Haystack: Laurel v. Garcia (GRs 92013 & 92047, 25 July 1990)

En Banc, Gutierrez, Jr. (J): 5 concur

Facts: The subject Roppongi property is one of the four properties in Japan acquired by the Philippine government under the Reparations Agreement entered into with Japan on 9 May 1956, the other lots being the Nampeidai Property (site of Philippine Embassy Chancery), the Kobe Commercial Property (Commercial lot used as warehouse and parking lot of consulate staff), and the Kobe Residential Property (a vacant residential lot). The properties and the capital goods and services procured from the Japanese government for national development projects are part of the indemnification to the Filipino people for their losses in life and property and their suffering during World War II. The Reparations Agreement provides that reparations valued at $550 million would be payable in 20 years in accordance with annual schedules of procurements to be fixed by the Philippine and Japanese governments (Article 2, Reparations Agreement). RA 1789, the Reparations Law, prescribes the national policy on procurement and utilization of reparations and development loans; those which belong to the government and which may be availed of by private entities. The Roppongi property was acquired from the Japanese government under the Second Year Schedule and listed under the heading "Government Sector", through Reparations Contract 300 dated 27 June 1958. The Roponggi property consists of the land and building "for the Chancery of the Philippine Embassy." As intended, it became the site of the Philippine Embassy until the latter was transferred to Nampeidai on 22 July 1976 when the Roppongi building needed major repairs. Due to the failure of our government to provide necessary funds, the Roppongi property has remained undeveloped since that time.During the incumbency of President Aquino, a proposal was made by former Philippine Ambassador to Japan, Carlos J. Valdez, to lease the subject property to Kajima Corporation, a Japanese firm, in exchange of the construction of 2 buildings in Roppongi, 1 building in Nampeidai, and the renovation of the Philippine Chancery in Nampeidai. The Government did not act favorably to said proposal, but instead, on 11 August 1986, President Aquino created a committee to study the disposition or utilization of Philippine government properties in Tokyo and Kobe though AO-3, and AO 3-A to 3-D. On 25 July 1987, the President issued EO 296 entitling non-Filipino citizens or entities to avail of reparations' capital goods and services in the event of sale, lease or disposition. The four properties in Japan including the Roppongi were specifically mentioned in the first "Whereas" clause. Amidst opposition by various sectors, the Executive branch of the government has been pushing, with great vigor, its decision to sell the reparations properties starting with the Roppongi lot.Two petitions for prohibition were filed seeking to enjoin respondents, their representatives and agents from proceeding with the bidding for the sale of the 3,179 sq. m. of land at 306 Ropponggi, 5-Chome Minato-ku, Tokyo, Japan scheduled on 21 February 1990; the temporary restaining order of which was granted by the court on 20 February 1990. In G.R. No. 92047, a writ of mandamus was prayed for to compel the respondents to fully disclose to the public the basis of their decision to push through with the sale of the Roppongi property inspite of strong public opposition and to explain the proceedings which effectively prevent the participation of Filipino citizens and entities in the bidding process.After multiple motions for extension to file comment by the respondents, the Supreme Court resolved to decide the 2 cases; thereby granting the petitions and enjoining the respondents from proceeding with the sale of the Roppongi property in Tokyo, Japan. The Court also made permanent the 20 February 1990 temporary restaining order.1. Roponggi lot is a property of public dominion

The nature of the Roppongi lot as property for public service is expressly spelled out. It is dictated by the terms of the Reparations Agreement and the corresponding contract of procurement which bind both the Philippine government and the Japanese government, that these were assigned to the government sector and that the Roppongi property itself was specifically designated under the Reparations Agreement to house the Philippine Embassy. There can be no doubt that it is of public dominion unless it is convincingly shown that the property has become patrimonial; which respondents have failed to show.

2. Property of public dominion outside the commerce of man

As property of public dominion, the Roppongi lot is outside the commerce of man. It cannot be alienated. Its ownership is a special collective ownership for general use and enjoyment, an application to the satisfaction of collective needs, and resides in the social group. The purpose is not to serve the State as a juridical person, but the citizens; it is intended for the common and public welfare and cannot be the object of appropriation.3. Pertinent provisions of the Civil Code

Article 419 provides that “property is either of public dominion or of private ownership.” Article 420 provides that property of public dominion includes “(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.” Article 421 provides that

“all other property of the State, which is not of the character stated in the preceding article, is patrimonial property." In the present case, the Roppongi property is correctly classified under paragraph 2 of Article 420 of the Civil Code as property belonging to the State and intended for some public service.4. Conversion to patrimonial property happen if property is withdrawn from public use; Abandonment must be certain and positive act based on correct legal premises

The fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property continues to be part of the public domain, not available for private appropriation or ownership "until there is a formal declaration on the part of the government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]) An abandonment of the intention to use the Roppongi property for public service and to make it patrimonial property under Article 422 of the Civil Code must be definite. Abandonment cannot be inferred from the non-use alone specially if the non-use was attributable not to the government's own deliberate and indubitable will but to a lack of financial support to repair and improve the property (See Heirs of Felino Santiago v. Lazarao, 166 SCRA 368 [1988]). Abandonment must be a certain and positive act based on correct legal premises. In the present case, the recent Administrative Orders authorizing a study of the status and conditions of government properties in Japan were merely directives for investigation but did not in any way signify a clear intention to dispose of the properties. Further EO 296 does not declare that the properties lost their public character, but merely intends to make the properties available to foreigners and not to Filipinos alone in case of a sale, lease or other disposition.5. RA 6657 does not authorize the disposition of Roppongi property as it is outside the commerce of man; EO 296 amended nationality provision for the sale of procurements for the private sector, not the procurements for the government (the latter which includes Roppongi property)

EO 296 is based on the wrong premise or assumption that the Roppongi and the three other properties were earlier converted into alienable real properties. RA 1789 differentiates the procurements for the government sector and the private sector (Sections 2 and 12, RA 1789). Only the private sector properties can be sold to end-users who must be Filipinos or entities owned by Filipinos. It is this nationality provision which was amended by EO 296. Further, Section 63 (c) of RA 6657 (the CARP Law) which provides as one of the sources of funds for its implementation, the proceeds of the disposition of the properties of the Government in foreign countries, did not withdraw the Roppongi property from being classified as one of public dominion when it mentions Philippine properties abroad. Section 63 (c) refers to properties which are alienable and not to those reserved for public use or service. RA 6657, therefore, does not authorize the Executive Department to sell the Roppongi property. It merely enumerates possible sources of future funding to augment (as and when needed) the Agrarian Reform Fund created under EO 299. Obviously any property outside of the commerce of man cannot be tapped as a source of funds.6. Conflict of law rule does not apply when conflict of law situation does not exist

A conflict of law rule cannot apply when no conflict of law situation exists. A conflict of law situation arises only when: (1) There is a dispute over the title or ownership of an immovable, such that the capacity to take and transfer immovables, the formalities of conveyance, the essential validity and effect of the transfer, or the interpretation and effect of a conveyance, are to be determined; and (2) A foreign law on land ownership and its conveyance is asserted to conflict with a domestic law on the same matters. Hence, the need to determine which law should apply. In the present case, none of the above elements exists.7. Issue on the authority of officials to dispose property belonging to state, and not validity of ownership or title, in question; governed by Philippine law

The issues are not concerned with validity of ownership or title. There is no question that the property belongs to the Philippines. The issue is the authority of the respondent officials to validly dispose of property belonging to the State. And the validity of the procedures adopted to effect its sale. This is governed by Philippine Law. The rule of lex situs does not apply.8. Opinion of Secretary of Justice irrelevant; Issue of whether the property can be sold precedes the issue of who can acquire

The assertion that the opinion of the Secretary of Justice sheds light on the relevance of the lex situs rule is misplaced. The opinion does not tackle the alienability of the real properties procured through reparations nor the existence in what body of the authority to sell them. In discussing who are capable of acquiring the lots, the Secretary merely explains that it is the foreign law which should determine who can acquire the properties so that the constitutional limitation on acquisition of lands of the public domain to Filipino citizens and entities wholly owned by Filipinos is inapplicable. There is no need to discuss who can acquire the Roppongi lot when there is no showing that it can be sold.9. Approval of the President of the recommendation of the committee to sell the Roppongi property premature, and without force and effect of law

The subsequent approval on 4 October 1988 by President Aquino of the recommendation by the investigating committee to sell the Roppongi property was premature or, at the very least, conditioned on a valid change in the public character of the Roppongi property. Moreover, the approval does not have the force and effect of law since the President already lost her legislative powers. The Congress had already convened for more than a year.10. There is no law authorizing the conveyance of the Roppongi property; Conveyance must be authorized by law enacted by Congress and requires executive and legislative concurrence

Section 79 (f) of the Revised Administrative Code of 1917 (Conveyances and contracts to which the Government is a party) provides that “in cases in which the Government of the Republic of the Philippines is a party to any deed or other instrument conveying the title to real estate or to any other property the value of which is in excess of P100,000, the respective Department Secretary shall prepare the necessary papers which, together with the proper recommendations, shall be submitted to the Congress of the Philippines for approval by the same. Such deed, instrument, or contract shall be executed and signed by the President of the Philippines on behalf of the Government of the Philippines unless the Government of the Philippines unless the authority therefor be expressly vested by law in another officer." The requirement has been retained in Section 48, Book I of the Administrative Code of 1987 (EO 292; Official authorized to convey real property), which provides that “Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following: (1) for property belonging to and titled in the name of the Republic of the Philippines, by the President, unless the authority therefor is expressly vested by law in another officer; (2) for property belonging to the Republic of the Philippines but titled in the name of any political subdivision or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality." Thus, it is not for the President to convey valuable real property of the government on his or her own sole will. Any such conveyance must be authorized and approved by a law enacted by the Congress. It requires executive and legislative concurrence.11. 1989 case on the Roppongi property: Ojeda v. Bidding Committee; Issue different

The resolution of the Supreme Court in Ojeda v. Bidding Committee, et al., did not pass upon the constitutionality of EO 296 nor did it uphold the authority of the President to sell the Roppongi property. The Court stated that the constitutionality of the executive order was not the real issue and that resolving the constitutional question was "neither necessary nor finally determinative of the case." The Court noted that "[W]hat petitioner ultimately questions is the use of the proceeds of the disposition of the Roppongi property." In emphasizing that "the decision of the Executive to dispose of the Roppongi property to finance the CARP cannot be questioned" in view of Section 63 (c) of RA 6657, the Court did not acknowledge the fact that the property became alienable nor did it indicate that the President was authorized to dispose of the Roppongi property. The resolution should be read to mean that in case the Roppongi property is re-classified to be patrimonial and alienable by authority of law, the proceeds of a sale may be used for national economic development projects including the CARP.12. Constitutional questions raised in the Supreme Court

The Court does not ordinarily pass upon constitutional questions unless these questions are properly raised in appropriate cases and their resolution is necessary for the determination of the case (People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon a constitutional question although properly presented by the record if the case can be disposed of on some other ground such as the application of a statute or general law (Siler v. Louisville and Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v. Pullman Co., 312 U.S. 496 [1941]).13. Value of the Roppongi property; besides economic and financial benefits

The Roppongi property is valuable not so much because of the inflated prices fetched by real property in Tokyo but more so because of its symbolic value to all Filipinos — veterans and civilians alike. The Roppongi property is not just like any piece of property. It was given to the Filipino people in reparation for the lives and blood of Filipinos who died and suffered during the Japanese military occupation, for the suffering of widows and orphans who lost their loved ones and kindred, for the homes and other properties lost by countless Filipinos during the war. The Tokyo properties are a monument to the bravery and sacrifice of the Filipino people in the face of an invader. Roppongi is a reminder that cannot — should not — be dissipated.

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

REPUBLIC OF THE PHILIPPINES, petitioner, vs.

HON. COURT OF APPEALS and ISABEL LASTIMADO, respondents.

Eduardo G. Makalintal for private respondent.

MELENCIO-HERRERA, J.:

This is a Petition for Review (Appeal) by certiorari filed by the Republic of the Philippines from the Decision of the Court of Appeals promulgated on September 30, 1974 in CA-G.R. No. Sp-01504 denying the State's Petition for certiorari and Mandamus.

Briefly, the facts of the case are as follows:

Private respondent, Isabel Lastimado, filed on September 11, 1967, in the Court of First Instance of Bataan, Branch I, a Petition for the reopening of cadastral proceedings over a portion of Lot No. 626 of the Mariveles Cadastre, consisting of 971.0569 hectares, pursuant to Republic Act No. 931, as amended by Republic Act No. 2061, docketed as Cad. Case No. 19, LRC Cad. Rec. No. 1097. In the absence of any opposition, whether from the Government or from private individuals, private respondent was allowed to present her evidence ex-parte. On October 14, 1967, the trial Court rendered a Decision granting the Petition and adjudicating the land in favor of private respondent. The trial Court issued an order for the issuance of a decree of registration on November 20, 1967, and on November 21, 1967, the Land Registration Commission issued Decree No. N-117573 in favor of private respondent. Eventually, Original Certificate of Title No. N-144 was also issued in her favor. Private respondent thereafter subdivided the land into ten lots, and the corresponding titles. Transfer Certificates of Title Nos. 18905 to 18914 inclusive, were issued by the Register of Deeds.

On June 3, 1968, or within one year from the entry of the decree of registration, petitioner filed a Petition for Review pursuant to Sec. 38, Act No. 496, on the ground of fraud alleging that during the period of alleged adverse possession by private respondent, said parcel of land was part of the U.S. Military Reservation in Bataan. which was formally turned over to the Republic of the Philippines only on December 22, 1965, and that the same is inside the public forest of Mariveles, Bataan and, therefore, not subject to disposition or acquisition under the Public Land Law. Respondent field an Opposition thereto, which was considered by the trial Court, as a Motion to Dismiss, and on December 20,1968, said Court (Judge Tito V. Tizon, presiding) issued an Order dismissing the Petition for Review mainly on the ground that the Solicitor General had failed to file opposition to the original Petition for reopening of the cadastral proceedings and was, therefore, estopped from questioning the decree of registration ordered issued therein. On January 28, 1969, petitioner moved for reconsideration, which was denied by the trial Court in its Order dated May 20, 1969, for lack of merit.

Petitioner seasonably filed a Notice of Appeal and a Record on Appeal, which was objected to by private respondent. On July 15, 1972, or three years later, * the trial Court (Judge Abraham P. Vera, presiding) refused to give due course to the appeal. Petitioner filed a Motion for Reconsideration but the trial Court denied it in its Order of October 14, 1972 on the ground that the proper remedy of petitioner was a certiorari petition, not an ordinary appeal, and that the Order sought to be appealed from had long become final and executory as petitioner's Motion for Reconsideration was pro-forma and did not suspend the running of the reglementary period of appeal.

On November 9, 1972, petitioner filed a Petition for certiorari and mandamus with the Court of Appeals claiming that the trial Court gravely abused its discretion, amounting to lack of jurisdiction when, without the benefit of hearing, it summarily dismissed the Petition for Review; and since said Petition raised certain issues of fact which cannot be decided except in a trial on the merits, the dismissal of the Petition on the basis of private respondent's Opposition, considered as a Motion to Dismiss, constituted a denial of due process of law. Petitioner then prayed that the Order of the trial Court, dated December 20, 1968 dismissing the Petition for Review, be declared null and void, and that said trial Court be directed to give due course to the Petition for Review; or, in the alternative, to give due course to petitioner's appeal.

On September 30, 1974, the Court of Appeals upheld the trial Court's dismissal of the Petition for

Review stating:

... We cannot find any allegation in the petition for review which shows that private respondent had committed fraud against petitioner. Its representations and officials were duly notified of private respondent's petition for reopening and registration of title in her name. In said petition, the technical descriptions of the portion of Lot No. 626 of the Mariveles (Bataan) Cadastre, subject-matter of the petition were expressly stated, the boundaries, specifically delineated. The alleged ground that the land forms part of a forest land exists at the time petitioner was duly notified of said petition. Failure to file opposition is in effect, an admission that the petition is actually not part of a forest land. Indubitably, therefore, no justifiable reason exists for the annulment of the Order, dated December 20, 1968 (Annex D-Petition) of the lower court dismissing herein petitioner's petition for review of the decree issued in favor of private

respondent Lastimado. 1

The Court of Appeals then disposed as follows:

WHEREFORE, finding that the respondent Judge has not committed any grave abuse of discretion amounting to lack of jurisdiction in the issuance of an Order, dated December 20, 1968 (Annex D-Petition) dismissing herein petitioner's petition for review, the present petition for review is hereby denied.

The issuance of the writ of mandamus as prayed for in the petition is no longer necessary as this Court, in the exercise of its appellate jurisdiction and authority to supervise orderly administration of justice, has already resolved on the merits the question whether or not the dismissal of the petition for review had been done with

grave abuse of discretion amounting to lack of jurisdiction. 2

From this Decision, petitioner filed the present Petition for Review (Appeal) by certiorari assigning the following errors to the Court of Appeals and to the trial Court:

1. The Lower Court as well as the Court of Appeals erred in finding that there can be possession, even for the purpose of claiming title, of land which at the time of possession is subject to a military reservation.

2. The Lower Court as well as the Court of Appeals erred in finding that such land which is subject to a government reservation, may appropriately be the subject of cadastral proceedings, and hence. also of a petition to reopen cadastral proceedings.

3. The Lower Court as well as the Court of Appeals erred in finding that a parcel of land which is part of the public forest is susceptible of occupation and registration in favor of private individual.

4. The Lower Court as well as the Court of Appeals erred in not finding that the Republic of the Philippines is not estopped from questioning the decree of registration and the title issued pursuant thereto in favor of respondent Lastimado over the parcel of land in question.

5. The Lower Court erred in dismissing the petition for review of the Republic of the Philippines.

6. The Court of Appeals erred in denying Petitioner's petition for certiorari and mandamus.

Section 38 of the Land Registration Act (Act 496) provides:

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

If the court after hearing finds that the applicant or adverse claimant has title as stated in his application or adverse claim and proper for registration, a decree of confirmation and registration shall be entered. Every decree of registration shall bind the land, and quiet title thereto. subject only to the exceptions stated in the following section. It shall be conclusive upon and against all persons, including the Insular Government and all the branches thereof, whether mentioned by name in the application, notice of citation, or included in the general description "To all whom it may concern". Such decree shall

not be opened by reason of the absence, infancy, or other disability of any person affect thereby, nor by any proceeding in any court for reversing judgments or decrees; subject, however, to the right of any person deprived of land or of any estate or interest therein by decree of registration obtained by fraud to file in the competent Court of First Instance a petition for review within one year after entry of the decree provided

no innocent purchaser for value has acquired an interest. ... 3

The essential elements for the allowance of the reopening or review of a decree are: a) that the petitioner has a real and dominical right; b) that he has been deprived thereof; c) through fraud; d) that the petition is filed within one year from the issuance of the decree; and e) that the property

has not as yet been transferred to an innocent purchaser. 4

However, for fraud to justify the review of a decree, it must be extrinsic or collateral and the facts upon which it is based have not been controverted or resolved in the case where the judgment

sought to be annulled was rendered. 5 The following ruling spells out the difference between extrinsic and intrinsic fraud:

Extrinsic or collateral fraud, as distinguished from intrinsic fraud, connotes any fraudulent scheme executed by a prevailing litigant "outside the trial of a case against the defeated party, or his agents, attorneys or witnesses, whereby said defeated party is prevented from presenting fully and fairly his side of the case." But intrinsic fraud takes the form of "acts of a party in a litigation during the trial such as the use of forged instruments or perjured testimony, which did not affect the present action of the

case, but did prevent a fair and just determination of the case. 6

The fraud is one that affects and goes into the jurisdiction of the Court. 7

In its Petition for Review filed before the trial Court, petitioner alleged that fraud was committed by private respondent when she misrepresented that she and her predecessors-in-interest had been in possession of the land publicly, peacefully, exclusively and adversely against the whole world as owner for more than forty years when, in fact, the subject land was in. side the former U.S. Military Reservation, which was formally turned over to the Republic of the Philippines only on December 22, 1965, and that she likewise contended that her rights, as derived from the original and primitive occupants of the land in question, are capable of judicial confirmation under existing laws, when the truth is, said parcel of land is within the public forest of Mariveles, Bataan, and is not subject to disposition or acquisition by private persons under the Public Land Law.

The trial Court ruled, and was upheld by the Court of Appeals, that no fraud was committed by private respondent, which deprived petitioner of its day in Court as there was no showing that she was aware of the facts alleged by the Government, so that she could not have suppressed them with intent to deceive. The trial Court also noted that petitioner had failed to file an opposition to the reopening of the cadastral proceedings despite notices sent not only to the Solicitor General as required by Republic Act No. 931. but to the Bureau of Lands and the Bureau of Forestry as well. It then concluded that "the remedy granted by section 38 of the Land Registration Act is designed to give relief to victims of fraud, not to those who are victims of their own neglect, inaction or carelessness, especially when no attempt is ever made to excuse or justify the neglect." With the foregoing as the essential basis, the trial Court dismissed the Petition for Review.

We find reversible error. Although there was an agreement by the parties to submit for resolution the Opposition to the Petition for Review, which was treated as a motion to dismiss, the trial Court, in the exercise of sound judicial discretion, should not have dismissed the Petition outright but should have afforded petitioner an opportunity to present evidence in support of the facts alleged to constitute actual and extrinsic fraud committed by private respondent. Thus, in the case of Republic

vs. Sioson, et al., 8 it was held that "the action of the lower Court in denying the petition for review of a decree of registration filed within one year from entry of the d without hearing the evidence in support of the allegation and claim that actual and extrinsic fraud upon which the petition is predicated, is held to be in error, because the lower Court should have afforded the petitioner an opportunity to prove it."

If the allegation of petitioner that the land in question was inside the military reservation at the time

it was claimed is true, then, it cannot be the object of any cadastral p nor can it be the object of

reopening under Republic Act No. 931. 9 Similarly, if the land in question, indeed forms part of the public forest, then, possession thereof, however long, cannot convert it into private property as it is within the exclusive jurisdiction of the Bureau of Forestry and beyond the power and jurisdiction of

the Cadastral Court to register under the Torrens System. 10

Even assuming that the government agencies can be faulted for inaction and neglect (although the Solicitor General claims that it received no notice), yet, the same cannot operate to bar action by the

State as it cannot be estopped by the mistake or error of its officials or agents. 11 Further, we cannot lose sight of the cardinal consideration that "the State as persona in law is the juridical entity, which is the source of any asserted right to ownership in land" under basic Constitutional

Precepts, and that it is moreover charged with the conservation of such patrimony. 12

WHEREFORE, the Decision of the Court of Appeals dated September 30, 1974, dismissing the Petition for certiorari and mandamus filed before it, as well as the Order of the Court of First Instance of Bataan (Branch I) dated December 20, 1968, dismissing the Petition for Review, are hereby set aside and the records of this case hereby ed to the latter Court for further proceedings to enable petitioner to present evidence in support of its Petition for Review.

No pronouncement as to costs.

SO ORDERED.

G.R. No. L-32266 February 27, 1989

THE DIRECTOR OF FORESTRY, petitioner vs.

RUPERTO A. VILLAREAL, respondent.

The Solicitor General for petitioner.

Quasha, Asperilla, Ancheta, Valmonte, Pena & Marcos for respondents.

CRUZ, J.:

The basic question before the Court is the legal classification of mangrove swamps, or manglares, as they are commonly known. If they are part of our public forest lands, they are not alienable under the Constitution. If they are considered public agricultural lands, they may be acquired under private ownership. The private respondent's claim to the land in question must be judged by these criteria.

The said land consists of 178,113 square meters of mangrove swamps located in the municipality of Sapian, Capiz. Ruperto Villareal applied for its registration on January 25, 1949, alleging that he and his predecessors-in-interest had been in possession of the land for more than forty years. He was opposed by several persons, including the petitioner on behalf of the Republic of the Philippines.

After trial, the application was approved by the Court of First Instance. of Capiz. 1 The decision was

affirmed by the Court of Appeals. 2 The Director of Forestry then came to this Court in a petition for review on certiorari claiming that the land in dispute was forestal in nature and not subject to private appropriation. He asks that the registration be reversed.

It should be stressed at the outset that both the petitioner and the private respondent agree that the land is mangrove land. There is no dispute as to this. The bone of contention between the parties is the legal nature of mangrove swamps or manglares. The petitioner claims, it is forestal and therefore not disposable and the private respondent insists it is alienable as agricultural land. The issue before us is legal, not factual.

For a proper background of this case, we have to go back to the Philippine Bill of 1902, one of the earlier American organic acts in the country. By this law, lands of the public domain in the Philippine Islands were classified into three grand divisions, to wit, agricultural, mineral and timber or forest lands. This classification was maintained in the Constitution of the Commonwealth, promulgated in 1935, until it was superseded by the Constitution of 1973. That new charter expanded the classification of public lands to include industrial or commercial, residential, resettlement, and

grazing lands and even permitted the legislature to provide for other categories. 3 This provision

has been reproduced, but with substantial modifications, in the present Constitution. 4

Under the Commonwealth Constitution, which was the charter in force when this case arose, only

agricultural lands were allowed to be alienated. 5 Their disposition was provided for under C.A. No. 141. Mineral and timber or forest lands were not subject to private ownership unless they were first reclassified as agricultural lands and so released for alienation.

