006 of the Regional Trial Court (RTC) of Pasig City, Branch 68, in LRC Case No. N-11496.

The Facts On February 28, 2003, respondent Emmanuel C. Cortez (Cortez) filed with the RTC an application 4 for judicial confirmation
of title over a parcel of land located at Barangay (Poblacion) Aguho, P. Herrera Street, Pateros, Metro Manila. The said parcel of land
has an area of 110 square meters and more particularly described as Lot No. 2697-B of the Pateros Cadastre. In support of his
application, Cortez submitted, inter alia, the following documents: (1) tax declarations for various years from 1966 until 2005; (2) survey
plan of the property, with the annotation that the property is classified as alienable and disposable; (3) technical description of the
property, with a certification issued by a geodetic engineer; (4) tax clearance certificate; (5) extrajudicial settlement of estate dated
March 21, 1998, conveying the subject property to Cortez; and (6) escritura de particion extrajudicial dated July 19, 1946, allocating the
subject property to Felicisima Cotas – Cortez’ mother.

As there was no opposition, the RTC issued an Order of General Default and Cortez was allowed to present his evidence ex-parte.

Cortez claimed that the subject parcel of land is a portion of Lot No. 2697, which was declared for taxation purposes in the name of his
mother. He alleged that Lot No. 2697 was inherited by his mother from her parents in 1946; that, on March 21, 1998, after his parents
died, he and his siblings executed an Extra-Judicial Settlement of Estate over the properties of their deceased parents and one of the
properties allocated to him was the subject property. He alleged that the subject property had been in the possession of his family since
time immemorial; that the subject parcel of land is not part of the reservation of the Department of Environment and Natural Resources
(DENR) and is, in fact, classified as alienable and disposable by the Bureau of Forest Development (BFD).
Cortez likewise adduced in evidence the testimony of Ernesto Santos, who testified that he has known the family of Cortez for over sixty
(60) years and that Cortez and his predecessors-in-interest have been in possession of the subject property since he came to know
them.

On February 7, 2006, the RTC rendered a Decision, 5 which granted Cortez’ application for registration, viz:

WHEREFORE, finding the application meritorious, the Court DECLARES, CONFIRMS, and ORDERS the registration of the applicant’s
title thereto.

As soon as this Decision shall have become final and after payment of the required fees, let the corresponding Decrees be issued in
the name of the applicant, Emmanuel C. Cortez.

Let copies of this Decision be furnished the Office of the Solicitor General, Land Registration Authority, Land Management Bureau, and
the Registry of Deeds of Rizal.

SO ORDERED.6

In granting Cortez’ application for registration of title to the subject property, the RTC made the following ratiocinations:

From the foregoing, the Court finds that there is sufficient basis to grant the relief prayed for. It having been established by competent
evidence that the possession of the land being applied for by the applicant and his predecessor-in-interest have been in open, actual,
uninterrupted, and adverse possession, under claim of title and in the concept of owners, all within the time prescribed by law, the title
of the applicant should be and must be AFFIRMED and CONFIRMED.7

The Republic of the Philippines (petitioner), represented by the Office of the Solicitor General, appealed to the CA, alleging that the
RTC erred in granting the application for registration despite the failure of Cortez to comply with the requirements for original
registration of title. The petitioner pointed out that, although Cortez declared that he and his predecessors-in-interest were in
possession of the subject parcel of land since time immemorial, no document was ever presented that would establish his
predecessors-in-interest’s possession of the same during the period required by law. That petitioner claimed that Cortez’ assertion that
he and his predecessors-in-interest had been in open, adverse, and continuous possession of the subject property for more than thirty
(30) years does not constitute well-neigh incontrovertible evidence required in land registration cases; that it is a mere claim, which
should not have been given weight by the RTC.

Further, the petitioner alleged that there was no certification from any government agency that the subject property had already been
declared alienable and disposable. As such, the petitioner claims, Cortez’ possession of the subject property, no matter how long,
cannot confer ownership or possessory rights.

On February 17, 2009, the CA, by way of the assailed Decision, 8 dismissed the petitioner’s appeal and affirmed the RTC Decision
dated February 7, 2006. The CA ruled that Cortez was able to prove that the subject property was indeed alienable and disposable, as
evidenced by the declaration/notation from the BFD.

Further, the CA found that Cortez and his predecessors-in-interest had been in open, continuous, and exclusive possession of the
subject property for more than 30 years, which, under Section 14(2) of Presidential Decree (P.D.) No. 1529 9, sufficed to convert it to
private property. Thus:

It has been settled that properties classified as alienable and disposable land may be converted into private property by reason of open,
continuous and exclusive possession of at least 30 years. Such property now falls within the contemplation of "private lands" under
Section 14(2) of PD 1529, over which title by prescription can be acquired. Thus, under the second paragraph of Section 14 of PD
1529, those who are in possession of alienable and disposable land, and whose possession has been characterized as open,
continuous and exclusive for 30 years or more, may have the right to register their title to such land despite the fact that their
possession of the land commenced only after 12 June 1945.

While it is significant to note that applicant-appellee’s possession of the subject property can be traced from his mother’s possession of
the same, the records, indeed, show that his possession of the subject property, following Section 14(2) [of PD 1529], is to be reckoned
from January 3, 1968, when the subject property was declared alienable and disposable and not way back in 1946, the year when he
inherited the same from his mother. At any rate, at the time the application for registration was filed in 2003, there was already sufficient
compliance with the requirement of possession. His possession of the subject property has been characterized as open, continuous,
exclusive and notorious possession and occupation in the concept of an owner. Hence, the instant petition.

The sole issue to be resolved by the Court is whether the CA erred in affirming the RTC Decision dated February 7, 2006, which
granted the application for registration filed by Cortez.

The Court’s Ruling The petition is meritorious.

At the outset, the Court notes that the RTC did not cite any specific provision of law under which authority Cortez’ application for
registration of title to the subject property was granted. In granting the application for registration, the RTC merely stated that "the
possession of the land being applied for by [Cortez] and his predecessor-in-interest have been in open, actual, uninterrupted, and
adverse possession, under claim of title and in the concept of owners, all within the time prescribed by law[.]"11 On the other hand, the
CA assumed that Cortez’ application for registration was based on Section 14(2) of P.D. No. 1529. Nevertheless, Cortez, in the
application for registration he filed with the RTC, proffered that should the subject property not be registrable under Section 14(2) of
P.D. No. 1529, it could still be registered under Section 48(b) of Commonwealth Act No. 141 (C.A. No. 141), or the Public Land Act, as
amended by P.D. No. 107312 in relation to Section 14(1) of P.D. No. 1529. Thus, the Court deems it proper to discuss Cortez’
application for registration of title to the subject property vis-à-vis the provisions of Section 14(1) and (2) of P.D. No. 1529.

Applicants for original registration of title to land must establish compliance with the provisions of Section 14 of P.D. No. 1529, which
pertinently provides that:

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 fide claim of ownership since
June 12, 1945, or earlier.

(2) Those who have acquired ownership of private lands by prescription under the provision of existing laws. After a careful
scrutiny of the records of this case, the Court finds that Cortez failed to comply with the legal requirements for the registration
of the subject property under Section 14(1) and (2) of P.D. No. 1529.

Section 14(1) of P.D. No. 1529 refers to the judicial confirmation of imperfect or incomplete titles to public land acquired under Section
48(b) of C.A. No. 141, as amended by P.D. No. 1073. "Under Section 14(1) [of P.D. No. 1529], applicants for registration of title must
sufficiently establish first, that the subject land forms part of the disposable and alienable lands of the public domain; second, that the
applicant and his predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and occupation of the
same; and third, that it is under a bona fide claim of ownership since June 12, 1945, or earlier." 13

The first requirement was not satisfied in this case. To prove that the subject property forms part of the alienable and disposable lands
of the public domain, Cortez adduced in evidence a survey plan Csd-00-00063314 (conversion-subdivision plan of Lot 2697, MCadm
594-D, Pateros Cadastral Mapping) prepared by Geodetic Engineer Oscar B. Fernandez and certified by the Lands Management
Bureau of the DENR. The said survey plan contained the following annotation:

This survey is inside L.C. Map No. 2623, Project No. 29, classified as alienable & disposable by the Bureau of Forest Development on
Jan. 3, 1968.

However, Cortez’ reliance on the foregoing annotation in the survey plan is amiss; it does not constitute incontrovertible evidence to
overcome the presumption that the subject property remains part of the inalienable public domain. In Republic of the Philippines v. Tri-
Plus Corporation,15 the Court clarified that, the applicant must at the very least submit a certification from the proper government
agency stating that the parcel of land subject of the application for registration is indeed alienable and disposable, viz:

It must be stressed that incontrovertible evidence must be presented to establish that the land subject of the application is alienable or
disposable.

In the present case, the only evidence to prove the character of the subject lands as required by law is the notation appearing in the
Advance Plan stating in effect that the said properties are alienable and disposable. However, this is hardly the kind of proof required by
law. To prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive
act of the government such as a presidential proclamation or an executive order, an administrative action, investigation reports of
Bureau of Lands investigators, and a legislative act or statute. The applicant may also secure a certification from the Government that
the lands applied for are alienable and disposable. In the case at bar, while the Advance Plan bearing the notation was certified by the
Lands Management Services of the DENR, the certification refers only to the technical correctness of the survey plotted in the said plan
and has nothing to do whatsoever with the nature and character of the property surveyed. Respondents failed to submit a certification
from the proper government agency to prove that the lands subject for registration are indeed alienable and disposable.

Similarly, in Republic v. Roche,17 the Court declared that: Respecting the third requirement, the applicant bears the burden of proving
the status of the land. In this connection, the Court has held that he must present a certificate of land classification status issued by the
Community Environment and Natural Resources Office (CENRO) or the Provincial Environment and Natural Resources Office
(PENRO) of the DENR. He must also prove that the DENR Secretary had approved the land classification and released the land as
alienable and disposable, and that it is within the approved area per verification through survey by the CENRO or PENRO. Further, the
applicant must present a copy of the original classification approved by the DENR Secretary and certified as true copy by the legal
custodian of the official records. These facts must be established by the applicant to prove that the land is alienable and disposable.
Here, Roche did not present evidence that the land she applied for has been classified as alienable or disposable land of the public
domain. She submitted only the survey map and technical description of the land which bears no information regarding the land’s
classification. She did not bother to establish the status of the land by any certification from the appropriate government agency. Thus,
it cannot be said that she complied with all requisites for registration of title under Section 14(1) of P.D. 1529.

The annotation in the survey plan presented by Cortez is not the kind of evidence required by law as proof that the subject property
forms part of the alienable and disposable land of the public domain. Cortez failed to present a certification from the proper government
agency as to the classification of the subject property. Cortez likewise failed to present any evidence showing that the DENR Secretary
had indeed classified the subject property as alienable and disposable. Having failed to present any incontrovertible evidence, Cortez’
claim that the subject property forms part of the alienable and disposable lands of the public domain must fail.

Anent the second and third requirements, the Court finds that Cortez likewise failed to establish the same.] Cortez failed to present any
evidence to prove that he and his predecessors-in-interest have been in open, continuous, exclusive, and notorious possession and
occupation of the subject property since June 12, 1945, or earlier. Cortez was only able to present oral and documentary evidence of
his and his mother’s ownership and possession of the subject property since 1946, the year in which his mother supposedly inherited
the same.

Other than his bare claim that his family possessed the subject property since time immemorial, Cortez failed to present any evidence
to show that he and his predecessors-in-interest indeed possessed the subject property prior to 1946; it is a mere claim and not factual
proof of possession. "It is a rule that general statements that are mere conclusions of law and not factual proof of possession are
unavailing and cannot suffice. An applicant in a land registration case cannot just harp on mere conclusions of law to embellish the
application but must impress thereto the facts and circumstances evidencing the alleged ownership and possession of the land." 19

Further, the earliest tax declaration presented by Cortez was only in 1966. Cortez failed to explain why, despite his claim that he and
his predecessors-in-interest have been in possession of the subject property since time immemorial, it was only in 1966 that his
predecessors-in-interest started to declare the same for purposes of taxation.

That Cortez and his predecessors-in-interest have been in possession of the subject property for fifty-seven (57) years at the time he
filed his application for registration in 2003 would likewise not entitle him to registration thereof under Section 14(2) of P.D. No. 1529.

Section 14(2) of P.D. No. 1529 sanctions the original registration of lands acquired by prescription under the provisions of existing laws.
"As Section 14(2) [of P.D. No. 1529] categorically provides, only private properties may be acquired thru prescription and under Articles
420 and 421 of the Civil Code, only those properties, which are not for public use, public service or intended for the development of
national wealth, are considered private." 20

In Heirs of Mario Malabanan v. Republic,21 the Court however clarified that lands of the public domain that are patrimonial in character
are susceptible to acquisitive prescription and, accordingly, eligible for registration under Section 14(2) of P.D. No. 1529, viz:

The Civil Code makes it clear that patrimonial property of the State may be acquired by private persons through prescription. This is
brought about by Article 1113, which states that "[a]ll things which are within the commerce of man are susceptible to prescription," and
that property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription."

There are two modes of prescription through which immovables may be acquired under the Civil Code. The first is ordinary acquisitive
prescription, which, under Article 1117, requires possession in good faith and with just title; and, under Article 1134, is completed
through possession of ten (10) years. There is nothing in the Civil Code that bars a person from acquiring patrimonial property of the
State through ordinary acquisitive prescription, nor is there any apparent reason to impose such a rule. At the same time, there are
indispensable requisites–good faith and just title. The ascertainment of good faith involves the application of Articles 526, 527, and 528,
as well as Article 1127 of the Civil Code, provisions that more or less speak for themselves.

