NON- REGISTRABLE PROPERTIES

[G.R. No. 155650. July 20, 2006.]

MANILA INTERNATIONAL AIRPORT

AUTHORITY, petitioner, vs. COURT OF APPEALS,
CITY OF PARAÑAQUE, CITY MAYOR OF PARAÑAQUE,
SANGGUNIANG PANGLUNGSOD NG PARAÑAQUE, CITY
ASSESSOR OF PARAÑAQUE, and CITY
TREASURER OF PARAÑAQUE, respondents.

DECISION

CARPIO, J :p

The Antecedents
Petitioner Manila International Airport Authority (MIAA) operates the Ninoy
Aquino International Airport (NAIA) Complex in Parañaque City under Executive
Order No. 903, otherwise known as the Revised Charter of the Manila
International Airport Authority ("MIAA Charter"). Executive Order No. 903 was
issued on 21 July 1983 by then President Ferdinand E. Marcos. Subsequently,
Executive Order Nos. 909 1 and 298 2 amended the MIAA Charter.
As operator of the international airport, MIAA administers the land, improvements
and equipment within the NAIA Complex. The MIAA Charter transferred
to MIAAapproximately 600 hectares of land, 3 including the runways and
buildings ("Airport Lands and Buildings") then under the Bureau of Air
Transportation. 4 The MIAA Charter further provides that no portion of the land
transferred to MIAA shall be disposed of through sale or any other mode unless
specifically approved by the President of the Philippines. 5
On 21 March 1997, the Office of the Government Corporate Counsel (OGCC)
issued Opinion No. 061. The OGCC opined that the Local Government
Code of 1991 withdrew the exemption from real estate tax granted to MIAA under
Section 21 of the MIAA Charter. Thus, MIAA negotiated with respondent
City of Parañaque to pay the real estate tax imposed by the City. MIAA then paid
some of the real estate tax already due.
On 28 June 2001, MIAA received Final Notices of Real Estate Tax Delinquency
from the City of Parañaque for the taxable years 1992 to 2001. MIAA's real
estate tax delinquency is broken down as follows:
TAX DECLARATION TAXABLE YEAR TAX DUE PENALTY TOTAL
 E-016-01370 1992-2001 19,558,160.00 11,201,083.20 30,789,243.20
E-016-01374 1992-2001 111,689,424.90 68,149,479.59 179,838,904.49

E-016-01375 1992-2001 20,276,058.00 12,371,832.00 32,647,890.00

E-016-01376 1992-2001 58,144,028.00 35,477,712.00 93,621,740.00
E-016-01377 1992-2001 18,134,614.65 11,065,188.59 29,199,803.24
E-016-01378 1992-2001 111,107,950.40 67,794,681.59 178,902,631.99
E-016-01379 1992-2001 4,322,340.00 2,637,360.00 6,959,700.00

E-016-01380 1992-2001 7,776,436.00 4,744,944.00 12,521,380.00

*E-016-013-85 1998-2001 6,444,810.00 2,900,164.50 9,344,974.50
*E-016-01387 1998-2001 34,876,800.00 5,694,560.00 50,571,360.00
*E-016-01396 1998-2001 75,240.00 33,858.00 109,098.00
GRAND TOTAL P392,435,861.95 P232,070,863.47 P624,506,725.42
1992-1997 RPT was paid on Dec. 24, 1997 as per O.R. #9476102 for P4,207,028.75
#9476101 for P28,676,480.00
#9476103 for P49,115.00 6
On 17 July 2001, the City of Parañaque, through its City Treasurer, issued
notices of levy and warrants of levy on the Airport Lands and Buildings. The
Mayor of the City ofParañaque threatened to sell at public auction the Airport
Lands and Buildings should MIAA fail to pay the real estate tax
delinquency. MIAA thus sought a clarification of OGCC Opinion No. 061.
On 9 August 2001, the OGCC issued Opinion No. 147 clarifying OGCC
Opinion No. 061. The OGCC pointed out that Section 206 of the Local
Government Code requires persons exempt from real estate tax to show
proof of exemption. The OGCC opined that Section 21 of the MIAA Charter is the
proof that MIAA is exempt from real estate tax.
On 1 October 2001, MIAA filed with the Court of Appeals an original petition for
prohibition and injunction, with prayer for preliminary injunction or temporary
restraining order. The petition sought to restrain the City of Parañaque from
imposing real estate tax on, levying against, and auctioning for public sale the
Airport Lands and Buildings. The petition was docketed as CA-G.R. SP No.
66878.
On 5 October 2001, the Court of Appeals dismissed the petition
because MIAA filed it beyond the 60-day reglementary period.
The Court of Appeals also denied on 27 September 2002 MIAA's motion for
reconsideration and supplemental motion for reconsideration. Hence, MIAA filed
on 5 December 2002 the present petition for review. 7
Meanwhile, in January 2003, the City of Parañaque posted notices of auction
sale at the Barangay Halls of Barangays Vitalez, Sto. Niño, and Tambo,
Parañaque City; in the public market of Barangay La Huerta; and in the main
lobby of the Parañaque City Hall. The City of Parañaque published the notices in
the 3 and 10 January 2003 issues of thePhilippine Daily Inquirer, a
newspaper of general circulation in the Philippines. The notices announced the
public auction sale of the Airport Lands and Buildings to the highest bidder
on 7 February 2003, 10:00 a.m., at the Legislative Session Hall
Building of Parañaque City.
A day before the public auction, or on 6 February 2003, at 5:10 p.m., MIAA filed
before this Court an Urgent Ex-Parte and Reiteratory Motion for the Issuance of a
Temporary Restraining Order. The motion sought to restrain respondents — the
City of Parañaque, City Mayor of Parañaque, Sangguniang Panglungsod ng
Parañaque, City Treasurer ofParañaque, and the City Assessor of Parañaque
("respondents") — from auctioning the Airport Lands and Buildings.
On 7 February 2003, this Court issued a temporary restraining order (TRO)
effective immediately. The Court ordered respondents to cease and desist from
selling at public auction the Airport Lands and Buildings. Respondents received
the TRO on the same day that the Court issued it. However, respondents
received the TRO only at 1:25 p.m. or three hours after the conclusion of the
public auction.DTSaIc