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

... mud flats, alternately washed and exposed by the tide, in which grows various kindred plants which will not live except when watered by the sea, extending their roots deep into the mud and casting their seeds, which also germinate there. These constitute the mangrove flats of the tropics, which exist naturally, but which are also, to some extent cultivated by man for the sake of the combustible wood of the mangrove and like trees as well as for the useful nipa palm propagated thereon. Although these flats are literally tidal lands, yet we are of the opinion that they cannot be so regarded in the sense in which that term is used in the cases cited or in general American jurisprudence. The waters flowing over them are not available for purpose of navigation, and they may be disposed of without impairment of the public interest in what remains.

x x x

Under this uncertain and somewhat unsatisfactory condition of the law, the custom had grown of converting manglares and nipa lands into fisheries which became a common feature of settlement along the coast and at the same time of the change of sovereignty constituted one of the most productive industries of the Islands, the abrogation of which would destroy vested interests and prove a public disaster.

Mangrove swamps were thus considered agricultural lands and so susceptible of private ownership.

Subsequently, the Philippine Legislature categorically declared, despite the above-cited case, that mangrove swamps form part of the public forests of this country. This it did in the Administrative Code of 1917, which became effective on October 1 of that year, thus:

Section 1820. Words and phrase defined. - For the purpose of this chapter 'public forest' includes, except as otherwise specially indicated, all unreserved public land, including nipa and mangrove swamps, and all forest reserves of whatever character.

It is noteworthy, though, that notwithstanding this definition, the Court maintained the doctrine in

the Montano case when two years later it held in the case of Jocson v. Director of Forestry: 7

...the words timber land are always translated in the Spanish translation of that Act (Act of Congress) as terrenos forestales. We think there is an error in this translation and that a better translation would be 'terrenos madereros.' Lumber land in English means land with trees growing on it. The mangler plant would never be called a tree in English but a bush, and land which has only bushes, shrubs or aquatic plants growing on it cannot be called 'timber land.

xxx xxx xxx

The fact that there are a few trees growing in a manglare or nipa swamps does not change the general character of the land from manglare to timber land.

More to the point, addressing itself directly to above-quoted Section 1820, the Court declared:

'In the case of Mapa vs. Insular Government (10 Phil. Rep., 175), this Court said that the phrase agricultural lands as used in Act No. 926 means those public lands acquired from Spain which are not timber or mineral lands.

Whatever may have been the meaning of the term 'forestry' under the Spanish law, the Act of Congress of July 1st 1902, classifies the public lands in the Philippine Islands as timber, mineral or agricultural lands, and all public lands that are not timber or mineral lands are necessarily agricultural public lands, whether they are used as nipa swamps, manglares, fisheries or ordinary farm lands.

The definition of forestry as including manglares found in the Administrative Code of 1917 cannot affect rights which vested prior to its enactment.

These lands being neither timber nor mineral lands, the trial court should have considered them agricultural lands. If they are agricultural lands, then the rights of appellants are fully established by Act No. 926.

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

The opposition rests mainly upon the proposition that the land covered by the application there are mangrove lands as shown in his opponent's Exh. 1, but we think this opposition of the Director of Forestry is untenable, inasmuch as it has been definitely decided that mangrove lands are not forest lands in the sense in which this phrase is used in the Act of Congress.

No elaboration was made on this conclusion which was merely based on the cases of Montano and

Jocson. And in 1977, the above ruling was reaffirmed in Tongson v. Director of Forestry, 9 with Justice Fernando declaring that the mangrove lands in litis were agricultural in nature. The decision even quoted with approval the statement of the trial court that:

... Mangrove swamps where only trees of mangrove species grow, where the trees are small and sparse, fit only for firewood purposes and the trees growing are not of commercial value as lumber do not convert the land into public land. Such lands are not forest in character. They do not form part of the public domain.

Only last year, in Republic v. De Porkan, 10 the Court, citing Krivenko v. Register of Deeds, 11

reiterated the ruling in the Mapa case that "all public lands that are not timber or mineral lands are necessarily agricultural public lands, whether they are used as nipa swamps, manglares, fisheries or ordinary farm lands.

But the problem is not all that simple. As it happens, there is also a line of decisions holding the contrary view.

In Yngson v. Secretary of Agriculture and Natural Resources, 12 promulgated in 1983, the Court ruled "that the Bureau of Fisheries has no jurisdiction to dispose of swamp lands or mangrove lands forming part of the public domain while such lands are still classified as forest lands.

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

The Heirs of Jose Amunategui maintain that Lot No. 885 cannot be classified as forest land because it is not thickly forested but is a 'mangrove swamps.' Although conceding that 'mangrove swamp' is included in the classification of forest land in accordance with Section 1820 of the Revised Administrative Code, the petitioners argue that no big trees classified in Section 1821 of the said Code as first, second and third groups are found on the land in question. Furthermore, they contend that Lot 885, even if it is a mangrove swamp, is still subject to land registration proceedings because the property had been in actual possession of private persons for many years, and therefore, said land was already 'private land' better adapted and more valuable for agricultural than for forest purposes and not required by the public interests to be kept under forest

classification.

The petition is without merit.

A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. 'Forested lands' do not have to be on mountains or in out-of-the-way places. Swampy areas covered by mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land. The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the land classsified as 'forest' is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect titles do not apply.'

The view was maintained in Vallarta v. Intermediate Appellate Court, 14 where this Court agreed with the Solicitor General's submission that the land in dispute, which he described as "swamp mangrove or forestal land," were not private properties and so not registerable. This case was decided only twelve days after the De Porkan case.

Faced with these apparent contradictions, the Court feels there is a need for a categorical pronouncement that should resolve once and for all the question of whether mangrove swamps are agricultural lands or forest lands.

The determination of this question is a function initially belonging to the legislature, which has the authority to implement the constitutional provision classifying the lands of the public domain (and is now even permitted to provide for more categories of public lands). The legislature having made such implementation, the executive officials may then, in the discharge of their own role, administer our public lands pursuant to their constitutional duty " to ensure that the laws be faithfully executed' and in accordance with the policy prescribed. For their part, the courts will step into the picture if the rules laid down by the legislature are challenged or, assuming they are valid, it is claimed that they are not being correctly observed by the executive. Thus do the three departments, coordinating with each other, pursue and achieve the objectives of the Constitution in the conservation and utilization of our natural resources.

In C.A. No. 141, the National Assembly delegated to the President of the Philippines the function of making periodic classifications of public lands, thus:

Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Natural Resources, shall from time to time classify the lands of the public domain into:

(a) Alienable or disposable,

(b) Lumber, and

(c) Mineral lands,

and may at any time and in a like manner transfer such lands from one class to another, for the purposes of their administration and disposition.

Sec. 7. For the purposes of the administration and disposition of alienable or disposable lands, the President, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time declare what lands are open to disposition or concession under this Act.

With particular regard to alienable public lands, Section 9 of the same law provides:

For the purpose of their administration and disposition, the lands of the public domain alienable or open to disposition shall be classified, according to the use or purposes to which such lands are destined, as follows:

(a) Agricultural;

(b) Residential, commercial, industrial, or for similar productive purposes;

(c) Educational, charitable, or other similar purposes; and

(d) Reservations for townsites and for public and quasi-public uses.

The President, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time make the classifications provided for in this section, and may, at any time and in a similar manner, transfer lands from one class to another.

As for timber or forest lands, the Revised Administrative Code states as follows:

Sec. 1826. Regulation setting apart forest reserves- Revocation of same. - Upon there commendation of the Director of Forestry, with the approval of the Department Head, the President of the Philippines may set apart forest reserves from the public lands and he shall by proclamation declare the establishment of such reserves and the boundaries thereof, and thereafter such forest reserves shall not be entered, sold, or otherwise disposed of, but shall remain as such for forest uses, and shall be administered in the same manner as public forest.

The President of the Philippines may in like manner by proclamation alter or modify the boundaries of any forest reserve from time to time, or revoke any such proclamation, and upon such revocation such forest reserve shall be and become part of the public lands as though such proclamation had never been made.

Sec. 1827. Assignment of forest land for agricultural purposes. - Lands in public forest, not including forest reserves, upon the certification of the Director of Forestry that said lands are better adapted and more valuable for agricultural than for forest purposes and not required by the public interests to be kept under forest, shall be declared by the Department Head to be agricultural lands.

With these principles in mind, we reach the following conclusion:

Mangrove swamps or manglares should be understood as comprised within the public forests of the Philippines as defined in the aforecited Section 1820 of the Administrative Code of 1917. The legislature having so determined, we have no authority to ignore or modify its decision, and in effect veto it, in the exercise of our own discretion. The statutory definition remains unchanged to date and, no less noteworthy, is accepted and invoked by the executive department. More importantly, the said provision has not been challenged as arbitrary or unrealistic or unconstitutional assuming the requisite conditions, to justify our judicial intervention and scrutiny. The law is thus presumed valid and so must be respected. We repeat our statement in the Amunategui case that the classification of mangrove swamps as forest lands is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. That determination having been made and no cogent argument having been raised to annul it, we have no duty as judges but to apply it. And so we shall.

Our previous description of the term in question as pertaining to our agricultural lands should be understood as covering only those lands over which ownership had already vested before the Administrative Code of 1917 became effective. Such lands could not be retroactively legislated as forest lands because this would be violative of a duly acquired property right protected by the due process clause. So we ruled again only two months ago in Republic of the Philippines vs. Court of

Appeals, 15 where the possession of the land in dispute commenced as early as 1909, before it was much later classified as timberland.

It follows from all this that the land under contention being admittedly a part of the mangrove swamps of Sapian, and for which a minor forest license had in fact been issued by the Bureau of Forestry from 1920 to 1950, it must be considered forest land. It could therefore not be the subject of the adverse possession and consequent ownership claimed by the private respondent in support of his application for registration. To be so, it had first to be released as forest land and reclassified as agricultural land pursuant to the certification the Director of Forestry may issue under Section 1827 of the Revised Administrative Code.

The private respondent invokes the survey plan of the mangrove swamps approved by the Director

of Lands, 16 to prove that the land is registerable. It should be plain, however, that the mere existence of such a plan would not have the effect of converting the mangrove swamps, as forest land, into agricultural land. Such approval is ineffectual because it is clearly in officious. The Director of Lands was not authorized to act in the premises. Under the aforecited law, it is the

Director of Forestry who has the authority to determine whether forest land is more valuable for agricultural rather than forestry uses, as a basis for its declaration as agricultural land and release for private ownership.

Thus we held in the Yngson case:

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

The Bureau of Fisheries has no jurisdiction to administer and dispose of swamp lands or mangrove lands forming part of the public domain while such lands are still classified as forest land or timber land and not released for fishery or other purposes.

The same rule was echoed in the Vallarta case, thus:

It is elementary in the law governing natural resources that forest land cannot be owned by private persons. It is not registerable. The adverse possession which can be the basis of a grant of title in confirmation of imperfect title cases cannot commence until after the forest land has been declared alienable and disposable. Possession of forest land, no matter bow long cannot convert it into private property.'

We find in fact that even if the land in dispute were agricultural in nature, the proof the private respondent offers of prescriptive possession thereof is remarkably meager and of dubious persuasiveness. The record contains no convincing evidence of the existence of the informacion posesoria allegedly obtained by the original transferor of the property, let alone the fact that the conditions for acquiring title thereunder have been satisfied. Nowhere has it been shown that the informacion posesoria has been inscribed or registered in the registry of property and that the land has been under the actual and adverse possession of the private respondent for twenty years as

required by the Spanish Mortgage Law. 17 These matters are not presumed but must be established with definite proof, which is lacking in this case.

Significantly, the tax declarations made by the private respondent were practically the only basis used by the appellate court in sustaining his claim of possession over the land in question. Tax declarations are, of course, not sufficient to prove possession and much less vest ownership in favor

of the declarant, as we have held in countless cases. 18

We hold, in sum, that the private respondent has not established his right to the registration of the subject land in his name. Accordingly, the petition must be granted.

It is reiterated for emphasis that, conformably to the legislative definition embodied in Section 1820 of the Revised Administrative Code of 1917, which remains unamended up to now, mangrove swamps or manglares form part of the public forests of the Philippines. As such, they are not alienable under the Constitution and may not be the subject of private ownership until and unless they are first released as forest land and classified as alienable agricultural land.

WHEREFORE, the decision of the Court of Appeals is SET ASIDE and the application for registration of title of private respondent is DISMISSED, with cost against him. This decision is immediately executory.

SO ORDERED.

G.R. No. L-3714 [Montano v. Government et al.]ISABELO MONTANO Y MARCIAL, petitioner-appellee,vs.THE INSULAR GOVERNMENT, ET AL., respondents.THE INSULAR GOVERNMENT, appellant.

Tracey, J.:

Isabelo Montano presents a petition to the Court of Land Registration for the inscription of a piece of land in the barrio of Libis, municipality of Caloocan, used as a fishery having a superficial area of 10,805 square meters, and bounded as set out in the petition; its value according to the last assessment being $505.05, United States currency.

This petition was opposed by the Solicitor-General in behalf of the Director of Lands, and by the entity known as Obras Pias de la Sagrada Mitra, the former on the ground that the land in question belonged to the Government of the United States, and the latter, that it was the absolute owner of all the dry land along the eastern boundary of the said fishery.

The Court of Land Registration in its decision of December 1, 1906, dismissed the said oppositions without costs and decreed, after a general entry by default, the adjudication and registration of the property described in the petition, in favor of Isabelo Montano y Marcial.

From this decision only counsel for the Director of Public Lands appealed to this court. It is a kindred case to Cirilo Mapa vs. The Insular Government, decided by this court on February 19, 1908, reported in 10 Phil. 175.

As some discussion has arisen as to the scope of that decision, it appears opportune to reaffirm the principle there laid down. The issue was, whether the lands used as a fishery , for the growth of nipa, and as salt deposits, inland some distance from the sea, and asserted, though not clearly proved to be overflowed at high tide could be registered as private property on the strength of ten years' occupation, under paragraph 6 of section 54 of Act No. 926 of the Phil. Commission. The point decided was that such land within the meaning of the Act of Congress of July 1, 1902, was agricultural, the reasoning leading up to the conclusion being that congress having divided all the public lands of the Islands into three classes it must be included in one of the three, and being clearly neither forest nor mineral, it must of necessity fall into two division of agricultural land. In the concurring opinion, in order to avoid misapprehension on the part of those not familiar with United States land legislation and a misunderstanding of the reach of the doctrine, it was pointed out that under the decision of the Supreme Court of the United States the phrase "public lands" is held to be equivalent to "public domain," and dos not by any means include all lands of Government ownership, but only so much of said lands as are thrown open to private appropriation and settlement by homestead and other like general laws. Accordingly, "government land" and "public domain" are not synonymous items; the first includes not only the second, but also other lands of the Government already reserved or devoted to public use or subject to private right. In other words, the Government owns real estate which is part of the "public lands" and other real estate which is not part thereof.

This meaning attached to the phrase "public lands" by Congress in its land legislation is settled by usage and adjudication beyond a doubt, and without variation. It is therefore doing the utmost violence to all rules of construction to contend that in this law, dealing with the same subject-matter in connection with these Islands, a different meaning had, without indication or motive, been imported into the words. They cannot have one meaning in any other statute and a different and conflicting meaning in this statute. Where property in general is referred to therein, other and apt phrases are used in order to include it; for instance, section 12 provides "that all the property and rights which have been acquired in the Phil. Islands by the United States ... are hereby placed under

the control of the Government of the said Islands." Therefore, there is much real property belonging to the Government which is not affected by statutes for the settlement, prescription or sale of public lands. Examples in point are properties occupied by public buildings or devoted to municipal or other governmental uses.

Among the authorities cited in the Mapa case are two, Shively vs. Bowlby (152 U.S. 1), and Mann vs. Tacoma Land Co. (153 U.S. 273), in which it was held that general public land laws did not apply to land over which the tide ebbs and flows. Mr. Justice Gray, in Shively vs. Bowlby, which is in itself an epitome of the American Law of Waters, speaking of the tide lands, said:

But Congress has never undertaken by general laws to dispose of such lands. . . .

The Congress of the United States, in disposing of the public lands, has constantly acted upon the theory that those lands, whether in the interior, or on the coast, above high- water mark, may be taken up by actual occupants, in order to encourage the settlement of the country, but that the navigable water and the soils under them. whether within the above the ebb and flow of the tide, shall be and remain public highways; and being chiefly valuable for the public purposes of commerce, navigation, and fishery, and for the improvement necessary to secure and promote those purposes, shall not be granted away during the period of territorial government. (Pp. 48 and 49.)

The conclusions of the court are in part stated as follows:

Lands under tide waters are incapable of cultivation or improvement in the manner of lands above high-water mark. They are of great value to the public for the purposes of commerce, navigation, and fishery. Their improvement by individuals, when permitted, is incidental or subordinate to the public use and right. Therefore the title and the control of them are vested in the sovereign for the benefit of the whole people . . . .

Upon the acquisition of a territory by the United States, whether by cession from one of the States, or by treaty with a foreign country, or by discovery and settlement, the same title and dominion passed to the United States, for the benefit of whole people, and in trust for the several States to be ultimately created out of the territory . . . .

The United States, while hold the country as a territory, having all the powers both of national and municipal government, may grant, for appropriate purposes, titles or rights in the soil below high-water mark of tide waters. But that have never done so in general laws. (Pp. 57 and 58.)

In Mann vs. Tacoma Land Co., it was said by Mr. Justice Brewer (p. 284);

It is settled that the general legislation of Congress in respect to public lands does not extend to tide lands .... It provided that the scrip might be located on the unoccupied and unappropriated public lands. As said in Newhall vs. Sanger (92 U.S. 761, 763.) "The words "public lands" are habitually used in our legislation to described such as are subject to sale or other disposal under general laws."

In Illinois Central R.R. Company vs. Illinois (146 U.S. 387) Mr. Justice Field, delivering the opinion of the court, said:

That the State holds the title tot he lands under the navigable waters of lake Michigan within its limits, in the same manner that the State hold title to soils under tide water, by the common law, we have already shown, and that title necessarily carries with it control over the waters above them whenever the lands are subjected to use. But it is a title different in character from that which the States holds in lands intended for sale. It is different from the title which the United States hold in the public lands which are open to preemption and sale. It is a title held in trust for the people of the States that they may enjoy the navigation of the waters, carry on commerce over them, and have liberty of fishing therein freed from the obstruction or interference of private parties. The interest of the people in the navigation of the waters and in commerce over them may be improved in many instances by the erection of wharves, docks, and piers therein, for which purpose the State may grant parcels of the submerged lands; and so long as their disposition is made for such purposes, no valid objections can be made to the grants .... The control of the State for the purposes of the trust can never be lost, except as to such parcels as are used in promoting the interests of the public

therein, or can be disposed of without any substantial impairment of the public interest in the lands and waters remaining .... The State can no more abdicate its trust over property in which the whole people are interested, like navigable waters and soils under them, so as to leave them entirely under the use and control of private parties, except in the instance of parcels mentioned for the improvement of the navigation and use of the waters, or when parcels can be disposed of without impairment of the public interest in what remains, that can abdicate its police powers in the administration of government and the preservation of the peace .... So with trusts connected with public property, or property of a special character, like lands under navigable waters, they can not be placed entirely beyond the direction and control of the State.

The ownership of the navigable waters of the harbor and the lands under them is a subject of public concern to the whole people of the State. The trust with which they are held, therefore, is governmental and can not be alienated, except in those instances mentioned of parcels used in the improvement of the interest thus held, or when parcels can be disposed of without detriment to the public interest in the lands and waters remaining. . . . . (Pp. 452-455.)

Mr. Justice Fields quotes from an opinion by Mr. Justice Bradley, delivered in a case in the Circuit Court, speaking of lands under water, as follows (p. 457):

Being subject to this trust, they were publici juris; in other words, they were held for the use of the people at large. It is true that to utilize the fisheries, especially those of shellfish, it was necessary to parcel them out to particular operators, and employ the rent or consideration for the benefit of the whole people; but this did not alter the character of the title. The land remained subject to all other public uses as before, especially to those of navigation and commerce, which are always paramount to those of public fisheries. It is also true that portions of the submerged shoals and flats, which really interfered with navigation, and could better subserve the purposes of commerce by being filled up and reclaimed, were disposed of to individuals for that purpose. But neither did these dispositions of useless parts affect the character of the title to the remainder.

These citations are thus given at length in order to make clear, first, the lands under the ebb and flow of the tide of navigable waters are not in America understood to be included in the phrase "public lands" in Acts of Congress of United States; nor, perforce, can they best understood in laws of the Philippine Commission drawn immediately under the sanction of those Acts; and second, that such lands are under existing Congressional legislation the subject of private ownership, any occupation therefore be subordinate to the public purpose of navigation and fishery. While as well in the original thirteen States in which there was never a national public domain to which the land laws of Congress could apply as in States more recently created out of that domain and which upon their formation became masters of their own land policy the local laws govern riparian and littoral rights, subject only to Congressional control in matters of foreign and interstate commerce (U.S. vs. Mission Rock Co., 189 U.S. 391), yet, as to the unappropriated public lands constituting the public domain the sole power of legislation is vested in Congress, which are uniformly and consistently declined to assume the function of authorizing or regulating private appropriation of such rights. Therefore, in the absence of specific Congressional legislation, it is impossible for individuals to acquire title under the ten years provision of Act No. 926 or even through a definite grants from the local legislature of lands beneath navigable waters in which the tide ebbs and flows, except for wharf-age or other purposes auxiliary to navigation or other public uses, unless in conformity with the preexisting local law of the Archipelago.

The matter is dwelt is upon for the reason that the late Attorney-General in his very able brief calls attention to the effect apprehended from the extension of the words "agricultural lands" as used in Act No. 926 to include all public lands not forest or mineral in character, specifying two acts of the Philippine Commission, the validity of which he fears might thereby be called into question. The first of these, Act No. 1039, dedicates to use of the Navy Department of the United States Government certain ground and buildings in Cavite, while the other, Act No. 1654, is a fore-shore law regulating the control and disposal of filled Government lands. If the term "agricultural lands" be held to include all government property not forest or mineral in character, he suggests that these Acts, not being in conformity with the procedure of Act No. 926, as approved by Congress, would be invalid, and moreover, that the Philippine Government would be seriously tied up in the management and disposition of other lands owned by it.

Without finally passing on this question in relation to lands the owners of which are not before us parties to this action, it is appropriate, in answering the argument of the law officer of the State, to point out that this consequence appears to be avoided by the restricted sense given to the words "public lands" or "public domain" in the Act of Congress and in Act No. 926, as hereinbefore noted. Neither the property affected by Act No. 1039, already in use by the Navy Department of the United States, nor the foreshore land mentioned in Act No. 1654, which is under the ebb and flow of the tide, was, in so far as appears in the Acts before us, part of the public domain to be disposed of under sections 13, 14, 15, and 16 of the Act of congress of July 1, 1902, and for that reason it is not included in any of the three subdivisions of "public lands" as agricultural or otherwise, although it was part of the property acquired in the Philippine Islands by the United States by the treaty of peace with Spain, which by section 12 of that Act was "placed under the control of the Government of said Islands, to be administered for the benefit of the inhabitants thereof." It would seem that the validity of the Cavite Act can not be successfully assailed on this ground, while it may well be that The Fore-shore Act on examination will be found to fall, as to its general purpose, within the authorization of section 11 of the Act of Congress, whereby the duty is imposed upon the Island government of improving the harbors and navigable waters in the interest of commerce MOAEsSHIc.

As a consequence, it follows that The Public Land Act did not apply to the fisheries in the Mapa case, if they are to be regarded as constituting, in a general sense, land under tidal waters. It becomes necessary, therefore, to refer to the character of the lands.

Although argued at different times, five of these cases have been presented substantially together, all being covered by one brief of the late Attorney-General in behalf of the Government in which, with many interesting historical and graphic citations he describes that part of the marginal seashore of the Philippine Islands known as manglares, with their characteristic vegetation. In brief, it may be said that they are mud flats, alternately washed and exposed by the tide, in which grow various kindred plants which will not live except when watered by the sea, extending their roots deep into the mud and casting their seeds, which also germinate there. These constitute the mangrove flats of the tropics, which exist naturally, but which are also, to some extent, cultivated by man for the sake of the combustible wood of the mangrove and like trees as well as for the useful nipa palm propagated thereon. Although these flats are literally tidal lands, yet we are of the opinion that they can not be so regarded in the sense in which that term is used in the cases cited or in general American Jurisprudence. The waters flowing over them are not available for purpose of navigation, and they "may be disposed of without impairment of the public interest in what remains." Mr. Justice Bradley, in the passage quoted by Mr. Justice Field, makes an exception of submerged shoals and flats. In Railroad Company vs. Schurmeir (74 U.S. 272), a Government patent of public land bordering upon a river was held to include a parcel submerge at very high water and separated from the mainland by a slough in which the water ran when ordinarily high. In Mobile vs. Hallett (41 U.S. 260), at page 266. Mr. Justice Catron remarked in his dissenting opinion:

. . . and that a mud flat, flowed by tide water, is the subject of grant by the Government to an individual, I think can not well be doubted by anyone acquainted with the southern country; when such valuable portions of it are mud flats, in the constant course of reclamation.