The Court nevertheless emphasized that there must be an official declaration by the State that the public dominion property is no longer
intended for public use, public service, or for the development of national wealth before it can be acquired by prescription; that a mere
declaration by government officials that a land of the public domain is already alienable and disposable would not suffice for purposes
of registration under Section 14(2) of P.D. No. 1529. The Court further stressed that the period of acquisitive prescription would only
begin to run from the time that the State officially declares that the public dominion property is no longer intended for public use, public
service, or for the development of national wealth. Thus:

Let us now explore the effects under the Civil Code of a declaration by the President or any duly authorized government officer of
alienability and disposability of lands of the public domain. Would such lands so declared alienable and disposable be converted, under
the Civil Code, from property of the public dominion into patrimonial property? After all, by connotative definition, alienable and
disposable lands may be the object of the commerce of man; Article 1113 provides that all things within the commerce of man are
susceptible to prescription; and the same provision further provides that patrimonial property of the State may be acquired by
prescription.

Nonetheless, Article 422 of the Civil Code states that "[p]roperty of public dominion, when no longer intended for public use or for public
service, shall form part of the patrimonial property of the State." It is this provision that controls how public dominion property may be
converted into patrimonial property susceptible to acquisition by prescription. After all, Article 420 (2) makes clear that those property
"which belong to the State, without being for public use, and are intended for some public service or for the development of the national
wealth" are public dominion property. For as long as the property belongs to the State, although already classified as alienable or
disposable, it remains property of the public dominion if when it is "intended for some public service or for the development of the
national wealth."

Accordingly, there must be an express declaration by the State that the public dominion property is no longer intended for public service
or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration,
the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus
incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be
no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to
run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the
President is duly authorized by law.

In Republic v. Rizalvo,24 the Court deemed it appropriate to reiterate the ruling in Malabanan, viz:

On this basis, respondent would have been eligible for application for registration because his claim of ownership and possession over
the subject property even exceeds thirty (30) years. However, it is jurisprudentially clear that the thirty (30)-year period of prescription
for purposes of acquiring ownership and registration of public land under Section 14 (2) of P.D. No. 1529 only begins from the moment
the State expressly declares that the public dominion property is no longer intended for public service or the development of the
national wealth or that the property has been converted into patrimonial.

Accordingly, although lands of the public domain that are considered patrimonial may be acquired by prescription under Section 14(2)
of P.D. No. 1529, before acquisitive prescription could commence, the property sought to be registered must not only be classified as
alienable and disposable; it must also be declared by the State that it is no longer intended for public use, public service or the
development of the national wealth. Thus, absent an express declaration by the State, the land remains to be property of public
dominion.26

The Court finds no evidence of any official declaration from the state attesting to the patrimonial character of the subject property.
Cortez failed to prove that acquisitive prescription has begun to run against the State, much less that he has acquired title to the subject
property by virtue thereof. It is of no moment that Cortez and his predecessors-in-interest have been in possession of the subject
property for 57 years at the time he applied for the registration of title thereto. "[l]t is not the notorious, exclusive and uninterrupted
possession and occupation of an alienable and disposable public land for the mandated periods that converts it to patrimonial. The
indispensability of an official declaration that the property is now held by the State in its private capacity or placed within the commerce
of man for prescription to have any effect against the State cannot be overemphasized. " 27

WHEREFORE, in consideration of the foregoing disquisitions, the instant petition is GRANTED. The Decision dated February 17, 2009
of the Court of Appeals in CA-G.R. CV No. 87505, which affirmed the Decision dated February 7, 2006 of the Regional Trial Court of
Pasig City, Branch 68, in LRC Case No. N-11496, is hereby REVERSED and SET ASIDE. The Application for Registration of
Emmanuel C. Cortez in LRC Case No. N-11496 is DENIED for lack of merit.

G.R. No. 192896 July 24, 2013

DREAM VILLAGE NEIGHBORHOOD ASSOCIATION, INC., represented by its Incumbent President, GREG SERIEGO, Petitioner,
vs. BASES DEVELOPMENT AUTHORITY, Respondent.

Before us on Petition for Review1 under Rule 45 of the Rules of Court is the Decision2 dated September 10, 2009 and Resolution3
dated July 13, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 85228 nullifying and setting aside for lack of jurisdiction the
Resolution4 dated April 28, 2004 of the Commission on the Settlement of Land Problems (COSLAP) in COS LAP Case No. 99-500. The
fallo of the assailed COS LAP Resolution reads, as follows:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Declaring the subject property, covering an area of 78,466 square meters, now being occupied by the members of the Dream Village
Neighborhood Association, Inc. to be outside of Swo-00-0001302 BCDA property.
2. In accordance with the tenets of social justice, members of said association are advised to apply for sales patent on their respective
occupied lots with the Land Management Bureau, DENR-NCR, pursuant to R.A. Nos. 274 and 730.
3. Directing the Land Management Bureau-DENR-NCR to process the sales patent application of complainants pursuant to existing
laws and regulation.
4. The peaceful possession of actual occupants be respected by the respondents.

Petitioner Dream Village Neighborhood Association, Inc. (Dream Village) claims to represent more than 2,000 families who have been
occupying a 78,466-square meter lot in Western Bicutan, Taguig City since 1985 "in the concept of owners continuously, exclusively
and notoriously."6 The lot used to be part of the Hacienda de Maricaban (Maricaban), owned by Dolores Casal y Ochoa and registered
under a Torrens title,7 Original Certificate of Title (OCT) No. 291, issued on October 17, 1906 by the Registry of Deeds of Rizal. 8
Maricaban covered several parcels of land with a total area of over 2,544 hectares spread out over Makati, Pasig, Taguig, Pasay, and
Parañaque.9

Following the purchase of Maricaban by the government of the United States of America (USA) early in the American colonial period, to
be converted into the military reservation known as Fort William Mckinley, Transfer Certificate of Title (TCT) No. 192 was issued in the
name of the USA to cancel OCT No. 291.10 The US government later transferred 30 has. of Maricaban to the Manila Railroad
Company, for which TCT No. 192 was cancelled by TCT Nos. 1218 and 1219, the first in the name of the Manila Railroad Company for
30 has., and the second in the name of the USA for the rest of the Maricaban property. 11

On January 29, 1914, TCT No. 1219 was cancelled and replaced by TCT No. 1688, and later that year, on September 15, 1914, TCT
No. 1688 was cancelled and replaced by TCT No. 2288, both times in the name of the USA.12 On December 6, 1956, the USA formally
ceded Fort William Mckinley to the Republic of the Philippines (Republic), and on September 11, 1958, TCT No. 2288 was cancelled
and replaced by TCT No. 61524, this time in the name of the Republic. 13 On July 12, 1957, President Carlos P. Garcia issued
Proclamation No. 423 withdrawing from sale or settlement the tracts of land within Fort William Mckinley, now renamed Fort Bonifacio,
and reserving them for military purposes.14

On January 7, 1986, President Ferdinand E. Marcos issued Proclamation No. 2476 declaring certain portions of Fort Bonifacio
alienable and disposable15 in the manner provided under Republic Act (R.A.) Nos. 274 and 730, in relation to the Public Land Act, 16
thus allowing the sale to the settlers of home lots in Upper Bicutan, Lower Bicutan, Signal Village, and Western Bicutan. 17

On October 16, 1987, President Corazon C. Aquino issued Proclamation No. 172 amending Proclamation No. 2476 by limiting to Lots 1
and 2 of the survey Swo-13-000298 the areas in Western Bicutan open for disposition. 18

On March 13, 1992, R.A. No. 7227 was passed19 creating the Bases Conversion and Development Authority (BCDA) to oversee and
accelerate the conversion of Clark and Subic military reservations and their extension camps (John Hay Station, Wallace Air Station,
O’Donnell Transmitter Station, San Miguel Naval Communications Station and Capas Relay Station) to productive civilian uses. Section
820 of the said law provides that the capital of the BCDA will be provided from sales proceeds or transfers of lots in nine (9) military
camps in Metro Manila, including 723 has. of Fort Bonifacio. The law, thus, expressly authorized the President of the Philippines "to sell
the above lands, in whole or in part, which are hereby declared alienable and disposable pursuant to the provisions of existing laws and
regulations governing sales of government properties," 21 specifically to raise capital for the BCDA. Titles to the camps were transferred
to the BCDA for this purpose,22 and TCT No. 61524 was cancelled on January 3, 1995 by TCT Nos. 23888, 23887, 23886, 22460,
23889, 23890, and 23891, now in the name of the BCDA.23

Excepted from disposition by the BCDA are: a) approximately 148.80 has. reserved for the National Capital Region (NCR) Security
Brigade, Philippine Army officers’ housing area, and Philippine National Police jails and support services (presently known as Camp
Bagong Diwa); b) approximately 99.91 has. in Villamor Air Base for the Presidential Airlift Wing, one squadron of helicopters for the
NCR and respective security units; c) twenty one (21) areas segregated by various presidential proclamations; and d) a proposed 30.15
has. as relocation site for families to be affected by the construction of Circumferential Road 5 and Radial Road 4, provided that the
boundaries and technical description of these exempt areas shall be determined by an actual ground survey. 24

Now charging the BCDA of wrongfully asserting title to Dream Village and unlawfully subjecting its members to summary demolition,
resulting in unrest and tensions among the residents, 25 on November 22, 1999, the latter filed a letter-complaint with the COSLAP to
seek its assistance in the verification survey of the subject 78,466-sq m property, which they claimed is within Lot 1 of Swo-13-000298
and thus is covered by Proclamation No. 172. They claim that they have been occupying the area for thirty (30) years "in the concept of
owners continuously, exclusively and notoriously for several years," and have built their houses of sturdy materials thereon and
introduced paved roads, drainage and recreational and religious facilities. Dream Village, thus, asserts that the lot is not among those
transferred to the BCDA under R.A. No. 7227, and therefore patent applications by the occupants should be processed by the Land
Management Bureau (LMB).

On August 15, 2000, Dream Village formalized its complaint by filing an Amended Petition 26 in the COSLAP. Among the reliefs it sought
were:

d. DECLARING the subject property as alienable and disposable by virtue of applicable laws;

e. Declaring the portion of Lot 1 of subdivision Plan SWO-13-000298, situated in the barrio of Western Bicutan, Taguig, Metro Manila,
which is presently being occupied by herein petitioner as within the coverage of Proclamation Nos. 2476 and 172 and outside the claim
of AFP-RSBS INDUSTRIAL PARK COMPLEX and/or BASES CONVESION DEVELOPMENT AUTHORITY.

f. ORDERING the Land Management Bureau to process the application of the ASSOCIATION members for the purchase of their
respective lots under the provisions of Acts Nos. 274 and 730.

Respondent BCDA in its Answer28 dated November 23, 2000 questioned the jurisdiction of the COSLAP to hear Dream Village’s
complaint, while asserting its title to the subject property pursuant to R.A. No. 7227. It argued that under Executive Order (E.O.) No.
561 which created the COSLAP, its task is merely to coordinate the various government offices and agencies involved in the settlement
of land problems or disputes, adding that BCDA does not fall in the enumeration in Section 3 of E.O. No. 561, it being neither a
pastureland-lease holder, a timber concessionaire, or a government reservation grantee, but the holder of patrimonial government
property which cannot be the subject of a petition for classification, release or subdivision by the occupants of Dream Village.

In its Resolution29 dated April 28, 2004, the COSLAP narrated that it called a mediation conference on March 22, 2001, during which
the parties agreed to have a relocation/verification survey conducted of the subject lot. On April 4, 2001, the COSLAP wrote to the
Department of Environment and Natural Resources (DENR)-Community Environment and Natural Resources Office-NCR requesting
the survey, which would also include Swo-00-0001302, covering the adjacent AFP-RSBS Industrial Park established by Proclamation
No. 1218 on May 8, 1998 as well as the abandoned Circumferential Road 5 (C-5 Road).30

On April 1, 2004, the COSLAP received the final report of the verification survey and a blueprint copy of the survey plan from Atty.
Rizaldy Barcelo, Regional Technical Director for Lands of DENR. Specifically, Item No. 3 of the DENR report states:

3. Lot-1, Swo-000298 is inside Proclamation 172. Dream Village Neighborhood Association, Inc. is outside Lot-1, Swo-13-000298 and
inside Lot-10, 11 & Portion of Lot 13, Swo-00-0001302 with an actual area of 78,466 square meters. Likewise, the area actually is
outside Swo-00-0001302 of BCDA.

COSLAP Ruling On the basis of the DENR’s verification survey report, the COSLAP resolved that Dream Village lies outside of BCDA,
and particularly, outside of Swo-00-0001302, and thus directed the LMB of the DENR to process the applications of Dream Village’s
members for sales patent, noting that in view of the length of time that they "have been openly, continuously and notoriously occupying
the subject property in the concept of an owner, they are qualified to apply for sales patent on their respective occupied lots pursuant to
R.A. Nos. 274 and 730 in relation to the provisions of the Public Land Act.