On 10 February 2003, this Court issued a Resolution confirming nunc pro

tunc the TRO.
On 29 March 2005, the Court heard the parties in oral arguments. In compliance
with the directive issued during the hearing, MIAA, respondent
City of Parañaque, and the Solicitor General subsequently submitted their
respective Memoranda.
MIAA admits that the MIAA Charter has placed the title to the Airport Lands and
Buildings in the name of MIAA. However, MIAA points out that it cannot claim
ownership over these properties since the real owner of the Airport Lands and
Buildings is the Republic of the Philippines. The MIAA Charter mandates MIAA to
devote the Airport Lands and Buildings for the benefit of the general public. Since
the Airport Lands and Buildings are devoted to public use and public service, the
ownership of these properties remains with the State. The Airport Lands and
Buildings are thus inalienable and are not subject to real estate tax by local
governments.
MIAA also points out that Section 21 of the MIAA Charter specifically
exempts MIAA from the payment of real estate tax. MIAA insists that it is also
exempt from real estate tax under Section 234 of the Local Government Code
because the Airport Lands and Buildings are owned by the Republic. To justify
the exemption, MIAA invokes the principle that the government cannot tax
itself. MIAA points out that the reason for tax exemption of public property is that
its taxation would not inure to any public advantage, since in such a case the tax
debtor is also the tax creditor.
Respondents invoke Section 193 of the Local Government Code,
which expressly withdrew the tax exemption privileges of "government-owned
and-controlled corporations" upon the effectivity of the Local Government
Code. Respondents also argue that a basic rule of statutory construction is that
the express mention of one person, thing, or act excludes all others. An
international airport is not among the exceptions mentioned in Section 193 of the
Local Government Code. Thus, respondents assert thatMIAA cannot claim that
the Airport Lands and Buildings are exempt from real estate tax.
Respondents also cite the ruling of this Court in Mactan International Airport v.
Marcos 8 where we held that the Local Government Code has withdrawn the
exemption from real estate tax granted to international airports. Respondents
further argue that since MIAA has already paid some of the real estate tax
assessments, it is now estopped from claiming that the Airport Lands and
Buildings are exempt from real estate tax.
The Issue
This petition raises the threshold issue of whether the Airport Lands and
Buildings of MIAA are exempt from real estate tax under existing laws. If so
exempt, then the real estate tax assessments issued by the City of Parañaque,
and all proceedings taken pursuant to such assessments, are void. In such
event, the other issues raised in this petition become moot.
The Court's Ruling
We rule that MIAA's Airport Lands and Buildings are exempt from real estate tax
imposed by local governments.
First, MIAA is not a government-owned or controlled corporation but
an instrumentality of the National Government and thus exempt from local
taxation. Second, the real properties of MIAA are owned by the Republic of the
Philippines and thus exempt from real estate tax.
1. MIAA is Not a Government-Owned or Controlled Corporation
Respondents argue that MIAA, being a government-owned or controlled
corporation, is not exempt from real estate tax. Respondents claim that the
deletion of the phrase "any government-owned or controlled so exempt by its
charter" in Section 234(e) of the Local Government Code withdrew the real
estate tax exemption of government-owned or controlled corporations. The
deleted phrase appeared in Section 40(a) of the 1974 Real Property Tax Code
enumerating the entities exempt from real estate tax.
There is no dispute that a government-owned or controlled corporation is not
exempt from real estate tax. However, MIAA is not a government-owned or
controlled corporation. Section 2(13) of the Introductory
Provisions of the Administrative Code of 1987 defines a government-owned or
controlled corporation as follows:

SEC. 2. General Terms Defined. — . . .