In several of the older States along the Atlantic coast such flats, either by force of ordinance, custom, judicial construction, or local laws are held to pass under private grants as appurtenant to the uplands. (Winslow vs. Patten, 34 Maine 25; Litchfield vs. Scituate, 135 Mass. 39; People vs. New York and Staten Island Ferry Co., 68 N.Y. 71; Stevens vs. P.& N. Railroad, 5 Vroom, 34 N.J. Law 532.) There is even stronger reason for excepting mud flats from the rule of tide lands in these Islands, owing to the peculiarities of their configuration and to the nature of the tropical growth thereon, and whatever may be action of the tide, we do not think that in the Philippines such of the shoals covered by this vegetation, whether spontaneously or by cultivation, as are not available for free navigation, or required for any other purpose of general benefit, can be considered tidal land reserved for public use alone, under the governmental trust for commerce and public fishery, but on the contrary, we regard them as public property, susceptible of a sort of cultivation and of improvement, and as such, subject to occupation under paragraph 6 of section 54 of the Land Law. Instances may hereafter arise of fisheries unduly established in what are clearly navigable waters

which would constitute a nuisance, and not be the subject of prescription or of grant. A brief reference to the five cases under consideration in this court, however, will serve to show that they all fairly fall within the benefits of the law. In the Mapa case, 10 Phil. 175, the property was far from the the sea, partly occupied as fish pond, as nipa land, and as a salt pit. It does not appear whether it was connected with the sea by nature or by art, or whether the tide ebbed or flowed upon it, or whether the salt was sufficient to impart to any portion of it a mineral character. In the Santiago case, 12 Phil. 593, there was a fishery about two thousand yards from the sea, with which it communicated by a river, and a portion of the inclosure was dedicated to growing the aquatic tree called bacawan. The fishery had been constructed by man, upon land heretofore sown with this tree. In the Gutierrez case, 12 Phil. 796, it was shown that the land was partly highland, growing fruit trees, and partly lowland , converted by the occupant of the upland into a fishery by this labor. In the Baello case, 12 Phil. 795, the river running to the sea was a hundred meters away, the salt water therefrom reaching the lowland by means of an artificial canal cut by the owner of the land when he gave up cultivating bacawan thereon, an made it into a fishery. In the Montano case, although there was a considerable depth of water over the soil, yet before the fishery was made, some thirty years before the trial, bacawan had been sown and propagated in the mud by the owner who finally sold the entire cut when he built the dikes vg4u.

All these lots, in their original state, whether near the sea or at a distance from it inland, and whether bare or washed by the tides, were not covered by waters practically navigable and were filled, whether naturally or artificially, with vegetation sometimes cultivated and in common use for fuel and for building purposes, and they were all adapted to fisheries or fish hatcheries by the labor of man introducing or regulating the access of salt water thereto. It is obvious that that all five cases are of the same general nature and that one rule must be applied to them all.

In this discussion of the meaning which the Congress of the United States attached to the phrase "public lands" in the Philippine Bill, we have assumed that it was used in the same sense as in other laws enacted by that body. If, however, it can be considered as employed with reference to the peculiar conditions of the territory to which it was to be applied and to the local law or usage prevailing therein, the result would not be different. In many of its general features the Spanish law of public lands in the Philippines resembled the American. Government property was of two kinds — first, that of public use or service, said to be of public ownership, and second, that of having a private character or use. (Civil Code, arts. 339 and 340.) Lands of the first class, while they retain their public character are inalienable; those of the second are not.

By the royal decree of February 13, 1894, it was enacted that all "the land, soil, ground not under cultivation, and forests in the Philippine Islands should be considered saleable crown lands," which are not included in the four exceptions stated, among which were "those which belonged to the forest zones which the State desires to hold for the Commonwealth." This corresponds in the main to the American classification into Government property, public lands, and forest reserve. Mineral lands are elsewhere defined. It is to be noted, however, that in the two languages terms ordinarily equivalent are not in this relation employed in the same sense and that lands de dominio publico signify quite a different thing from the arbitrary English Phrases "public lands" or "public domain."

The Law of Waters of 1866, which was the latest Spanish Law of Waters extended to these Islands, provides that private property can not be acquired in lands preserving the character of public ownership (title 1, art. 1, par. 29), and among the lands declared of public ownership and use by article 1 of chapter 1 of title 5 of the same law are:

The seashore. — By shore is understood the land alternately covered and uncovered by the sea in its tidal movement. Its interior, or land limit, is the point reached by the highest and equinoctial tides. At those places not affected by tides, the land limit is the highest point reached by sea water in ordinary storms or hurricanes. (Par. 3.)

So that under this legislation the same question also presented itself as to what constituted seashore, which was of public use and trust and therefore not alienable. This question can not be said to have been settled by official ruling at the time of the American occupation. From the official records it appears that there were then pending for registration a great number of possessory expedientes, twenty-two of which, made before April 17, 1895, were from the Province of Pampanga

alone, in which the land was described as manglares. Under the royal decree of 1894 such manglares appear at the outset to have been registered and considered alienable and numbers of them were conceded by adjustment, including considerable tracts in the town of Sexmoan and Lubao in Pampanga. Claims having been made that on account of the trees growing thereon they formed part of the forest reserve and also because, being covered and uncovered by the tide, they were part of the shore, and in either case were inalienable, the engineer in chief of the forestry district of the center of Luzon addressed, on January 7, 1893, a communication to the inspector general de montes (Forestry Department) in which he expressed an opinion that as part of the shore they were not subject to private ownership and asked for an early decision of the question. On November 26, 1893, the acting inspector-general notified the chief of the district of the Visayas in Mindanao that his excellency, the governor-general, had that they ordered all action suspended on expedientes of manglar and nipa lands and salt marshes until the questions involved in regard thereto should be determined. In this condition the matter remained until the expiration of the Spanish sovereignty.

By article 14 of the Law of Waters the right of shore fishery was declared public, but by article 23 authority might be granted individuals to establish shore hatcheries for fish and shellfish, and by article 15 salt-water ponds on private ground not communicating with the sea by water navigable by boats were recognized as private property, while chapter 10 permitted and regulated the draining of swamps and marshes, both of private and of public ownership ChB.

Under this uncertain and somewhat unsatisfactory condition of the law the custom had grown up of converting manglares and nipa lands into fisheries which became common feature of settlements along the coast and at the time of the change of sovereignty constituted one of the most productive industries of the Islands, the abrogation of which would destroy vested interests and prove a public disaster. In our opinion it was the object of Congress not to work such a result but, on the contrary, in furtherance of the purposes of the treaty of Paris, to recognize and safeguard such property. Therefore, the judgment of the Court of Land Registration is affirmed, without costs FLazRz.

G.R. No. 100709 November 14, 1997REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner,

vs.COURT OF APPEALS, JOSEFINA L. MORATO, SPOUSES NENITA CO and ANTONIO QUILATAN AND THE REGISTER OF DEEDS OF QUEZON PROVINCE, respondents.

PANGANIBAN, J.:

Will the lease and/or mortgage of a portion of a realty acquired through free patent constitute sufficient ground for the nullification of such land grant? Should such property revert to the State once it is invaded by the sea and thus becomes foreshore land?

The Case

These are the two questions raised in the petition before us assailing the Court of Appeals' 1

Decision in CA-G.R. CV No. 02667 promulgated on June 13, 1991 which answered the said questions

in the negative. 2 Respondent Court's dismissed 3 petitioner's appeal and affirmed in toto the

decision of the Regional Trial Court 4 of Calauag, Quezon, dated December 28, 1983 in Civil Case No. C-608. In turn, the Regional Trial Court's decision dismissed petitioner's complaint for cancellation of the Torrens Certificate of Title of Respondent Morato and for reversion of the parcel of land subject thereof of the public domain.

The Facts

The petition of the solicitor general, representing the Republic of the Philippines, recites the

following facts: 5

Sometime in December, 1972, respondent Morato filed a Free Patent Application No. III-3-8186-B on a parcel of land with an area of 1,265 square meters situated at Pinagtalleran, Calauag, Quezon. On January 16, 1974, the patent was approved and the Register of Deeds of Quezon at Lucena City issued on February 4, 1974 Original Certificate of Title No. P-17789. Both the free paten and the title specifically mandate that the land shall not be alienated nor encumbered within five years from the date of the issuance of the patent (Sections 118 and 124 of CA No. 141, as amended).

Subsequently, the District Land Officer in Lucena City, acting upon reports that respondent Morato had encumbered the land in violation of the condition of the patent, conducted an investigation. Thereafter, it was established that the subject land is a portion of the Calauag Bay, five (5) to six (6) feet deep under water during high tide and two (2) feet deep at low tide, and not suitable to vegetation. Moreover, on October 24, 1974, a portion of the land was mortgaged by respondent Morato to respondents Nenita Co and Antonio Quilatan for P10,000.00 (pp. 2, 25, Folder of Exhibits). The spouses Quilatan constructed a house on the land. Another portion of the land was leased to Perfecto Advincula on February 2, 1976 at P100.00 a month, where a warehouse was constructed.

On November 5, 1978, petitioner filed an amended complaint against respondents Morato, spouses Nenita Co and Antonio Quilatan, and the Register of Deeds of Quezon for the cancellation of title and reversion of a parcel of land to the public domain, subject of a free patent in favor of respondent Morato, on the grounds that the land is a foreshore land and was mortgaged and leased within the five-year prohibitory period (p. 46, Records).

After trial, the lower court, on December 28, 1983, rendered a decision dismissing petitioner's complaint. In finding for private respondents, the lower court ruled that there was no violation of the 5-year period ban against alienating or encumbering the land, because the land was merely leased and not alienated. It also found that the mortgage to Nenita Co and Antonio Quilatan covered only the improvement and not the land itself.

On appeal, the Court of Appeals affirmed the decision of the trial court. Thereafter, the Republic of

the Philippines filed the present petition. 6

The Issues

Petitioner alleges that the following errors were committed by Respondent Court: 7

I

Respondent court erred in holding that the patent granted and certificate of title issued to Respondent Morato cannot be cancelled and annulled since the certificate of title becomes indefeasible after one year from the issuance of the title.

II

Respondent Court erred in holding that the questioned land is part of a disposable public land and not a foreshore land.

The Court's Ruling

The petition is meritorious.

First Issue: Indefeasibility of a Free Patent Title

In resolving the first issue against petitioner, Respondent Court held: 8

. . . As ruled in Heirs of Gregorio Tengco vs. Heirs of Jose Alivalas, 168 SCRA 198. ". . . The rule is well-settled that an original certificate of title issued on the strength of a homestead patent partakes of the nature of a certificate of title issued in a judicial proceeding, as long as the land disposed of is really part of the disposable land of the public domain, and becomes indefeasible and incontrovertible upon the expiration of one year from the date of promulgation of the order of the Director of Lands for the issuance of the patent. (Republic v. Heirs of Carle, 105 Phil. 1227 (1959); Ingaran v. Ramelo, 107 Phil. 498 (1960); Lopez v. Padilla, (G.R. No. L-27559, May 18, 1972, 45 SCRA 44). A homestead patent, one registered under the Land Registration Act, becomes as indefeasible as a Torrens Title. (Pamintuan v. San Agustin, 43 Phil. 558 (1982); El Hogar Filipino v. Olviga, 60 Phil. 17 (1934); Duran v. Oliva, 113 Phil. 144 (1961); Pajomayo v. Manipon, G.R. No. L-33676, June 30, 1971, 39 SCRA 676). (p. 203).

Again, in Lopez vs. Court of Appeals, 169 SCRA 271, citing Iglesia ni Cristo v. Hon. Judge, CFI of Nueva Ecija, Branch I, (123 SCRA 516 (1983) and Pajomayo, et al. v. Manipon, et al. (39 SCRA 676 (1971) held that once a homestead patent granted in accordance with the Public Land Act is registered pursuant to Section 122 of Act 496, the certificate of title issued in virtue of said patent has the force and effect of a Torrens Title issued under the Land Registration Act.

Indefeasibility of the title, however, may not bar the State, thru the Solicitor General, from filing an action for reversion, as ruled in Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas, (supra), as follows:

But, as correctly pointed out by the respondent Court of Appeals, Dr. Aliwalas' title to the property having become incontrovertible, such may no longer be collaterally attacked. If indeed there had been any fraud or misrepresentation in obtaining the title, an action for reversion instituted by the Solicitor General would be the proper remedy (Sec. 101, C.A. No. 141; Director of Lands v. Jugado, G.R. No. L-14702, May 21, 1961, 2 SCRA 32; Lopez v. Padilla, supra). (p. 204).

Petitioner contends that the grant of Free Patent (IV-3) 275 and the subsequent issuance of Original Certificate of Title No. P-17789 to Respondent Josefina L. Morato were subject to the conditions provided for in Commonwealth Act (CA) No. 141. It alleges that on October 24, 1974, or nine (9) months and eight (8) days after the grant of the patent, mortgaged a portion of the land" to Respondent Nenita Co, who thereafter constructed a house thereon. Likewise, on February 2, 1976 and "within the five-year prohibitory period," Respondent Morato "leased a portion of the land to Perfecto Advincula at a monthly rent of P100.00 who, shortly thereafter, constructed a house of

concrete materials on the subject land." 9 Further, petitioner argues that the defense of indefeasibility of title is "inaccurate." The original certificate of title issued to Respondent Morato "contains the seeds of its own cancellation": such certificate specifically states on its face that "it is

subject to the provisions of Sections 118, 119, 121, 122, 124 of CA No. 141, as amended." 10

Respondent Morato counters by stating that although a "portion of the land was previously leased," it resulted "from the fact that Perfecto Advincula built a warehouse in the subject land without [her] prior consent." The mortgage executed over the improvement "cannot be considered a violation of

the said grant since it can never affect the ownership." 11 She states further:

. . . . the appeal of the petitioner was dismissed not because of the principle of indefeasibility of title but mainly due to failure of the latter to support and prove the alleged violations of respondent Morato. The records of this case will readily show that

although petitioner was able to establish that Morato committed some acts during the prohibitory period of 5 years, a perusal thereof will also show that what petitioner was

able to prove never constituted a violation of the grant. 12

Respondent-Spouses Quilatan, on the other hand, state that the mortgage contract they entered into with Respondent Morato "can never be considered as [an] 'alienation' inasmuch as the ownership

over the property remains with the owner." 13 Besides, it is the director of lands and not the Republic of the Philippines who is the real party in interest in this case, contrary to the provision of the Public Land Act which states that actions for reversion should be instituted by the solicitor

general in the name of Republic of the Philippines. 14

We find for petitioner.

Quoted below are relevant sections of Commonwealth Act No. 141, otherwise known as the Public Land Act:

Sec. 118. Except in favor of the Government or any of its branches, units or institutions, or legally constituted banking corporations, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period; but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

No alienation, transfer, or conveyance of any homestead after five years and before twenty-five years after issuance of title shall be valid without the approval of the Secretary of Agriculture and Natural Resources, which approval shall not be denied except on constitutional and legal grounds. (As amended by Com. Act No. 456, approved June 8, 1939.)

xxx xxx xxx

Sec. 121. Except with the consent of the grantee and the approval of the Secretary of Agriculture and Natural Resources, and solely for educational, religious, or charitable purposes or for a right of way, no corporation, association, or partnership may acquire or have any right, title, interest, or property right whatsoever to any land granted under the free patent, homestead, or individual sale provisions of this Act or to any permanent improvement on such land. (As amended by Com. Act No. 615, approved May 5, 1941)

Sec. 122. No land originally acquired in any manner under the provisions of this Act, nor any permanent improvement on such land, shall be encumbered, alienation or transferred, except to persons, corporations, association, or partnerships who may acquire lands of the public domain under this Act or to corporations organized in the Philippines authorized therefore by their charters.

Except in cases of hereditary successions, no land or any portion thereof originally acquired under the free patent, homestead, or individual sale provisions of this Act, or any permanent improvement on such land, shall be transferred or assigned to any individual, nor shall such land or any permanent improvement thereon be leased to such individual, when the area of said land, added to that of this own, shall exceed one hundred and forty-four hectares. Any transfer, assignment, or lease made in violation hereto shall be null and void. (As amended by Com Act No. 615, Id.).

xxx xxx xxx

Sec. 124. Any acquisition, conveyance, alienation, transfer, or other contract made or executed in violation of any of the provisions of sections one hundred and eighteen, one hundred and twenty, one hundred and twenty-one, one hundred and twenty-two, and one hundred and twenty-three of this Act shall be unlawful and null and void from its execution and shall produce the effect of annulling and cancelling the grant, title, patent, or permit originally issued, recognized or confirmed, actually or presumatively,

and cause the reversion of the property and its improvements to the State. (Emphasis supplied)

The foregoing legal provisions clearly proscribe the encumbrance of a parcel of land acquired under a free patent or homestead within five years from the grant of such patent. Furthermore, such encumbrance results in the cancellation of the grant and the reversion of the land to the public domain. Encumbrance has been defined as "[a]nything that impairs the use or transfer of property; anything which constitutes a burden on the title; a burden or charge upon property; a claim or lien upon property." It may be a "legal claim on an estate for the discharge of which the estate is liable; and embarrassment of the estate or property so that it cannot be disposed of without being subject to it; an estate, interest, or right in lands, diminishing their value to the general owner; a liability

resting upon an estate." 15 Do the contracts of lease and mortgage executed within five (5) years from the issuance of the patent constitute an "encumbrance" and violate the terms and conditions of

such patent? Respondent Court answered in the negative: 16

From the evidence adduced by both parties, it has been proved that the area of the portion of the land, subject matter of the lease contract (Exh. "B") executed by and between Perfecto Advincula and Josefina L. Morato is only 10 x 12 square meters, where the total area of the land granted to Morato is 1,265 square meters. It is clear from this that the portion of the land leased by Advincula does not significantly affect Morato's ownership and possession. Above all, the circumstances under which the lease was executed do not reflect a voluntary and blatant intent to violate the conditions provided for in the patent issued in her favor. On the contrary, Morato was compelled to enter into that contract of leaseout of sympathy and the goodness of her heart to accommodate a fellow man. . . .

It is indisputable, however, that Respondent Morato cannot fully use or enjoy the land during the duration of the lease contract. This restriction on the enjoyment of her property sufficiently meets the definition of an encumbrance under Section 118 of the Public Land Act, because such contract "impairs the use of the property" by the grantee. In a contract of lease which is consensual, bilateral, onerous and commutative, the owner temporarily grants the use of his or her property to

another who undertakes to pay rent therefor. 17 During the term of the lease, the grantee of the patent cannot enjoy the beneficial use of the land leased. As already observed, the Public Land Act does not permit a grantee of a free patent from encumbering any portion of such land. Such encumbrance is a ground for the nullification of the award.

Morato's resort to equity, i.e. that the lease was executed allegedly out of the goodness of her heart without any intention of violating the law, cannot help her. Equity, which has been aptly described as "justice outside legality," is applied only in the absence of, and never against, statutory law or judicial rules of procedure. Positive rules prevail over all abstract arguments based on equity contra

legem. 18

Respondents failed to justify their position that the mortgage should not be considered an encumbrance. Indeed, we do not find any support for such contention. The questioned mortgage

falls squarely within the term "encumbrance" proscribed by Section 118 of the Public Land Act. 19

Verily, a mortgage constitutes a legal limitation on the estate, and the foreclosure of such mortgage

would necessarily result in the auction of the property. 20

Even if only part of the property has been sold or alienated within the prohibited period of five years from the issuance of the patent, such alienation is a sufficient cause for the reversion of the whole estate to the State. As a condition for the grant of a free patent to an applicant, the law requires that the land should not be encumbered, sold or alienated within five years from the issuance of

the patent. The sale or the alienation of part of the homestead violates that condition. 21

The prohibition against the encumbrance — lease and mortgage included — of a homestead which,

by analogy applies to a free patent, is mandated by the rationale for the grant, viz.: 22

It is well-known that the homestead laws were designed to distribute disposable agricultural lots of the State to land-destitute citizens for their home and cultivation.

Pursuant to such benevolent intention the State prohibits the sale or incumbrance of the homestead (Section 116) within five years after the grant of the patent. After that five-year period the law impliedly permits alienation of the homestead; but in line with the primordial purpose to favor the homesteader and his family the statute provides that such alienation or conveyance (Section 117) shall be subject to the right of repurchase by the homesteader, his widow or heirs within five years. This section 117 is undoubtedly a complement of section 116. It aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given to him. It would, therefore, be in keeping with this fundamental idea to hold, as we hold, that the right to repurchase exists not only when the original homesteader makes the conveyance, but also when it is made by his widow or heirs. This construction is clearly deducible from the terms of the statute.

By express provision of Section 118 of Commonwealth Act 141 and in conformity with the policy of the law, any transfer or alienation of a free patent or homestead within five years from the issuance of the patent is proscribed. Such transfer nullifies said alienation and constitutes a cause for the reversion of the property to the State.

The prohibition against any alienation or encumbrance of the land grant is a proviso attached to the

approval of every application. 23 Prior to the fulfillment of the requirements of law, Respondent Morato had only an inchoate right to the property; such property remained part of the public domain and, therefore, not susceptible to alienation or encumbrance. Conversely, when a "homesteader has complied with all the terms and conditions which entitled him to a patent for [a] particular tract of public land, he acquires a vested interest therein and has to be regarded an

equitable owner thereof." 24 However, for Respondent Morato's title of ownership over the patented land to be perfected, she should have complied with the requirements of the law, one of which was to keep the property for herself and her family within the prescribed period of five (5) years. Prior to the fulfillment of all requirements of the law, Respondent Morato's title over the property was incomplete. Accordingly, if the requirements are not complied with, the State as the grantor could petition for the annulment of the patent and the cancellation of the title.

Respondent Morato cannot use the doctrine of the indefeasibility of her Torrens title to bar the state from questioning its transfer or encumbrance. The certificate of title issued to her clearly stipulated that its award was "subject to the conditions provided for in Sections 118, 119, 121, 122 and 124 of Commonwealth Act (CA) No. 141." Because she violated Section 118, the reversion of the property to the public domain necessarily follows, pursuant to Section 124.

Second Issue: Foreshore LandRevert to the Public Domain

There is yet another reason for granting this petition.

Although Respondent Court found that the subject land was foreshore land, it nevertheless

sustained the award thereof to Respondent Morato: 25

First of all, the issue here is whether the land in question, is really part of the foreshore lands. The Supreme Court defines foreshore land in the case of Republic vs. Alagad, 169 SCRA 455, 464, as follows:

Otherwise, where the rise in water level is due to, the "extraordinary" action of nature, rainful, for instance, the portions inundated thereby are not considered part of the bed or basin of the body of water in question. It cannot therefore be said to be foreshore land but land outside of the public dominion, and land capable of registration as private property.

A foreshore land, on the other hand has been defined as follows:

. . . that part of (the land) which is between highand low water and left dry by the flux and reflux of the tides . . . . (Republic vs. C.A., Nos. L-43105, L-43190, August 31, 1984, 131 SCRA 532; Government vs. Colegio de San Jose, 53 Phil 423)

The strip of land that lies between the high and low water marks and that is alternatively wet and dry according to the flow of the tide. (Rep. vs. CA, supra, 539).

The factual findings of the lower court regarding the nature of the parcel of land in question reads:

Evidence disclose that the marginal area of the land radically changed sometime in 1937 up to 1955 due to a strong earthquake followed by frequent storms eventually eroding the land. From 1955 to 1968, however, gradual reclamation was undertaken by the lumber company owned by the Moratos. Having thus restored the land thru mostly human hands employed by the lumber company, the area continued to be utilized by the owner of the sawmill up to the time of his death in 1965. On or about March 17, 1973, there again was a strong earthquake unfortunately causing destruction to hundreds of residential houses fronting the Calauag Bay including the Santiago Building, a cinema house constructed of concrete materials. The catastrophe totally caused the sinking of a concrete bridge at Sumulong river also in the municipality of Calauag, Quezon.

On November 13, 1977 a typhoon code named "Unding" wrought havoc as it lashed the main land of Calauag, Quezon causing again great erosion this time than that which the area suffered in 1937. The Court noted with the significance of the newspaper clipping entitled "Baryo ng Mangingisda Kinain ng Dagat" (Exh. "11").

xxx xxx xxx

Evidently this was the condition of the land when on or about December 5, 1972 defendant Josefina L. Morato filed with the Bureau of Lands her free patent application. The defendant Josefina Morato having taken possession of the land after the demise of Don Tomas Morato, she introduced improvement and continued developing the area, planted it to coconut tree. Having applied for a free patent, defendant had the land area surveyed and an approved plan (Exh. "9") based on the cadastral survey as early as 1927 (Exh. "10") was secured. The area was declared for taxation purposes in the name of defendant Josefina Morato denominated as Tax Declaration No. 4115 (Exh. "8") and the corresponding realty taxes religiously paid as shown by Exh. "8-A"). (pp. 12-14, DECISION).

Being supported by substantial evidence and for failure of the appellant to show cause which would warrant disturbance, the aforecited findings of the lower court, must be respected.

Petitioner correctly contends, however, that Private Respondent Morato cannot own foreshore land:

Through the encroachment or erosion by the ebb and flow of the tide, a portion of the subject land was invaded by the waves and sea advances. During high tide, at least half of the land (632.5 square meters) is 6 feet deep under water and three (3) feet deep during low tide. The Calauag Bay shore has extended up to a portion of the questioned land.