On the question of its jurisdiction over the complaint, the COSLAP cited the likelihood that the summary eviction by the BCDA of more
than 2,000 families in Dream Village could stir up serious social unrest, and maintained that Section 3(2) of E.O. No. 561 authorizes it
to "assume jurisdiction and resolve land problems or disputes which are critical and explosive in nature considering, for instance, the
large number of parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring
immediate action," even as Section 3(2)(d) of E.O. No. 561 also allows it to take cognizance of "petitions for classification, release
and/or subdivision of lands of the public domain," exactly the ultimate relief sought by Dream Village. Rationalizing that it was created
precisely to provide a more effective mechanism for the expeditious settlement of land problems "in general," the COSLAP invoked as
its authority the 1990 case of Bañaga v. COSLAP,33 where this Court said:

It is true that Executive Order No. 561 provides that the COSLAP may take cognizance of cases which are "critical and explosive in
nature considering, for instance, the large number of parties involved, the presence or emergence of social tension or unrest, or other
similar critical situations requiring immediate action." However, the use of the word "may" does not mean that the COSLAP’s jurisdiction
is merely confined to the above mentioned cases. The provisions of the said Executive Order are clear that the COSLAP was created
as a means of providing a more effective mechanism for the expeditious settlement of land problems in general, which are frequently
the source of conflicts among settlers, landowners and cultural minorities. Besides, the COSLAP merely took over from the abolished
PACLAP whose functions, including its jurisdiction, power and authority to act on, decide and resolve land disputes (Sec. 2, P.D. No.
832) were all assumed by it. The said Executive Order No. 561 containing said provision, being enacted only on September 21, 1979,
cannot affect the exercise of jurisdiction of the PACLAP Provincial Committee of Koronadal on September 20, 1978. Neither can it
affect the decision of the COSLAP which merely affirmed said exercise of jurisdiction. 34

In its Motion for Reconsideration35 filed on May 20, 2004, the BCDA questioned the validity of the survey results since it was conducted
without its representatives present, at the same time denying that it received a notification of the DENR verification survey.36 It
maintained that there is no basis for the COSLAP’s finding that the members of Dream Village were in open, continuous, and adverse
possession in the concept of owner, because not only is the property not among those declared alienable and disposable, but it is a
titled patrimonial property of the State.37

In the Order38 dated June 17, 2004, the COSLAP denied BCDA’s Motion for Reconsideration, insisting that it had due notice of the
verification survey, while also noting that although the BCDA wanted to postpone the verification survey due to its tight schedule, it
actually stalled the survey when it failed to suggest an alternative survey date to ensure its presence.

CA Ruling

On Petition for Review39 to the CA, the BCDA argued that the dispute is outside the jurisdiction of the COSLAP because of the land’s
history of private ownership and because it is registered under an indefeasible Torrens title 40; that Proclamation No. 172 covers only
Lots 1 and 2 of Swo-13-000298 in Western Bicutan, whereas Dream Village occupies Lots 10, 11 and part of 13 of Swo-00-0001302,
which also belongs to the BCDA 41; that the COSLAP resolution is based on an erroneous DENR report stating that Dream Village is
outside of BCDA, because Lots 10, 11, and portion of Lot 13 of Swo-00-0001302 are within the DA42; that the COSLAP was not justified
in ignoring BCDA’s request to postpone the survey to the succeeding year because the presence of its representatives in such an
important verification survey was indispensable for the impartiality of the survey aimed at resolving a highly volatile situation43; that the
COSLAP is a mere coordinating administrative agency with limited jurisdiction44; and, that the present case is not among those
enumerated in Section 3 of E.O. No. 56145.
The COSLAP, on the other hand, maintained that Section 3(2)(e) of E.O. No. 561 provides that it may assume jurisdiction and resolve
land problems or disputes in "other similar land problems of grave urgency and magnitude," 46 and the present case is one such
problem.

The CA in its Decision47 dated September 10, 2009 ruled that the COSLAP has no jurisdiction over the complaint because the question
of whether Dream Village is within the areas declared as available for disposition in Proclamation No. 172 is beyond its competence to
determine, even as the land in dispute has been under a private title since 1906, and presently its title is held by a government agency,
the BCDA, in contrast to the case of Bañaga relied upon by Dream Village, where the disputed land was part of the public domain and
the disputants were applicants for sales patent thereto.

Dream Village’s motion for reconsideration was denied in the appellate court’s Order 48 of July 13, 2010.

Petition for Review in the Supreme Court

On petition for review on certiorari to this Court, Dream Village interposes the following issues:

A IN ANNULLING THE RESOLUTION OF COSLAP IN COSLAP CASE NO. 99-500, THE HONORABLE CA DECIDED THE CASE IN
A MANNER NOT CONSISTENT WITH LAW AND APPLICABLE DECISIONS OF THIS HONORABLE COURT;

B THE HONORABLE CA ERRED IN RULING THAT COSLAP HAD NO JURISDICTION OVER THE CONTROVERSY BETWEEN THE
PARTIES HEREIN.49

The Court’s Ruling We find no merit in the petition. The BCDA holds title to Fort Bonifacio.

That the BCDA has title to Fort Bonifacio has long been decided with finality. In Samahan ng Masang Pilipino sa Makati, Inc. v.
BCDA,50 it was categorically ruled as follows:

First, it is unequivocal that the Philippine Government, and now the BCDA, has title and ownership over Fort Bonifacio. The case of
Acting Registrars of Land Titles and Deeds of Pasay City, Pasig and Makati is final and conclusive on the ownership of the then
Hacienda de Maricaban estate by the Republic of the Philippines. Clearly, the issue on the ownership of the subject lands in Fort
Bonifacio is laid to rest. Other than their view that the USA is still the owner of the subject lots, petitioner has not put forward any claim
of ownership or interest in them.51

The facts in Samahan ng Masang Pilipino sa Makati are essentially not much different from the controversy below. There, 20,000
families were long-time residents occupying 98 has. of Fort Bonifacio in Makati City, who vainly sought to avert their eviction and the
demolition of their houses by the BCDA upon a claim that the land was owned by the USA under TCT No. 2288. The Supreme Court
found that TCT No. 2288 had in fact been cancelled by TCT No. 61524 in the name of the Republic, which title was in turn cancelled on
January 3, 1995 by TCT Nos. 23888, 23887, 23886, 22460, 23889, 23890, and 23891, all in the name of the BCDA. The Court ruled
that the BCDA’s aforesaid titles over Fort Bonifacio are valid, indefeasible and beyond question, since TCT No. 61524 was cancelled in
favor of BCDA pursuant to an explicit authority under R.A. No. 7227, the legal basis for BCDA’s takeover and management of the
subject lots.52

Dream Village sits on the abandoned C-5 Road, which liesoutside the area declared in Proclamation Nos. 2476 and 172 as
alienable and disposable.

Pursuant to Proclamation No. 2476, the following surveys were conducted by the Bureau of Lands to delimit the boundaries of the
areas excluded from the coverage of Proclamation No. 423:

Barangay Survey Plan Date Approved

1. Lower Bicutan SWO-13-000253 October 21, 1986
2. Signal Village SWO-13-000258 May 13, 1986
3. Upper Bicutan SWO-13-000258 May 13, 1986
4. Western Bicutan SWO-13-000298 January 15, 198753

However, the survey plan for Western Bicutan, Swo-13-000298, shows that Lots 3, 4, 5 and 6 thereof are inside the area segregated for
the Libingan ng mga Bayani under Proclamation No. 208, which then leaves only Lots 1 and 2 of Swo-13-000298 as available for
disposition. For this reason, it was necessary to amend Proclamation No. 2476. Thus, in Proclamation No. 172 only Lots 1 and 2 of
Swo-13-000298 are declared alienable and disposable.54

The DENR verification survey report states that Dream Village is not situated in Lot 1 of Swo-13-000298 but actually occupies Lots 10,
11 and part of 13 of Swo-00-0001302: Dream Village is outside Lot1, SWO-13-000298 and inside Lot 10, 11 & portion of Lot 13, SWO-
00-0001302 with an actual area of 78466 square meters. The area is actually is [sic] outside SWO-00-0001302 of BCDA."55
Inexplicably and gratuitously, the DENR also states that the area is outside of BCDA, completely oblivious that the BCDA holds title
over the entire Fort Bonifacio, even as the BCDA asserts that Lots 10, 11 and 13 of SWO-00-0001302 are part of the abandoned right-
of-way of C-5 Road. This area is described as lying north of Lot 1 of Swo-13-000298 and of Lots 3, 4, 5 and 6 of Swo-13-000298
(Western Bicutan) inside the Libingan ng mga Bayani, and the boundary line of Lot 1 mentioned as C-5 Road is really the proposed
alignment of C-5 Road, which was abandoned when, as constructed, it was made to traverse northward into the Libingan ng mga
Bayani. Dream Village has not disputed this assertion.

The mere fact that the original plan for C-5 Road to cross Swo-00-0001302 was abandoned by deviating it northward to traverse the
southern part of Libingan ng mga Bayani does not signify abandonment by the government of the bypassed lots, nor that these lots
would then become alienable and disposable. They remain under the title of the BCDA, even as it is significant that under Section 8(d)
of R.A. No. 7227, a relocation site of 30.5 has. was to be reserved for families affected by the construction of C-5 Road. It is nowhere
claimed that Lots 10, 11 and 13 of Swo-00-0001302 are part of the said relocation site. These lots border C-5 Road in the south,56
making them commercially valuable to BCDA, a farther argument against a claim that the government has abandoned them to Dream
Village.

While property of the State or any of its subdivisions patrimonial in character may be the object of prescription, those
"intended for some public service or for the development of the national wealth" are considered property of public dominion
and therefore not susceptible to acquisition by prescription.

Article 1113 of the Civil Code provides that "property of the State or any of its subdivisions not patrimonial in character shall not be the
object of prescription." Articles 420 and 421 identify what is property of public dominion and what is patrimonial property:

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.

Art. 421. All other property of the State, which is not of the character stated in the preceding article, is patrimonial property.

One question laid before us is whether the area occupied by Dream Village is susceptible of acquisition by prescription. In Heirs of
Mario Malabanan v. Republic,57 it was pointed out that from the moment R.A. No. 7227 was enacted, the subject military lands in Metro
Manila

became alienable and disposable. However, it was also clarified that the said lands did not thereby become patrimonial, since the
BCDA law makes the express reservation that they are to be sold in order to raise funds for the conversion of the former American
bases in Clark and Subic. The Court noted that the purpose of the law can be tied to either "public service" or "the development of
national wealth" under Article 420(2) of the Civil Code, such that the lands remain property of the public dominion, albeit their status is
now alienable and disposable. The Court then explained that it is only upon their sale to a private person or entity as authorized by the
BCDA law that they become private property and cease to be property of the public dominion: 58

For as long as the property belongs to the State, although already classified as alienable or disposable, it remains property of the public
dominion if when it is "intended for some public service or for the development of the national wealth." 59

Thus, under Article 422 of the Civil Code, public domain lands become patrimonial property only if there is a declaration that these are
alienable or disposable, together with an express government manifestation that the property is already patrimonial or no longer
retained for public service or the development of national wealth. Only when the property has become patrimonial can the prescriptive
period for the acquisition of property of the public dominion begin to run. Also under Section 14(2) of Presidential Decree (P.D.) No.
1529, it is provided that before acquisitive prescription can commence, the property sought to be registered must not only be classified
as alienable and disposable, it must also be expressly declared by the State that it is no longer intended for public service or the
development of the national wealth, or that the property has been converted into patrimonial. Absent such an express declaration by the
State, the land remains to be property of public dominion. 60

Since the issuance of Proclamation No. 423 in 1957, vast portions of the former Maricaban have been legally disposed to settlers,
besides those segregated for public or government use. Proclamation No. 1217 (1973) established the Maharlika Village in Bicutan,
Taguig to serve the needs of resident Muslims of Metro Manila; Proclamation No. 2476 (1986), as amended by Proclamation No. 172
(1987), declared more than 400 has. of Maricaban in Upper and Lower Bicutan, Signal Village, and Western Bicutan as alienable and
disposable; Proclamation No. 518 (1990) formally exempted from Proclamation No. 423 the Barangays of Cembo, South Cembo, West
Rembo, East Rembo, Comembo, Pembo and Pitogo, comprising 314 has., and declared them open for disposition.

The above proclamations notwithstanding, Fort Bonifacio remains property of public dominion of the State, because although declared
alienable and disposable, it is reserved for some public service or for the development of the national wealth, in this case, for the
conversion of military reservations in the country to productive civilian uses. 61 Needless to say, the acquisitive prescription asserted by
Dream Village has not even begun to run.
Ownership of a land registered under a Torrens title cannot be lost by prescription or adverse possession.

Dream Village has been unable to dispute BCDA’s claim that Lots 10, 11 and part of 13 of Swo-00-0001302 are the abandoned right-of-
way of C-5 Road, which is within the vast titled territory of Fort Bonifacio. We have already established that these lots have not been
declared alienable and disposable under Proclamation Nos. 2476 or 172.

Moreover, it is a settled rule that lands under a Torrens title cannot be acquired by prescription or adverse possession. 62 Section 47 of
P.D. No. 1529, the Property Registration Decree, expressly provides that no title to registered land in derogation of the title of the
registered owner shall be acquired by prescription or adverse possession. And, although the registered landowner may still lose his
right to recover the possession of his registered property by reason of laches, 63 nowhere has Dream Village alleged or proved laches,
which has been defined as such neglect or omission to assert a right, taken in conjunction with lapse of time and other circumstances
causing prejudice to an adverse party, as will operate as a bar in equity. Put any way, it is a delay in the assertion of a right which works
disadvantage to another because of the inequity founded on some change in the condition or relations of the property or parties. It is
based on public policy which, for the peace of society, ordains that relief will be denied to a stale demand which otherwise could be a
valid claim.64

The subject property having been expressly reserved for a specific public purpose, the COSLAP cannot exercise jurisdiction
over the complaint of the Dream Village settlers.

BCDA has repeatedly asserted that the COSLAP has no jurisdiction to hear Dream Village’s complaint. Concurring, the CA has ruled
that questions as to the physical identity of Dream Village and whether it lies in Lots 10, 11 and 13 of Swo-00-0001302, or whether
Proclamation No. 172 has released the disputed area for disposition are issues which are "manifestly beyond the scope of the
COSLAP’s jurisdiction vis-á-vis Paragraph 2, Section 3 of E.O. No. 561,"65 rendering its Resolution a patent nullity and its
pronouncements void. Thus, the CA said, under Section 3 of E.O. No. 561, the COSLAP’s duty would have been to refer the conflict to
another tribunal or agency of government in view of the serious ramifications of the disputed claims:

In fine, it is apparent that the COSLAP acted outside its jurisdiction in taking cognizance of the case. It would have been more prudent if
the COSLAP has [sic] just referred the controversy to the proper forum in order to fully thresh out the ramifications of the dispute at bar.
As it is, the impugned Resolution is a patent nullity since the tribunal which rendered it lacks jurisdiction. Thus, the pronouncements
contained therein are void. "We have consistently ruled that a judgment for want of jurisdiction is no judgment at all. It cannot be the
source of any right or the creator of any obligation. All acts performed pursuant to it and all claims emanating from it have no legal
effect.