(13) Government-owned or controlled corporation refers to any
agency organized as a stock or non-stock corporation, vested with
functions relating to public needs whether governmental or proprietary in
nature, and owned by the Government directly or through its
instrumentalities either wholly, or, where applicable as in the
case of stock corporations, to the extent of at least fifty-one (51)
percent of its capital stock: . . . . (Emphasis supplied)
A government-owned or controlled corporation must be "organized as a stock
or non-stock corporation." MIAA is not organized as a stock or non-stock
corporation. MIAA is not a stock corporation because it has no capital stock
divided into shares. MIAA has no stockholders or voting shares. Section
10 of the MIAA Charter 9 provides:
SECTION 10. Capital. — The capital of the Authority to be contributed
by the National Government shall be increased from Two and One-half
Billion (P2,500,000,000.00) Pesos to Ten Billion (P10,000,000,000.00)
Pesos to consist of:
(a) The value of fixed assets including airport facilities, runways and
equipment and such other properties, movable and immovable[,] which
may be contributed by the National Government or transferred by it from
any of its agencies, the valuation of which shall be determined jointly
with the Department of Budget and Management and the Commission
on Audit on the date of such contribution or transfer after making due
allowances for depreciation and other deductions taking into account the
loans and other liabilities of the Authority at the time of the
takeover of the assets and other properties;
(b) That the amount of P605 million as of December 31, 1986
representing about seventy percentum (70%) of the unremitted
share of the National Government from 1983 to 1986 to be remitted to
the National Treasury as provided for in Section 11 of E.O. No. 903 as
amended, shall be converted into the equity of the National Government
in the Authority. Thereafter, the Government contribution to the
capital of the Authority shall be provided in the General Appropriations
Act.
 Clearly, under its Charter, MIAA does not have capital stock that is divided
into shares.
Section 3 of the Corporation Code 10 defines a stock corporation as one whose
"capital stock is divided into shares and . . . authorized to distribute to the
holders of such shares dividends . . . ." MIAA has capital but it is not divided
into shares of stock. MIAA has no stockholders or voting shares. Hence, MIAA is
not a stock corporation.
MIAA is also not a non-stock corporation because it has no members. Section
87 of the Corporation Code defines a non-stock corporation as "one
where no part of its income is distributable as dividends to its members, trustees
or officers." A non-stock corporation must have members. Even if we assume
that the Government is considered as the sole member of MIAA, this will not
make MIAA a non-stock corporation. Non-stock corporations cannot distribute
any part of their income to their members. Section 11 of the MIAACharter
mandates MIAA to remit 20% of its annual gross operating income to the
National Treasury. 11 This prevents MIAA from qualifying as a non-stock
corporation.
Section 88 of the Corporation Code provides that non-stock corporations are
"organized for charitable, religious, educational, professional, cultural,
recreational, fraternal, literary, scientific, social, civil service, or similar purposes,
like trade, industry, agriculture and like chambers." MIAA is not organized for
any of these purposes. MIAA, a public utility, is organized to operate an
international and domestic airport for public use.
Since MIAA is neither a stock nor a non-stock corporation, MIAA does not qualify
as a government-owned or controlled corporation. What then is the legal
status of MIAA within the National Government?
MIAA is a government instrumentality vested with corporate powers to perform
efficiently its governmental functions. MIAA is like any other government
instrumentality, the only difference is that MIAA is vested with corporate powers.
Section 2(10) of the Introductory Provisions of the Administrative Code defines a
government "instrumentality" as follows:
SEC. 2. General Terms Defined. –– . . .
(10) Instrumentality refers to any agency of the National Government,
not integrated within the department framework, vested with special
functions or jurisdiction by law,endowed with some if not all corporate
powers, administering special funds, and enjoying operational
autonomy, usually through a charter. . . . (Emphasis supplied)
When the law vests in a government instrumentality corporate powers, the
instrumentality does not become a corporation. Unless the government
instrumentality is organized as a stock or non-stock corporation, it remains a
government instrumentality exercising not only governmental but also corporate
powers. Thus, MIAA exercises the governmental powers of eminent
domain, 12 police authority 13 and the levying of fees and charges. 14 At the same
time, MIAA exercises "all the powers of a corporation under the Corporation Law,
insofar as these powers are not inconsistent with the provisions of this Executive
Order." 15
Likewise, when the law makes a government instrumentality operationally
autonomous, the instrumentality remains part of the National Government
machinery although not integrated with the department framework.
The MIAA Charter expressly states that transforming MIAA into a "separate and
autonomous body" 16 will make its operation more "financially viable." 17
Many government instrumentalities are vested with corporate powers but they do
not become stock or non-stock corporations, which is a necessary condition
before an agency or instrumentality is deemed a government-owned or controlled
corporation. Examples are the Mactan International Airport Authority, the
Philippine Ports Authority, the University of the Philippines and Bangko Sentral
ng Pilipinas. All these government instrumentalities exercise corporate powers
but they are not organized as stock or non-stock corporations as required by
Section 2(13) of the Introductory Provisions of the Administrative Code. These
government instrumentalities are sometimes loosely called government corporate
entities. However, they are not government-owned or controlled corporations in
the strict sense as understood under the Administrative Code, which is the
governing law defining the legal relationship and status of government entities.
A government instrumentality like MIAA falls under Section 133(o) of the Local
Government Code, which states:
SEC. 133. Common Limitations on the Taxing Powers of Local
Government Units. — Unless otherwise provided herein, the
exercise of the taxing powers of provinces, cities, municipalities,
and barangays shall not extend to the levy of the following:
xxx xxx xxx
(o) Taxes, fees or charges of any kind on the National Government,
its agencies and instrumentalities and local government units.
(Emphasis and underscoring supplied)
Section 133(o) recognizes the basic principle that local governments cannot
tax the national government, which historically merely delegated to local
governments the power to tax. While the 1987 Constitution now includes
taxation as one of the powers of local governments, local governments may
only exercise such power "subject to such guidelines and limitations as the
Congress may provide." 18
When local governments invoke the power to tax on national government
instrumentalities, such power is construed strictly against local governments. The
rule is that a tax is never presumed and there must be clear language in the law
imposing the tax. Any doubt whether a person, article or activity is taxable is
resolved against taxation. This rule applies with greater force when local
governments seek to tax national government instrumentalities.
Another rule is that a tax exemption is strictly construed against the taxpayer
claiming the exemption. However, when Congress grants an exemption to a
national government instrumentality from local taxation, such exemption is
construed liberally in favor of the national government instrumentality. As
this Court declared in Maceda v. Macaraig, Jr.:
The reason for the rule does not apply in the case of exemptions running
to the benefit of the government itself or its agencies. In such case the
practical effect of an exemption is merely to reduce the amount of money
that has to be handled by government in the course of its operations. For
these reasons, provisions granting exemptions to government agencies
may be construed liberally, in favor of non tax-liability of such
agencies. 19
There is, moreover, no point in national and local governments taxing each
other, unless a sound and compelling policy requires such transfer of public
funds from one government pocket to another.
There is also no reason for local governments to tax national government
instrumentalities for rendering essential public services to inhabitants of local
governments. The only exception is when the legislature clearly intended to
tax government instrumentalities for the delivery of essential public
services for sound and compelling policy considerations. There must be
express language in the law empowering local governments to tax national
government instrumentalities. Any doubt whether such power exists is resolved
against local governments.
Thus, Section 133 of the Local Government Code states that "unless otherwise
provided" in the Code, local governments cannot tax national government
instrumentalities. As this Court held in Basco v. Philippine Amusements and
Gaming Corporation:
The states have no power by taxation or otherwise, to retard,
impede, burden or in any manner control the
operation of constitutional laws enacted by Congress to carry into
execution the powers vested in the federal government. (MC
Culloch v. Maryland, 4 Wheat 316, 4 L Ed. 579)
 This doctrine emanates from the "supremacy" of the National
Government over local governments.
"Justice Holmes, speaking for the Supreme Court, made
reference to the entire absence of power on the part of the States
to touch, in that way (taxation) at least, the instrumentalities of the
United States (Johnson v. Maryland, 254 US 51) and it can be
agreed that no state or political subdivision can regulate a federal
instrumentality in such a way as to prevent it from consummating
its federal responsibilities, or even to seriously burden it in the
accomplishment of them." (Antieau, Modern Constitutional Law,
Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru
extermination of what local authorities may perceive to be undesirable
activities or enterprise using the power to tax as "a tool for regulation"
(U.S. v. Sanchez, 340 US 42). TAScID