While at the time of the grant of free patent to respondent Morato, the land was not reached by the water, however, due to gradual sinking of the land caused by natural calamities, the sea advances had permanently invaded a portion of subject land. As disclosed at the trial, through the testimony of the court-appointed commissioner, Engr. Abraham B. Pili, the land was under water during high tide in the month of August 1978. The water margin covers half of the property, but during low tide, the water is about a kilometer (TSN, July 19, 1979, p. 12). Also, in 1974, after the grant of the patent, the land was covered with vegetation, but it disappeared in 1978 when the land was reached by the tides (Exh. "E-1", "E-14"). In fact, in its decision dated December 28, 1983, the lower court observed that the erosion of the land was caused by natural

calamities that struck the place in 1977 (Cf. Decision, pp. 17-18). 26

Respondent-Spouses Quilatan argue, however, that it is "unfair and unjust if Josefina Morato will be deprived of the whole property just because a portion thereof was immersed in water for reasons

not her own doing." 27

As a general rule, findings of facts of the Court of Appeals are binding and conclusive upon this Court, unless such factual findings are palpably unsupported by the evidence on record or unless

the judgment itself is based on a misapprehension of facts. 28 The application for a free patent was made in 1972. From the undisputed factual findings of the Court of Appeals, however, the land has since become foreshore. Accordingly, it can no longer be subject of a free patent under the Public

Land Act. Government of the Philippine Islands vs. Cabañgis 29 explained the rationale for this proscription:

Article 339, subsection 1, of the Civil Code, reads:

Art. 339. Property of public ownership is —

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, riverbanks, shores, roadsteads, and that of a similar character.

xxx xxx xxx

Article 1, case 3, of the law of Waters of August 3, 1866, provides as follows:

Art. 1. The following are part of the national domain open to public use.

xxx xxx xxx

3. The Shores. By the shore is understood that space covered and uncovered by the movement of the tide. Its interior or terrestrial limit is the line reached by the highest equinoctal tides. Where the tides are not appreciable, the shore begins on the land side at the line reached by the sea during ordinary storms or tempests.

In the case of Aragon vs. Insular Government (19 Phil. 223), with reference to article 339 of the Civil Code just quoted, this Court said:

We should not be understood, by this decision, to hold that in a case of gradual encroachment or erosion by the ebb and flow of the tide, private property may not become "property of public ownership." as defined in article 339 of the code, where it appear that the owner has to all intents and purposes abandoned it and permitted it to be totally destroyed, so as to become a part of the "playa" (shore of the sea), "rada" (roadstead), or the like. . . .

In the Enciclopedia Juridica Española, volume XII, page 558, we read the following:

With relative frequency the opposite phenomenon occurs; that is, the sea advances and private properties are permanently invaded by the waves, and in this case they become part of the shore or breach. The then pass to the public domain, but the owner thus dispossessed does not retain any right to the natural products resulting from their new nature; it is a de facto case of eminent domain, and not subject to indemnity.

In comparison, Article 420 of the Civil Code provides:

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

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.

When the sea moved towards the estate and the tide invaded it, the invaded property became foreshore land and passed to the realm of the public domain. In fact, the Court in Government vs.

Cabangis 30 annulled the registration of land subject of cadastral proceedings when the parcel

subsequently became foreshore land. 31 In another case, the Court voided the registration decree of a trial court and held that said court had no jurisdiction to award foreshore land to any private

person or entity. 32 The subject land in this case, being foreshore land, should therefore be returned to the public domain.

WHEREFORE, the petition is GRANTED. This Court hereby REVERSES and SETS ASIDE the assailed Decision of Respondent Court and ORDERS the CANCELLATION of Free Patent No. (IV-3) 275 issued to Respondent Morato and the subsequent Original Certificate of Title No. P-17789. The subject land therefore REVERTS to the State. No costs.

SO ORDERED.

G.R. No. 103882 November 25, 1998REPUBLIC OF THE PHILIPPINES, petitioner,

vs.THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL ESTATE CORPORATION,

respondents, CULTURAL CENTER OF THE PHILIPPINES, intervenor.

G.R. No. 105276 November 25, 1998

PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners, vs.

COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.

 PURISIMA, J.:

At bar are two consolidated petitions for review on certiorari under Rule 45 of the Revised Rules of Court. Here, the Court is confronted with a case commenced before the then Court of First Instance (now Regional Trial Court) of Rizal in Pasay City, in 1961, more than 3 decades back, that has spanned six administrations of the Republic and outlasted the tenure of ten (10) Chief Justices of the

Supreme Court.

In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision, dated January

29, 1992 and Amended Decision, dated April 28, 1992, of the Court of Appeals 1 which affirmed with modification the Decision of the former Court of First Instance of Rizal (Branch 7, Pasay City) in Civil Case No. 2229-P, entitled "Republic of the Philippines vs. Pasay City and Republic Real Estate Corporation".

The facts that matter are, as follows:

Republic Act No. 1899 ("RA 1899"), which was approved on June 22, 1957, authorized the reclamation of foreshore lands by chartered cities and municipalities. Section I of said law, reads:

Sec. 1. Authority is hereby granted to all municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications.

On May 6, 1958, invoking the a forecited provision of RA 1899, the Pasay City Council passed Ordinance No. 121, for the reclamation of Three Hundred (300) hectares of foreshore lands in Pasay City, empowering the City Mayor to award and enter into reclamation contracts, and prescribing terms and conditions therefor. The said Ordinance was amended on April 21, 1959 by Ordinance No. 158, which authorized the Republic Real Estate Corporation ("RREC") to reclaim foreshore lands of Pasay City under certain terms and conditions.

On April 24, 1959, Pasay City and RREC entered into an Agreement 2 for the reclamation of the foreshore lands in Pasay City.

On December 19, 1961, the Republic of the Philippines ("Republic") filed a Complaint 3 for Recovery of Possession and Damages with Writ of Preliminary Preventive injunction and Mandatory Injunction, docketed as Civil Case No. 2229-P before the former Court of First Instance of Rizal, (Branch 7, Pasay City).

On March 5, 1962, the Republic of the Philippines filed an Amended Complaint 4 questioning subject Agreement between Pasay City and RREC (Exhibit "P") on the grounds that the subject-matter of such Agreement is outside the commerce of man, that its terms and conditions are violative of RA 1899, and that the said Agreement was executed without any public bidding.

The Answers 5 of RREC and Pasay City, dated March 10 and March 14, 1962, respectively, averred that the subject-matter of said Agreement is within the commerce of man, that the phrase "foreshore lands" within the contemplation of RA 1899 has a broader meaning than the cited definition of the term in the Words and Phrases and in the Webster's Third New International Dictionary and the plans and specifications of the reclamation involved were approved by the authorities concerned.

On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former Court of First Instance of

Rizal (Branch 7, Pasay City) issued an Order 6 the dispositive portion of which was to the following effect:

WHEREFORE, the court hereby orders the defendants, their agents, and all persons claiming under them, to refrain from "further reclaiming or committing acts of dispossession or dispoilation over any area within the Manila Bay or the Manila Bay Beach Resort", until further orders of the court.

On the following day, the same trial court issued a writ of preliminary injunction 7 which enjoined the defendants, RREC and Pasay City, their agents, and all persons claiming under them "from further reclaiming or committing acts of dispossession."

Thereafter, a Motion to Intervene 8, dated June 27, 1962, was filed by Jose L. Bautista, Emiliano Custodio, Renato Custodio, Roger de la Rosa, Belen Gonzales, Norma Martiner, Emilia E. Paez, Ambrosio R. Parreno, Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, Zamora

Enterprises, Inc., Industrial and Commercial Factors, Inc., Metropolitan Distributors of the Philippines, and Bayview Hotel, Inc. stating inter alia that they were buyers of lots in the Manila Bay area being reclaimed by RREC, whose rights would be affected by whatever decision to be rendered

in the case. The Motion was granted by the trial court and the Answer attached thereto admitted. 9

The defendants and the intervenors then moved to dismiss 10 the Complaint of the Republic, placing reliance on Section 3 of Republic Act No. 5187, which reads:

Sec. 3. Miscellaneous Projects

xxx xxx xxx

m. For the construction of seawall and limited access highway from the south boundary of the City of Manila to Cavite City, to the south, and from the north boundary of the City of Manila to the municipality of Mariveles, province of Bataan, to the north, including the reclamation of the foreshore and submerged areas: Provided, That priority in the construction of such seawalls, highway and attendant reclamation works shall be given to any corporation and/or corporations that may offer to undertake at its own expense such projects, in which case the President of the Philippines may, after competitive didding, award contracts for the construction of such project, with the winning bidder shouldering all costs thereof, the same to be paid in terms of percentage fee of the contractor which shall not exceed fifty percent of the area reclaimed by the contractor and shall represent full compensation for the purpose, the provisions of the Public Land Law concerning disposition of reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally, that the foregoing provisions and those of other laws, executive orders, rules and regulations to the contrary notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected. . . . . (emphasis ours).

Since the aforecited law provides that existing contracts shall be respected, movants contended that the issues raised by the pleadings have become "moot, academic and of no further validity or effect."

Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU") moved to intervene 11, alleging as legal interest in the matter in litigation the avowed purpose of the organization for the promotion of good government in Pasay City. In its Order of June 10, 1969, the lower court of origin allowed the

said intervention 12.

On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:

WHEREFORE, after carefully considering (1) the original complaint, (2) the first Amended Complaint, (3) the Answer of Defendant Republic Real Estate Corporation to the first Amended Complaint, (4) the Answer of Defendant Pasay City to the first Amended Complaint, (5) the Second Amended Complaint, (6) the Answer of Defendant Republic Real Estate Corporation to the Second Amended Complaint, (7) the Answer of Defendant Pasay City to the Second Amended Complaint, (8) the Memorandum in Support of Preliminary Injunction of Plaintiff, (9) the Memorandum In Support of the Opposition to the Issuance of Preliminary Injunction of Defendant Pasay City and Defendant Republic Real Estate Corporation, (10) the Answer in Intervention of Intervenors Bautista, et. al., (11) Plaintiff's Opposition to Motion to Intervene, (12) the Reply to Opposition to Motion to Intervene of Intervenors Bautista, et. al., (13) the Stipulation of Facts by all the parties, (14) the Motion for Leave to Intervene of Intervenor Pasay Law and Conscience Union, Inc., (15) the Opposition to Motion For Leave to Intervene of Intervenors Bautista, et. al., (16) the Reply of Intervenor Pasay Law and Conscience Union, Inc., (17) the Supplement to Opposition to Motion to Intervene of Defendant Pasay City and Republic Real Estate Corporation (18) the Complain in Intervention of Intervenor Pasay Law and Conscience Union, Inc., (19) the Answer of Defendant Republic Real Estate Corporation, (20) the Answer of Intervenor Jose L. Bautista, et. al., to Complaint in Intervention, (21) the Motion to Dismiss of Defendant Republic Real Estate Corporation, and Intervenors Bautista, et. al., (22) the

Opposition of Plaintiff to said Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law and Conscience Union, Inc., (24) the Memorandum of the Defendant Republic Real Estate Corporation, (25) the Memorandum for the Intervenor Pasay Law and Conscience Union, Inc., (26) the Manifestation of Plaintiff filed by the Office of the Solicitor General, and all the documentary evidence by the parties to wit: (a) Plaintiff's Exhibits "A" to "YYY- 4", (b) Defendant Republic Real Estate Corporation's Exhibits "1-RREC" to "40-a" and (c) Intervenor Pasay Law and Conscience Union, Inc's., Exhibits "A-PLACU" to "C-PLACU", the Court hereby:

(1) Denies the "Motion to Dismiss" filed on January 10, 1968, by Defendant Republic Real Estate Corporation and Intervenors Bautista, et. al., as it is the finding of this Court that Republic Act No. 5187 was not passed by Congress to cure any defect in the ordinance and agreement in question and that the passage of said Republic Act No. 5187 did not make the legal issues raised in the pleadings "moot, academic and of no further validity or effect;" and

(2) Renders judgment:

(a) dismissing the Plaintiff's Complaint;

(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law and Conscience Union, Inc.,

(c) Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City to have all the plans and specifications in the reclamation approved by the Director of Public Works and to have all the contracts and sub-contracts for said reclamation awarded by means of, and only after, public bidding; and

(d) Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon as Defendant Republic Real Estate Corporation and Defendant Pasay City shall have submitted the corresponding plans and specifications to the Director of Public Works, and shall have obtained approval thereof, and as soon as the corresponding public bidding for the award to the contractor and sub-contractor that will undertake the reclamation project shall have been effected.

No pronouncement as to costs.

SO ORDERED. (See Court of Appeals' Decision dated January 28, 1992; pp. 6-8)

Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of Appeals. However, on January 11, 1973, before the appeal could be resolved, Presidential Decree No. 3-A issued, amending Presidential Decree No. 3, thus:

Sec. 1. Section 7 of Presidential Decree No. 3, dated September 26, 1972, is hereby amended by the addition of the following paragraphs:

The provisions of any law to the contrary notwithstanding, the reclamation of areas under water, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under a proper contract.

All reclamations made in violation of this provision shall be forfeited to the State without need of judicial action.

Contracts for reclamation still legally existing or whose validity has been accepted by the National Government shall be taken over by the National Government on the basis of quantum meruit, for proper prosecution of the project involved by administration.

On November 20, 1973, the Republic and the Construction Development Corporation of the

Philippines ("CDCP") signed a Contract 13 for the Manila-Cavite Coastal Road Project (Phases I and II) which contract included the reclamation and development of areas covered by the Agreement between Pasay City and RREC. Then, there was issued Presidential Decree No. 1085 which transferred to the Public Estate Authority ("PEA") the rights and obligations of the Republic of the Philippines under the contract between the Republic and CDCP.

Attempts to settle amicably the dispute between representatives of the Republic, on the one hand, and those of Pasay City and RREC, on the other, did not work out. The parties involved failed to

hammer out a compromise.

On January 28, 1992, the Court of Appeals came out with a Decision 14 dismissing the appeal of the Republic and holding, thus:

WHEREFORE, the decision appealed from is hereby AFFIRMED with the following modifications:

1. The requirement by the trial court on public bidding and submission of RREC's plans specification to the Department Public Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for being moot and academic;

2. Ordering the plaintiff-appellant to turn over to Pasay City the ownership and possession over all vacant spaces in the twenty-one hectare area already reclaimed by Pasay City and RREC at the time it took over the same. Areas thereat over which permanent structures has (sic) been introduced shall, including the structures, remain in the possession of the present possessor, subject to any negotiation between Pasay City and the said present possessor, as regards the continued possession and ownership of the latter area.

3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the Twenty-One (21) hectares of land already reclaimed by it, to be exercised within one (1) year from the finality of this decision, at the same terms and condition embodied in the Pasay City-RREC reclamation contract, and enjoining appellee Pasay City to respect RREC's option.

SO ORDERED.

On February 14, 1992, Pasay City and RREC presented a Motion for Reconsideration of such Decision of the Court of Appeals, contending, among others, that RREC had actually reclaimed Fifty-Five (55) hectares, and not only Twenty-one (21) hectares, and the respondent Court of Appeals erred in not awarding damages to them, movants.

On April 28, 1992, the Court of Appeals acted favorably on the said Motion for Reconsideration, by amending the dispositive portion of its judgment of January 28, 1992, to read as follows:

WHEREFORE, the dispositive portion of our Decision dated January 28, 1992 is hereby AMENDED to read as follows:

1. The requirement by the trial court on public bidding and the submission of the RREC's plans and specification to the Department of Public Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for being moot and academic.

2. Ordering plaintiff-appellant to turn over to Pasay City the ownership and possession of the above enumerated lots (1 to 9).

3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the land referred to in No. 2 of this dispositive portion, to be exercised within one (1) year from the finality of this Decision, at the same terms and condition embodied in the Pasay City-RREC reclamation contract, and enjoining Pasay City to respect RREC's irrevocable option.

SO ORDERED.

From the Decision and Amended Decision of the Court of Appeals aforementioned, the Republic of the Philippines, as well as Pasay City and RREC, have come to this Court to seek relief, albeit with different prayers.

On September 10, 1997, the Court commissioned the former thirteenth Division of Court of Appeals to hear and receive evidence on the controversy. The corresponding Commissioner's Report, dated November 25, 1997, was submitted and now forms part of the records.

On October 11, 1997, the Cultural Center of the Philippines ("CCP") filed a Petition in Intervention, theorizing that it has a direct interest in the case being the owner of subject nine (9) lots titled in its

(CCP) name, which the respondent Court of Appeals ordered to be turned over to Pasay City. The CCP, as such intervenor, was allowed to present its evidence, as it did, before the Court of Appeals, which evidence has been considered in the formulation of this disposition.

In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of errors, that:

I

THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF PASAY CITY ORDINANCE NO. 158 DATED APRIL 21, 1959 AND THE RECLAMATION CONTRACT ENTERED INTO BETWEEN PASAY CITY AND RREC;

II

THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD RECLAIMED 55 HECTARES AND IN ORDERING THE TURN-OVER TO PASAY CITY OF THE OWNERSHIP AND POSSESSION OF NINE (9) LOTS TITLED IN THE NAME OF CCP.

In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that:

I

THE COURT OF APPEALS ERRED IN NOT DECLARING PRESIDENTIAL DECREE NO. 3-A UNCONSTITUTIONAL;

II

THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN FAVOR OF PASAY CITY AND RREC.

Let us first tackle the issues posed in G.R. No. 103882.

On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21, 1959 and the Agreement dated April 24, 1959 between Pasay City and RREC, we rule in the negative.

Sec. 1 of RA 1899, reads:

Sec. 1. Authority is hereby granted to all municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications.

It is the submission of the petitioner, Republic of the Philippines, that there are no foreshore lands

along the seaside of Pasay City 15; that what Pasay City has are submerged or offshore areas outside the commerce of man which could not be a proper subject matter of the Agreement between Pasay City and RREC in question as the area affected is within the National Park, known as Manila Bay Beach Resort, established under Proclamation No. 41, dated July 5, 1954, pursuant to Act No. 3915, of which area it (Republic) has been in open, continuous and peaceful possession since time immemorial.

Petitioner faults the respondent court for unduly expanding what may be considered "foreshore land" through the following disquisition:

The former Secretary of Justice Alejo Mabanag, in response to a request for an opinion from the then Secretary of Public Works and Communications as to whether the term, "foreshore areas" as used in Section I of the immediately aforequoted law is that defined in Webster's Dictionary and the Law of Waters so as to make any dredging or filling beyond its prescribed limit illegal, opined:

According to the basic letter of the Director of Public Works, the law of Waters speaks of "shore" and defines it thus: "that

space movement of the tide. Its interior or terrestrial limit in the line reached by highest equinoctial tides."

Webster's definition of foreshore reads as follows:

That part of the shore between high water and low-water marks usually fixed at the line to which the ordinary means tide flows: also, by extension, the beach, the shore near the water's edge.

If we were to be strictly literal the term foreshore or foreshore lands should be confined to but a portion of the shore, in itself a very limited area. (p. 6, Intervenors-appellees' brief).

Bearing in mind the (Webster's and Law of Waters) definitions of "shore" and of foreshore lands, one is struck with the apparent inconsistency between the areas thus described and the purpose to which that area, when reclaimed under the provision of Republic Act No. 1899, shall be devoted. Section I (of said Law) authorizes the construction thereat of "adequate docking and harbor facilities". This purpose is repeated in Sections 3 and 4 of the Act.

And yet, it is well known fact that foreshore lands normally extend only from 10 to 20 meters along the coast. Not very much more if at all. In fact certain parts in Manila bordering on Manila Bay, has no foreshore to speak of since the sea washes the sea wall.

It does not seem logical, then, that Congress had in mind. Webster's limited concept of foreshore when it enacted Republic Act No. 1899, unless it intends that the wharves, piers, docks, etc. should be constructed parallel to the shore, which is impractical.

Since it is to be presumed that Congress could not have intended to enact an ineffectual measure not one that would lead to absurd consequences, it would seem that it used "foreshore" in a sense wider in scope that defined by Webster. . . .

To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant could not offer any refutation or contrary opinion. Neither can we. In fact, the above construction is consistent with the "rule on context" in statutory construction which provides that in construing a statute, the same must be construed as a whole. The particular words, clauses and phrases should not be studied as detached and isolated expressions, but the whole and every part of the statute must be considered in fixing the meaning of any of its parts in order to produce a harmonious whole (see Araneta vs. Concepcion, 99 Phil. 709). There are two reasons for this. Firstly, the force and significance of particular expressions will largely depend upon the connection in which they are found and their relation to the general subject-matter of the law. The legislature must be understood to have expressed its whole mind on the special object to which the legislative act is directed but the vehicle for the expressions of that meaning is the statute, considered as one entire and continuous act, and not as an agglomeration of unrelated clauses. Each clause or provision will be illuminated by those which are cognate to it and by the general tenor of the whole statute and thus obscurities end ambiguities may often be cleared up by the most direct and natural means. Secondly effect must be

given, if it is possible, to every word and clause of the statute, so that nothing shall be left devoid of meaning or destitute of force. To this end, each provision of the statute should be read in the light of the whole. For the general meaning of the legislature, as gathered from the entire act, may often prevail over the construction which would appear to be the most natural and obvious on the face of a particular clause. If is by this means that contradiction and repugnance between the different parts of the statute may be avoided. (See Black, Interpretation of Laws, 2nd Ed., pp. 317-319).

Resorting to extrinsic aids, the "Explanatory Note" to House Bill No. 3830, which was subsequently enacted as Republic Act No. 1899, reads:

In order to develop and expand the Maritime Commerce of the Philippines, it is necessary that harbor facilities be correspondingly improved and, where necessary, expanded and developed. The national government is not in a financial position to handle all this work. On the other hand, with a greater autonomy many chartered cities and provinces are financially able to have credit position which will allow them to undertake these projects. Some cities, such as the City of Bacolod under R.A. 161, has been authorized to reclaim foreshore lands bordering it.

Other cities end provinces have continuously been requesting for authority to reclaim foreshore lands on the basis of the Bacolod City pattern, and to undertake work to establish, construct on the reclaimed area and maintain such port facilities as may be necessary. In order not to unduly delay the undertaking of these projects, and inorder to obviate the passage of individual pieces of legislation for every chartered city and province, it is hereby recommended that the accompanying bill be approved. It covers Authority for All chartered cities and provinces to undertake this work. . . . (emphasis supplied)

Utilizing the above explanatory note in interpreting and construing the provisions of R.A. 1899, then Secretary of Justice Mabanag opined:

It is clear that the "Bacolod City pattern" was the basis of the enactment of the aforementioned bill of general application. This so-called "Bacolod City pattern" appears to be composed of 3 parts, namely: Republic Ad No. 161, which grants authority to Bacolod City to undertake or carry out . . . the reclamation . . . of any [sic] carry out the reclamation project conformably with Republic Act No. 161; and Republic Act No. 1132 authorizing Bacolod City to contract indebtedness or to issue bonds in the amount not exceeding six million pesos to finance the reclamation of land in said city.

Republic Act No. 161 did not in itself specify the precise space therein referred to as "foreshore" lands, but it provided that docking and harbor facilities should be erected on the reclaimed portions thereof, while not conclusive would indicate that Congress used the word "foreshore" in its broadest sense. Significantly, the plan of reclamation of foreshore drawn up by the Bureau of Public Works maps out an area of approximately 1,600,000 square meters, the boundaries of which clearly extend way beyond Webster's limited concept of the term "foreshore". As a

contemporaneous construction by that branch of the Government empowered to oversee at least, the conduct of the work, such an interpretation deserves great weight. Finally, Congress in enacting Republic Act No. 1132 (supplement to RA 161), tacitly confirmed and approved the Bureau's interpretation of the term 'foreshore' when instead of taking the occasion to correct the Bureau of over extending its plan, it authorized the city of Bacolod to raise the full estimated cost of reclaiming the total area covered by the plan. The explanatory note to House Bill No. 1249 which became Republic Act No. 1132 states among the things:

The Bureau of Public Works already prepared a plan for the reclamation of about 1,600,000 square meters of land at an estimated costs of about P6,000,000.00. The project is self-supporting because the proceeds from the sales or leases of lands so reclaimed will be more than sufficient to cover the cost of the project.

Consequently, when Congress passed Republic Act No. 1899 in order to facilitate the reclamation by local governments of foreshore lands on the basis of the Bacolod City pattern and in order to obviate the passage of individual pieces of legislation for every chartered city and provinces requesting authority to undertake such projects, the lawmaking body could not have had in mind the limited area described by Webster as "foreshore" lands. . . . .

If it was really the intention of Congress to limit the area to the strict literal meaning of "foreshore" lands which may be reclaimed by chartered cities and municipalities, Congress would have excluded the cities of Manila, Iloilo, Cebu, Zamboanga and Davao from the operation of RA 1899 as suggested by Senator Cuenco during the deliberation of the bill considering that these cities do not have 'foreshore' lands in the strict meaning of the term. Yet, Congress did not approve the proposed amendment of Senator Cuenco, implying therefore, that Congress intended not to limit the area that may be reclaimed to the strict definition of "foreshore" lands.

The opinion of the then Secretary of Justice Mabanag, who was at that time the chief law officer and legal adviser of the government and whose office is required by law to issue opinions for the guidance of the various departments of the government, there being then no judicial interpretation to the contrary, is entitled to respect (see Bengzon vs. Secretary of Justice and Insular Auditor, 68 Phil. 912).

We are not unmindful of the Supreme Court Resolution dated February 3, 1965 in Ponce vs. Gomez (L-21870) and Ponce vs. City of Cebu (L-2266), by a unanimous vote of six (6) justices (the other five (5) members deemed it unnecessary to express their view because in their opinion the questions raised were not properly brought before the court), which in essence applied the strict dictionary meaning of "foreshore lands" as used in RA 1899 in the case of the city of Cebu. But this was promulgated long after the then Secretary of Justice Mabanag rendered the above opinion on November 16, 1959 and long after RREC has started the subject reclamation project.

Furthermore, as held by the lower court, Congress, after the Supreme Court issued the aforementioned Resolution, enacted RA 5187. In Sec. 3 (m) of said law, Congress appropriated money "for the construction of the

seawall and limited access highway from the South boundary of the city of Manila to Cavite City, to the South, and from the North boundary of the city of Manila to the municipality of Mariveles, province of Bataan, to the North (including the reclamation of foreshore and submerged areas . . . provided . . . that . . . existing projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected . . ." This is a clear manifestation that Congress in enacting RA 1899, did not intend to limit the interpretation of the term "foreshore land" to its dictionary meaning.