We add that Fort Bonifacio has been reserved for a declared specific public purpose under R.A. No. 7227, which unfortunately for
Dream Village does not encompass the present demands of its members. Indeed, this purpose was the very reason why title to Fort
Bonifacio has been transferred to the BCDA, and it is this very purpose which takes the dispute out of the direct jurisdiction of the
COSLAP. A review of the history of the COSLAP will readily clarify that its jurisdiction is limited to disputes over public lands not
reserved or declared for a public use or purpose.

On July 31, 1970, President Marcos issued E.O. No. 251 creating the Presidential Action Committee on Land Problems (PACLAP) to
expedite and coordinate the investigation and resolution of all kinds of land disputes between settlers, streamline and shorten
administrative procedures, adopt bold and decisive measures to solve land problems, or recommend other solutions. 67 E.O. No. 305,
issued on March 19, 1971, reconstituted the PACLAP and gave it exclusive jurisdiction over all cases involving public lands and other
lands of the public domain,68 as well as adjudicatory powers phrased in broad terms: "To investigate, coordinate, and resolve
expeditiously land disputes, streamline administrative proceedings, and, in general, to adopt bold and decisive measures to solve
problems involving public lands and lands of the public domain."69

On November 27, 1975, P.D. No. 832 reorganized the PACLAP and enlarged its functions and duties. Section 2 thereof even granted it
quasi judicial functions, to wit:

Sec. 2. Functions and duties of the PACLAP. – The PACLAP shall have the following functions and duties:
1. Direct and coordinate the activities, particularly the investigation work, of the various government agencies and agencies involved in
land problems or disputes, and streamline administrative procedures to relieve small settlers and landholders and members of cultural
minorities of the expense and time-consuming delay attendant to the solution of such problems or disputes;
2. Refer for immediate action any land problem or dispute brought to the attention of the PACLAP, to any member agency having
jurisdiction thereof: Provided, That when the Executive Committee decides to act on a case, its resolution, order or decision thereon
shall have the force and effect of a regular administrative resolution, order or decision, and shall be binding upon the parties therein
involved and upon the member agency having jurisdiction thereof;

4. Evolve and implement a system of procedure for the speedy investigation and resolution of land disputes or problems at provincial
level, if possible.

On September 21, 1979, E.O. No. 561 abolished the PACLAP and created the COSLAP to be a more effective administrative body to
provide a mechanism for the expeditious settlement of land problems among small settlers, landowners and members of the cultural
minorities to avoid social unrest.70 Paragraph 2, Section 3 of E.O No. 561 now specifically enumerates the instances when the COSLAP
can exercise its adjudicatory functions:

Sec. 3. Powers and Functions. — The Commission shall have the following powers and functions:
1. Coordinate the activities, particularly the investigation work, of the various government offices and agencies involved in the
settlement of land problems or disputes, and streamline administrative procedures to relieve small settlers and landholders and
members of cultural minorities of the expense and time consuming delay attendant to the solution of such problems or disputes;
2. Refer and follow-up for immediate action by the agency having appropriate jurisdiction any land problem or dispute referred to the
Commission: Provided, That the Commission may, in the following cases, assume jurisdiction and resolve land problems or disputes
which are critical and explosive in nature considering, for instance, the large number of the parties involved, the presence or emergence
of social tension or unrest, or other similar critical situations requiring immediate action:
(a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires;
(b) Between occupants/squatters and government reservation grantees;
(c) Between occupants/squatters and public land claimants or applicants;
(d) Petitions for classification, release and/or subdivision of lands of the public domain; and
(e) Other similar land problems of grave urgency and magnitude.

Citing the constant threat of summary eviction and demolition by the BCDA and the seriousness and urgency of the reliefs sought in its
Amended Petition, Dream Village insists that the COSLAP was justified in assuming jurisdiction of COSLAP Case No. 99-500. But in
Longino v. Atty. General,71 it was held that as an administrative agency, COSLAP’s jurisdiction is limited to cases specifically mentioned
in its enabling statute, E.O. No. 561. The Supreme Court said:

Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction and, as such, could wield only such as are specifically
granted to them by the enabling statutes. .Under the law, E.O. No. 561, the COSLAP has two options in acting on a land dispute or
problem lodged before it, namely, (a) refer the matter to the agency having appropriate jurisdiction for settlement/resolution; or (b)
assume jurisdiction if the matter is one of those enumerated in paragraph 2(a) to (e) of the law, if such case is critical and explosive in
nature, taking into account the large number of the parties involved, the presence or emergence of social tension or unrest, or other
similar critical situations requiring immediate action. In resolving whether to assume jurisdiction over a case or to refer the same to the
particular agency concerned, the COSLAP has to consider the nature or classification of the land involved, the parties to the case, the
nature of the questions raised, and the need for immediate and urgent action thereon to prevent injuries to persons and damage or
destruction to property. The law does not vest jurisdiction on the COSLAP over any land dispute or problem.

The Longino ruling has been consistently cited in subsequent COSLAP cases, among them Davao New Town Development Corp. v.
COSLAP,73 Barranco v. COSLAP,74 NHA v. COSLAP,75 Cayabyab v. de Aquino,76 Ga, Jr. v. Tubungan,77 Machado v. Gatdula,78 and
Vda. de Herrera v. Bernardo.79

Thus, in Machado, it was held that the COSLAP cannot invoke Section 3(2)(e) of E.O. No. 561 to assume jurisdiction over "other similar
land problems of grave urgency," since the statutory construction principle of ejusdem generis prescribes that where general words
follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed
in their widest extent but are to be held as applying only to persons or things of the same kind as those specifically mentioned. 80
Following this rule, COSLAP’s jurisdiction is limited to disputes involving lands in which the government has a proprietary or regulatory
interest,81 or public lands covered with a specific license from the government such as a pasture lease agreements, a timber
concessions, or a reservation grants,82 and where moreover, the dispute is between occupants/squatters and pasture lease agreement
holders or timber concessionaires; between occupants/squatters and government reservation grantees; and between
occupants/squatters and public land claimants or applicants.

In Longino, the parties competed to lease a property of the Philippine National Railways. The high court rejected COSLAP’s jurisdiction,
noting that the disputed lot is not public land, and neither party was a squatter, patent lease agreement holder, government reservation
grantee, public land claimant or occupant, or a member of any cultural minority, nor was the dispute critical and explosive in nature so
as to generate social tension or unrest, or a critical situation which required immediate action. 83

In Davao New Town Development Corp., it was held that the COSLAP has no concurrent jurisdiction with the Department of Agrarian
Reform (DAR) in respect of disputes concerning the implementation of agrarian reform laws, since "the grant of exclusive and primary
jurisdiction over agrarian reform matters on the DAR implies that no other court, tribunal, or agency is authorized to resolve disputes
properly cognizable by the DAR."84 Thus, instead of hearing and resolving the case, COSLAP should have simply referred private
respondents’ complaint to the DAR or DARAB. According to the Court:

The abovementioned proviso Section (3)(2) of E.O. No. 561, which vests COSLAP the power to resolve land disputes, does not confer
upon COSLAP blanket authority to assume every matter referred to it. Its jurisdiction is confined only to disputes over lands in which the
government has proprietary or regulatory interest. Moreover, the land dispute in Bañaga involved parties with conflicting free patent
applications which was within the authority of PACLAP to resolve, unlike that of the instant case which is exclusively cognizable by the
DAR.85

In Barranco, COSLAP issued a writ to demolish structures encroaching into private property. The Supreme court ruled that COSLAP
may resolve only land disputes "involving public lands or lands of the public domain or those covered with a specific license from the
government such as a pasture lease agreement, a timber concession, or a reservation grant." 86
In NHA, it was held that COSLAP has no jurisdiction over a boundary dispute between two local government units, that its decision is
an utter nullity correctible by certiorari, that it can never become final and any writ of execution based on it is void, and all acts
performed pursuant to it and all claims emanating from it have no legal effect. 87

In Cayabyab, it was held that "the jurisdiction of COSLAP does not extend to disputes involving the ownership of private lands, or those
already covered by a certificate of title, as these fall exactly within the jurisdiction of the courts and other administrative agencies."88

In Ga, Jr., it was reiterated that the COSLAP has no jurisdiction over controversies relating to ownership and possession of private
lands, and thus, the failure of respondents to properly appeal from the COSLAP decision before the appropriate court was held not fatal
to the petition for certiorari that they eventually filed with the CA. The latter remedy remained available despite the lapse of the period to
appeal from the void COSLAP decision.89

In Machado, the high court ruled that COSLAP has no jurisdiction in disputes over private lands between private parties, reiterating the
essential rules contained in Section 3 of E.O. No. 561 governing the exercise by COSLAP of its jurisdiction, to wit:

Under these terms, the COSLAP has two different rules in acting on a land dispute or problem lodged before it, e.g., COSLAP can
assume jurisdiction only if the matter is one of those enumerated in paragraph 2(a) to (e) of the law. Otherwise, it should refer the case
to the agency having appropriate jurisdiction for settlement or resolution. In resolving whether to assume jurisdiction over a case or to
refer it to the particular agency concerned, the COSLAP considers: (a) the nature or classification of the land involved; (b) the parties to
the case; (c) the nature of the questions raised; and (d) the need for immediate and urgent action thereon to prevent injury to persons
and damage or destruction to property. The terms of the law clearly do not vest on the COSLAP the general power to assume
jurisdiction over any land dispute or problem. Thus, under EO 561, the instances when the COSLAP may resolve land disputes are
limited only to those involving public lands or those covered by a specific license from the government, such as pasture lease
agreements, timber concessions, or reservation grants.

In Vda. de Herrera, the COSLAP assumed jurisdiction over a complaint for "interference, disturbance, unlawful claim, harassment and
trespassing" over a private parcel of land. The CA ruled that the parties were estopped to question COSLAP’s jurisdiction since they
participated actively in the proceedings. The Supreme Court, noting from the complaint that the case actually involved a claim of title
and possession of private land, ruled that the RTC or the MTC has jurisdiction since the dispute did not fall under Section 3, paragraph
2 (a) to (e) of E.O. No. 561, was not critical and explosive in nature, did not involve a large number of parties, nor was there social
tension or unrest present or emergent.91

In the case at bar, COSLAP has invoked Bañaga to assert its jurisdiction. There, Guillermo Bañaga had filed a free patent application
with the Bureau of Lands over a public land with an area of 30 has. Gregorio Daproza (Daproza) also filed a patent application for the
same property. The opposing claims and protests of the claimants remained unresolved by the Bureau of Lands, and neither did it
conduct an investigation. Daproza wrote to the COSLAP, which then opted to exercise jurisdiction over the controversy. The high court
sustained COSLAP, declaring that its jurisdiction is not confined to the cases mentioned in paragraph 2(a) to (e) of E.O. No. 561, but
includes land problems in general, which are frequently the source of conflicts among settlers, landowners and cultural minorities.

But as the Court has since clarified in Longino and in the other cases aforecited, the land dispute in Bañaga was between private
individuals who were free patent applicants over unregistered public lands. In contrast, the present petition involves land titled to and
managed by a government agency which has been expressly reserved by law for a specific public purpose other than for settlement.
Thus, as we have advised in Longino, the law does not vest jurisdiction on the COSLAP over any land dispute or problem, but it has to
consider the nature or classification of the land involved, the parties to the case, the nature of the questions raised, and the need for
immediate and urgent action thereon to prevent injuries to persons and damage or destruction to property.

WHEREFORE, premises considered, the petition is DENIED.

G.R. No. 191109 July 18, 2012

REPUBLIC OF THE PHILIPPINES, represented by the PHILIPPINE RECLAMATION AUTHORITY (PRA), Petitioner, vs. CITY OF
PARANAQUE, Respondent.

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, on pure questions of law, assailing the
January 8, 2010 Order1 of the Regional Trial Court, Branch 195, Parafiaque City (RTC), which ruled that petitioner Philippine
Reclamation Authority (PRA) is a government-owned and controlled corporation (GOCC), a taxable entity, and, therefore, . not exempt
from payment of real property taxes. The pertinent portion of the said order reads:

In view of the finding of this court that petitioner is not exempt from payment of real property taxes, respondent Parañaque City
Treasurer Liberato M. Carabeo did not act xxx without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
in excess of jurisdiction in issuing the warrants of levy on the subject properties.

WHEREFORE, the instant petition is dismissed. The Motion for Leave to File and Admit Attached Supplemental Petition is denied and
the supplemental petition attached thereto is not admitted.
The Public Estates Authority (PEA) is a government corporation created by virtue of Presidential Decree (P.D.) No. 1084 (Creating the
Public Estates Authority, Defining its Powers and Functions, Providing Funds Therefor and For Other Purposes) which took effect on
February 4,

1977 to provide a coordinated, economical and efficient reclamation of lands, and the administration and operation of lands belonging
to, managed and/or operated by, the government with the object of maximizing their utilization and hastening their development
consistent with public interest.

On February 14, 1979, by virtue of Executive Order (E.O.) No. 525 issued by then President Ferdinand Marcos, PEA was designated
as the agency primarily responsible for integrating, directing and coordinating all reclamation projects for and on behalf of the National
Government.

On October 26, 2004, then President Gloria Macapagal-Arroyo issued E.O. No. 380 transforming PEA into PRA, which shall perform all
the powers and functions of the PEA relating to reclamation activities.