The power to tax which was called by Justice Marshall as the "power to
destroy" (Mc Culloch v. Maryland, supra) cannot be allowed to defeat an
instrumentality or creation of the very entity which has the inherent
power to wield it. 20
2. Airport Lands and Buildings of MIAA are Owned by the Republic
a. Airport Lands and Buildings are of Public Dominion
The Airport Lands and Buildings of MIAA are property of public dominion and
therefore owned by the State or the Republic of the Philippines. The Civil
Code provides:
ARTICLE 419. Property is either of public dominion or of private
ownership.
ARTICLE 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. (Emphasis supplied)
ARTICLE 421. All other property of the State, which is not of the
character stated in the preceding article, is patrimonial property.
ARTICLE 422. Property of public dominion, when no longer intended for
public use or for public service, shall form part of the patrimonial
property of the State.
No one can dispute that properties of public dominion mentioned in Article
420 of the Civil Code, like "roads, canals, rivers, torrents, ports and bridges
constructed by the State," are owned by the State. The term "ports" includes
seaports and airports. The MIAA Airport Lands and Buildings constitute a
"port" constructed by the State. Under Article 420 of the Civil Code,
the MIAA Airport Lands and Buildings are properties of public dominion and thus
owned by the State or the Republic of the Philippines.
The Airport Lands and Buildings are devoted to public use because they
are used by the public for international and domestic travel and
transportation. The fact that theMIAA collects terminal fees and other charges
from the public does not remove the character of the Airport Lands and Buildings
as properties for public use. The operation by the government of a tollway does
not change the character of the road as one for public use. Someone must pay
for the maintenance of the road, either the public indirectly through the taxes they
pay the government, or only those among the public who actually use the road
through the toll fees they pay upon using the road. The tollway system is even a
more efficient and equitable manner of taxing the public for the
maintenance of public roads.
The charging of fees to the public does not determine the character of the
property whether it is of public dominion or not. Article 420 of the Civil Code
defines property of public dominion as one "intended for public use." Even if the
government collects toll fees, the road is still "intended for public use" if anyone
can use the road under the same terms and conditions as the rest of the public.
The charging of fees, the limitation on the kind of vehicles that can use the road,
the speed restrictions and other conditions for the useof the road do not affect
the public character of the road.
The terminal fees MIAA charges to passengers, as well as the landing
fees MIAA charges to airlines, constitute the bulk of the income that maintains
the operations of MIAA. The collection of such fees does not change the
character of MIAA as an airport for public use. Such fees are often termed user's
tax. This means taxing those among the public who actually use a public facility
instead of taxing all the public including those who never use the particular public
facility. A user's tax is more equitable — a principle of taxation mandated in
the 1987 Constitution. 21
The Airport Lands and Buildings of MIAA, which its Charter calls the "principal
airport of the Philippines for both international and domestic air traffic," 22 are
properties of public dominion because they are intended for public use. As
properties of public dominion, they indisputably belong to the State or the
Republic of the Philippines.
b. Airport Lands and Buildings are Outside the Commerce of Man
The Airport Lands and Buildings of MIAA are devoted to public use and thus are
properties of public dominion. As properties of public dominion, the Airport
Lands and Buildings are outside the commerce of man. The Court has ruled
repeatedly that properties of public dominion are outside the commerce of man.
As early as 1915, this Courtalready ruled in Municipality of Cavite v. Rojas that
properties devoted to public use are outside the commerce of man, thus:
According to article 344 of the Civil Code: "Property for public use in
provinces and in towns comprises the provincial and town roads, the
squares, streets, fountains, and public waters, the promenades, and
public works of general service supported by said towns or provinces."
The said Plaza Soledad being a promenade for public use, the municipal
council of Cavite could not in 1907 withdraw or exclude from public use a
portion thereof in order to lease it for the sole benefit of the defendant
Hilaria Rojas. In leasing a portion of said plaza or public place to the
defendant for private use the plaintiff municipality exceeded its authority
in the exercise of its powers by executing a contract over a
thing of which it could not dispose, nor is it empowered so to do.
The Civil Code, article 1271, prescribes that everything which is not
outside the commerce of man may be the object of a contract, and
plazas and streets are outside of this commerce, as was decided by
the supreme court of Spain in its decision of February 12, 1895, which
says: "Communal things that cannot be sold because they are by
their very nature outside of commerce are those for public use,
such as the plazas, streets, common lands, rivers, fountains, etc."
(Emphasis supplied) 23
Again in Espiritu v. Municipal Council, the Court declared that
properties of public dominion are outside the commerce of man:
. . . Town plazas are properties of public dominion, to be devoted to
public use and to be made available to the public in general. They
are outside the commerce of man and cannot be disposed of or even
leased by the municipality to private parties. While in case of war or
during an emergency, town plazas may be occupied temporarily by
private individuals, as was done and as was tolerated by the
Municipality of Pozorrubio, when the emergency has ceased, said
temporary occupation or use must also cease, and the town officials
should see to it that the town plazas should ever be kept open to the
public and free from encumbrances or illegal private
constructions. 24 (Emphasis supplied)
The Court has also ruled that property of public dominion, being outside the
commerce of man, cannot be the subject of an auction sale. 25
Properties of public dominion, being for public use, are not subject to levy,
encumbrance or disposition through public or private sale. Any encumbrance,
levy on execution or auction sale of any property of public dominion is void for
being contrary to public policy. Essential public services will stop if
properties of public dominion are subject to encumbrances, foreclosures and
auction sale. This will happen if the City of Parañaque can foreclose and compel
the auction sale of the 600-hectare runway of the MIAA for non-payment of real
estate tax.
Before MIAA can encumber 26 the Airport Lands and Buildings, the President
must first withdraw from public use the Airport Lands and Buildings. Sections
83 and 88 of thePublic Land Law or Commonwealth Act No. 141, which "remains
to this day the existing general law governing the classification and
disposition of lands of the public domain other than timber and mineral
lands," 27 provide:
SECTION 83. Upon the recommendation of the Secretary of Agriculture
and Natural Resources, the President may designate by proclamation
any tract or tracts of land of the public domain as reservations for the
use of the Republic of the Philippines or of any of its branches, or of the
inhabitants thereof, in accordance with regulations prescribed for this
purposes, or for quasi-public uses or purposes when the public interest
requires it, including reservations for highways, rights of way for
railroads, hydraulic power sites, irrigation systems, communal pastures
or lequas communales, public parks, public quarries, public fishponds,
working men's village and other improvements for the public benefit.
SECTION 88. The tract or tracts of land reserved under the
provisions of Section eighty-three shall be non-alienable and shall
not be subject to occupation, entry, sale, lease, or other disposition
until again declared alienable under the provisions of this Act or by
proclamation of the President. (Emphasis and underscoring supplied)
Thus, unless the President issues a proclamation withdrawing the Airport Lands
and Buildings from public use, these properties remain properties of public
dominion and areinalienable. Since the Airport Lands and Buildings are
inalienable in their present status as properties of public dominion, they are not
subject to levy on execution or foreclosure sale. As long as the Airport Lands and
Buildings are reserved for public use, their ownership remains with the State or
the Republic of the Philippines.