It is presumed that the legislature was acquainted with and had in mind the judicial construction given to a former statute on the subject, and that the statute on the subject, and that the statute was enacted having in mind the judicial construction that the prior enactment had received, or in the light of such existing judicial decisions as have direct bearing upon it (see 50 Am. Jur., Sec. 321, pp. 312-313). But notwithstanding said interpretation by the Supreme Court of RA 1899 in the Ponce cases, Congress enacted a law covering the same areas previously embraced in a RA 1899 (as mentioned earlier, cities without foreshore lands which were sought to be excluded from the operation of RA 1899 were not excluded), providing that respect be given the reclamation of not only foreshore lands but also of submerged lands signifying its non-conformity to the judicial construction given to RA 1899. If Congress was in accord with the interpretation and construction made by the Supreme Court on RA 1899, it would have mentioned reclamation of "foreshore lands" only in RA 5187, but Congress included "submerged lands" in order to clarify the intention on the grant of authority to cities and municipalities in the reclamation of lands bordering them as provided in RA 1899. It is, therefore, our opinion that it is actually the intention of Congress in RA 1899 not to limit the authority granted to cities and municipalities to reclaim foreshore lands in its strict dictionary meaning but rather in its wider scope as to include submerged lands.

The Petition is impressed with merit.

To begin with, erroneous and unsustainable is the opinion of respondent court that under RA 1899, the term "foreshore lands" includes submerged areas. As can be gleaned from its disquisition and rationalization aforequoted, the respondent court unduly stretched and broadened the meaning of "foreshore lands", beyond the intentment of the law, and against the recognized legal connotation of "foreshore lands". Well entrenched, to the point of being elementary, is the rule that when the law speaks in clear and categorical language, there is no reason for interpretation or construction, but

only for application. 16 So also, resort to extrinsic aids, like the records of the constitutional

convention, is unwarranted, the language of the law being plain and unambiguous. 17 Then, too, opinions of the Secretary of Justice are unavailing to supplant or rectify any mistake or omission in

the law. 18 To repeat, the term "foreshore lands" refers to:

The strip of land that lies between the high and low water marks and that is alternately wet and dry according to the flow of the tide. (Words and Phrases, "Foreshore")

A strip of land margining a body of water (as a lake or stream); the part of a seashore between the low-water line usually at the seaward margin of a low-tide terrace and the upper limit of wave wash at high tide usually marked by a beach scarp or berm. (Webster's Third New International Dictionary)

The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its meaning, much less widen the coverage thereof. If the intention of Congress were to include submerged areas, it should have provided expressly. That Congress did not so provide could only signify the exclusion of submerged areas from the term "foreshore lands".

Neither is there any valid ground to disregard the Resolution of this Court dated February 3, 1965 in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) despite the enactment of Republic Act No. 5187 ("RA 5187"), the relevant portion of which, reads:

Sec. 3. Miscellaneous Projects

xxx xxx xxx

m. For the construction of seawall and limited access highway from the south boundary of the City of Manila to Cavite City, to the south, and from the north boundary of the City of Manila to the municipality of Mariveles, province of Bataan, to the north, including the reclamation of the foreshore and submerged areas: Provided, That priority in the construction of such seawalls, highway and attendant reclamation works shell be given to any corporation and/or corporations that may offer to undertake at its own expense such projects, in which case the President of the Philippines may, after competitive bidding, award contracts for the construction of such projects, with the winning bidder shouldering all costs thereof, the same to be paid in terms of percentage fee of the contractor which shall not exceed fifty percent of the area reclaimed by the contractor and shall represent full compensation for the purpose, the provisions of the Public Land Law concerning disposition of reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally, that the foregoing provisions and those of other laws, executive orders, rules and regulations to the contrary notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the reclamation of foreshore and submerged lands shall be respected. . . . .

There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden the scope of "foreshore lands." The said law is not amendatory to RA 1899. It is an Appropriations Act, entitled — "AN ACT APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE SAME WITH PREVIOUS PUBLIC WORKS APPROPRIATIONS."

All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) that the term "foreshore" refers to "that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides." As opined by this Court in said cases:

WHEREAS, six (6) members of the Court (Justices Bautista Angelo, Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine that said city ordinance and contracts are ultra vires and hence, null and void, insofar as the remaining 60% of the area aforementioned, because the term "foreshore lands" as used in Republic Act No. 1899 should be understood in the sense attached thereto by common parlance; (emphasis ours)

The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his opinion dated December 22, 1966, in a case with analogous facts as the present one, to wit:

December 22, 1966

The Secretary of Agriculture

and Natural Resources

Diliman, Quezon City

Sir:

xxx xxx xxx

I. Facts —

1. On January 19, 1961, pursuant to the provisions of Republic Act No. 1899, the Municipality of Navotas enacted Ordinance No. 1 authorizing the Municipal Mayor to enter into a reclamation contract with Mr.

Chuanico.

2. On March 15, 1961, a reclamation contract was concluded between the Municipality of Navotas, represented by the Municipal Mayor, and Mr. Chuanico in accordance with the above ordinance. Thereunder, Mr. Chuanico shall be the attorney-in-fact of the Municipality in prosecuting the reclamation project and shall advance the money needed therefor; that the actual expenses incurred shall be deemed a loan to the Municipality; that Mr. Chuanico shall have the irrevocable option to buy 70% of the reclaimed area at P7.00 per square meter; that he shall have the full and irrevocable powers to do any and all things necessary and proper in and about the premises," including the power to hire necessary personnel for the prosecution of the work, purchase materials and supplies, and purchase or lease construction machineries and equipment, but any and all contracts to be concluded by him in behalf of the Municipality shall be submitted to public bidding.

xxx xxx xxx

3. On March 16, 1961, the Municipal Council of Navotas passed Resolution No. 22 approving and ratifying the contract.

xxx xxx xxx

III. Comments —

1. The above reclamation contract was concluded on the basis of Navotas Ordinance No. 1 which, in turn, had been enacted avowedly pursuant to Republic Act No. 1899. This being so, the contract, in order to be valid, must conform to the provisions of the said law.

By authorizing local governments "to execute by administration any reclamation work," (Republic Act No. 1899 impliedly forbids the execution of said project by contract. Thus, in the case or Ponce et al. vs. Gomez (February 3, 1966), five justices of the Supreme Court voted to annul the contract between Cebu Development Corporation and Cebu City for the reclamation of foreshore lands because "the provisions of said . . . contract are not . . . in accordance with the provisions of Republic Act No. 1899," as against one Justice who opined that the contract substantially complied with the provisions of the said law. (Five Justices expressed no opinion on this point.)

Inasmuch as the Navotas reclamation contract is substantially similar to the Cebu reclamation contract, it is believed that the former is likewise fatally defective.

2. The Navotas reclamation project envisages the construction of a channel along the Manila Bay periphery of that town and the reclamation of approximately 650 hectares of land from said channel to a seaward distance of one kilometer. In the basic letter it is stated that "practically, all the 650 hectares of lands proposed to be reclaimed under the agreement" do not constitute foreshore lands and that "the greater portion of the area . . . is in fact navigable and presently being used as a fishing harbor by deep-sea fishing operators as well as a fishing ground of sustenance fisherman. Assuming the correctness of these averments, the Navotas reclamation contract evidently transcends the authority granted under Republic Act No. 1899, which empowers the local governments to reclaim nothing more than "foreshore lands, i.e., "that part of the land adjacent to the see which is alternately covered and left dry by the ordinary flow of the tides." (26 C.J. 890.) It was for this reason that in the cited case Ponce case, the Supreme Court, by a vote of 6-0 with five Justices abstaining, declared ultra vires and void the contractual stipulation for the reclamation of submerged lands off Cebu City, and

permanently enjoined its execution under Republic Act No. 1899.

xxx xxx xxx

In accordance with the foregoing, I have the honor to submit the view that the Navotas reclamation contract is not binding and should be disregarded for non-compliance with law.

Very truly yours,

(SGD) CLAUDIO TEEHANKEE

Secretary of Justice

The said opinion of Justice Secretary Teehankee who became Associate Justice, and later Chief Justice, of this Court, did, in our considered view, supersede the earlier opinion of former justice Secretary Alejo Mabanag, aforestated, as the cases, in connection with which subject opinions were sought, were with similar facts. The said Teehankee opinion accords with RA 1899.

It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by Ordinance No. 158, and the Agreement under attack, have been found to be outside the intendment and scope of RA 1899, and therefore ultra vires and null and void.

What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.

Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed 55 hectares. The letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that RREC had reclaimed 55 hectares. Said letter was just referring to a tentative schedule of work to be done by RREC, even as it required RREC to submit the pertinent papers to show its supposed accomplishment, to secure approval by the Ministry of Public Works and Highways to the reclamation plan, and to submit to a public bidding all contracts and sub-contracts for subject reclamation project but RREC never complied with such requirements and conditions sine qua non.

No contracts or sub-contracts or agreements, plans, designs, and/or specifications of the reclamation project were presented to reflect any accomplishment. Not even any statement or itemization of works accomplished by contractors or subcontractors or vouchers and other relevant papers were introduced to describe the extent of RREC's accomplishment. Neither was the requisite certification from the City Engineer concerned that "portions of the reclamation project not less than 50 hectares in area shall have been accomplished or completed" obtained and presented by RREC.

As a matter of fact, no witness ever testified on any reclamation work done by RREC, and extent thereof, as of April 26, 1962. Not a single contractor, sub-contractor, engineer, surveyor, or any other witness involved in the alleged reclamation work of RREC testified on the 55 hectares supposedly reclaimed by RREC. What work was done, who did the work, where was it commenced, and when was it completed, was never brought to light by any witness before the court. Certainly, onus probandi was on RREC and Pasay City to show and point out the as yet unidentified 55 hectares they allegedly reclaimed. But this burden of proof RREC and Pasay City miserably failed to discharge.

So also, in the decision of the Pasay Court of First Instance dismissing the complaint of plaintiff-appellant, now petitioner Republic of the Philippines, the lifting of the writ of Preliminary Injunction issued on April 26, 1962 would become effective only "as soon as Defendant Republic Real Estate Corporation and Defendant Pasay City shall have submitted the corresponding plans and specifications to the Director of Public Work, and shall have obtained approval thereof, and as soon as corresponding public bidding for the award to the contractor and sub-contractor that will undertake the reclamation project shall have been effected." (Rollo, pp. 127-129, G.R. No. 103882)

From the records on hand, it is abundantly clear that RREC and Pasay City never complied with such prerequisites for the lifting of the writ of Preliminary Injunction. Consequently, RREC had no authority to resume its reclamation work which was stopped by said writ of preliminary injunction issued on April 26, 1962.

From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit "21-A" for RREC before the lower court, and Exhibit "EE" for CCP before the Court of Appeals, it can be deduced that only on November 26, 1960 did RREC contract out the dredging work to C and A Construction

Company, Inc., for the reclamation of the 55 hectares initially programmed to be reclaimed by it. But, as stated by RREC itself in the position paper filed with this Court on July 15, 1997, with reference to CDCP's reclamation work, mobilization of the reclamation team would take one year before a reclamation work could actually begin. Therefore, the reclamation work undertaker by RREC could not have started before November 26, 1961.

Considering that on April 26, 1962 RREC was enjoined from proceeding any further with its reclamation work, it had barely five (5) months, from November, 1961 to April, 1962, to work on subject reclamation project. It was thus physically impossible for RREC to reclaim 55 hectares, with the stipulated specifications and elevation, in such a brief span of time. In the report of RREC (Exhibit "DD" for CCP), it was conceded that due to the writ of preliminary injunction issued on April 26, 1962, C and A Construction Co., Inc. had suspended its dredging operation since May, 1962.

The "graphical report" on the Pasay Reclamation project, as of April 30, 1962, attached to the Progress Report marked Exhibit "DD", is a schematic representation of the work accomplishment referred to in such Progress Report, indicating the various elevations of the land surface it embraced, ranging from 0.00 meters to the highest elevation of 2.5 meters above MLLW. Such portrayal of work accomplished is crucial in our determination of whether or not RREC had actually "reclaimed" any land as under its Contract for Dredging Work with C and A Construction Company (Exhibit "EE", the required final elevation for a completely reclaimed land was 3.5 meters above MLLW, as explicitly provided in said Contract for Dredging Work. So, the irresistible conclusion is — when the work on subject RREC-Pasay City reclamation project stopped in April, 1962 in compliance with the writ of preliminary injunction issued by the trial court of origin, no portion of the reclamation project worked on by RREC had reached the stipulated elevation of 3.5 meters above MLLW. The entire area it worked on was only at sea level or 0.00 meter above MLLW. In short, RREC had not yet reclaimed any area when the writ of preliminary injunction issued in April 1962.

On this point, the testimonies of Architect Ruben M. Protacio, Architect and Managing partner of Leandro V. Locsin and partners, Architect and City Planner Manuel T. Mañoza, Jr. of Planning Resources and Operation System, Inc., Rose D. Cruz, Executive Assistant, Office of the President, from 1966 to 1970, and Dr. Lucrecia Kasilag, National Artist and member of CCP Advisory Committee, come to the fore. These credible, impartial and knowledgeable witnesses recounted on the witness stand that when the construction of the Main Building of the Cultural Center of the Philippines (CCP) began in 1966, the only surface land available was the site for the said building (TSN, Sept. 29, 1997, pages 8, 14 and 50), what could be seen in front of and behind it was all water (TSN, Sept. 29, 1997 pages 127-128). When the CCP Main Building was being constructed, from 1968 to 1969, the land above sea level thereat was only where the CCP Main Building was erected and the rest of the surroundings were all under water, particularly the back portion fronting the bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr. Lucrecia R. Kasilag stressed that on April 16, 1966, during the ground breaking for the CCP Main Building, it was water all around (TSN, Sept. 30, 1997, pp. 320, 324, 325).

There was indeed no legal and factual basis for the Court of Appeals to order and declare that "the requirement by the trial court on public bidding and the submission of RREC's plans and specification to the Department of Public Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for being moot and academic." Said requirement has never become moot and academic. It has remained indispensable, as ever, and non-compliance therewith restrained RREC from lawfully resuming the reclamation work under controversy, notwithstanding the rendition below of the decision in its favor.

Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with the prescribed elevation of 3.5 meters above MLLW, so much so that in 1978, it (RREC) opted to file with the former Ministry of Public Highways, a claim for compensation of P30,396,878.20, for reclamation work allegedly done before the CDCP started working on the reclamation of the CCP grounds. On September 7, 1979, RREC asked the Solicitor General to settle its subject claim for compensation at the same amount of P30,396,878.20. But on June 10, 1981, guided by the cost data, work volume accomplished and other relevant information gathered by the former Ministry of Public Highways, the Solicitor General informed RREC that the value of what it had accomplished, based on 1962 price levels, was only P8,344,741.29, and the expenses for mobilization of equipment amounted to P2,581,330.00. The aforesaid evaluation made by the government, through the then Minister of Public Highways, is factual and realistic, so much so that on June 25, 1981, RREC, in its

reply letter to the Solicitor General, stated:

We regret that we are not agreeable to the amount of P10,926,071.29, based on 1962 cost data, etc., as compensation based on quantum meruit. The least we would consider is the amount of P10,926,071.29 plus interest at the rate of 6% per annum from 1962 to the time of payment. We feel that 6% is very much less than the accepted rate of inflation that has supervened since 1962 to the present, and even less than the present

legal rate of 12% per annum. 19

Undoubtedly, what RREC claimed for was compensation for what it had done, and for the dredge fill of 1,558,395 cubic meters it used, on subject reclamation project.

Respondent Court likewise erred in ordering the turn-over to Pasay City of the following titled lots, to wit:

LOT NO. BUILDING AREA OCT/TCT

42 Gloria Maris 9,516 sq.m. OCT 159 in the

Restaurant name of GSIS

3 Asean Garden 76,299 sq.m. OCT 10251 in the

name of CCP

12 Folk Arts Theater 1.7503 hec. TCT 18627 in the

and PICC parking name of CCP

space

22 landscaped with 132,924 sq.m. TCT 75676 in the

sculpture of Asean name of CCP

Artists-site of

Boom na Boom

23 open space, back 34,346 sq.m. TCT 75677 in the

of Philcite name of CCP

24 Parking space for 10,352 sq.m. TCT 75678 in the

Star City, CCP, name of CCP

Philcite

25 open space 11,323 sq.m. TCT 75679 in the

occupied by Star name of CCP

City

28 open space, 27,689 sq.m. TCT 75684 in the

beside PICC name of CCP

29 open space, 106,067 sq.m. TCT 75681 in the

leased by El name of CCP

Shaddai

We discern no factual basis nor any legal justification therefor. In the first place, in their answer to the Complaint and Amended Complaint below, RREC and Pasay City never prayed for the transfer to Pasay City of subject lots, title to which had long become indefeasible in favor of the rightful title holders, CCP and GSIS, respectively.

The annotation of a notice of lis pendens on the certificates of title covering the said lots is of no moment. It did not vest in Pasay City and RREC any real right superior to the absolute ownership

thereover of CCP and GSIS. Besides, the nature of the action did not really warrant the issuance of a notice of lis pendens.

Sec. 14 of Rule 13, Revised Rules of Civil Procedure, reads:

Sec. 14. Notice of lis pendens. — In an action affecting the title or the right of possession of real properly, the plaintiff and the defendant, when affirmative relief is claimed in his answer, may record in the office of the registry of deeds of the province in which the property is situated a notice of the pendency of the action. Said notice shall contain the names of the parties and the object of the action or defense, and a description of the property in that province affected thereby. Only from the time of filing such notice for record shall a purchaser, or encumbrancer of the property affected thereby, be deemed to have constructive notice of the pendency of the action, and only of its pendency against the parties designated by their real names.

The notice of lis pendens herein above mentioned may be cancelled only upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded.

Under the aforecited provision of law in point, a notice of lis pendens is necessary when the action is for recovery of possession or ownership of a parcel of land. In the present litigation, RREC and Pasay City, as defendants in the main case, did not counterclaim for the turnover to Pasay City of the titled lots aforementioned.

What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens title, whether fraudulently issued or not, may be posed only in an action brought to impugn or annul it. (Halili vs. National Labor Relations Commission, 257 SCRA 174, Cimafranca vs. Intermediate Appellate Court, 147 SCRA 611.) Unmistakable, and cannot be ignored, is the germane provision of Section 48 of P.D. 1529, that a certificate of title can never be the subject of a collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding instituted in accordance with law.

Although Pasay City and RREC did not succeed in their undertaking to reclaim any area within subject reclamation project, it appearing that something compensable was accomplished by them, following the applicable provision of law and hearkening to the dictates of equity, that no one, not

even the government, shall unjustly enrich oneself/itself at the expense of another 20, we believe; and so hold, that Pasay City and RREC should be paid for the said actual work done and dredge-fill poured in, worth P10,926,071.29, as verified by the former Ministry of Public Highways, and as claimed by RREC itself in its aforequoted letter dated June 25, 1981.

It is fervently hoped that long after the end of our sojourn in this valley of tears, the court, for its herein historic disposition, will be exalted by the future generations of Filipinos, for the preservation of the national patrimony and promotion of our cultural heritage. As writer Channing rightly puts it: "Whatever expands the affections, or enlarges the sphere of our sympathies — Whatever makes us feel our relation to the universe and all that it inherits in time and in eternity, and to the great and beneficent cause of all, must unquestionably refine our nature, and elevate us in the scale of being."

WHEREFORE:

In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January 28, 1992, and Amended Decision, dated April 28, 1992, of the Court of Appeals, are both SET ASIDE; and Pasay City Ordinance No. 121, dated May 6, 1958, and Ordinance No. 158, dated April 21, 1959, as well as the Reclamation Agreements entered into by Pasay City and Republic Real Estate Corporation (RREC) as authorized by said city ordinances, are declared NULL and VOID for being ultra vires, and contrary to Rep. Act 1899.

The writ of preliminary injunction issued on April 26, 1962 by the trial court a quo in Civil Case No. 2229-P is made permanent and the notice of lis pendens issued by the Court of Appeals in CA G.R. CV No. 51349 ordered CANCELLED. The Register of Deeds of Pasay City is directed to take note of and annotate on the certificates of title involved, the cancellation of subject notice of lis pendens.

The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay City and Republic Real Estate Corporation the sum of TEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND SEVENTY-ONE AND TWENTY-NINE CENTAVOS (P10,926,071.29) PESOS, plus interest thereon of six (6%) percent per annum from May 1, 1962 until full payment, which amount shall be divided by Pasay City and RREC, share and share alike.

In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 133250 May 6, 2003FRANCISCO I. CHAVEZ, petitioner,

vs.PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION,

respondents.

RESOLUTION

CARPIO, J.:

For resolution of the Court are the following motions: (1) Motion to Inhibit and for Re-Deliberation filed by respondent Amari Coastal Bay Development Corporation ("Amari" for brevity) on September 13, 2002; (2) Motion to Set Case for Hearing on Oral Argument filed by Amari on August 20, 2002; (3) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by Amari on July

26, 2002 and August 20, 2002, respectively; (4) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by respondent Public Estates Authority ("PEA" for brevity) on July 26, 2002 and August 8, 2002, respectively; and (5) Motion for Reconsideration and/or Clarification filed by the Office of the Solicitor General on July 25, 2002. Petitioner Francisco I. Chavez filed on November 13, 2002 his Consolidated Opposition to the main and supplemental motions for reconsideration.

To recall, the Court’s decision of July 9, 2002 ("Decision" for brevity) on the instant case states in its summary:

We can now summarize our conclusions as follows:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409 of the Civil Code, contracts whose "object or purpose is contrary to law," or whose "object is outside the commerce of men," are "inexistent and void from the beginning." The Court must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and void ab initio.

Amari seeks the inhibition of Justice Antonio T. Carpio, ponente of the Decision, on the ground that Justice Carpio, before his appointment to the Court, wrote in his Manila Times column of July 1, 1997, "I have always maintained that the law requires the public bidding of reclamation projects." Justice Carpio, then a private law practitioner, also stated in the same column, "The Amari-PEA reclamation contract is legally flawed because it was not bid out by the PEA." Amari claims that because of these statements Justice Carpio should inhibit himself "on the grounds of bias and prejudgment" and that the instant case should be "re-deliberated" after being assigned to a new ponente.

The motion to inhibit Justice Carpio must be denied for three reasons. First, the motion to inhibit came after Justice Carpio had already rendered his opinion on the merits of the case. The rule is that a motion to inhibit must be denied if filed after a member of the Court had already given an opinion

on the merits of the case,1 the rationale being that "a litigant cannot be permitted to speculate upon the action of the Court xxx (only to) raise an objection of this sort after a decision has been rendered." Second, as can be readily gleaned from the summary of the Decision quoted above, the

absence of public bidding is not one of the ratio decidendi of the Decision which is anchored on violation of specific provisions of the Constitution. The absence of public bidding was not raised as an issue by the parties. The absence of public bidding was mentioned in the Decision only to complete the discussion on the law affecting reclamation contracts for the guidance of public officials. At any rate, the Office of the Solicitor General in its Motion for Reconsideration concedes that the absence of public bidding in the disposition of the Freedom Islands rendered the Amended

JVA null and void.2 Third, judges and justices are not disqualified from participating in a case just because they have written legal articles on the law involved in the case. As stated by the Court in

Republic v. Cocofed,3 -

The mere fact that, as a former columnist, Justice Carpio has written on the coconut levy will not disqualify him, in the same manner that jurists will not be disqualified just because they may have given their opinions as textbook writers on the question involved in a case.

Besides, the subject and title of the column in question was "The CCP reclamation project" and the column referred to the Amari-PEA contract only in passing in one sentence.

Amari’s motion to set the case for oral argument must also be denied since the pleadings of the parties have discussed exhaustively the issues involved in the case.

The motions for reconsideration reiterate mainly the arguments already discussed in the Decision. We shall consider in this Resolution only the new arguments raised by respondents.

In its Supplement to Motion for Reconsideration, Amari argues that the Decision should be made to apply prospectively, not retroactively to cover the Amended JVA. Amari argues that the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal

consequences are attached, citing De Agbayani v. PNB,4 thus:

x x x. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.

In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, - with respect to particular relations, individual and corporate, and particular conduct, private and official." This language has been quoted with approval in a resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores. x x x.

x x x

x x x That before the decision they were not constitutionally infirm was admitted expressly. There is all the more reason then to yield assent to the now prevailing principle that the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached.

Amari now claims that "assuming arguendo that Presidential Decree Nos. 1084 and 1085, and Executive Order Nos. 525 and 654 are inconsistent with the 1987 Constitution, the limitation imposed by the Decision on these decrees and executive orders should only be applied prospectively from the finality of the Decision."

Amari likewise asserts that a new doctrine of the Court cannot operate retroactively if it impairs

vested rights. Amari maintains that the new doctrine embodied in the Decision cannot apply retroactively on those who relied on the old doctrine in good faith, citing Spouses Benzonan v. Court

of Appeals,5 thus:

At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional (Francisco v. Certeza, 3 SCRA 565 [1961]).

The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974] "x x x when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof.

There may be special cases where weighty considerations of equity and social justice will warrant a retroactive application of doctrine to temper the harshness of statutory law as it applies to poor farmers or their widows and orphans. In the present petitions, however, we find no such equitable considerations. Not only did the private respondent apply for free agricultural land when he did not need it and he had no intentions of applying it to the noble purposes behind the law, he would now repurchase for only P327,995.00, the property purchased by the petitioners in good faith for P1,650,000.00 in 1979 and which, because of improvements and the appreciating value of land must be worth more than that amount now.