By virtue of its mandate, PRA reclaimed several portions of the foreshore and offshore areas of Manila Bay, including those located in
Parañaque City, and was issued Original Certificates of Title (OCT Nos. 180, 202, 206, 207, 289, 557, and 559) and Transfer
Certificates of Title (TCT Nos. 104628, 7312, 7309, 7311, 9685, and 9686) over the reclaimed lands.

On February 19, 2003, then Parañaque City Treasurer Liberato M. Carabeo (Carabeo) issued Warrants of Levy on PRA’s reclaimed
properties (Central Business Park and Barangay San Dionisio) located in Parañaque City based on the assessment for delinquent real
property taxes made by then Parañaque City Assessor Soledad Medina Cue for tax years 2001 and 2002.

On March 26, 2003, PRA filed a petition for prohibition with prayer for temporary restraining order (TRO) and/or writ of preliminary
injunction against Carabeo before the RTC.

On April 3, 2003, after due hearing, the RTC issued an order denying PRA’s petition for the issuance of a temporary restraining order.

On April 4, 2003, PRA sent a letter to Carabeo requesting the latter not to proceed with the public auction of the subject reclaimed
properties on April 7, 2003. In response, Carabeo sent a letter stating that the public auction could not be deferred because the RTC
had already denied PRA’s TRO application.

On April 25, 2003, the RTC denied PRA’s prayer for the issuance of a writ of preliminary injunction for being moot and academic
considering that the auction sale of the subject properties on April 7, 2003 had already been consummated.

On August 3, 2009, after an exchange of several pleadings and the failure of both parties to arrive at a compromise agreement, PRA
filed a Motion for Leave to File and Admit Attached Supplemental Petition which sought to declare as null and void the assessment for
real property taxes, the levy based on the said assessment, the public auction sale conducted on April 7, 2003, and the Certificates of
Sale issued pursuant to the auction sale.

On January 8, 2010, the RTC rendered its decision dismissing PRA’s petition. In ruling that PRA was not exempt from payment of real
property taxes, the RTC reasoned out that it was a GOCC under Section 3 of P.D. No. 1084. It was organized as a stock corporation
because it had an authorized capital stock divided into no par value shares. In fact, PRA admitted its corporate personality and that said
properties were registered in its name as shown by the certificates of title. Therefore, as a GOCC, local tax exemption is withdrawn by
virtue of Section 193 of Republic Act (R.A.) No. 7160 Local Government Code (LGC) which was the prevailing law in 2001 and 2002
with respect to real property taxation. The RTC also ruled that the tax exemption claimed by PRA under E.O. No. 654 had already been
expressly repealed by R.A. No. 7160 and that PRA failed to comply with the procedural requirements in Section 206 thereof.

Not in conformity, PRA filed this petition for certiorari assailing the January 8, 2010 RTC Order based on the following GROUNDS

THE TRIAL COURT GRAVELY ERRED IN FINDING THAT PETITIONER IS LIABLE TO PAY REAL PROPERTY TAX ON THE
SUBJECT RECLAIMED LANDS CONSIDERING

THAT PETITIONER IS AN INCORPORATED INSTRUMENTALITY OF THE NATIONAL GOVERNMENT AND IS, THEREFORE,
EXEMPT FROM PAYMENT OF REAL PROPERTY TAX UNDER SECTIONS 234(A) AND 133(O) OF REPUBLIC ACT 7160 OR THE
LOCAL GOVERNMENT CODE VIS-À-VIS MANILA INTERNATIONAL AIRPORT AUTHORITY V. COURT OF APPEALS.

II

THE TRIAL COURT GRAVELY ERRED IN FAILING TO CONSIDER THAT RECLAIMED LANDS ARE PART OF THE PUBLIC
DOMAIN AND, HENCE, EXEMPT FROM REAL PROPERTY TAX.
PRA asserts that it is not a GOCC under Section 2(13) of the Introductory Provisions of the Administrative Code. Neither is it a GOCC
under Section 16, Article XII of the 1987 Constitution because it is not required to meet the test of economic viability. Instead, PRA is a
government instrumentality vested with corporate powers and performing an essential public service pursuant to Section 2(10) of the
Introductory Provisions of the Administrative Code. Although it has a capital stock divided into shares, it is not authorized to distribute
dividends and allotment of surplus and profits to its stockholders. Therefore, it may not be classified as a stock corporation because it
lacks the second requisite of a stock corporation which is the distribution of dividends and allotment of surplus and profits to the
stockholders.

It insists that it may not be classified as a non-stock corporation because it has no members and it is not organized for charitable,
religious, educational, professional, cultural, recreational, fraternal, literary, scientific, social, civil service, or similar purposes, like trade,
industry, agriculture and like chambers as provided in Section 88 of the Corporation Code.

Moreover, PRA points out that it was not created to compete in the market place as there was no competing reclamation company
operated by the private sector. Also, while PRA is vested with corporate powers under P.D. No. 1084, such circumstance does not
make it a corporation but merely an incorporated instrumentality and that the mere fact that an incorporated instrumentality of the
National Government holds title to real property does not make said instrumentality a GOCC. Section 48, Chapter 12, Book I of the
Administrative Code of 1987 recognizes a scenario where a piece of land owned by the Republic is titled in the name of a department,
agency or instrumentality.

Thus, PRA insists that, as an incorporated instrumentality of the National Government, it is exempt from payment of real property tax
except when the beneficial use of the real property is granted to a taxable person. PRA claims that based on Section 133(o) of the
LGC, local governments cannot tax the national government which delegate to local governments the power to tax.

It explains that reclaimed lands are part of the public domain, owned by the State, thus, exempt from the payment of real estate taxes.
Reclaimed lands retain their inherent potential as areas for public use or public service. While the subject reclaimed lands are still in its
hands, these lands remain public lands and form part of the public domain. Hence, the assessment of real property taxes made on said
lands, as well as the levy thereon, and the public sale thereof on April 7, 2003, including the issuance of the certificates of sale in favor
of the respondent Parañaque City, are invalid and of no force and effect.

On the other hand, the City of Parañaque (respondent) argues that PRA since its creation consistently represented itself to be a GOCC.
PRA’s very own charter (P.D. No. 1084) declared it to be a GOCC and that it has entered into several thousands of contracts where it
represented itself to be a GOCC. In fact, PRA admitted in its original and amended petitions and pre-trial brief filed with the RTC of
Parañaque City that it was a GOCC.

Respondent further argues that PRA is a stock corporation with an authorized capital stock divided into 3 million no par value shares,
out of which 2 million shares have been subscribed and fully paid up. Section 193 of the LGC of 1991 has withdrawn tax exemption
privileges granted to or presently enjoyed by all persons, whether natural or juridical, including GOCCs.

Hence, since PRA is a GOCC, it is not exempt from the payment of real property tax.

THE COURT’S RULING The Court finds merit in the petition.

Section 2(13) of the Introductory Provisions of the Administrative Code of 1987 defines a GOCC as follows:

SEC. 2. General Terms Defined. – (13) Government-owned or controlled corporation refers to any agency organized as a stock or non-
stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the
Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent
of at least fifty-one (51) percent of its capital stock:

On the other hand, Section 2(10) of the Introductory Provisions of the Administrative Code defines a government "instrumentality" as
follows:

SEC. 2. General Terms Defined. (10) Instrumentality refers to any agency of the National Government, not integrated within the
department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy, usually through a charter.

From the above definitions, it is clear that a GOCC must be "organized as a stock or non-stock corporation" while an instrumentality is
vested by law with corporate powers. Likewise, when the law makes a government instrumentality operationally autonomous, the
instrumentality remains part of the National Government machinery although not integrated with the department framework.

When the law vests in a government instrumentality corporate powers, the instrumentality does not necessarily become a corporation.
Unless the government instrumentality is organized as a stock or non-stock corporation, it remains a government instrumentality
exercising not only governmental but also corporate powers.
Many government instrumentalities are vested with corporate powers but they do not become stock or non-stock corporations, which is
a necessary condition before an agency or instrumentality is deemed a GOCC. Examples are the Mactan International Airport Authority,
the Philippine Ports Authority, the University of the Philippines, and Bangko Sentral ng Pilipinas. All these government instrumentalities
exercise corporate powers but they are not organized as stock or non-stock corporations as required by Section 2(13) of the
Introductory Provisions of the Administrative Code. These government instrumentalities are sometimes loosely called government
corporate entities. They are not, however, GOCCs in the strict sense as understood under the Administrative Code, which is the
governing law defining the legal relationship and status of government entities.2

Correlatively, Section 3 of the Corporation Code defines a stock corporation as one whose "capital stock is divided into shares and
authorized to distribute to the holders of such shares dividends. Section 87 thereof defines a non-stock corporation as "one where no
part of its income is distributable as dividends to its members, trustees or officers." Further, Section 88 provides that non-stock
corporations are "organized for charitable, religious, educational, professional, cultural, recreational, fraternal, literary, scientific, social,
civil service, or similar purposes, like trade, industry, agriculture and like chambers."

Two requisites must concur before one may be classified as a stock corporation, namely: (1) that it has capital stock divided into
shares; and (2) that it is authorized to distribute dividends and allotments of surplus and profits to its stockholders. If only one requisite
is present, it cannot be properly classified as a stock corporation. As for non-stock corporations, they must have members and must not
distribute any part of their income to said members. 3

In the case at bench, PRA is not a GOCC because it is neither a stock nor a non-stock corporation. It cannot be considered as a stock
corporation because although it has a capital stock divided into no par value shares as provided in Section 74 of P.D. No. 1084, it is not
authorized to distribute dividends, surplus allotments or profits to stockholders. There is no provision whatsoever in P.D. No. 1084 or in
any of the subsequent executive issuances pertaining to PRA, particularly, E.O. No. 525, 5 E.O. No. 6546 and EO No. 7987 that
authorizes PRA to distribute dividends, surplus allotments or profits to its stockholders.

PRA cannot be considered a non-stock corporation either because it does not have members. A non-stock corporation must have
members.8 Moreover, it was not organized for any of the purposes mentioned in Section 88 of the Corporation Code. Specifically, it was
created to manage all government reclamation projects.

Furthermore, there is another reason why the PRA cannot be classified as a GOCC. Section 16, Article XII of the 1987 Constitution
provides as follows:

Section 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations.
Government-owned or controlled corporations may be created or established by special charters in the interest of the common good
and subject to the test of economic viability.

The fundamental provision above authorizes Congress to create GOCCs through special charters on two conditions: 1) the GOCC must
be established for the common good; and 2) the GOCC must meet the test of economic viability. In this case, PRA may have passed
the first condition of common good but failed the second one - economic viability. Undoubtedly, the purpose behind the creation of PRA
was not for economic or commercial activities. Neither was it created to compete in the market place considering that there were no
other competing reclamation companies being operated by the private sector. As mentioned earlier, PRA was created essentially to
perform a public service considering that it was primarily responsible for a coordinated, economical and efficient reclamation,
administration and operation of lands belonging to the government with the object of maximizing their utilization and hastening their
development consistent with the public interest. Sections 2 and 4 of P.D. No. 1084 reads, as follows:

Section 2. Declaration of policy. It is the declared policy of the State to provide for a coordinated, economical and efficient reclamation
of lands, and the administration and operation of lands belonging to, managed and/or operated by the government, with the object of
maximizing their utilization and hastening their development consistent with the public interest.

Section 4. Purposes. 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 services as may be necessary for the efficient, economical and beneficial
utilization of the above properties.

The twin requirement of common good and economic viability was lengthily discussed in the case of Manila International Airport
Authority v. Court of Appeals,9 the pertinent portion of which reads:
Third, the government-owned or controlled corporations created through special charters are those that meet the two conditions
prescribed in Section 16, Article XII of the Constitution.

The first condition is that the government-owned or controlled corporation must be established for the common good. The second
condition is that the government-owned or controlled corporation must meet the test of economic viability. Section 16, Article XII of the
1987 Constitution provides:

SEC. 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations.
Government-owned or controlled corporations may be created or established by special charters in the interest of the common good
and subject to the test of economic viability.

The Constitution expressly authorizes the legislature to create "government-owned or controlled corporations" through special charters
only if these entities are required to meet the twin conditions of common good and economic viability. In other words, Congress has no
power to create government-owned or controlled corporations with special charters unless they are made to comply with the two
conditions of common good and economic viability. The test of economic viability applies only to government-owned or controlled
corporations that perform economic or commercial activities and need to compete in the market place. Being essentially economic
vehicles of the State for the common good — meaning for economic development purposes — these government-owned or controlled
corporations with special charters are usually organized as stock corporations just like ordinary private corporations.

In contrast, government instrumentalities vested with corporate powers and performing governmental or public functions need not meet
the test of economic viability. These instrumentalities perform essential public services for the common good, services that every
modern State must provide its citizens. These instrumentalities need not be economically viable since the government may even
subsidize their entire operations. These instrumentalities are not the "government-owned or controlled corporations" referred to in
Section 16, Article XII of the 1987 Constitution.

Thus, the Constitution imposes no limitation when the legislature creates government instrumentalities vested with corporate powers
but performing essential governmental or public functions. Congress has plenary authority to create government instrumentalities
vested with corporate powers provided these instrumentalities perform essential government functions or public services. However,
when the legislature creates through special charters corporations that perform economic or commercial activities, such entities —
known as "government-owned or controlled corporations" — must meet the test of economic viability because they compete in the
market place.

This is the situation of the Land Bank of the Philippines and the Development Bank of the Philippines and similar government-owned or
controlled corporations, which derive their incometo meet operating expenses solely from commercial transactions in competition with
the private sector. The intent of the Constitution is to prevent the creation of government-owned or controlled corporations that cannot
survive on their own in the market place and thus merely drain the public coffers.