The authority of the President to reserve lands of the public domain for public
use, and to withdraw such public use, is reiterated in Section 14, Chapter 4, Title
I, Book III of theAdministrative Code of 1987, which states:
SEC. 14. Power to Reserve Lands of the Public and Private
Domain of the Government. — (1) The President shall have the power
to reserve for settlement or public use, and for specific public
 purposes, any of the lands of the public domain, the use of which is
not otherwise directed by law. The reserved land shall thereafter
remain subject to the specific public purpose indicated until
otherwise provided by law or proclamation;
xxx xxx xxx. (Emphasis supplied)
There is no question, therefore, that unless the Airport Lands and Buildings
are withdrawn by law or presidential proclamation from public use, they are
properties of public dominion, owned by the Republic and outside the
commerce of man. DSAICa

c. MIAA is a Mere Trustee of the Republic

MIAA is merely holding title to the Airport Lands and Buildings in trust for the
Republic. Section 48, Chapter 12, Book I of the Administrative Code allows
instrumentalities like MIAA to hold title to real properties owned by the
Republic, thus:
SEC. 48. Official Authorized to Convey Real Property. — Whenever real
property of the Government is authorized by law to be conveyed, the
deed of conveyance shall be executed in behalf of the government by
the following:
(1) 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. (Emphasis supplied)
In MIAA's case, its status as a mere trustee of the Airport Lands and Buildings is
clearer because even its executive head cannot sign the deed of conveyance on
behalf of the Republic. Only the President of the Republic can sign such
deed of conveyance. 28
d. Transfer to MIAA was Meant to Implement a Reorganization
The MIAA Charter, which is a law, transferred to MIAA the title to the Airport
Lands and Buildings from the Bureau of Air Transportation of the
Department of Transportation and Communications. The MIAA Charter provides:
SECTION 3. Creation of the Manila International Airport Authority. — . . .
The land where the Airport is presently located as well as the
surrounding land area of approximately six hundred hectares, are
hereby transferred, conveyed and assigned to the ownership and
administration of the Authority, subject to existing rights, if any.
The Bureau of Lands and other appropriate government agencies shall
 undertake an actual survey of the area transferred within one year from
the promulgation of this Executive Order and the corresponding title to
be issued in the name of the Authority. Any portion thereof shall not
be disposed through sale or through any other mode unless
specifically approved by the President of the Philippines. (Emphasis
supplied)
SECTION 22. Transfer of Existing Facilities and Intangible Assets. — All
existing public airport facilities, runways, lands, buildings and other
property, movable or immovable, belonging to the Airport, and all
assets, powers, rights, interests and privileges belonging to the
Bureau of Air Transportation relating to airport works or air operations,
including all equipment which are necessary for the operation of crash
fire and rescue facilities, are hereby transferred to the Authority.
(Emphasis supplied)
SECTION 25. Abolition of the Manila International Airport as a Division in
the Bureau of Air Transportation and Transitory Provisions. — The
Manila International Airport including the Manila Domestic Airport as a
division under the Bureau of Air Transportation is hereby abolished.
xxx xxx xxx.
The MIAA Charter transferred the Airport Lands and Buildings
to MIAA without the Republic receiving cash, promissory notes or even stock
since MIAA is not a stock corporation.
The whereas clauses of the MIAA Charter explain the rationale for the
transfer of the Airport Lands and Buildings to MIAA, thus:
WHEREAS, the Manila International Airport as the principal airport of the
Philippines for both international and domestic air traffic, is required to
provide standards of airport accommodation and service comparable
with the best airports in the world;
WHEREAS, domestic and other terminals, general aviation and other
facilities, have to be upgraded to meet the current and future air traffic
and other demands of aviation in Metro Manila;
WHEREAS, a management and organization study has indicated
that the objectives of providing high standards of accommodation
and service within the context of a financially viable operation, will
best be achieved by a separate and autonomous body; and
WHEREAS, under Presidential Decree No. 1416, as amended
by Presidential Decree No. 1772, the President of the Philippines is
given continuing authority to reorganize the National Government,
which authority includes the creation of new entities, agencies and
instrumentalities of the Government[.] (Emphasis supplied)
The transfer of the Airport Lands and Buildings from the Bureau of Air
Transportation to MIAA was not meant to transfer beneficial ownership of these
assets from the Republic to MIAA. The purpose was merely to reorganize a
division in the Bureau of Air Transportation into a separate and
autonomous body. The Republic remains the beneficial owner of the Airport
Lands and Buildings. MIAA itself is owned solely by the Republic. No party
claims any ownership rights over MIAA's assets adverse to the Republic.
The MIAA Charter expressly provides that the Airport Lands and Buildings "shall
not be disposed through sale or through any other mode unless
specifically approved by the President of the Philippines." This only means
that the Republic retained the beneficial ownership of the Airport Lands and
Buildings because under Article 428 of the Civil Code, only the "owner has the
right to . . . dispose of a thing." Since MIAA cannot dispose of the Airport Lands
and Buildings, MIAA does not own the Airport Lands and Buildings.
At any time, the President can transfer back to the Republic title to the Airport
Lands and Buildings without the Republic paying MIAA any consideration. Under
Section 3 of theMIAA Charter, the President is the only one who can authorize
the sale or disposition of the Airport Lands and Buildings. This only confirms that
the Airport Lands and Buildings belong to the Republic.
e. Real Property Owned by the Republic is Not Taxable
Section 234(a) of the Local Government Code exempts from real estate tax any
"[r]eal property owned by the Republic of the Philippines." Section 234(a)
provides:
SEC. 234. Exemptions from Real Property Tax. — The following are
exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or
any of its political subdivisions except when the beneficial use thereof
has been granted, for consideration or otherwise, to a taxable
person;
xxx xxx xxx. (Emphasis supplied)
This exemption should be read in relation with Section 133(o) of the same Code,
which prohibits local governments from imposing "[t]axes, fees or charges of any
kind on the National Government, its agencies and instrumentalities . . . ." The
real properties owned by the Republic are titled either in the name of the
Republic itself or in the name ofagencies or instrumentalities of the National
Government. The Administrative Code allows real property owned by the
Republic to be titled in the name of agencies or instrumentalities of the national
government. Such real properties remain owned by the Republic and continue to
be exempt from real estate tax.
The Republic may grant the beneficial use of its real property to an agency or
instrumentality of the national government. This happens when title of the real
property is transferred to an agency or instrumentality even as the Republic
remains the owner of the real property. Such arrangement does not result in the
loss of the tax exemption. Section 234(a) of the Local Government Code states
that real property owned by the Republic loses its tax exemption only if the
"beneficial use thereof has been granted, for consideration or otherwise, to
a taxable person." MIAA, as a government instrumentality, is not a taxable
person under Section 133(o) of the Local Government Code. Thus, even if we
assume that the Republic has granted to MIAA the beneficial use of the Airport
Lands and Buildings, such fact does not make these real properties subject to
real estate tax.
However, portions of the Airport Lands and Buildings that MIAA leases to private
entities are not exempt from real estate tax. For example, the land area occupied
by hangars that MIAA leases to private corporations is subject to real estate tax.
In such a case, MIAA has granted the beneficial use of such land area for a
consideration to a taxable person and therefore such land area is subject to real
estate tax. In Lung Center of the Philippines v. Quezon City, the Court ruled:
Accordingly, we hold that the portions of the land leased to private
entities as well as those parts of the hospital leased to private individuals
are not exempt from such taxes. On the other hand, the portions of the
land occupied by the hospital and portions of the hospital used for its
patients, whether paying or non-paying, are exempt from real property
taxes. 29
3. Refutation of Arguments of Minority
The minority asserts that the MIAA is not exempt from real estate tax because
Section 193 of the Local Government Code of 1991 withdrew the tax
exemption of "all persons, whether natural or juridical" upon the
effectivity of the Code. Section 193 provides:

SEC. 193. Withdrawal of Tax Exemption Privileges — Unless otherwise

provided in this Code, tax exemptions or incentives granted to,
or presently enjoyed by all persons, whether natural or
juridical, including government-owned or controlled corporations, except
local water districts, cooperatives duly registered under R.A. No. 6938,
non-stock and non-profit hospitals and educational institutions are
hereby withdrawn upon effectivity of this Code. (Emphasis supplied) ESacHC

The minority states that MIAA is indisputably a juridical person. The minority
argues that since the Local Government Code withdrew the tax exemption of all
juridical persons, then MIAA is not exempt from real estate tax. Thus, the
minority declares:
 It is evident from the quoted provisions of the Local Government
Code that the withdrawn exemptions from realty tax cover not just
GOCCs, but all persons. To repeat, the provisions lay down the explicit
proposition that the withdrawal of realty tax exemption applies to all
persons. The reference to or the inclusion of GOCCs is only clarificatory
or illustrative of the explicit provision.
The term "All persons" encompasses the two classes of persons
recognized under our laws, natural and juridical persons.
Obviously, MIAA is not a natural person. Thus, the determinative
test is not just whether MIAA is a GOCC, but whether MIAA is a
juridical person at all. (Emphasis and underscoring in the original)
The minority posits that the "determinative test" whether MIAA is exempt from
local taxation is its status — whether MIAA is a juridical person or not. The
minority also insists that "Sections 193 and 234 may be examined in isolation
from Section 133(o) to ascertain MIAA's claim of exemption."
The argument of the minority is fatally flawed. Section 193 of the Local
Government Code expressly withdrew the tax exemption of all juridical persons
"[u]nless otherwise provided in this Code." Now, Section 133(o) of the Local
Government Code expressly provides otherwise, specifically prohibiting local
governments from imposing any kindof tax on national government
instrumentalities. Section 133(o) states:
SEC. 133. Common Limitations on the Taxing Powers of Local
Government Units. — Unless otherwise provided herein, the
exercise of the taxing powers of provinces, cities, municipalities,
and barangays shall not extend to the levy of the following:
xxx xxx xxx
(o) Taxes, fees or charges of any kinds on the National
Government, its agencies and instrumentalities, and local
government units. (Emphasis and underscoring supplied)
By express mandate of the Local Government Code, local governments cannot
impose any kind of tax on national government instrumentalities like
the MIAA. Local governments are devoid of power to tax the national
government, its agencies and instrumentalities. The taxing powers of local
governments do not extend to the national government, its agencies and
instrumentalities, "[u]nless otherwise provided in this Code" as stated in the
saving clause of Section 133. The saving clause refers to Section 234(a) on the
exception to the exemption from real estate tax of real property owned by the
Republic.
The minority, however, theorizes that unless exempted in Section 193 itself, all
juridical persons are subject to tax by local governments. The minority insists
that the juridical persons exempt from local taxation are limited to the three
classes of entities specifically enumerated as exempt in Section 193. Thus,
the minority states:
. . . Under Section 193, the exemption is limited to (a) local water
districts; (b) cooperatives duly registered under Republic Act No.
6938; and (c) non-stock and non-profit hospitals and educational
institutions. It would be belaboring the obvious why the MIAA does not
fall within any of the exempt entities under Section 193. (Emphasis
supplied)
The minority's theory directly contradicts and completely negates Section
133(o) of the Local Government Code. This theory will result in gross absurdities.
It will make thenational government, which itself is a juridical person, subject
to tax by local governments since the national government is not included in the
enumeration of exempt entities in Section 193. Under this theory, local
governments can impose any kind of local tax, and not only real estate tax,
on the national government.
Under the minority's theory, many national government instrumentalities with
juridical personalities will also be subject to any kind of local tax, and not only
real estate tax. Some of the national government instrumentalities vested by
law with juridical personalities are: Bangko Sentral ng Pilipinas, 30 Philippine
Rice Research Institute, 31 Laguna Lake Development Authority, 32 Fisheries
Development Authority, 33 Bases Conversion Development
Authority, 34 Philippine Ports Authority, 35 Cagayan de Oro Port Authority, 36San
Fernando Port Authority, 37 Cebu Port Authority, 38 and Philippine National
Railways. 39
The minority's theory violates Section 133(o) of the Local Government Code
which expressly prohibits local governments from imposing any kind of tax on
national government instrumentalities. Section 133(o) does not distinguish
between national government instrumentalities with or without juridical
personalities. Where the law does not distinguish, courts should not distinguish.
Thus, Section 133(o) applies to all national government instrumentalities, with or
without juridical personalities. The determinative test whether MIAA is exempt
from local taxation is not whether MIAA is a juridical person, but whether it is a
national government instrumentality under Section 133(o) ofthe Local
Government Code. Section 133(o) is the specific provision of law prohibiting local
governments from imposing any kind of tax on the national government, its
agencies and instrumentalities.
Section 133 of the Local Government Code starts with the saving clause
"[u]nless otherwise provided in this Code." This means that unless the Local
Government Code grants an express authorization, local governments
have no power to tax the national government, its agencies and instrumentalities.
Clearly, the rule is local governments have nopower to tax the national
government, its agencies and instrumentalities. As an exception to this rule, local
governments may tax the national government, its agencies and
instrumentalities only if the Local Government Code expressly so provides.
The saving clause in Section 133 refers to the exception to the exemption in
Section 234(a) of the Code, which makes the national government subject to real
estate tax when it gives the beneficial use of its real properties to a taxable
entity. Section 234(a) of the Local Government Code provides:
SEC. 234. Exemptions from Real Property Tax — The following are
exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or
any of its political subdivisions except when the beneficial use thereof
has been granted, for consideration or otherwise, to a taxable
person.
xxx xxx xxx. (Emphasis supplied)
Under Section 234(a), real property owned by the Republic is exempt from
real estate tax. The exception to this exemption is when the government
gives the beneficial useof the real property to a taxable entity.
The exception to the exemption in Section 234(a) is the only instance when
the national government, its agencies and instrumentalities are subject to
any kind of tax by local governments. The exception to the exemption applies
only to real estate tax and not to any other tax. The justification for the exception
to the exemption is that the real property, although owned by the Republic, is not
devoted to public use or public service but devoted to the private gain of a
taxable person.
The minority also argues that since Section 133 precedes Section 193 and
234 of the Local Government Code, the later provisions prevail over Section 133.
Thus, the minority asserts:
. . . Moreover, sequentially Section 133 antecedes Section 193 and 234.
Following an accepted rule of construction, in case of conflict the
subsequent provisions should prevail. Therefore, MIAA, as a juridical
person, is subject to real property taxes, the general exemptions
attaching to instrumentalities under Section 133(o) of the Local
Government Code being qualified by Sections 193 and 234 of the same
law. (Emphasis supplied)
The minority assumesthat there is an irreconcilable conflict between Section 133
on one hand, and Sections 193 and 234 on the other. No one has urged that
there is such a conflict, much less has any one presented a persuasive argument
that there is such a conflict. The minority's assumption of an irreconcilable
conflict in the statutory provisions is an egregious error for two reasons.
First, there is no conflict whatsoever between Sections 133 and 193
because Section 193 expressly admits its subordination to other
provisions of the Code when Section 193 states "[u]nless otherwise provided
in this Code." By its own words, Section 193 admits the superiority of other
provisions of the Local Government Code that limit the exercise of the taxing
power in Section 193. When a provision of law grants a power but withholds such
power on certain matters, there is no conflict between the grant of power and the
withholding of power. The grantee of the power simply cannot exercise the power
on matters withheld from its power.
Second, Section 133 is entitled "Common Limitations on the Taxing
Powers of Local Government Units." Section 133 limits the grant to local
governments of the power to tax, and not merely the exercise of a delegated
power to tax. Section 133 states that the taxing powers of local governments
"shall not extend to the levy" of any kind of tax on the national government, its
agencies and instrumentalities. There is no clearer limitation on the taxing power
than this.