The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they purchased the property from DBP in 1979 or thirteen (13) years ago. Under the rulings in these two cases, the period to repurchase the disputed lot given to respondent Pe expired on June 18, 1982. He failed to exercise his right. His lost right cannot be revived by relying on the 1988 case of Belisario. The right of petitioners over the subject lot had already become vested as of that time and cannot be impaired by the retroactive application of the Belisario ruling.

Amari’s reliance on De Agbayani and Spouses Benzonan is misplaced. These cases would apply if the prevailing law or doctrine at the time of the signing of the Amended JVA was that a private corporation could acquire alienable lands of the public domain, and the Decision annulled the law or reversed this doctrine. Obviously, this is not the case here.

Under the 1935 Constitution, private corporations were allowed to acquire alienable lands of the public domain. But since the effectivity of the 1973 Constitution, private corporations were banned from holding, except by lease, alienable lands of the public domain. The 1987 Constitution continued this constitutional prohibition. The prevailing law before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the public domain. The Decision has not annulled or in any way changed the law on this matter. The Decision, whether made retroactive or not, does not change the law since the Decision merely reiterates the law that prevailed since the effectivity of the 1973 Constitution. Thus, De Agbayani, which refers to a law that is invalidated by a decision of the Court, has no application to the instant case.

Likewise, Spouses Benzonan is inapplicable because it refers to a doctrine of the Court that is overruled by a subsequent decision which adopts a new doctrine. In the instant case, there is no previous doctrine that is overruled by the Decision. Since the case of Manila Electric Company v.

Judge Castro-Bartolome,6 decided on June 29, 1982, the Court has applied consistently the constitutional provision that private corporations cannot hold, except by lease, alienable lands of the public domain. The Court reiterated this in numerous cases, and the only dispute in the application of this constitutional provision is whether the land in question had already become private property

before the effectivity of the 1973 Constitution.7 If the land was already private land before the 1973

Constitution because the corporation had possessed it openly, continuously, exclusively and adversely for at least thirty years since June 12, 1945 or earlier, then the corporation could apply for judicial confirmation of its imperfect title. But if the land remained public land upon the effectivity of the 1973 Constitution, then the corporation could never hold, except by lease, such public land. Indisputably, the Decision does not overrule any previous doctrine of the Court.

The prevailing doctrine before, during and after the signing of the Amended JVA is that private corporations cannot hold, except by lease, alienable lands of the public domain. This is one of the two main reasons why the Decision annulled the Amended JVA. The other main reason is that submerged areas of Manila Bay, being part of the sea, are inalienable and beyond the commerce of man, a doctrine that has remained immutable since the Spanish Law on Waters of 1886. Clearly, the Decision merely reiterates, and does not overrule, any existing judicial doctrine.

Even on the characterization of foreshore lands reclaimed by the government, the Decision does not overrule existing law or doctrine. Since the adoption of the Regalian doctrine in this jurisdiction, the sea and its foreshore areas have always been part of the public domain. And since the enactment of Act No. 1654 on May 18, 1907 until the effectivity of the 1973 Constitution, statutory law never allowed foreshore lands reclaimed by the government to be sold to private corporations. The 1973 and 1987 Constitution enshrined and expanded the ban to include any alienable land of the public domain.

There are, of course, decisions of the Court which, while recognizing a violation of the law or Constitution, hold that the sale or transfer of the land may no longer be invalidated because of

"weighty considerations of equity and social justice."8 The invalidation of the sale or transfer may also be superfluous if the purpose of the statutory or constitutional ban has been achieved. But none of these cases apply to Amari.

Thus, the Court has ruled consistently that where a Filipino citizen sells land to an alien who later sells the land to a Filipino, the invalidity of the first transfer is corrected by the subsequent sale to a

citizen.9 Similarly, where the alien who buys the land subsequently acquires Philippine citizenship, the sale is validated since the purpose of the constitutional ban to limit land ownership to Filipinos

has been achieved.10 In short, the law disregards the constitutional disqualification of the buyer to hold land if the land is subsequently transferred to a qualified party, or the buyer himself becomes a qualified party. In the instant case, however, Amari has not transferred the Freedom Islands, or any portion of it, to any qualified party. In fact, Amari admits that title to the Freedom Islands still

remains with PEA.11

The Court has also ruled consistently that a sale or transfer of the land may no longer be questioned

under the principle of res judicata, provided the requisites for res judicata are present.12 Under this principle, the courts and the parties are bound by a prior final decision, otherwise there will be no

end to litigation. As the Court declared in Toledo-Banaga v. Court of Appeals,13 "once a judgement has become final and executory, it can no longer be disturbed no matter how erroneous it may be." In the instant case, there is no prior final decision adjudicating the Freedom Islands to Amari.

There are, moreover, special circumstances that disqualify Amari from invoking equity principles. Amari cannot claim good faith because even before Amari signed the Amended JVA on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning precisely the qualification of Amari to acquire the Freedom Islands. Even before the filing of this petition, two

Senate Committees14 had already approved on September 16, 1997 Senate Committee Report No. 560. This Report concluded, after a well-publicized investigation into PEA’s sale of the Freedom Islands to Amari, that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended JVA.

Amari has also not paid to PEA the full reimbursement cost incurred by PEA in reclaiming the

Freedom Islands. Amari states that it has paid PEA only P300,000,000.0015 out of the P1,894,129,200.00 total reimbursement cost agreed upon in the Amended JVA. Moreover, Amari does not claim to have even initiated the reclamation of the 592.15 hectares of submerged areas covered in the Amended JVA, or to have started to construct any permanent infrastructure on the

Freedom Islands. In short, Amari does not claim to have introduced any physical improvement or development on the reclamation project that is the subject of the Amended JVA. And yet Amari claims that it had already spent a "whopping P9,876,108,638.00" as its total development cost as of

June 30, 2002.16 Amari does not explain how it spent the rest of the P9,876,108,638.00 total project cost after paying PEA P300,000,000.00. Certainly, Amari cannot claim to be an innocent purchaser in good faith and for value.

In its Supplement to Motion for Reconsideration, PEA claims that it is "similarly situated" as the Bases Conversion Development Authority (BCDA) which under R.A. No. 7227 is tasked to sell portions of the Metro Manila military camps and other military reservations. PEA’s comparison is incorrect. The Decision states as follows:

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 or disposable lands of the public domain, these lands are still public, not private lands.

PEA is the central implementing agency tasked to undertake reclamation projects nationwide. PEA took the place of Department of Environment and Natural Resources ("DENR" for brevity) as the government agency charged with leasing or selling all reclaimed lands of the public domain. In the hands of PEA, which took over the leasing and selling functions of DENR, reclaimed foreshore lands are public lands in the same manner that these same lands would have been public lands in the hands of DENR. BCDA is an entirely different government entity. BCDA is authorized by law to sell specific government lands that have long been declared by presidential proclamations as military reservations for use by the different services of the armed forces under the Department of National Defense. BCDA’s mandate is specific and limited in area, while PEA’s mandate is general and national. BCDA holds government lands that have been granted to end-user government entities – the military services of the armed forces. In contrast, under Executive Order No. 525, PEA holds the reclaimed public lands, not as an end-user entity, but as the government agency "primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government."

In Laurel v. Garcia,17 cited in the Decision, the Court ruled that land devoted to public use by the Department of Foreign Affairs, when no longer needed for public use, may be declared patrimonial property for sale to private parties provided there is a law authorizing such act. Well-settled is the doctrine that public land granted to an end-user government agency for a specific public use may subsequently be withdrawn by Congress from public use and declared patrimonial property to be sold to private parties. R.A. No. 7227 creating the BCDA is a law that declares specific military reservations no longer needed for defense or military purposes and reclassifies such lands as patrimonial property for sale to private parties.

Government owned lands, as long they are patrimonial property, can be sold to private parties, whether Filipino citizens or qualified private corporations. Thus, the so-called Friar Lands acquired

by the government under Act No. 1120 are patrimonial property18 which even private corporations can acquire by purchase. Likewise, reclaimed alienable lands of the public domain if sold or transferred to a public or municipal corporation for a monetary consideration become patrimonial property in the hands of the public or municipal corporation. Once converted to patrimonial property, the land may be sold by the public or municipal corporation to private parties, whether Filipino citizens or qualified private corporations.

We reiterate what we stated in the Decision is the rationale for treating PEA in the same manner as DENR with respect to reclaimed foreshore lands, thus:

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations

from acquiring any kind of alienable land of the public domain. PEA will simply turn around, as PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80 million strong.

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can "acquire x x x any and all kinds of lands." This will open the floodgates to corporations and even individuals acquiring hundreds, if not thousands, of hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands. This will result in corporations amassing huge landholdings never before seen in this country - creating the very evil that the constitutional ban was designed to prevent. This will completely reverse the clear direction of constitutional development in this country. The 1935 Constitution allowed private corporations to acquire not more than 1,024 hectares of public lands. The 1973 Constitution prohibited private corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally reiterated this prohibition.

Finally, the Office of the Solicitor General and PEA argue that the cost of reclaiming deeply submerged areas is "enormous" and "it would be difficult for PEA to accomplish such project without

the participation of private corporations."19 The Decision does not bar private corporations from participating in reclamation projects and being paid for their services in reclaiming lands. What the Decision prohibits, following the explicit constitutional mandate, is for private corporations to acquire reclaimed lands of the public domain. There is no prohibition on the directors, officers and stockholders of private corporations, if they are Filipino citizens, from acquiring at public auction reclaimed alienable lands of the public domain. They can acquire not more than 12 hectares per individual, and the land thus acquired becomes private land.

Despite the nullity of the Amended JVA, Amari is not precluded from recovering from PEA in the proper proceedings, on a quantum meruit basis, whatever Amari may have incurred in implementing the Amended JVA prior to its declaration of nullity.

WHEREFORE, finding the Motions for Reconsideration to be without merit, the same are hereby DENIED with FINALITY. The Motion to Inhibit and for Re-Deliberation and the Motion to Set Case for Hearing on Oral Argument are likewise DENIED.

SO ORDERED.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

 

G.R. No. 95608 January 21, 1997

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

 

ROMERO, J.:

The issue in the case at bar pertains to ownership of 15 parcels of land in Tiwi, Albay which form part of the "Tiwi Hot Spring National Park." The facts of the case are as follows.

On June 13, 1913, then Governor General of the Philippine Islands, William Cameron Forbes issued Executive Order No. 40 which reserved for provincial park purposes some 440,530 square meters of land situated in Barrio Naga, Municipality of Tiwi, Province of

Albay pursuant to the provisions of Act 648 of the Philippine Commission. 1

Subsequently, the then Court of First Instance of Albay, 15th Judicial District, United States of America, ordered the registration of 15 parcels of land covered by Executive

Order No. 40 in the name of Diego Palomo on December 9, 1916; 2 December 28, 3 and

January 17, 1917. 4 Diego Palomo donated these parcels of land consisting of 74,872 square meters which were allegedly covered by Original Certificates of Title Nos. 513,

169, 176 and 173 5 to his heirs, herein petitioners, Ignacio and Carmen Palomo two

months before his death in April 1937. 6

Claiming that the aforesaid original certificates of title were lost during the Japanese occupation, Ignacio Palomo filed a petition for reconstitution with the Court of First

Instance of Albay on May 30, 1950. 7 The Register of Deeds of Albay issued Transfer

Certificates of Title Nos. 3911, 3912, 3913 and 3914 sometime in October 1953. 8

On July 10, 1954 President Ramon Magsaysay issued Proclamation No. 47 converting the area embraced by Executive Order No. 40 into the "Tiwi Hot Spring National Park," under the control, management, protection and administration of the defunct Commission of Parks and Wildlife, now a division of the Bureau of Forest Development. The area was never released as alienable and disposable portion of the public domain and, therefore, is neither susceptible to disposition under the provisions of the Public Land Law (CA 141) nor registrable under the Land Registration Act (Act No. 496).

The Palomos, however, continued in possession of the property, paid real estate taxes

thereon 9 and introduced improvements by planting rice, bananas, pandan and coconuts. On April 8, 1971, petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual mortgaged the parcels of land covered by TCT 3911, 3912, 3913 and 3914 to guarantee a loan of P200,000 from the Bank of the Philippine Islands.

In May 7, 1974 petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual filed Civil Case No. T-143 before the then Court of First Instance of Albay for Injunction with damages against private respondents Faustino J. Perfecto, Raffy Santillan, Boy Ariado, Lorenzo Brocales, Salvador Doe and other Does who are all employees of the Bureau of Forest Development who entered the land covered by TCT No. 3913 and/or TCT 3914 and cut down bamboos thereat, totally leveling no less than 4 groves worth not less than P2,000.00.

On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176 for annulment and cancellation of Certificates of Title involving the 15 parcels of land registered in the name of the petitioners and subject of Civil Case T-143. Impleaded with the petitioners as defendants were the Bank of the Philippine Islands, Legazpi Branch and the Register of Deeds of Albay.

The case against the Bank of Philippine Islands was dismissed because the loan of P200,000 with the Bank was already paid and the mortgage in its favor cancelled.

A joint trial of Civil Case T-143 and T-176 was conducted upon agreement of the parties

and on July 31, 1986, the trial court rendered the following decision:

WHEREFORE, premises considered, judgment is hereby rendered:

IN CIVIL CASE No. T-143, in favor of the defendants and against the plaintiffs, dismissing the complaint for injunction and damages, as it is hereby DISMISSED.

Costs against the plaintiffs.

In CIVIL CASE No. T-176, in favor of the plaintiffs and against the defendants:

(1) Declaring null and void and no force and effect the Order dated September 14, 1953, as well as the Original Certificate of Titles Nos. 153, 10 169, 173 and 176 and Transfer Certificates of Titles Nos. 3911, T-3912, T-3913, and T-3914, all of the Register of Deeds of Albay and all transactions based on said titles.

(2) Forfeiting in favor of the plaintiff Government any and all improvements on the lands in question that are found therein and introduced by the defendants;

(3) Declaring Lot Nos. 1, 2, 3, 4, 5, 6, 7 8, 9,10, 11 and 12, Plan II-9299 and

Lots 1, 21, 11 3 and 4 of Plan II-9205 as part of the Tiwi Hot Spring National Park;

(4) and Finally, the Register of Deeds of Albay is hereby ordered to cancel the alleged Original Certificates of Titles Nos. 513, 169, 173 and 176, Transfer Certificates of Title Nos. T-3911, T-3912, T-3913 and T-3914.

Costs against the defendants.

So Ordered. 12

The court a quo in ruling for the Republic found no sufficient proof that the Palomos have established property rights over the parcels of land in question before the Treaty of Paris which ended the Spanish-American War at the end of the century. The court further stated that assuming that the decrees of the Court of First Instance of Albay were really issued, the Palomos obtained no right at all over the properties because these were issued only when Executive Order No. 40 was already in force. At this point, we take note that although the Geodetic Engineer of the Bureau of Lands appointed as one of the Commissioners in the relocation survey of the properties stated in his reamended report that of the 3,384 square meters covered by Lot 2, Plan II-9205, only 1,976 square meters

fall within the reservation area, 13 the RTC ordered TCT 3913 covering the entire Lot 21 (sic) Plan II-9205 cancelled.

The petitioners appealed to the Court of Appeals which affirmed in toto the findings of the lower Court; hence this petition raising the following issues:

1. The respondent Court of Appeals committed grave abuse of discretion in affirming in toto the decision of the lower court.

2. The declaration of nullity of the original certificates of title and subsequent transfer certificates of titles of the petitioners over the

properties in question is contrary to law and jurisprudence on the matter.

3. The forfeiture of all improvements introduced by the petitioners in the premises in favor of the government is against our existing law and jurisprudence.

The issues raised essentially boil down to whether or not the alleged original certificate of titles issued pursuant to the order of the Court of First Instance in 1916-1917 and the subsequent TCTs issued in 1953 pursuant to the petition for reconstitution are valid.

Petitioners contend that the Treaty of Paris which ended the Spanish-American War at the end of the 19th century recognized the property rights of Spanish and Filipino citizens and the American government had no inherent power to confiscate properties of private citizens and declare them part of any kind of government reservation. They allege that their predecessors in interest have been in open, adverse and continuous possession of the subject lands for 20-50 years prior to their registration in 1916-1917. Hence, the reservation of the lands for provincial purposes in 1913 by then Governor-general Forbes was tantamount to deprivation of private property without due process of law.

In support of their claim, the petitioners presented copies of a number of decisions of the Court of First Instance of Albay, 15th Judicial District of the United States of America which state that the predecessors in interest of the petitioners' father Diego Palomo, were in continuous, open and adverse possession of the lands from 20 to 50 years at the time of their registration in 1916.

We are not convinced.

The Philippines passed to the Spanish Crown by discovery and conquest in the 16th century. Before the Treaty of Paris in April 11, 1899, our lands, whether agricultural, mineral or forest were under the exclusive patrimony and dominion of the Spanish Crown. Hence, private ownership of land could only be acquired through royal concessions which were documented in various forms, such as (1) Titulo Real or Royal Grant," (2) Concesion Especial or Special Grant, (3) Titulo de Compra or Title by Purchase and (4) Informacion Posesoria or Possessory Information title obtained under the Spanish Mortgage Law or under the Royal Decree of January 26, 1889.

Unfortunately, no proof was presented that the petitioners' predecessors in interest derived title from an old Spanish grant. Petitioners placed much reliance upon the declarations in Expediente No. 5, G.L.R.O. Record Decision No. 9820, dated January 17, 1917; Expediente No. 6, G.L.R.O. Record No. 9821, dated December 28, 1916; Expediente No. 7, G.L.R.O. Record No. 9822, dated December 9, 1916; Expediente No. 8, G.L.R.O. Record No. 9823, dated December 28, 1916 and Expediente No. 10, G.L.R.O. Record No. 9868, dated December 9, 1916 of the Court of First Instance of Albay, 15th Judicial District of the United States of America presided by Judge Isidro Paredes that their predecessors in interest were in open, adverse and continuous possession of the subject

lands for 20-50 years. 14 The aforesaid "decisions" of the Court of First Instance, however, were not signed by the judge but were merely certified copies of notification to Diego Palomo bearing the signature of the clerk of court.

Moreover, despite claims by the petitioners that their predecessors in interest were in open, adverse and continuous possession of the lands for 20 to 50 years prior to their registration in 1916-1917, the lands were surveyed only in December 1913, the very same year they were acquired by Diego Palomo. Curiously , in February 1913 or 10 months before the lands were surveyed for Diego Palomo, the government had already surveyed the area in preparation for its reservation for provincial park purposes. If the petitioners' predecessors in interest were indeed in possession of the lands for a number of years prior to their registration in 1916-1917, they would have undoubtedly known about the

inclusion of these properties in the reservation in 1913. It certainly is a trifle late at this point to argue that the government had no right to include these properties in the reservation when the question should have been raised 83 years ago.

As regards the petitioners' contention that inasmuch as they obtained the titles without government opposition, the government is now estopped from questioning the validity of the certificates of title which were granted. As correctly pointed out by the respondent Court of Appeals, the principle of estoppel, does not operate against the Government for

the act of its agents. 15

Assuming that the decrees of the Court of First Instance were really issued, the lands are still not capable of appropriation. The adverse possession which may be the basis of a grant of title in confirmation of imperfect title cases applies only to alienable lands of the public domain.

There is no question that the lands in the case at bar were not alienable lands of the public domain. As testified by the District Forester, records in the Bureau of Forestry show that the subject lands were never declared as alienable and disposable and subject

to private alienation prior to 1913 up to the present. 16 Moreover, as part of the reservation for provincial park purposes, they form part of the forest zone.

It is elementary in the law governing natural resources that forest land cannot be owned by private persons. It is not registrable and possession thereof, no matter how lengthy,

cannot convert it into private property, 17 unless such lands are reclassified and considered disposable and alienable.

Neither do the tax receipts which were presented in evidence prove ownership of the parcels of land inasmuch as the weight of authority is that tax declarations are not

conclusive proof of ownership in land registration cases. 18

Having disposed of the issue of ownership, we now come to the matter regarding the forfeiture of improvements introduced on the subject lands. It bears emphasis that Executive Order No. 40 was already in force at the time the lands in question were surveyed for Diego Palomo. Petitioners also apparently knew that the subject lands were covered under the reservation when they filed a petition for reconstitution of the lost original certificates of title inasmuch as the blueprint of Survey Work Order Number 21781 of Plan II-9299 approved by the Chief of the Land Registration Office Enrique Altavas in 1953 as a true and correct copy of the Original Plan No. II-9299 filed in the

Bureau of Lands dated September 11, 1948 19 contains the following note, "in conflict

with provincial reservation." 20 In any case, petitioners are presumed to know the law and the failure of the government to oppose the registration of the lands in question is no justification for the petitioners to plead good faith in introducing improvements on the lots.

Finally, since 1,976 square meters of the 3,384 square meters covered by TCT 3913 fall within the reservation, TCT 3913 should be annulled only with respect to the aforesaid area. Inasmuch as the bamboo groves leveled in TCT 3913 and subject of Civil Case T-

143, 21 were within the perimeter of the national park, 22 no pronouncement as to damages is in order.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the modification that TCT 3913 be annulled with respect to the 1,976 square meter area falling within the reservation zone.

SO ORDERED.

Regalado, Puno, Mendoza and Torres, Jr., JJ., concur.

WENCESLAO VlNZONS TAN, THE DIRECTOR OF FORESTRY, APOLONIO THE SECRETARY OF AGRICULTURE AND NATURAL RESOURCES JOSE Y. FELICIANO,

respondents-appelllees, vs.

THE DIRECTOR OF FORESTRY, APOLONIO RIVERA, THE SECRETARY OF AGRICULTURE AND N ATURAL RESOURCES JOSE Y. FELICIANO, respon dents-

appellees,RAVAGO COMMERCIAL CO., JORGE LAO HAPPICK and ATANACIO MALLARI, intervenors,

MAKASIAR, J:

This is an appeal from the order dated January 20, 1965 of the then Court of First Instance of Manila, Branch VII, in Civil Case No. 56813, a petition for certiorari, prohibition and mandamus with preliminary prohibitory injunction (p. 2. rec.), which dismissed the petition of petitioner-appellant Wenceslao Vinzons Tan on the ground that it does not state a sufficient cause of action, and upon the respondents-appellees' (Secretary of Agriculture and Natural resources and the Director of Forestry) motion to dismiss (p. 28, rec.).

Sometime in April 1961, the Bureau of Forestry issued Notice No. 2087, advertising for public bidding a certain tract of public forest land situated in Olongapo, Zambales, provided tenders were received on or before May 22, 1961 (p. 15, CFI rec.). This public forest land, consisting of 6,420 hectares, is located within the former U.S. Naval Reservation comprising 7,252 hectares of timberland, which was turned over by the United States Government to the Philippine Government (P. 99, CFI rec.).

On May 5, 1961, petitioner-appellant Wenceslao Vinzons Tan submitted his application in due form after paying the necessary fees and posting tile required bond therefor. Nine other applicants submitted their offers before the deadline (p. 29, rec.).

Thereafter, questions arose as to the wisdom of having the area declared as a forest reserve or allow the same to be awarded to the most qualified bidder. On June 7, 1961, then President Carlos P. Garcia issued a directive to the Director of the Bureau of Forestry, which read as follows:

It is desired that the area formerly covered by the Naval Reservation be made a forest reserve for watershed purposes. Prepare and submit immediately a draft of a proclamation establishing the said area as a watershed forest reserve for Olongapo, Zambales. It is also desired that the bids received by the Bureau of Forestry for the issuance of the timber license in the area during the public bidding conducted last May 22, 1961 be rejected in order that the area may be reserved as above stated. ...

(SGD.) CARLOS P. GARCIA

(pp. 98, CFI rec.).

On August 3, 1961, Secretary Cesar M. Fortich of Agriculture and Natural Resources sustained the findings and re comendations of the Director of Forestry who concluded that "it would be beneficial to the public interest if the area is made available for exploitation under certain conditions," and

We quote:

Respectfully forwarded to the honorable, the Executive Secretary Malacanang. Manila inviting particular attention to the comment and recommendation of the Director of

Forestry in the proceeding in indorsement in which this Of fice fully concurs.

The observations of responsible forest officials are most revealing of their zeal to promote forest conservation and watershed protection especially in Olongapo, Zambales area. In convincing fashion, they have demonstrated that to declare the forest area involved as a forest reserve ratify than open it for timber exploitation under license and regulation would do more harm than of to the public interest. To convert the area into a forest reserve without an adequate forest protection force, would make of it a 'Free Zone and Logging Paradise,' to the ever 'Problem Loggers' of Dinalupihan, Bataan . . . an open target of timber smugglers, kaingineros and other forms of forest vandals and despoilers. On the other hand, to award the area, as planned, to a reputable and responsible licensee who shall conduct logging operations therein under the selective logging method and who shall be obliged to employ a sufficient number of forest guards to patrol and protect the forest consecration and watershed protection.

Worthy of mention is the fact that the Bureau of Forestry had already conducted a public bidding to determine the most qualified bidder to whom the area advertised should be awarded. Needless to stress, the decision of the Director of Forestry to dispose of the area thusly was arrived at after much thought and deliberation and after having been convinced that to do so would not adversely affect the watershed in that sector. The result of the bidding only have to be announced. To be sure, some of the participating bidders like Mr. Edgardo Pascual, went to much expense in the hope of winning a virgin forest concession. To suddenly make a turn about of this decision without strong justifiable grounds, would cause the Bureau of Forestry and this Office no end of embarrassment.

In view of the foregoing, it is earnestly urged that the Director of Forestry be allowed to proceed with the announcement of the results of the bidding for the subject forest area (p. 13, CFI rec.).