Commissioner Blas F. Ople, proponent of the test of economic viability, explained to the Constitutional Commission the purpose of this
test, as follows:

MR. OPLE: Madam President, the reason for this concern is really that when the government creates a corporation, there is a sense in
which this corporation becomes exempt from the test of economic performance. We know what happened in the past. If a government
corporation loses, then it makes its claim upon the taxpayers' money through new equity infusions from the government and what is
always invoked is the common good. That is the reason why this year, out of a budget of P115 billion for the entire government, about
P28 billion of this will go into equity infusions to support a few government financial institutions. And this is all taxpayers' money which
could have been relocated to agrarian reform, to social services like health and education, to augment the salaries of grossly underpaid
public employees. And yet this is all going down the drain.

Therefore, when we insert the phrase "ECONOMIC VIABILITY" together with the "common good," this becomes a restraint on future
enthusiasts for state capitalism to excuse themselves from the responsibility of meeting the market test so that they become viable. And
so, Madam President, I reiterate, for the committee's consideration and I am glad that I am joined in this proposal by Commissioner
Foz, the insertion of the standard of "ECONOMIC VIABILITY OR THE ECONOMIC TEST," together with the common good.

Father Joaquin G. Bernas, a leading member of the Constitutional Commission, explains in his textbook The 1987 Constitution of the
Republic of the Philippines: A Commentary:

The second sentence was added by the 1986 Constitutional Commission. The significant addition, however, is the phrase "in the
interest of the common good and subject to the test of economic viability." The addition includes the ideas that they must show capacity
to function efficiently in business and that they should not go into activities which the private sector can do better. Moreover, economic
viability is more than financial viability but also includes capability to make profit and generate benefits not quantifiable in financial
terms.

Clearly, the test of economic viability does not apply to government entities vested with corporate powers and performing essential
public services. The State is obligated to render essential public services regardless of the economic viability of providing such service.
The non-economic viability of rendering such essential public service does not excuse the State from withholding such essential
services from the public.

However, government-owned or controlled corporations with special charters, organized essentially for economic or commercial
objectives, must meet the test of economic viability. These are the government-owned or controlled corporations that are usually
organized under their special charters as stock corporations, like the Land Bank of the Philippines and the Development Bank of the
Philippines. These are the government-owned or controlled corporations, along with government-owned or controlled corporations
organized under the Corporation Code, that fall under the definition of "government-owned or controlled corporations" in Section 2(10)
of the Administrative Code.

This Court is convinced that PRA is not a GOCC either under Section 2(3) of the Introductory Provisions of the Administrative Code or
under Section 16, Article XII of the 1987 Constitution. The facts, the evidence on record and jurisprudence on the issue support the
position that PRA was not organized either as a stock or a non-stock corporation. Neither was it created by Congress to operate
commercially and compete in the private market. Instead, PRA is a government instrumentality vested with corporate powers and
performing an essential public service pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code. Being an
incorporated government instrumentality, it is exempt from payment of real property tax.

Clearly, respondent has no valid or legal basis in taxing the subject reclaimed lands managed by PRA. On the other hand, Section
234(a) of the LGC, in relation to its Section 133(o), exempts PRA from paying realty taxes and protects it from the taxing powers of
local government units.

Sections 234(a) and 133(o) of the LGC provide, as follows:

SEC. 234. Exemptions from Real Property Tax – The following are exempted from payment of the real property tax:

(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has
been granted, for consideration or otherwise, to a taxable person.

SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. – Unless otherwise provided herein, the exercise of
the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: (o) Taxes, fees or
charges of any kinds on the National Government, its agencies and instrumentalities, and local government units.

It is clear from Section 234 that real property owned by the Republic of the Philippines (the Republic) is exempt from real property tax
unless the beneficial use thereof has been granted to a taxable person. In this case, there is no proof that PRA granted the beneficial
use of the subject reclaimed lands to a taxable entity. There is no showing on record either that PRA leased the subject reclaimed
properties to a private taxable entity.

This exemption should be read in relation to Section 133(o) of the same Code, which prohibits local governments from imposing "taxes,
fees or charges of any kind on the National Government, its agencies and instrumentalities . The Administrative Code allows real
property owned by the Republic to be titled in the name of agencies or instrumentalities of the national government. Such real
properties remain owned by the Republic and continue to be exempt from real estate tax.

Indeed, the Republic grants the beneficial use of its real property to an agency or instrumentality of the national government. This
happens when the title of the real property is transferred to an agency or instrumentality even as the Republic remains the owner of the
real property. Such arrangement does not result in the loss of the tax exemption, unless "the beneficial use thereof has been granted,
for consideration or otherwise, to a taxable person." 10

The rationale behind Section 133(o) has also been explained in the case of the Manila International Airport Authority,11 to wit:

Section 133(o) recognizes the basic principle that local governments cannot tax the national government, which historically merely
delegated to local governments the power to tax. While the 1987 Constitution now includes taxation as one of the powers of local
governments, local governments may only exercise such power "subject to such guidelines and limitations as the Congress may
provide."

When local governments invoke the power to tax on national government instrumentalities, such power is construed strictly against
local governments. The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. Any doubt
whether a person, article or activity is taxable is resolved against taxation. This rule applies with greater force when local governments
seek to tax national government instrumentalities.

Another rule is that a tax exemption is strictly construed against the taxpayer claiming the exemption. However, when Congress grants
an exemption to a national government instrumentality from local taxation, such exemption is construed liberally in favor of the national
government instrumentality. As this Court declared in Maceda v. Macaraig, Jr.:
The reason for the rule does not apply in the case of exemptions running to the benefit of the government itself or its agenc ies. In such
case the practical effect of an exemption is merely to reduce the amount of money that has to be handled by government in the course
of its operations. For these reasons, provisions granting exemptions to government agencies may be construed liberally, in favor of non
tax-liability of such agencies.

There is, moreover, no point in national and local governments taxing each other, unless a sound and compelling policy requires such
transfer of public funds from one government pocket to another.

There is also no reason for local governments to tax national government instrumentalities for rendering essential public services to
inhabitants of local governments. The only exception is when the legislature clearly intended to tax government instrumentalities for the
delivery of essential public services for sound and compelling policy considerations. There must be express language in the law
empowering local governments to tax national government instrumentalities. Any doubt whether such power exists is resolved against
local governments.

Thus, Section 133 of the Local Government Code states that "unless otherwise provided" in the Code, local governments cannot tax
national government instrumentalities. As this Court held in Basco v. Philippine Amusements and Gaming Corporation:

The states have no power by taxation or otherwise, to retard, impede, burden or in any manner control the operation of constitutional
laws enacted by Congress to carry into execution the powers vested in the federal government.

This doctrine emanates from the "supremacy" of the National Government over local governments.

"Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of power on the part of the States to touch, in
that way (taxation) at least, the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be agreed that no
state or political subdivision can regulate a federal instrumentality in such a way as to prevent it from consummating its federal
responsibilities, or even to seriously burden it in the accomplishment of them."

Otherwise, mere creatures of the State can defeat National policies thru extermination of what local authorities may perceive to be
undesirable activities or enterprise using the power to tax as "a tool for regulation."

The power to tax which was called by Justice Marshall as the "power to destroy" cannot be allowed to defeat an instrumentality or
creation of the very entity which has the inherent power to wield it.

The Court agrees with PRA that the subject reclaimed lands are still part of the public domain, owned by the State and, therefore,
exempt from payment of real estate taxes.

Section 2, Article XII of the 1987 Constitution reads in part, as follows:

Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources
shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-
production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum
of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not
more than twenty-five years, and under such terms and conditions as may provided by law. In cases of water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of waterpower, beneficial use may be the measure and limit of the grant.
Similarly, Article 420 of the Civil Code enumerates properties belonging to the State:

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.

Here, the subject lands are reclaimed lands, specifically portions of the foreshore and offshore areas of Manila Bay. As such, these
lands remain public lands and form part of the public domain. In the case of Chavez v. Public Estates Authority and AMARI Coastal
Development Corporation,12 the Court held that foreshore and submerged areas irrefutably belonged to the public domain and were
inalienable unless reclaimed, classified as alienable lands open to disposition and further declared no longer needed for public service.
The fact that alienable lands of the public domain were transferred to the PEA (now PRA) and issued land patents or certificates of title
in PEA’s name did not automatically make such lands private. This Court also held therein that reclaimed lands retained their inherent
potential as areas for public use or public service.

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.13

Likewise, it is worthy to mention Section 14, Chapter 4, Title I, Book III of the Administrative Code of 1987, thus:

SEC 14. Power to Reserve Lands of the Public and Private Dominion of the Government.-

(1)The President shall have the power to reserve for settlement or public use, and for specific public purposes, any of the lands of the
public domain, the use of which is not otherwise directed by law. The reserved land shall thereafter remain subject to the specific public
purpose indicated until otherwise provided by law or proclamation.

Reclaimed lands such as the subject lands in issue are reserved lands for public use. They are properties of public dominion. The
ownership of such lands remains with the State unless they are withdrawn by law or presidential proclamation from public use.

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 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.

As the Court has repeatedly ruled, properties of public dominion are not subject to execution or foreclosure sale.14 Thus, the
assessment, levy and foreclosure made on the subject reclaimed lands by respondent, as well as the issuances of certificates of title in
favor of respondent, are without basis.

WHEREFORE, the petition is GRANTED. The January 8, 2010 Order of the Regional Trial Court, Branch 195, Parañaque City, is
REVERSED and SET ASIDE. All reclaimed properties owned by the Philippine Reclamation Authority are hereby declared EXEMPT
from real estate taxes. All real estate tax assessments, including the final notices of real estate tax delinquencies, issued by the City of
Parañaque on the subject reclaimed properties; the assailed auction sale, dated April 7, 2003; and the Certificates of Sale subsequently
issued by the Parañaque City Treasurer in favor of the City of Parañaque, are all declared VOID.

G.R. Nos. 175806 and 175810 October 20, 2010

MANUEL ALMAGRO joined by his spouse, ELIZABETH ALMAGRO, Petitioners, vs. SALVACION C. KWAN, WILLIAM C. KWAN,
VICTORIA C. KWAN, assisted by her husband, JOSE A. ARBAS, and CECILIA C. KWAN, Respondents.

G.R. No. 175849

Petitioners, vs. WILLIAM C. KWAN, SALVACION C. KWAN, VICTORIA C. KWAN, assisted by her husband, JOSE A. ARBAS, and
CECILIA C. KWAN, Respondents.

MARGARITA PACHORO, DRONICA ORLINA, PIO TUBAT, JR., ANDRES TUBAT, EDUVIGIS KISKIS, ELSA BIÑALBER, NOELA
TUBAT, ELSA TUBAT, and ROGELIO DURAN,

This is a consolidation of two separate petitions for review,1 assailing the 4 April 2006 Decision2 and the 31 October 2006 Resolution3 of
the Court of Appeals in CA-G.R. SP Nos. 71237 and 71437.

This case involves Lot No. 6278-M, a 17,181 square meter parcel of land covered by TCT No. T-11397. Lot No. 6278-M is located at
Maslog, Sibulan, Negros Oriental and is registered in the name of spouses Kwan Chin and Zosima Sarana. Respondents are the
legitimate children of spouses Kwan Chin and Zosima Sarana, who both died intestate on 2 November 1986 and 23 January 1976,
respectively, in Dumaguete City. Upon the death of their parents, respondents inherited Lot No. 6278-M through hereditary succession.

On 18 September 1996, respondents filed with the Municipal Trial Court (MTC) an action for recovery of possession and damages
against spouses Rogelio and Lourdes Duran, spouses Romulo Vinalver and Elsa Vinalver, 4 spouses Marte5 Bati-on and Liz E. Bati-on,
spouses Pablo Deciar and Marlyn Deciar, spouses Salvador Palongpalong and Bienvenida Palongpalong, spouses Sabas Kiskis and
Eduvigis Kiskis, spouses Pio Tubat, Jr. and Encarnita Tubat, spouses Andres Tubat and Leonides Tubat, spouses George Tubat and
Noela Tubat, spouses Dodong Go and Alice Go, spouses Delano Bangay and Maria Bangay, 6 spouses Simeon Pachoro and Margarita
Pachoro, spouses Cepriano7 Tubat and Elsa Tubat, spouses Jovito Remolano and Editha Orlina Remolano, spouses Nelson Miravalles
and Erlene Miravalles, Dronica Orlina,8 Clarita Barot Lara, Conchita Orlina, Antonia Malahay and the Philippine National Police (PNP),9
Agan-an, Sibulan, Negros Oriental. Subsequently, spouses Manuel Almagro and Elizabeth Almagro intervened as successors-in-interest
of spouses Delano Bangay and Maria Bangay.

During pre-trial, the parties agreed to refer the case to the Chief of the Land Management Services Division, PENRO-DENR, Dumaguete
City, to conduct a verification survey of Lot No. 6278-M. When the PENRO personnel failed to conduct the verification survey, the court
and the parties designated Geodetic Engineer Jorge Suasin, Sr. (Engr. Suasin) as joint commissioner to do the task. Engr. Suasin
conducted the verification and relocation survey of Lot No. 6278-M on 12-13 September 2000 in the presence of the parties, some of
their lawyers, and the MTC Clerk of Court. Thereafter, Engr. Suasin submitted a written report with the following findings:

WRITTEN REPORT

Comes now, the undersigned Geodetic Engineer Jorge S. Suasin, Sr., to this Honorable Court, most respectfully submit the following
written report of the verification and relocation survey of the lot 6278-M located at Maslog, Sibulan, Negros Oriental with T.C.T. No. T-
11397 owned by Salvacion G. Kwan, et al.