Since Section 133 prescribes the "common limitations" on the taxing

powers of local governments, Section 133 logically prevails over Section 193
which grants local governments such taxing powers. By their very meaning and
purpose, the "common limitations" on the taxing power prevail over the
grant or exercise of the taxing power. If the taxing power of local governments
in Section 193 prevails over the limitations on such taxing power in Section 133,
then local governments can impose any kind oftax on the national government,
its agencies and instrumentalities — a gross absurdity.
Local governments have no power to tax the national government, its agencies
and instrumentalities, except as otherwise provided in the Local Government
Code pursuant to the saving clause in Section 133 stating "[u]nless otherwise
provided in this Code." This exception — which is an exception to the
exemption of the Republic from real estate tax imposed by local governments —
refers to Section 234(a) of the Code. The exception to the exemption in Section
234(a) subjects real property owned by the Republic, whether titled in the
name of the national government, its agencies or instrumentalities, to real estate
tax if the beneficial use of such property is given to a taxable entity.
The minority also claims that the definition in the Administrative Code of the
phrase "government-owned or controlled corporation" is not controlling. The
minority points out that Section 2 of the Introductory
Provisions of the Administrative Code admits that its definitions are not
controlling when it provides:
 SEC. 2. General Terms Defined. — Unless the specific words of the text,
or the context as a whole, or a particular statute, shall require a different
meaning:
xxx xxx xxx
The minority then concludes that reliance on the Administrative
Code definition is "flawed."
The minority's argument is a non sequitur. True, Section 2 of the Administrative
Code recognizes that a statute may require a different meaning than that defined
in theAdministrative Code. However, this does not automatically mean that the
definition in the Administrative Code does not apply to the Local Government
Code. Section 2 of theAdministrative Code clearly states that "unless the
specific words . . . of a particular statute shall require a different meaning,"
the definition in Section 2 of theAdministrative Code shall apply. Thus, unless
there is specific language in the Local Government Code defining the phrase
"government-owned or controlled corporation" differently from the definition in
the Administrative Code, the definition in the Administrative Code prevails. EcSCHD