The Office of the President in its 4th Indorsement dated February 2, 1962, signed by Atty. Juan Cancio, Acting Legal Officer, "respectfully returned to the Honorable Secretary of the Department of Agriculture and Natural Resources for appropriate action," the papers subject of Forestry Notice No. 2087 which was referred to the Bureau of Forestry for decision (p. 14, CFI rec.).

Finally, of the ten persons who submitted proposed the area was awarded to herein petitioner-appellant Wenceslao Vinzons Tan, on April 15, 1963 by the Bureau of Forestry (p. 17, CFI rec.). Against this award, bidders Ravago Commercial Company and Jorge Lao Happick filed motions for reconsideration which were denied by the Director of Forestry on December 6, 1963.

On May 30, 1963, the Secretary of Agriculture and Natural Resources Benjamin M. Gozon — who succeeded Secretary Cesar M. Fortich in office — issued General Memorandum Order No. 46, series of 1963, pertinent portions of which state:

xxx xxx xxx

SUBJECT: ... ... ...

(D)elegation of authority to the Director of Forestry to grant ordinary timber licenses.

1. ... ... ...

2. The Director of Forestry is hereby authorized to grant (a) new ordinary timber licenses where the area covered thereby is not more than 3,000 hectares each; and (be the extension of ordinary timber licenses for areas not exceeding 5,000 hectares each;

3. This Order shall take effect immediately (p. 267, CFI rec.).

Thereafter, Jose Y. Feliciano was appointed as Acting secretary of Agriculture and Natural Resources, replacing secretary Benjamin M. Gozon. Upon assumption of office he Immediately promulgate on December 19, 19b3 General memorandum Order No. 60, revoking the authority delegated to the Director of Forestry, under General Memorandum order No. 46, to grant ordinary timber licenses, which order took effect on the same day, December 19, 1963. Pertinent portions of the said Order read as follows:

xxx xxx xxx

SUBJECT: Revocation of General Memorandum Order No 46 dated May 30, 1963 —

1. In order to acquaint the undersigned with the volume and Nature of the work of the Department, the authority delegated to the Director of forestry under General Memorandum Order No. 46, dated May 30, 1963, to grant (a) new ordinary timber licenses where the area covered thereby is not more than 3,000 hectares each; and (b) the extension of ordinary timber licenses for areas not exceeding 3,000 hectares each is hereby revoked. Until further notice, the issuance of' new licenses , including amendments thereto, shall be signed by the secretary of Agriculture and Natural Resources.

2. This Order shall take effect immediately and all other previous orders, directives, circulars, memoranda, rules and regulations inconsistent with this Order are hereby revoked (p. 268, CFl rec.; Emphasis supplied).

On the same date that the above-quoted memorandum took effect, December 19, 1963, Ordinary Timber License No. 20-'64 (NEW) dated April 22, 1963, in the name of Wenceslao Vinzons Tan, was signed by then Acting Director of Forestry Estanislao R. Bernal without the approval of the Secretary of Agriculture and Natural Resources. On January 6, 1964, the license was released by the Office of the Director of Forestry (p. 30, CFI rec.; p. 77, rec.). It was not signed by the Secretary of Agriculture and Natural Resources as required by Order No. 60 aforequoted.

On February 12, 1964, Ravago Commercial Company wrote a letter to the Secretary of Agriculture and Natural Resources shall be considered by tile Natural Resources praying that, pending resolution of the appeal filed by Ravago Commercial Company and Jorge Lao Happick from the order of the Director of Forestry denying their motion for reconsideration, OTI No. 20-'64 in the name of Wenceslao V. Tan be cancelled or revoked on the ground that the grant thereof was irregular, anomalous and contrary to existing forestry laws, rules and regulations.

On March 9, 1964, acting on the said representation made by Ravago Commercial Company, the Secretary of Agriculture and Natural Resources promulgated an order declaring Ordinary Timber License No. 20-'64 issued in the name of Wenceslao Vinzons Tan, as having been issued by the Director of Forestry without authority, and is therefore void ab initio. The dispositive portion of said order reads as follows:

WHEREFORE, premises considered, this Office is of the opinion and so holds that O.T. License No. 20-'64 in the name of Wenceslao Vinzons Tan should be, as hereby it is, REVOKED AND DECLARED without force and effect whatsoever from the issuance thereof.

The Director of Forestry is hereby directed to stop the logging operations of Wenceslao Vinzons Tan, if there be any, in the area in question and shall see to it that the appellee shall not introduce any further improvements thereon pending the disposition of the appeals filed by Ravago Commercial Company and Jorge lao Happick in this case" (pp. 30-31, CFI rec.).

Petitioner-appellant moved for a reconsideration of the order, but the Secretary of Agriculture and Natural Resources denied the motion in an Order dated March 25, 1964, wherein this paragraph appears:

In this connection, it has been observed by the Acting Director of Forestry in his 2nd indorsement of February 12, 1964, that the area in question composes of water basin overlooking Olongapo, including the proposed Olongapo watershed Reservation; and that the United States as well as the Bureau of Forestry has earmarked this entire watershed for a watershed pilot forest for experiment treatment Concerning erosion and water conservation and flood control in relation to wise utilization of the forest, denudation, shifting cultivation, increase or decrease of crop harvest of agricultural areas influenced by the watershed, etc. .... (pp. 3839, CFI rec.; p. 78, rec.).

On April 11, 1964, the Secretary of Agriculture and Natural Resources, acting on the separate appeals filed by Jorge Lao Happick and Ravago Commercial Company, from the order of the Director of Forestry dated April 15, 1963, awarding to Wenceslao Vinzons Tan the area under Notive No.

2087, and rejecting the proposals of the other applicants covering the same area, promulgated an order commenting that in view of the observations of the Director of Forestry just quoted, "to grant the area in question to any of the parties herein, would undoubtedly adversely affect public interest which is paramount to private interests," and concluding that, "for this reason, this Office is of the opinion and so holds, that without the necessity of discussing the appeals of the herein appellants, the said appeals should be, as hereby they are, dismissed and this case is considered a closed matter insofar as this Office is concerned" (p. 78, rec.).

On April 18, 1964, on the basis of the denial of his motion for reconsideration by the Secretary of Agriculture and Natural Resources, petitioner-appellant filed the instant case before tile court a quo (Court of First Instance, Manila), Special Civil Action No. 56813, a petition for certiorari, prohibition and mandamus with preliminary prohibitory injunction (pp. 1-12, CFI rec.). Petitioner-appellant claims that the respondents-appellees "unlawfully, illegally whimsically, capriciously and arbitrarily acted without or in excess of their jurisdiction, and/or with grave abuse of discretion by revoking a valid and existing timber license without just cause, by denying petitioner-appellant of the equal protection of the laws, by depriving him of his constitutional right to property without due process of law, and in effect, by impairing the obligation of contracts" (P. 6, CFI rec.). Petitioner-appellant prayed for judgment making permanent the writ of preliminary injunction against the respondents- appellees; declaring the orders of the Secretary of Agriculture and Natural Resources dated March 9, March 25, and April 11, 1964, as well as all his acts and those of the Director of Forestry implementing said orders, and all the proceedings in connection therewith, null and void, unlawful and of no force and effect; ordering the Director of Forestry to renew OTI No. 20-'64 upon expiration, and sentencing the respondents, jointly and severally, to pay the petitioner-appellant the sum of Two Hundred Thousand Pesos (P200,000.000) by way of pecuniary damage, One Hundred Thousand Pesos (P100,000.00) by way of moral and exemplary damages, and Thirty Thousand Pesos (P30,000-00) as attorney's fees and costs. The respondents-appellees separately filed oppositions to the issuance of the writ of preliminary injunction, Ravago Commercial Company, Jorge Lao, Happick and Atanacio Mallari, presented petitions for intervention which were granted, and they too opposed the writ.

The Director of Forestry in his motion to dismiss dated April 24, 1964, alleges the following grounds: (1) that the court has no jurisdiction; (2) that the respondents may not be sued without their consent; (3) that the petitioner has not exhausted all available administrative remedies; (4) that the petition does not state a cause of action; and (5) that purely administrative and discretionary functions of administrative officials may not be interfered with by the courts. The Secretary of Agriculture and Natural Resources joined the motion to dismiss when in his answer of May 18, 1964, he avers the following special and affirmative defenses: (1) that the court has no jurisdiction to entertain the action for certiorari, prohibition and mandamus; (2) that the petitioner has no cause of action; (3) that venue is improperly laid; (4) that the State is immune from suit without its consent; (5) that the court has no power to interfere in purely administrative functions; and (6) that the cancellation of petitioner's license was dictated by public policy (pp. 172-177, rec.). Intervenors also filed their respective answers in intervention with special and affirmative defenses (pp. 78-79, rec.). A hearing was held on the petition for the issuance of writ of preliminary injunction, wherein evidence was submitted by all the parties including the intervenors, and extensive discussion was held both orally and in writing.

After the said hearing, on January 20, 1965, the court a quo, from the evidence received, resolved not only the question on the issuance of a writ of preliminary injunction but also the motion to dismiss, declared that the petition did not state a sufficient cause of action, and dismissed the same accordingly. To justify such action, the trial court, in its order dismissing the petition, stated that "the court feels that the evidence presented and the extensive discussion on the issuance of the writ of preliminary mandatory and prohibitory injunction should also be taken into consideration in resolving not only this question but also the motion to dismiss, because there is no reason to believe that the parties will change their stand, arguments and evidence" (p. 478, CFI rec.). His motion for reconsideration having been denied (p. 488, CFI rec.), petitioner-appellant Wenceslao Vinzons Tan appealed directly to this Court.

I

Petitioner-appellant now comes before this Court, claiming that the trial court erred in:

(1) holding that the petition does not state a sufficient cause of action: and

(2) dismissing the petition [p.27,rec. ].

He argues that the sole issue in the present case is, whether or not the facts in the petition constitute a sufficient cause of action (p. 31, rec.). Petitioner-appellant, in his brief, presented a lengthy discussion on the definition of the term cause of action wherein he contended that the three essential elements thereon, — namely, the legal right of the plaintiff, the correlative obligation of the defendants and the act or omission of the defendant in violation of that right — are satisfied in the averments of this petition (pp. 31-32, rec.). He invoked the rule that when the ground for dismissal is that the complaint states no cause of action, such fact can be determined only from the facts alleged in the complaint and from no other, and the court cannot consider other matters aliunde He further invoked the rule that in a motion to dismiss based on insufficiency of cause of action, the facts alleged in the complaint are deemed hypothetically admitted for the purpose of the motion (pp. 32-33, rec.).

A perusal of the records of the case shows that petitioner-appellant's contentions are untenable. As already observed, this case was presented to the trial court upon a motion to dismiss for failure of the petition to state a claim upon which relief could be granted (Rule 16 [g], Revised Rules of Court), on the ground that the timber license relied upon by the petitioner- appellant in his petition was issued by the Director of Forestry without authority and is therefore void ab initio. This motion supplanted the general demurrer in an action at law and, as a rule admits, for the purpose of the motion, ail facts which are well pleaded however while the court must accept as true all well pleaded facts, the motion does not admit allegations of which the court will take judicial notice are not true, nor does the rule apply to legally impossible facts, nor to facts inadmissible in evidence, nor to facts which appear by record or document included in the pleadings to be unfounded (Vol. 1, Moran's Comments on the Rules of Court, 1970 ed., p. 505, citing cases).

It must be noted that there was a hearing held in the instant case wherein answers were interposed and evidence introduced. In the course of the hearing, petitioner-appellant had the opportunity to introduce evidence in support of tile allegations iii his petition, which he readily availed of. Consequently, he is estopped from invoking the rule that to determine the sufficiency of a cause of action on a motion to dismiss, only the facts alleged in the complaint must be considered. If there were no hearing held, as in the case of Cohen vs. U.S. CCA Minn 1942,129 F. 2d 733), "where the case was presented to District Court upon a motion to dismiss because of alleged failure of complaint to state a claim upon which relief could be granted, and no answer was interposed and no evidence introduced, the only facts which the court could properly consider in passing upon the motion were those facts appearing in the complaint, supplemented be such facts as the court judicially knew.

In Llanto vs. Ali Dimaporo, et al. (16 SCRA 601, March 31, 1966), this Court, thru Justice Conrado V. Sanchez, held that the trial court can properly dismiss a complaint on a motion to dismiss due to lack of cause of action even without a hearing, by taking into consideration the discussion in said motion and the opposition thereto. Pertinent portion of said decision is hereby quoted:

Respondents moved to dismiss. Ground therefor is lack of cause of action. The Court below granted the motion, dismissed the petition. The motion to reconsider failed. Offshoot is this appeal.

1. The threshold questions are these: Was the dismissal order issued without any hearing on the motion to dismiss? Is it void?

WE go to the record. The motion to dismiss was filed on February 1, 1961 and set for hearing on February 10 following. On February 8, 1961 petitioner's counsel telegraphed the court, (r)equest postponement motion dismissal till written opposition filed.' He did not appear at the scheduled hearing. But on March 4, 1961, he followed up his wire, with his written opposition to the motion to dismiss. Adverting to the 5-page motion to dismiss and the 6-page opposition thereto, We find that the arguments pro and con on the question of the board's power to abolish petitioner's position to discussed the problem said profusely cited authorities. The May 15, 1961 8-page court order recited at length the said arguments and concluded that petitioner made no case.

One good reason for the statutory requirement of hearing on a motion as to enable the

suitors to adduce evidence in support of their opposing claims. But here the motion to dismiss is grounded on lack of cause of action. Existence of a cause of action or lack of it is determined be a reference to the facts averred in the challenged pleading. The question raised in the motion is purely one of law. This legal issue was fully discussed in said motion and the opposition thereto. In this posture, oral arguments on the motion are reduced to an unnecessary ceremony and should be overlooked. And, correctly so, because the other intendment of the law in requiring hearing on a motion, i.e., 'to avoid surprises upon the opposite party and to give to the latter time to study and meet the arguments of the motion,' has been sufficiently met. And then, courts do not exalt form over substance (Emphasis supplied).

Furthermore even if the complaint stated a valid cause of action, a motion to dismiss for- insufficiency of cause of action will be granted if documentary evidence admitted by stipulation disclosing facts sufficient to defeat the claim enabled the court to go beyond disclosure in the complaint (LOCALS No. 1470, No. 1469, and No. 1512 of the International Longshoremen's Association vs. Southern Pacific Co., 6 Fed. Rules Service, p. 107; U.S. Circuit Court of Appeals, Fifth Circuit, Dec. 7, 1952; 131 F. 2d 605). Thus, although the evidence of the parties were presented on the question of granting or denying petitioner-appellant's application for a writ of preliminary injunction, the trial court correctly applied said evidence in the resolution of the motion to dismiss. Moreover, in applying said evidence in the resolution of the motion to dismiss, the trial court, in its order dismissing the petition, pointed out that, "there is no reason to believe that the parties will change their stand, arguments and evidence" (p. 478, CFI rec.). Petitioner-appellant did not interpose any objection thereto, nor presented new arguments in his motion for reconsideration (pp. 482-484, CFI rec.). This omission means conformity to said observation, and a waiver of his right to object, estopping him from raising this question for the first time on appeal. " I question not raised in the trial court cannot be raised for the first time on appeal" (Matienzo vs. Servidad, Sept. 10, 1981, 107 SCRA 276).

Moreover, petitioner-appellant cannot invoke the rule that, when the ground for asking dismissal is that the complaint states no cause of action, its sufficiency must be determined only from the allegations in the complaint. "The rules of procedure are not to be applied in a very rigid, technical sense; rules of procedure are used only to help secure substantial justice. If a technical and rigid enforcement of the rules is made, their aim would be defeated. Where the rules are merely secondary in importance are made to override the ends of justice; the technical rules had been misapplied to the prejudice of the substantial right of a party, said rigid application cannot be countenanced" (Vol. 1, Francisco, Civil Procedure, 2 ed., 1973, p. 157, citing cases).

What more can be of greater importance than the interest of the public at large, more particularly the welfare of the inhabitants of Olongapo City and Zambales province, whose lives and properties are directly and immediately imperilled by forest denudation.

The area covered by petitioner-appellant's timber license practically comprises the entire Olongapo watershed (p. 265, CFI rec.). It is of public knowledge that watersheds serves as a defense against soil erosion and guarantees the steady supply of water. As a matter of general policy, the Philippine Constitution expressly mandated the conservation and proper utilization of natural resources, which includes the country's watershed. Watersheds in the Philippines had been subjected to rampant abusive treatment due to various unscientific and destructive land use practices. Once lush watersheds were wantonly deforested due to uncontrolled timber cutting by licensed concessionaries and illegal loggers. This is one reason why, in paragraph 27.of the rules and regulations included in the ordinary timber license it is stated:

The terms and conditions of this license are subject to change at the discretion of the Director of Forestry, and that this license may be made to expire at an earlier date, when public interests so require (Exh. D, p. 22, CFI rec.).

Considering the overriding public interest involved in the instant case, We therefore take judicial notice of the fact that, on April 30, 1964, the area covered by petitioner-appellant's timber license has been established as the Olongapo Watershed Forest Reserve by virtue of Executive Proclamation No. 238 by then President Diosdado Macapagal which in parts read as follows:

Pursuant to the provisions of Section 1824 of the Revised Administrative Code, as amended, 1, Diosdado Macapagal, President of the Philippines do hereby withdraw

from entry, sale, or settlement and establish as Olongapo Watershed Forest Reserve for watershed, soil protection, and timber production purposes, subject to private rights, if any there be, under the administration and control of the Director of Forestry, xx the following parcels of land of the public domain situated in the municipality of Olongapo, province of Zambales, described in the Bureau of Forestry map No. FR-132, to wit: ... ... (60 O.G. No. 23, 3198).

Petitioner-appellant relies on Ordinary Timber License No. 20-'64 (NEW) for his alleged right over the timber concession in question. He argues thus: "The facts alleged in the petition show: (1) the legal right of the petitioner to log in the area covered by his timber license; (2) the legal or corresponding obligation on the part of the respondents to give effect, recognize and respect the very timber license they issued to the petitioner; and (3) the act of the respondents in arbitrarily revoking the timber license of the petitioner without giving him his day in court and in preventing him from using and enjoying the timber license issued to him in the regular course of official business" (p. 32, rec.).

In the light of petitioner-appellant's arguments, it is readily seen that the whole controversy hinges on the validity or invalidity of his timber license.

WE fully concur with the findings of the trial court that petitioner- appellant's timber license was signed and released without authority by then Acting Director Estanislao R. Bernal of Forestry, and is therefore void ab initio. WE hereby quote such findings:

In the first place, in general memorandum order No. 46 dated May 30, 1963, the Director of Forestry was authorized to grant a new ordinary timber license only where the area covered thereby was not more than 3,000 hectares; the tract of public forest awarded to the petitioner contained 6,420 hectares (Exhs. 2-A and 2-B Ravago, embodied in Annex B; Exh. B). The petitioner contends that only 1,756 hectares of the said area contain commercial and operable forest; the authority given to the Director of Forestry to grant a new ordinary timber license of not more than 3,000 hectares does not state that the whole area should be commercial and operable forest. It should be taken into consideration that the 1,756 hectares containing commercial and operable forest must have been distributed in the whole area of 6,420 hectares. Besides the license states, 'Please see attached sketch and technical description,' gives an area of 6,420 hectares and does not state what is the area covered of commmercial and operable forest (Exh. Ravago Also Annex B of the petition, which was marked as Exhibit B, states:

Under Notice No. 2087, a tract of public forest containing 6,420 hectares located in Olongapo, Zambales was declared available for timber utilization and development. Pursuant to this Notice, there were received bid proposals from the following persons: ...

Wherefore, confirming the findings of said Committee, the area described in Notice No. 2087 shall be awarded, as it is hereby awarded to Wenceslao Vinzons Tan, subject to the following conditions: ... ...

In the second place, at the time it was released to the petitioner, the Acting Director of Forestry had no more authority to grant any license. The license was signed by the Acting Director of Forestry on December 19, 1963, and released to the petitioner on January 6, 1964 (Exh. RavaGo The authority delegated to the Director of Forestry to grant a new ordinary timber license was contained in general memorandum order No. 46 dated May 30, 1963. This was revoked by general memorandum order No. 60, which was promulgated on December 19, 1963. In view thereof, the Director of Forestry had no longer any authority to release the license on January 6, 1964, and said license is therefore void ab initio (pp. 479480, CFI rec.).

The release of the license on January 6, 1964, gives rise to the impression that it was ante-dated to December 19, 1963 on which date the authority of the Director of Forestry was revoked. But, what is of greatest importance is the date of the release or issuance, and not the date of the signing of the license. While petitioner-appellant's timber license might have been signed on December 19, 1963 it was released only on January 6, 1964. Before its release, no right is acquired by the licensee. As

pointed out by the trial court, the Director of Forestry had no longer any authority to release the license on January 6, 1964. Therefore, petitioner-appellant had not acquired any legal right under such void license. This is evident on the face of his petition as supplemented by its annexes which includes Ordinary Timber License No. 20-'64 (NEW). Thus, in the case of World Wide Insurance & Surety Co., Inc. vs. Macrohon, et al. (105 Phil. 250, Feb. 28, 1959), this Court held that if from the face of the complaint, as supplemented by its annexes, plaintiff is not the owner, or entitled to the properties it claims to have been levied upon and sold at public auction by the defendants and for which it now seeks indemnity, the said complaint does not give plaintiff any right of action against the defendants. In the same case, this Court further held that, in acting on a motion to dismiss, the court cannot separate the complaint from its annexes where it clearly appears that the claim of the plaintiff to be the A owner of the properties in question is predicated on said annexes. Accordingly, petitioner-appellant's petition must be dismissed due to lack of cause of action.

II

Petitioner-appellant, in his petition, alleged that he has exhausted all his administrative remedies to no avail as respondents-appellees have failed, neglected, refused and continue to refuse to allow petitioner-appellant to continue operation in the area covered by his timber license. He further alleged that he has neither recourse by way of appeal, nor any plain, speedy and adequate remedy in the ordinary course of law except thru this special civil action, as the last official act of the respondent-appellee Secretary of Agriculture and Natural Resources in declaring void the timber license referred to above after denying petitioner-appellant's motion for reconsideration, is the last administrative act. Petitioner-appellant relies on the case of Demaisip vs. The Court of Appeals, et al. (106 Phil. 237, Sept. 24, 1959), wherein it was held that the failure of the plaintiff to appeal from the adverse decision of the Secretary to the President cannot preclude the plaintiff from taking court action in view of the theory that the Secretary of a department is merely an alter-ego of the President. The presumption is that the action of the Secretary bears the implied sanction of the President unless the same is disapproved by the latter (Villena vs. the Secretary of Interior, 67 Phil. 451; p. 7, CFI rec.).

To this We cannot agree. Petitioner-appellant did not appeal the order of the respondent Secretary of Agriculture and Natural Resources to the President of the Philippines, who issued Executive Proclamation No. 238 withdrawing the area from private exploitation, and establishing it as the Olongapo Watershed Forest Reserve. Considering that the President has the power to review on appeal the orders or acts of the respondents-appellees, the failure of the petitioner-appellant to take that appeal is failure on his part to exhaust his administrative remedies. Thus, this Court, in the case of Calo vs. Fuertes (5 SCRA 399, 400, June 29, 1962), held that:

At any rate, the appellant's contention that, as the Secretary of Agriculture and Natural Resources is the alter ego of the President and his acts or decisions are also those of the latter, he need not appeal from the decision or opinion of the former to the latter, and that, such being the case, after he had appealed to the Secretary of Agriculture and Natural Resources from the decision or opinion of the Director of Lands he had exhausted the administrative remedies, is untenable.

The withdrawal of the appeal taken to the President of the Philippines is tantamount to not appealing all thereto. Such withdrawal is fatal, because the appeal to the President is the last step he should take in an administrative case.

In 1912, in the case of Lamb vs. Phipps (22 Phil. 491-92, July 22, 1912), this Court stressed the doctrine of exhaustion of administrative remedies, thus:

When a plain, adequate and speedy remedy is afforded by and within the executive department of the government the courts will not interfere until at least that remedy has been exhausted. Jao Igco vs. Shuster, 10 Phil. Rep. 448; Ekiu vs. U.S., 142 U.S. 651; U.S. vs. Sing Tuck, 194 U.S. 161; U.S. vs. Ju Toy 198 U.S. 253; Chill Yow vs. U.S., 28 Sup. Ct. Rep. 201). The administrative remedies afforded by law must first be exhausted before resort can be had to the courts, especially when the administrative remedies are by law exclusive and final. Some matters and some questions are by law delegated entirely and absolutely to the discretion of particular branches of the executive department of the government. When the law confers exclusive and final jurisdiction upon the executive department of the government to dispose of particular

questions, their judgments or the judgments of that particular department are no more reviewable by the courts than the final judgment or decisions of the courts are subject to be reviewed and modified by them" (emphasis supplied).

Moreover, this being a special civil action, petitioner-appellant must allege and prove that he has no other speedy and adequate remedy (Diego vs. The Court of Appeals, et al., 54 Off. Gaz., No. 4, 956). In the case at bar, petitioner- appellant's speedy and adequate remedy is an appeal to the President of the Philippines.

Accordingly, "it is settled to the point of being elementary that the only question involved n certiorari is jurisdiction, either want of jurisdiction or excess thereof, and abuse of discretion shall warrant the issuance of the extraordinary remedy of certiorari when the same is so grave as when the power is exercised in an arbitrary or despotic manner by reason of passion, prejudice or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty, or to a virtual refusal to perform a duty enjoined, or to act at all in contemplation of law" FS Divinagracia Agro-Commercial Inc. vs. Court of Appeals, 104 SCRA 191 [April .1, 1981]). The foregoing is on the assumption that there is any irregularity, albeit there is none in the acts or omissions of the respondents-appellees. certiorari is not a substitute for appeal as held time and again by this Court (People vs. Villanueva, 110 SCRA 465), "it being a time honored and well known principle that before seeking judicial redress, a party must first exhaust the administrative remedies available" (Garcia vs. Teehankee, 27 SCRA 944, April 18, 1969).