A. That a big portion of the lot is submerged under the sea and only a small portion remain as dry land.

B. That some of the defendants have constructed their buildings or houses inside the dry land while others have constructed outside or
only a small portion of their buildings or houses are on the said dry land.
The defendants and their buildings or houses are as follows:

1. Sps. Rogelio Duran . . . . . . . . . . . . . . . . . . inside

2. Sps. Romulo Vinalver. . . . . . . . . . . . . . . . inside
3. Sps. Marto Bati-on . . . . . . . . . . . . . . . . . . inside
4. Sps. Salvador Palongpalong . . . . . . . . . . . inside
5. Sps. Pablo Deciar . . . . . . . . . . . . . . . . . . . inside
6. Sps. Sabas Kiskis . . . . . . . . . . . . . . . . . . inside
7. Sps. Pio Tubat, Jr. . . . . . . . . . . . . . . . . . . 2 houses, the first house a portion, and the second one - inside
8. Sps. Andres Tubat . . . . . . . . . . . . . . . . . . inside
9. Sps. George Tubat . . . . . . . . . . . . . . . . . . portion
10. Sps. Dodong Go . . . . . . . . . . . . . . . . . . . inside
11. Sps. Delano Bangay-Almagro . . . . . . . . . portion
12. Sps. Simeon Pachoro . . . . . . . . . . . . . . . inside
13. Sps. Cipriano Tubat . . . . . . . . . . . . . . . . inside
14. Sps. Jovito Remolano . .. . . . . . . . . . . . . inside
15. Sps. Nelson Miravalles . . . . . . . . . . . . . . cottage and house - outside
16. Monica Orlina . . . . . . . . . . . . . . . . . . . cottage inside and house - portion
17. Clarita Barot . . . . . . . . . . . . . . . . . . . . . . outside
18. Conchita Orlina . . . . . . . . . . . . . . . . . . . . outside
19. Antonia Malahay . . . . . . . . . . . . . . . . . . . outside

The verification and relocation survey was executed last September 12-13, 2000 with the presence of both parties and of the Clerk of
Court. The cost of the survey was FIFTEEN THOUSAND PESOS (P15,000) shouldered by the plaintiffs and the defendants equally.

Enclosed are a blue print of the sketch plan and a xerox copy of the land title of the said lot. Respectfully submitted by: (Sgd) JORGE
SUASIN, SR. Geodetic Engineer10

After the court admitted Engr. Suasin's report and the pleadings of the parties, respondents filed a motion for judgment on the pleadings,
which the MTC granted.
In its Judgment dated 11 May 2001, the MTC dismissed the complaint on the ground that the remaining dry portion of Lot No. 6278-M
has become foreshore land and should be returned to the public domain. The MTC explained:

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. "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. The term "foreshore land" clearly does not include submerged lands.

From these definitions, it is safe to conclude that the remaining dry portion of Lot No. 6278-M is now "foreshore land." A big portion of the
said lot is presently underwater or submerged under the sea. When the sea moves towards the estate and the tide invades it, the
invaded property becomes foreshore land and passes to the realm of public domain. The subject land, being foreshore land, should
therefore be returned to the public domain. Besides, Article 420 of the Civil Code provides:Art. 420. The following thin[g]s 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;

Plaintiff cannot use the doctrine of indefeasibility of their Torrens title, as property in question is clearly foreshore land. At the time of its
registration, property was along the shores. In fact, it is bounded by the Tañon Strait on the NW along lines 2-3-4. The property was of
public dominion and should not have been subject of registration. The survey showed that the sea had advanced and the waves
permanently invaded a big portion of the property making the land part of the shore or the beach. The remaining dry land is foreshore
and therefore should be returned to the public domain.11

Respondents appealed to the Regional Trial Court (RTC). The RTC conducted ocular inspections of Lot No. 6278-M on two separate
dates: on 5 October 2001 during low tide and on 15 October 2001 when the high tide registered 1.5 meters. All the parties and their
lawyers were notified before the two ocular inspections were conducted. During the ocular inspections, in which some parties and their
lawyers were present, the RTC observed that the small portion referred to by Engr. Suasin as dry land in his report actually remained dry
even during high tide.12 Thus, the RTC concluded that the disputed remaining portion of Lot No. 6278-M is not foreshore land. The RTC
stated:

It is the Court's considered view that the small portion of plaintiff's property which remains as dry land is not within the scope of the well-
settled definition of foreshore and foreshore land as mentioned above. For one thing, the small dry portion is not adjacent to the sea as
the term adjacent as defined in Webster's Dictionary means "contiguous or touching one another or lying next to." Secondly, the small
dry portion is not alternately wet and dry by the ordinary flow of the tides as it is dry land. Granting, as posited by defendants, that at
certain times of the year, said dry portion is reached by the waves, then that is not anymore caused by the ordinary flow of the tide as
contemplated in the above definition. The Court then finds that the testimony of Engr. Suasin dovetails with the import and meaning of
foreshore and foreshore land as defined above.1avvphil

Anent the case of Republic vs. Court of Appeals, 281 SCRA 639, also cited in the appealed judgment, the same has a different factual
milieu. Said case involves a holder of a free patent on a parcel of land situated at Pinagtalleran, Caluag, Quezon who mortgaged and
leased portions thereof within the prescribed five-year period from the date of issuance of the patent. It was established in said case that
the land subject of the free patent is five (5) to six (6) feet deep under water during high tide and two (2) feet deep at low tide. Such is not
the situation of the "remaining small dry portion" which plaintiffs seek to recover in the case at bar. 13

On 8 January 2002, the RTC rendered its Decision,14 the dispositive portion of which reads:

WHEREFORE, all told and circumspectly considered, the appealed judgment is hereby reversed and set aside insofar as it states that
plaintiffs are not entitled to recover possession of the property in question.

Plaintiffs-appellants have the right to recover possession of the remaining small dry portion of the subject property in question. It is further
ordered to remand this case to the court of origin for the reception of further evidence to determine who among the defendants-appellees
are builders or possessors in good faith and who are not and once determined, to apply accordingly the pertinent laws and jurisprudence
on the matter.

SO ORDERED.15

Petitioners moved for reconsideration, which the RTC denied in its Order16 dated 6 May 2002.

Petitioners filed separate petitions for review with the Court of Appeals, alleging that the disputed portion of Lot No. 6278-M is no longer
private land but has become foreshore land and is now part of the public domain.

The Ruling of the Court of Appeals On 4 April 2006, the Court of Appeals promulgated its decision, affirming with modification the RTC
Decision. The dispositive portion of the Court of Appeals Decision 17 reads:

WHEREFORE, the instant petitions for review are DENIED. And the Decision dated January 8, 2002 of Branch 38 of the Regional Trial
Court of Dumaguete City is hereby AFFIRMED with MODIFICATION as regards the dispositive portion only. Based on the written report
of Geodetic Engr. Suasin categorically indentifying who among herein petitioners are illegally occupying a portion of Lot No. 6278-M, the
following petitioners are ordered to vacate the premises and/or remove the houses and/or cottages constructed on Lot No. 6278-
M within thirty (30) days from finality of judgment, namely: 1)Sps. Rogelio Duran, 2) Sps. Romulo Vinalver, 3) Sps. Marto Bati-on, 4)
Sps. Salvador Palongpalong, 5) Sps. Pablo Deciar, 6) Sps. Sabas Kiskis, 7) Sps. Pio Tubat, Jr. (first house – portion, second house–
inside), 8) Sps. Andres Tubat, 9) George Tubat (portion), 10) Sps. Dodong Go, 11) Sps. Delano Bangay-Almagro (portion), 12) Sps.
Simeon Pachoro, 13) Sps. Cipriano Tubat, 14) Sps. Jovito Remolano and 15) Monica Orlina (cottage–inside and house– portion).

In modifying the RTC Decision, the Court of Appeals explained:

Lastly, the argument that the RTC decision was "vague and indefinite" is utterly bereft of merit. We have found no reversible error in the
appreciation of the facts and in the application of the law by the RTC which will warrant the reversal of the questioned decision. However,
litigation must end and terminate sometime and somewhere, and it is essential to the administration of justice that the issues or causes
therein should be laid to rest. Hence, in keeping with this principle, We modify the assailed decision insofar as the dispositive portion is
concerned. It is our considered view that there is no longer a need to determine who among the petitioners are builders in good faith or
not considering that it has been established in the MTC that they knew all along that the subject lot is a titled property. As such,
petitioners should vacate and/or demolish the houses and/or cottages they constructed on Lot No. 6278-M as stated in the written report
of Geodetic Engineer Jorge S. Suasin, Sr. Remanding this case to the court of origin would not only unduly prolong the resolution of the
issues of this case, but would also subject the parties to unnecessary expenses. Hence, these consolidated petitions.

The Issue The primary issue in this case is whether the disputed portion of Lot No. 6278-M is still private land or has become foreshore
land which forms part of the public domain.

The Ruling of the Court We find the petitions without merit.

Petitioners contend that the disputed portion of Lot No. 6278-M is already foreshore land. In fact, most of them allegedly have foreshore
lease permits from the Department of Environment and Natural Resources (DENR) on the said foreshore land.

However, petitioners failed to present evidence to prove their claim that they are holders of foreshore lease permits from the DENR.
Thus, the RTC Order dated 6 May 2002 stated:

Defendants-appellees have been harping that they have been granted foreshore leases by DENR. However, this is merely lip service
and not supported at all by concrete evidence. Not even an iota of evidence was submitted to the lower court to show that defendants-
appellees herein have been granted foreshore leases. 20

Although the MTC concluded that the subject land is foreshore land, we find such conclusion contrary to the evidence on record.

It is undisputed that the subject land is part of Lot No. 6278-M, which is covered by TCT No. T-11397, registered in the name of
respondents' parents, Kwan Chin and Zosimo Sarana. In fact, as found by the Court of Appeals, even the Provincial Environment and
Natural Resources Officer (PENRO) declared in May 1996 that Lot No. 6278-M is a private property covered by a Torrens Title and that
petitioners should vacate the disputed property or make other arrangements with respondents.21

Furthermore, from the report of Engr. Suasin, the geodetic engineer designated by the court and the parties as joint commissioner to
conduct the survey, it can be clearly gleaned that the contested land is the small portion of dry land of Lot No. 6278-M. Even in his
testimony, Engr. Suasin was adamant in stating that the remaining portion of Lot No. 6278-M is not foreshore because "it is already dry
land" and is "away from the shoreline."22 Because of this apparent contradiction between the evidence and the conclusion of the MTC,
the RTC conducted ocular inspection twice, during low tide and high tide, and observed that the disputed portion of Lot No. 6278-M
actually remained dry land even during high tide. Thus, the RTC concluded that the said land is not foreshore land. On appeal, the Court
of Appeals adopted the findings and conclusion of the RTC that the disputed land is not foreshore land and that it remains as private land
owned by respondents.

We are in accord with the conclusion of the Court of Appeals and the RTC that the disputed land is not foreshore land. To qualify as
foreshore land, it must be shown that the land lies between the high and low water marks and is alternately wet and dry according to the
flow of the tide.23 The land's proximity to the waters alone does not automatically make it a foreshore land. 24

Thus, in Republic of the Philippines v. Lensico,25 the Court held that although the two corners of the subject lot adjoins the sea, the lot
cannot be considered as foreshore land since it has not been proven that the lot was covered by water during high tide.

Similarly in this case, it was clearly proven that the disputed land remained dry even during high tide. Indeed, all the evidence supports
the conclusion that the disputed portion of Lot No. 6278-M is not foreshore land but remains private land owned by respondents.

WHEREFORE, we DENY the petitions. We AFFIRM the 4 April 2006 Decision and the 31 October 2006 Resolution of the Court of
Appeals in CA-G.R. SP Nos. 71237 and 71437.

G.R. No. 156205, November 12, 2014

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE REGIONAL EXECUTIVE DIRECTOR, REGION IV, DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES, Petitioner, v. MARJENS INVESTMENT CORPORATION AND PATROCINIO P.
VILLANUEVA, Respondents.

This petition for review on certiorari seeks to reverse the November 19, 2002 Decision of the Court of Appeals in CA-G.R. SP No.
50023, which dismissed petitioner Republic of the Philippines' petition on the ground that the disputed property had already been
segregated and classified as private property and no longer form part of the public domain.

Background The Court of Appeals gave a short background on the subject property. In Land Registration Case No. 52, G.L.R.O. Rec.
No. 3454, entitled, "Hammon H. Buck, et al. vs. Director of Lands," the then Court of First Instance of Batangas rendered a Decision
dated March 30, 1951 granting the application for registration of several parcels of land in favor of the applicants therein, Hammon H.
Buck, et al.

In the said judgment, it was established that the lands described in Plans Psu-118922 and 114430 were originally owned by Rita Vda.
de Ilustre since 1890. In 1923, the parcels of land applied for were purchased by Donato Punzalan. Later, the lots under Plan Psu-
114430 were purchased from Donato Punzalan by Agustin Canoso and Gregorio Decepeda and in consideration of the survey and
registration thereof, Lots 1 and 2, Plan Psu-114430 were ceded to Hammon H. Buck. This was to become the basis of Hammon H.
Buck's application for registration under Land Registration Case No. 52.

As a consequence of the final and executory decision in Land Registration Case No. 52, Decree No. 6610 was awarded to Hammon H.
Buck which finally led to the issuance in his name of Original Certificate of Title No. 0-669 on February 18, 1952.2

The Facts of the Case On December 22, 1998, or almost 46 years after the issuance of Original Certificate of Title (OCT) No. 0-669,
petitioner Republic, represented by the Region IV Regional Executive Director of the Department of Environment and Natural
Resources (DENR), filed a petition before the Court of Appeals for annulment of judgment, cancellation of title, and reversion against
respondents Marjens Investment Corporation (Marjens) and Patrocinio Villanueva (Villanueva), the Register of Deeds for the Province
of Batangas (Tanauan, Batangas), and the Regional Trial Court of LipaCity.

Petitioner, through the Office of the Solicitor General (OSG), alleges that respondents Marjens and Villanueva appear as registered
owners of a land identified as Lot 1 (LRC) Pcs-943, which is a portion of Lots 1 and 2, plan Psu-114430 LRC (G.L.R.O.) Record No. N-
3454, with an area of five thousand (5,000) square meters, covered by Transfer Certificate of Title (TCT) No. T-18592 issued on April 7,
1976 by the Office of the Register of Deeds of Tanauan, Batangas.

The OSG avers that TCT No. T-18592 appears to have emanated from Original Certificate of Title (OCT) No. 0-669 in the name of
Hammon H. Buck issued by virtue of a Decision5 dated March 30, 1951, rendered in Land Registration Case No. 52, G.L.R.O. Record
No. N-3454 of the Court of First Instance (CFI) of Lipa City, Batangas, Eighth Judicial District.

The OSG further alleges that upon verification through a certification7 dated April 30, 1997 issued by the Community Environment and
Natural Resources Office (CENRO) of the DENR in Batangas City, it was ascertained that the land covered by TCT No. T-18592 is
within the unclassified public forest per Land Classification Control Map No. 10 for the Provinces of Batangas and Cavite.

The OSG argues that the land in question cannot be the subject of disposition or registration, and the trial court did not acquire
jurisdiction over said property, much less to decree the same as private property. Therefore, the registration proceedings, the judgment
in the subject case, the OCT No. O-669 issued pursuant thereto, and all subsequent titles are null and void. The land covered by TCT
No. T-18592, not having been legally registered, remains and forms part of the public domain of the State.
In their comment, respondents deny the OSG's allegations. They claim that their titles, their predecessors' titles, and their mother title
are issued in accordance with law, and that the property was registered and brought under the Torrens system. Respondents contend
that the subject property was already private property even before the Spanish Crown ceded sovereignty over the Philippine Islands to
the United States of America.

Respondents assert that the government has lost its rights by laches and estoppel to question the validity of the OCT No. 0-669, the
proceedings in LRC Case No. 52, G.L.R.O. Record No. N-3454, and the corresponding decree (Decree 6610) issued after almost 50
years have lapsed. They maintain that the proceeding for its registration was made in accordance with the requirements of the law,
including the publication of notices addressed to the Solicitor General, the Director of Lands, and the Director of Forestry, among
others, in the Official Gazette Despite the notices, there was no opposition from the government.

Respondents insist that it will be most unfair and will violate their right to due process if they will again be required to undergo another
trial to establish their long continued, open, public, adverse possession and cultivation of the property in the concept of owners as
against the whole world, now that all their witnesses are long dead, senile, or impossible to locate. They also point out that the subject
property has transferred to various parties who have been regularly assessed and paying realty taxes for several years.

Respondents allege that the government through the Bureau of Lands had presumably issued various free patents over the subject
property that has constrained petitioners to file a petition for annulment based on these free patent titles that overlap with the
respondents' title. They questioned why the government issued free patents over the subject property when it believed that the same is
part of an unclassified public forest. They even suggested to implead the individuals with titles overlapping with their titles for a
complete determination of the issues in the case and to avoid unnecessary and wasteful duplication of valuable time and resources of
the OSG.

To bolster its argument, respondents cited that there are many real estate developments going on near or around the area where the
property is located, one of which is the Splendido Gardens, a resort and golf course. Respondents speculated how the said
developments proceeded if the property covered therein is within the unclassified public forest as the government claims, and that is
assuming all the requisite government approvals have been secured by the developers.

Respondents availed of two modes of discovery, and moved to serve written interrogatories to parties and for the production of
documents.14 The Court of Appeals granted the motions,15 to which the petitioner filed its comments. The Court of Appeals likewise
directed both parties to file their respective memoranda, after which the case was submitted for decision.

The Court of Appeals Decision On November 19, 2002, the Court of Appeals dismissed the petition as follows: IN VIEW OF THE
FOREGOING, the instant petition is ordered DISMISSED. No cost.

The Court of Appeals applied the case of Cariho v. Insular Government of the Philippine Islands,18 which recognized private ownership
of lands already possessed or held by individuals under claim of ownership as far back as testimony or memory goes and therefore
never to have been public land that Spain could bequeath to the United States of America.

Reiterating the CFI Decision, the Court of Appeals held that the subject properties under Plan Psu-114430 were originally owned by
Rita Vda. de Ilustre since 1890 before the Treaty of Paris. Reckoned from such time, under the Cariño ruling, the subject property had
already ceased to be public, had been appropriated into private ownership, and therefore excluded from the "public domain" ceded by
Spain to the United States of America in the Treaty of Paris of 1898.

The Court of Appeals pronounced that the CFI of Batangas is unmistakably equipped with jurisdiction and authority to legally adjudicate
the land applied for in Registration Case No. 52 in favor of the applicants. Consequently, Decree 6610, OCT No. O-669, and TCT No.
T-18592, in respondents' name, must be upheld as valid issuances and documents of title.

Further, the Court of Appeals said that there are still other reasons in rejecting the arguments of the petitioner that the controversial lot
and title in this petition still forms part of the public domain. By its own act and admission in the answer to the written interrogatories,
petitioner confessed to have issued several Environmental Compliance Certificates (ECCs) to projects within Land Classification
Control Map (LCCM) No. 10, although identification is not feasible as the issuance of ECCs began in 1982, pursuant to Presidential
Decree No. 1586 dated June 11, 1978, among others.21 The foregoing admissions militate against petitioner's assertion and cast
serious doubts on what the DENR certification contains. The Court of Appeals said that it is inconceivable how petitioner can claim that
the subject land is an inalienable forest land when it had been alienating it by the numerous grants and decrees it had issued.

The Court of Appeals cited Republic v. Court of Appeals and Cosalan,23 wherein the Court declared that despite the general rule that
forest lands cannot be appropriated by private ownership, it had been previously held that while the government has the right to classify
portions of public land, the primary right of a private individual who possessed and cultivated the land in good faith much prior to such
classification must be recognized and should not be prejudiced by after-events which could not have been anticipated.

Moreover, the Court of Appeals observed that LCCM No. 10 is not dated. Petitioner explained that according to the Land Classification
Department of National Mapping and Resource Information Authority (NAMRIA), LCCM No. 10 is not dated because it is used as a
control map or reference in order to determine which land classification map is to be used. When the lot covered by TCT No. T-18592
was plotted based on the given tie point/line, it is covered by LC Map No. 3013 under the land classification for Batangas. LC Map No.
3013 was certified under Forest Administrative Order No. 4-1656 dated March 15, 1982. The Court of Appeals concluded that long
before LC Map No. 3013 was certified, the subject property covered by TCT No. T-18592 had already acquired the character of a
private ownership before the reclassification of the area to an unclassified forest.

As for respondents' affirmative defenses of estoppel and laches, the Court of Appeals ruled that estoppel and laches run against the
State, citing Republic v. Court of Appeals and Santos, as follows:

The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials or agents. However, like all general
rules, this is also subject to exceptions, viz.:
Estoppels against the public are little favored. They should not be invoked except in ra[r]e and unusual circumstances, and may not be
invoked where they would operate to defeat the effective operation of a policy adopted to protect the public. They must be applied with
circumspection and should be applied only in those special cases where the interests of justice clearly require it. Nevertheless, the
government must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby
thing; and subject to limitations the doctrine of equitable estoppel may be invoked against public authorities as well as against private
individuals.

Unconvinced, the OSG filed this petition for review on certiorari before the Court assigning the following as errors:

1) The Court of Appeals' finding that the property covered by TCT No. T- 18592 had become private property prior to the classification
of the area to an unclassified forest, and

2) The Court of Appeals' ruling that the instant case is an exception to the general rule that laches and estoppel do not run against the
State.

The Court's Ruling The petition is denied.

First Issue: Whether or not the subject property covered by TCT No. T-18592 is a private property or part of the public domain.
The case of Cariño v. Insular Government of the Philippine Islands 27 states that "[prescription is mentioned again in the royal cedula of
October 15, 1754, cited in 3 Philippine, 546; '[w]here such possessors shall not be able to produce title deeds, it shall be sufficient if
they shall show that ancient possession, as a valid title by prescription.' It may be that this means possession from before 1700; but, at
all events, the principle is admitted. As prescription, even against Crown lands, was recognized by the laws of Spain we see no
sufficient reason for hesitating to admit that it was recognized in the Philippines in regard to lands over which Spain had only a paper
sovereignty."

The United States Supreme Court through Mr. Justice Oliver Wendell Holmes pronounced in the Cariño case28 that "every presumption
is and ought to be against the government in a case like the present. It might, perhaps, be proper and sufficient to say that when, as far
back as testimony or memory goes, the land has been held by individuals under a claim of private ownership, it will be presumed to
have been held in the same way from before the Spanish conquest, and never to have been public land."

The records did not categorically state that Rita Vda. de Ilustre had Spanish title over the subject property. But by virtue of her long
continued, open, public, adverse possession and cultivation of the property in the concept of owner as against the whole world she is
deemed to have acquired ownership over the subject property.

As for respondents, it is undisputed that the property covered by TCT No. T-18592 traces its title to the property originally owned by
Rita Vda. de Ilustre since 1890. From her it passed on to several hands until it was transferred to Hammon H. Buck, who successfully
registered it in his name on February 18, 1952. From 1890, respondents' predecessors in interest had been in peaceful, open,
continuous, exclusive, adverse, and notorious possession in the concept of an owner of the subject property including the portion
covered by TCT No. T-18592. Following the Cariño ruling, the subject property had been a private land and excluded from the public
domain since 1890 prior to the signing of the Treaty of Paris on December 10, 1898. Therefore, it is not part of the public domain that
passed on from Spain to the United States of America.

For the same reason, it is also not part of the unclassified public forest as petitioner claims. In Republic v. Court of Appeals and
Cosalan,29 the Court held that "[d]espite the general rule that forest lands cannot be appropriated by private ownership, it has been
previously held that 'while the Government has the right to classify portions of public land, the primary right of a private individual who
possessed and cultivated the land in good faith much prior to such classification must be recognized and should not be prejudiced by
after-events which could not have been anticipated...Government in the first instance 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'"

The map (LC Map No. 3013), which is the basis of petitioner's claim, is inexistent at the time Hammon H. Buck was issued an original
certificate of title. Therefore, the subject property had been a private property before it was classified. Thus, the Court agrees with the
Court of Appeals' findings and upholds the private character of the subject property.

The Court also agrees with the Court of Appeals' observation that petitioner admitted in its answer to the written interrogatories that the
DENR issued several ECCs to projects within LCCM No. 10. The admissions go against petitioner's assertion and cast serious doubts
on what the DENR certification contains. The Court of Appeals said, to which the Court concurs, that it is inconceivable how petitioner
can claim that the subject land is an inalienable forest land when it had been alienating it by the numerous grants and decrees it had
issued. Quoted hereunder are excerpts from petitioner's answer to respondents' written interrogatories.
10. Have you issued any Environmental Clearance Certificate (ECC) for any property or development project of any project situated
within (and/or where any portion of such project is located within) LC Map CM-10 for the Province of Batangas and Cavite mentioned in
Annex "D" of your petition?

ANSWER: Yes.

11. If your answer to the immediately preceding interrogatory is in the affirmative, please identify such ECC and/or the project.

ANSWER: The DENR Region IV had already issued several Environmental Compliance Certificates (ECC) to projects within [the] Land
Classification Control Map (LCCM) 10. Identification of such projects is not feasible considering that the issuance of the ECCs began in
1982 pursuant to Presidential Decree No. 1586 dated June 11, 1978 and the said map covers the two (2) Provinces of Batangas and
Cavite. The issuance of the ECCs in 1982 up to 1992 was previously done by the defunct National Environmental Protection Council
(NEPC), then by the Environmental Management Bureau (EMB) and subsequently, upon the implementation of Executive Order No.
192, the Department of Environment and Natural Resources (DENR) Reorganization Law, it was issued by the DENR-EMB, however,
there were projects within the jurisdiction of the DENR Regional Office and the issuance of the ECCs was devolved to the latter office.

16. Has the government issued any free patents, sales patents, or homestead patents, under the provisions of the Public Land Act (CA
No. 141, as amended), over any property located within (or including within its boundary any portion thereof) the area covered by LC
Map CM-10 for the Province of Batangas and Cavite? ANSWER: Yes.

17. If your answer to the immediately preceding interrogatory is in the affirmative, please identify such free patents, sales patents and
homestead patents.

ANSWER: It is impossible to identify all the patents issued within the area covered by LCCM-10 considering that thousands were
already issued within the Provinces of Cavite and Batangas since the approval of Commonwealth Act No. 141, as amended, otherwise
known as the Public Land Act on November 7, 1936.
From the foregoing, the Court sustains the Court of Appeals' ruling that the CFI of Batangas has jurisdiction and authority to legally
adjudicate the land applied for in Registration Case No. 52 in favor of the applicants. Consequently, Decree 6610, OCT No. 0-669, and
TCT No. T-18592, in respondents' name, must be upheld as valid issuances and documents of title.

Second Issue: Whether or not the government is barred by laches and estoppel.

Laches has been defined as the "failure or neglect for an unreasonable and unexplained length of time to do that which, by observance
of due diligence, could or should have been done earlier. It is negligence or omission to assert a right within a reasonable time,
warranting the presumption that the party entitled to assert his right either has abandoned or declined to assert it."

The following elements must be present in order to constitute laches: (a) conduct on the part of the defendant, or of one under whom he
claims, giving rise to the situation complained of; (b) delay in asserting complainant's rights after he had knowledge of defendant's acts
and after he has had the opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant will assert the right on
which he bases his suit; and (d) injury or prejudice to the defendant in the event the relief is accorded to the complainant.
We find it unnecessary to discuss further this issue in view of our ruling that Decree No. 6610, OCT No. 0-669, and TCT No. T-18592
registered in the name of respondents were validly issued. WHEREFORE, premises considered, the Court of Appeals Decision dated
November 19, 2002 in CA-G.R. SP No. 50023 is AFFIRMED.