Moreover, from the decision of the Secretary of Agriculture and Natural Resources complained of, petitioners had a plain, speedy and adequate remedy by appealing therefrom to the Chief Executive. In other words, before filing the present action for certiorari in the court below, they should have availed of this administrative remedy and their failure to do so must be deemed fatal to their case [Calo vs. Fuertes, et al., G.R. No. L-16537, June 29,1962]. To place petitioners' case beyond the pale of this rule, they must show that their case falls — which it does not — within the cases where, in accordance with our decisions, the aggrieved party need not exhaust administrative remedies within his reach in the ordinary course of the law [Tapales vs. The President and the Board of Regents of the U.P., G.R. No. L-17532, March 30, 1963; Mangubat vs. Osmena, G.R. No. L- 12837, April 30, 1959; Baguio vs. Hon. Jose Rodriguez, G. R. No. L-11078, May 27, 1959; Pascual vs. Provincial Board, G.R. No. L-11959, Oct. 31, 1959; Marinduque Iron Mines, etc. vs. Secretary of Public Works, G.R. No. L-15982, May 31, 1963; Alzate vs. Aldaba, G.R. No. L-14407, Feb. 29, 1960 and Demaisip vs. Court of Appeals, G.R. No. L- 13000, Sept. 25, 1959] (Ganob vs. Ramas, 27 SCRA 1178, April 28, 1969).

III

Petitioner-appellant not only failed to exhaust his administrative remedies, but also failed to note that his action is a suit against the State which, under the doctrine of State immunity from suit, cannot prosper unless the State gives its consent to be sued Kawananakoa vs. Polybank, 205 U.S. 349; Siren vs. U.S., 7 Wall. 152; Sec. 16, Art. XV, 1973 Constitution).

The respondents-appellees, in revoking the petitioner-appellant's timber license, were acting within the scope of their authority. Petitioner-appellant contends that "this case is not a suit against the State but an application of a sound principle of law whereby administrative decisions or actuations may be reviewed by the courts as a protection afforded the citizens against oppression" (p. 122, CFI rec.). But, piercing the shard of his contention, We find that petitioner-appellant's action is just an attempt to circumvent the rule establishing State exemption from suits. He cannot use that principle of law to profit at the expense and prejudice of the State and its citizens. The promotion of public welfare and the protection of the inhabitants near the public forest are property, rights and interest of the State. Accordingly, "the rule establishing State exeraiption from suits may not be circumvented by directing the action against the officers of the State instead of against the State itself. In such cases the State's immunity may be validly invoked against the action as long as it can be shown that the suit really affects the property, rights, or interests of the State and not merely those of the officer nominally made party defendant" (SINCO, Phil. Political Law, 10th ed., p. 35; Salgado vs. Ramos, 64 Phil. 724; see also Angat River Irrigation System vs. Angat River Workers' Union, G.R. No. L-10943-44, Dec. 28, 1957, 102 Phil. 789, 800-802; Mobil PhiL vs. Customs Arrastre Service, 18 SCRA 1120, 1121-1125; Bureau of Printing vs. Bureau of Printing Employees' Association, 1 SCRA 340, 341, 343).

Both the Secretary of Agriculture and Natural Resources and the Director of Forestry acted in their capacity as officers of the State, representatives of the sovereign authority discharging governmental powers. A private individual cannot issue a timber license.

Consequently, a favorable judgment for the petitioner-appellant would result in the government losing a substantial part of its timber resources. This being the case, petitioner-appellant's action cannot prosper unless the State gives its consent to be sued.

IV

Granting arguendo, that petitioner-appellant's timber license is valid, still respondents-appellees can validly revoke his timber license. As pointed out earlier, paragraph 27 of the rules and regulations included in the ordinary timber license states: "The terms and conditions of this license are subject to change at the discretion of the Director of Forestry, and that this license may be made to expire at an earlier date, when public interests so require" (Exh. D, p. 22, CFI rec.). A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this ceise

"A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation" (37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property or property rights (People vs. Ong Tin 54 O.G. 7576). In the case of Pedro vs. Provincial Board of Rizal (56 Phil. 123), it was held that:

A license authorizing the operation and exploitation of a cockpit is not property of which the holder may not be deprived without due process of law, but a mere privilege which may be revoked when public interests so require.

The welfare of the people is the supreme law. Thus, no franchise or right can be availed of to defeat the proper exercise of police power (Surigao Electric Co., Inc. vs. Municipality of Surigao, 24 SCRA 898, Aug. 30, 1968). The State has inherent power enabling it to prohibit all things hurtful to comfort, safety, and welfare of society (Edu vs. Ericta, 35 SCRA 481, Oct. 24,1970).

V

As provided in the aforecited provision, timber licenses are subject to the authority of the Director of Forestry. The utilization and disposition of forest resources is directly under the control and supervision of the Director of Forestry. However, "while Section 1831 of the Revised Administrative Code provides that forest products shall be cut, gathered and removed from any forest only upon license from the Director of Forestry, it is no less true that as a subordinate officer, the Director of Forestry is subject to the control of the Department Head or the Secretary of Agriculture and Natural Resources (See. 79[c], Rev. Adm. Code), who, therefore, may impose reasonable regulations in the exercise of the powers of the subordinate officer" (Director of Forestry vs. Benedicto, 104 SCRA 309, May 5, 1981). The power of control of the Department Head over bureaus and offices includes the power to modify, reverse or set aside acts of subordinate officials (Province of Pangasinan vs. Secretary of Public Works and Communications, 30 SCRA 134, Oct. 31, 1969; Montano vs. Silvosa, 97 Phil. 143, 144, 147-148). Accordingly, respondent-appellee Secretary of Agriculture and Natural Resources has the authority to revoke, on valid grounds, timber licenses issued by the Director of Forestry. There being supporting evidence, the revocation of petitioner-appellant's timber license was a wise exercise of the power of the respondent- appellee (Secretary of Agriculture and Natural Resources) and therefore, valid.

Thus, "this Court had rigorously adhered to the principle of conserving forest resources, as corollary to which the alleged right to them of private individuals or entities was meticulously inquired into and more often than not rejected. We do so again" (Director of Forestry vs. Benedicto, supra). WE reiterate Our fidelity to the basic policy of conserving the national patrimony as ordained by the Constitution.

WHEREFORE, IN VIEW OF ALL THE FOREGOING, THE ORDER APPEALED FROM IS HEREBY .AFFIRMED IN TOTO. COSTS AGAINST PETITIONER-APPELLANT.

SO ORDERED,

THE DIRECTOR OF LANDS, petitioner, vs.

MELECIO ABANZADO, ET AL., claimants. THE DIRECTOR OF FORESTRY, claimant-appellant, vs. PERPETUO SILVA, ET AL., claimants-appellees.

FERNANDO, J.:

The significant issues that have to be resolved in this appeal by the Director of Forestry from an order of the lower court denying his amended petition to review a judgment in a land registration proceeding, no decree having been issued as yet, arose from its failure to accord him the opportunity to present his evidence to show that the land in controversy is part of a communal forestand is thus non-disposable. Reliance is primarily based on what is submitted to be the

controlling doctrine announced in 1960 in Adorable v. Director of Forestry. 1 It is pointed out that such a ruling is traceable to a number of previous pronouncements that stretch quite a while back, and, what is more, indicative of fidelity to the basic policy of conserving the national patrimony as

ordained by the Constitution. 2 More specifically, what was sought by appellant public official in his amended petition for review was the reconsideration of a previous decision, reached without his being heard, adjudicating in favor of private respondents what was alleged to be a portion of the Bais Communal Forest, a non-disposable public land. There was an opposition to such petition by private respondents, who argued that no extrinsic fraud was alleged and that the Director of Forestry was barred by estoppel or laches. The appealed order was based on the absence of actual or extrinsic fraud, thus resulting in the denial of the petition for review. A motion for reconsideration having proved futile, the appeal was taken directly to this Court on a question of law raising the constitutional issues of absence of a hearing in accordance with due process as well as the deviation from the fundamental principle that forest resources as part of the national patrimony should be

inalienable. 3 The appeal possesses merit. We have to reverse.

In the brief for the appellant Director of Forestry, mention is made that in a previous cadastral case, 4 "judgment was rendered adjudicating Lot No. 6034 to the spouses Perpetuo Silva and Juana Divinagracia, and ordering its registration in their names ... . On December 29, 1961, the Director of Forestry, through the Provincial fiscal, filed a Petition for Review of Judgment ..., later amended on January 17, 1962, alleging, inter alia, that Lot No. 6034 awarded to the respondents-spouses Perpetuo Silva and Juana Divinagracia forms a major portion of Parcel No. I of the Bais Communal Forest situated at Pamplona, Negros Oriental and under the administration of the Director of Forestry; that said lot also forms a portion of Lot No. 5164, Cad. Case No. 8, L.R.C. Rec. 293, Tanjay Cadastre, declared public land in said proceedings on March 12, 1926, which decision has never been revoked or set aside by any competent court and is, with respect to said Lot No. 6034, res judicata in the present Cad. Case No. N-4; that sometime in 1959, the respondents-spouses, with the intention of defrauding the government, filed an answer in Cad. Case No. N-4 claiming Lot No. 6034 as their property through long and adverse possession; that on December 29, 1959, the Cadastral Court rendered judgment adjudicating said Lot No. 6034 to respondents-spouses, but no decree of registration has as yet been entered by the Land Registration Commission, pursuant to said judgment; that the petitioner Director of Forestry was not duly notified of the hearing over said Lot 6034, and for this reason was unable to oppose its registration in the name of respondents-spouses; and that Lot 6034 is non-disposable land, the same being a part of the Bais Communal Forest, no portion of which has been released as disposable by the Bureau of Forestry in favor of the Bureau of

Lands or any other person or entity ... ." 5 Respondents filed their opposition, and as noted, they were sustained. The lower court disregarded the contention that at the very least, the Director of Forestry was entitled to be heard on his petition and was equally deaf to the plea that non-disposable timberland was involved.

To repeat, the order denying the petition for review should be reversed.

1. It is the contention of appellant Director, relying on due process, that instead of an outright denial of the petition for review, the lower court should have set the matter for hearing to enable him to

prove his claim. Adorable v. Director of Forestry, a 1960 decision, speaks quite plainly to that effect. Regrettably, its message failed to register. It was simply ignored. In that case, this Court, with Justice J. B. L. Reyes as ponente, noted that the appellant, as here, was the Director of Forestry. The similarity does not end there. There was a claim filed by private parties in a cadastral court over a

certain lot which, in the opinion of the appellant, was "permanent timberland." 7 He would seek reconsideration, therefore, on two grounds: first, that he was entitled to a personal notice of the hearing, and second, that he was entitled to be heard. The assertion as to the need for a personal notice to appellant presented no difficulty. It was disposed of easily. Then came this relevant portion of the opinion of Justice J. B. L. Reyes: "But while the lower court was not legally bound to send personal notice of the hearing to appellant, it does not mean, however, that it acted correctly and within legal bounds in summarily dismissing appellant's motion for reconsideration and new trial without any injury as to the truth of the facts alleged therein. Appellant based his motion on the claim that a portion of the land in question either is needed for river bank protection or forms part of permanent timberland. If this claim that any portion of the land in question still forms part of the public forests is true, then possession thereof, however long, cannot convert it into private property ..., and such portion would fall within the exclusive jurisdiction of the Bureau of Forestry and beyond the power and jurisdiction of the cadastral court to register under the torrens system ... . Hence, the lower court should have set appellant's motion for hearing to receive evidence on his allegations, in order that any portion or portions of the land in question that should form part of the forest or timber zone may be excluded and segregated from the decree of

registration in favor of appellees." 8

2. It should be quite apparent why no other decision except that of reversal of the appealed order is warranted. For in addition to the lack of respect for the requirements of procedural due process, there was on the part of the lower court a disregard of a basic state policy. The Constitution then in force, as is similarly the case with the present Charter, was quite explicit on the point of forest resources being inalienable. That is a paramount state objective. The fundamental law left no doubt. It is not to be thwarted. A lower court that is not duly mindful of such grave responsibility is recreant to its trust. Regrettably, that was what happened here.

3. There is more to be said about the excerpt from Adorable. Two cases were cited, Nicolas v. Jose, 9

decided in 1906, and Vaño v. Government of the Philippines, 10 promulgated in 1920. Outside of

Adorable v. Director of Forestry, 11 the Nicolas doctrine was cited with approval in Municipality of

Luzuriaga v. Director of Lands, 12 Municipality of Hagonoy v. Archbishop of Manila, 13 Municipality

of Cavite v. Rojas, 14 Director of Lands v. Roman Catholic Bishop of Zamboanga, 15 and Unson v.

Lacson. 16 The Vaño opinion penned by Justice Malcolm insofar as relevant states: "To prove title, open, continuous, exclusive, and notorious occupation of the land by the applicant and his predecessors in interest since 1882, interrupted by the revolution, is relied upon. Included within the perimeter of the tract are approximately 685 hectares of forest land and four logging trails in the nature of highways. These portions should, without question, be eliminated from the claim. The Government concedes, however, that approximately 1,060 hectares are under cultivation and that certain other portions have been used by the claimant for pasturage. But the doctrine of constructive possession announced in Ramos v. Director of Lands ... cannot be successfully advanced, for the claimant is not holding the land under color of title. To the tracts, of which

applicant is in actual possession, he can secure title, on submission of proper plans." 17 The

reference to Ramos v. Director of Lands, 18 decided two years previously with the same jurist as ponente, is understandable. It is a leading case. It was Justice Malcolm who, by reference to the first Organic Act, the Philippine Bill of 1902, stressed the significance of timberlands for the national economy thus: "Indubitably, there should be conservation of the natural resources of the Philippines. The prodigality of the spendthrift who squanders his substance for the pleasure of the fleeting moment must be restrained for the less spectacular but surer policy which protects Nature's wealth for future generations. Such is the wise stand of our Government as represented by the Director of Forestry who, with the Forester for the Government of the United States, believes in 'the control of

nature's powers by man for his own good.'" 19 Such an observation has not lost pertinence with the

passage of time as shown by reference to Ramos in subsequent cases. 20

4. To complete the picture, reference may be made to the learned and scholarly opinion of Justice

Sanchez in Director of Forestry v. Muñoz, 21 a 1968 decision. After a review of Spanish legislation, he summarized the present state of the law thus: "If a Spanish title covering forest land is found to be invalid, that land is public forest land, is part of the public domain, and cannot be appropriated. Before private interests have intervened, the government may decide for itself what portions of the public domain shall be set aside and reserved as forest land. Possession of forest lands, however

long, cannot ripen into private ownership." 22 Nor is this all. He reiterated the basic state objective on the matter in clear and penetrating language: "The view this Court takes of the cases at bar is but in adherence to public policy that should be followed with respect to forest lands. Many have written much, and many more have spoken, and quite often, about the pressing need for forest preservation, conservation, protection, development and reforestation. Not without justification. For, forests constitute a vital segment of any country's natural resources. It is of common knowledge by now that absence of the necessary green cover on our lands produces a number of adverse or ill effects of serious proportions. Without the trees, watersheds dry up; rivers and takes which they supply are emptied of their contents. The fish disappear. Denuded areas become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak havoc and destruction to property — crops, livestock, houses and highways — not to mention precious human lives. ..."

WHEREFORE, the order denying the petition for review of appellant Director of Forestry dated November 15, 1962 is reversed and set aside, and the case is remanded to the aforesaid Court of First Instance of Negros Oriental of the 12th Judicial District, to enable appellant Director of Forestry to present evidence on his allegation that the land in question forms part of the Bais Communal Forest, which is not disposable public land, after which a decision on the merits of the petition for review may be promulgated in accordance with law and the controlling decisions of this Honorable Tribunal. Costs against private respondents.

G.R. No. L-43938 April 15, 1988

REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner, vs.

HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents.

G.R. No. L-44081 April 15, 1988

BENGUET CONSOLIDATED, INC., petitioner, vs.

HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO, all surnamed DE LA ROSA, represented by their father JOSE Y. DE LA ROSA, respondents.

G.R. No. L-44092 April 15, 1988

ATOK-BIG WEDGE MINING COMPANY, petitioner, vs.

HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO, all surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA ROSA, respondents.

 

CRUZ, J.:

The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of the

earth even if the land where the discovery is made be private. 1 In the cases at bar, which have been consolidated because they pose a common issue, this doctrine was not correctly applied.

These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by

Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2

The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through

the Bureau of Forestry Development, as to lots 1-9. 3

In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the Liberation. She testified she was born in the land, which was possessed by her parents under claim of

ownership. 4 Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who declared that the land was planted by Jaime and his predecessors-in-interest to bananas, avocado, nangka and camote, and was enclosed with a barbed-wire fence. She was corroborated by Felix Marcos, 67 years old at the

time, who recalled the earlier possession of the land by Alberto's father. 5 Balbalio presented her tax

declaration in 1956 and the realty tax receipts from that year to 1964, 6 Alberto his tax declaration in

1961 and the realty tax receipts from that year to 1964. 7

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

cuts, and its payment of taxes on the land. 8

For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots as evidenced by its annual assessment work on the claims, such as the boring of tunnels,

and its payment of annual taxes thereon. 9

The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill of 1902 which provided that:

SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both surveyed and unsurveyed are hereby declared to be free and open to exploration, occupation and purchase and the land in which they are found to occupation and purchase

by the citizens of the United States, or of said islands.

The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the

Constitutions of 1935 and 1973. 10

The trial court * denied the application, holding that the applicants had failed to prove their claim of

possession and ownership of the land sought to be registered. 11 The applicants appealed to the respondent court, * which reversed the trial court and recognized the claims of the applicant, but subject

to the rights of Benguet and Atok respecting their mining claims. 12 In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims.

Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The Republic has filed its own petition for review and reiterates its argument that neither the private respondents nor the two mining companies have any valid claim to the land because it is not alienable and registerable.

It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time. The Court of Appeals correctly declared that:

There is no question that the 9 lots applied for are within the June Bug mineral claims of Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug mineral claim of plaintiff Benguet was one of the 16 mining claims of James E. Kelly, American and mining locator. He filed his declaration of the location of the June Bug mineral and the same was recorded in the Mining Recorder's Office on October 14, 1909. All of the Kelly claims ha subsequently been acquired by Benguet Consolidated, Inc. Benguet's evidence is that it had made improvements on the June Bug mineral claim consisting of mine tunnels prior to 1935. It had submitted the required affidavit of annual assessment. After World War II, Benguet introduced improvements on mineral claim June Bug, and also conducted geological mappings, geological sampling and trench side cuts. In 1948, Benguet redeclared the "June Bug" for taxation and had religiously paid the taxes.

The Emma and Fredia claims were two of the several claims of Harrison registered in 1931, and which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the Emma and Fredia mineral claims of Atok Big Wedge Mining Company.

The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of Atok having been perfected prior to the approval of the Constitution of the Philippines of 1935, they were removed from the public domain and had become private properties of Benguet and Atok.

It is not disputed that the location of the mining claim under consideration was perfected prior to November 15, 1935, when the Government of the Commonwealth was inaugurated; and according to the laws existing at that time, as construed and applied by this court in McDaniel v. Apacible and Cuisia (42 Phil. 749), a valid location of a mining claim segregated the area from the public domain. Said the court in that case: The moment the locator discovered a valuable mineral deposit on the lands located, and perfected his location in accordance with law, the power of the United States Government to deprive him of the exclusive right to the possession and enjoyment of the located claim was gone, the lands had become mineral lands and they were exempted from lands that could be granted to any other person. The reservations of public lands cannot be made so as to include prior mineral perfected locations; and, of course, if a valid mining location is made upon public lands afterwards included in a reservation, such inclusion or reservation does not affect the validity of the former location. By such location and perfection, the land located is segregated from the public domain even as against the Government. (Union Oil Co. v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc. 546).

"The legal effect of a valid location of a mining claim is not only to segregate

the area from the public domain, but to grant to the locator the beneficial ownership of the claim and the right to a patent therefor upon compliance with the terms and conditions prescribed by law. Where there is a valid location of a mining claim, the area becomes segregated from the public domain and the property of the locator." (St. Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650; 655; 43 Law ed., 320, 322.) "When a location of a mining claim is perfected it has the effect of a grant by the United States of the right of present and exclusive possession, with the right to the exclusive enjoyment of all the surface ground as well as of all the minerals within the lines of the claim, except as limited by the extralateral right of adjoining locators; and this is the locator's right before as well as after the issuance of the patent. While a lode locator acquires a vested property right by virtue of his location made in compliance with the mining laws, the fee remains in the government until patent issues."(18 R.C.L. 1152) (Gold Creek Mining Corporation v. Hon. Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico Abadilla, Director of the Bureau of Mines, 66 Phil. 259, 265-266)

It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold Creek Mining Corp. Case, for all physical purposes of ownership, the owner is not required to secure a patent as long as he complies with the provisions of the mining laws; his possessory right, for all practical purposes of ownership, is as good as though secured by patent.

We agree likewise with the oppositors that having complied with all the requirements of the mining laws, the claims were removed from the public domain, and not even the government of the Philippines can take away this right from them. The reason is obvious. Having become the private properties of the oppositors, they cannot be deprived thereof

without due process of law. 13

Such rights were not affected either by the stricture in the Commonwealth Constitution against the alienation of all lands of the public domain except those agricultural in nature for this was made subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided that:

SEC. 1. All agricultural, timber and mineral lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy and other natural resources of the Philipppines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to corporations or associations at least 60% of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of the government established under this Constitution. Natural resources with the exception of public agricultural lands, shall not be alienated, and no license, concession, or lease for the exploitation, development or utilization of any of the natural resources shall be granted for a period exceeding 25 years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which case beneficial use may be the measure and the limit of the grant.

Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:

Any provision of existing laws, executive order, proclamation to the contrary notwithstanding, all locations of mining claim made prior to February 8, 1935 within lands set apart as forest reserve under Sec. 1826 of the Revised Administrative Code which would be valid and subsisting location except to the existence of said reserve are hereby declared to be valid and subsisting locations as of the date of their respective locations.

The perfection of the mining claim converted the property to mineral land and under the laws then in

force removed it from the public domain. 14 By such act, the locators acquired exclusive rights over the land, against even the government, without need of any further act such as the purchase of the land or

the obtention of a patent over it. 15 As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok.

It is true, as the Court of Appeals observed, that such private property was subject to the "vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas is not available in the case at

bar, for two reasons.

First, the trial court found that the evidence of open, continuous, adverse and exclusive possession submitted by the applicants was insufficient to support their claim of ownership. They themselves had acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier alleged

possession of their predecessors-in-interest. 16 The trial judge, who had the opportunity to consider the evidence first-hand and observe the demeanor of the witnesses and test their credibility was not convinced. We defer to his judgment in the absence of a showing that it was reached with grave abuse of

discretion or without sufficient basis. 17

Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in possession of the subject property, their possession was not in the concept of owner of the mining claim but of the property as agricultural land, which it was not. The property was mineral land, and they were claiming it as agricultural land. They were not disputing the lights of the mining locators nor were they seeking to oust them as such and to replace them in the mining of the land. In fact, Balbalio testified that

she was aware of the diggings being undertaken "down below" 18 but she did not mind, much less protest, the same although she claimed to be the owner of the said land.

The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything

underneath and the airspace above it up to a reasonable height. 19 Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to separate claims of title. This is also difficult to understand, especially in its practical application.

Under the theory of the respondent court, the surface owner will be planting on the land while the mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may interfere with the operations below and the miner cannot blast a tunnel lest he destroy the crops above. How deep can the farmer, and how high can the miner, go without encroaching on each other's rights? Where is the dividing line between the surface and the sub-surface rights?

The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally classified as forest land ceased to be so and became mineral — and completely mineral — once the

mining claims were perfected. 20 As long as mining operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully occupying the surface.

What must have misled the respondent court is Commonwealth Act No. 137, providing as follows:

Sec. 3. All mineral lands of the public domain and minerals belong to the State, and their disposition, exploitation, development or utilization, shall be limited to citizens of the Philippines, or to corporations, or associations, at least 60% of the capital of which is owned by such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of government established under the Constitution.

SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial, commercial, residential, or for any purpose other than mining does not include the ownership of, nor the right to extract or utilize, the minerals which may be found on or under the surface.

SEC. 5. The ownership of, and the right to extract and utilize, the minerals included within all areas for which public agricultural land patents are granted are excluded and excepted from all such patents.

SEC. 6. The ownership of, and the right to extract and utilize, the minerals included within all areas for which Torrens titles are granted are excluded and excepted from all such titles.

This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not of private persons. The rule simply reserves to the State all minerals that may be found in public and even private land devoted to "agricultural, industrial, commercial, residential or (for) any purpose other than mining." Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to extract or utilize the said minerals without the permission of the State to which such minerals belong.

The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used for both mining and non-mining purposes simultaneously. The correct interpretation is that once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use may be discontinued by the State to enable it to extract the minerals therein in the exercise of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any private party, including the registered owner thereof, for any other purpose that will impede the mining operations to be undertaken therein, For the loss sustained by such owner, he is of course entitled to just

compensation under the Mining Laws or in appropriate expropriation proceedings. 21

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

WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that of the trial court dated March 11, 1969, is REINSTATED, without any pronouncement as to costs.

SO ORDERED.