The minority does not point to any provision in the Local Government Code
defining the phrase "government-owned or controlled corporation" differently
from the definition in the Administrative Code. Indeed, there is none. The Local
Government Code is silent on the definition of the phrase "government-
owned or controlled corporation." TheAdministrative Code, however,
expressly defines the phrase "government-owned or controlled corporation." The
inescapable conclusion is that the Administrative Codedefinition of the phrase
"government-owned or controlled corporation" applies to the Local Government
Code.
The third whereas clause of the Administrative Code states that the Code
"incorporates in a unified document the major structural, functional and
procedural principles and rules of governance." Thus, the Administrative
Code is the governing law defining the status and relationship of government
departments, bureaus, offices, agencies and instrumentalities. Unless a statute
expressly provides for a different status and relationship for a specific
government unit or entity, the provisions of the Administrative Codeprevail.
The minority also contends that the phrase "government-owned or controlled
corporation" should apply only to corporations organized under the Corporation
Code, the generalincorporation law, and not to corporations created by special
charters. The minority sees no reason why government corporations with special
charters should have a capital stock. Thus, the minority declares:
I submit that the definition of "government-owned or controlled
corporations" under the Administrative Code refer to those corporations
owned by the government or its instrumentalities which are created not
 by legislative enactment, but formed and organized under the
Corporation Code through registration with the Securities and Exchange
Commission. In short, these are GOCCs without original charters.
xxx xxx xxx
It might as well be worth pointing out that there is no point in requiring a
capital structure for GOCCs whose full ownership is limited by its charter
to the State or Republic. Such GOCCs are not empowered to declare
dividends or alienate their capital shares.
The contention of the minority is seriously flawed. It is not in accord with the
Constitution and existing legislations. It will also result in gross absurdities.
First, the Administrative Code definition of the phrase "government-owned or
controlled corporation" does not distinguish between one incorporated under the
Corporation Code or under a special charter. Where the law does not distinguish,
courts should not distinguish.
Second, Congress has created through special charters several government-
owned corporations organized as stock corporations. Prime examples are the
Land Bank of the Philippines and the Development Bank of the Philippines. The
special charter 40 of the Land Bank of the Philippines provides:
SECTION 81. Capital. — The authorized capital stock of the Bank
shall be nine billion pesos, divided into seven hundred and eighty
million common shares with a par value of ten pesos each, which
shall be fully subscribed by the Government, and one hundred and
twenty million preferred shares with a par value of ten pesos each, which
shall be issued in accordance with the provisions of Sections seventy-
seven and eighty-three of this Code. (Emphasis supplied)
Likewise, the special charter 41 of the Development Bank of the Philippines
provides:
SECTION 7. Authorized Capital Stock — Par value. — The capital
stock of the Bank shall be Five Billion Pesos to be divided into Fifty
Million common shares with par value of P100 per share. These
shares are available for subscription by the National Government. Upon
the effectivity of this Charter, the National Government shall subscribe to
Twenty-Five Million common shares of stock worth Two Billion Five
Hundred Million which shall be deemed paid for by the Government with
the net asset values of the Bank remaining after the transfer of assets
and liabilities as provided in Section 30 hereof. (Emphasis supplied)
Other government-owned corporations organized as stock corporations under
their special charters are the Philippine Crop Insurance Corporation, 42 Philippine
International Trading Corporation, 43 and the Philippine National Bank 44 before it
was reorganized as a stock corporation under the Corporation Code. All these
government-owned corporations organized under special charters as stock
corporations are subject to real estate tax on real properties owned by them. To
rule that they are not government-owned or controlled corporations because they
are not registered with the Securities and Exchange Commission would remove
them from the reach of Section 234 of the Local Government Code, thus
exempting them from real estate tax.
Third, the government-owned or controlled corporations created through special
charters are those that meet the two conditions prescribed in Section 16, Article
XII of the Constitution. The first condition is that the government-owned or
controlled corporation must be established for the common good. The second
condition is that the government-owned or controlled corporation must
meet the test of economic viability. Section 16, Article XII of the 1987
Constitution provides:
SEC. 16. The Congress shall not, except by general law, provide for the
formation, organization, or regulation of private
corporations. Government-owned or controlled corporations may be
created or established by special charters in the interest of the
common good and subject to the test of economic viability.
(Emphasis and underscoring supplied)
The Constitution expressly authorizes the legislature to create "government-
owned or controlled corporations" through special charters only if these entities
are required to meet the twin conditions of common good and economic
viability. In other words, Congress has no power to create government-
owned or controlled corporations with special charters unless they are
made to comply with the two conditions of common good and economic
viability. The test of economic viability applies only to government-owned or
controlled corporations that perform economic or commercial activities and need
to compete in the market place. Being essentially economic vehicles ofthe State
for the common good — meaning for economic development purposes — these
government-owned or controlled corporations with special charters are usually
organized as stock corporations just like ordinary private corporations.
In contrast, government instrumentalities vested with corporate powers and
performing governmental or public functions need not meet the test of economic
viability. These instrumentalities perform essential public services for the
common good, services that every modern State must provide its citizens. These
instrumentalities need not be economically viable since the government may
even subsidize their entire operations. These instrumentalities are not the
"government-owned or controlled corporations" referred to in Section 16, Article
XII of the 1987 Constitution.
Thus, the Constitution imposes no limitation when the legislature creates
government instrumentalities vested with corporate powers but performing
essential governmental or public functions. Congress has plenary authority to
create government instrumentalities vested with corporate powers
provided these instrumentalities perform essential government functions
or public services. However, when the legislature creates through special
charters corporations that perform economic or commercial activities, such
entities — known as "government-owned or controlled corporations" — must
meet the test of economic viability because they compete in the market place.

This is the situation of the Land Bank of the Philippines and the Development
Bank of the Philippines and similar government-owned or controlled corporations,
which derive their income to meet operating expenses solely from commercial
transactions in competition with the private sector. The intent of the
Constitution is to prevent the creation ofgovernment-owned or controlled
corporations that cannot survive on their own in the market place and thus
merely drain the public coffers.
Commissioner Blas F. Ople, proponent of the test of economic viability, explained
to the Constitutional Commission the purpose of this test, as follows:
MR. OPLE: Madam President, the reason for this concern is really that
when the government creates a corporation, there is a sense in which
this corporation becomes exempt from the test of economic
performance. We know what happened in the past. If a government
corporation loses, then it makes its claim upon the taxpayers' money
through new equity infusions from the government and what is always
invoked is the common good. That is the reason why this year, out of a
budget of P115 billion for the entire government, about P28 billion of this
will go into equity infusions to support a few government financial
institutions. And this is all taxpayers' money which could have been
relocated to agrarian reform, to social services like health and education,
to augment the salaries of grossly underpaid public employees. And yet
this is all going down the drain.
Therefore, when we insert the phrase "ECONOMIC VIABILITY" together
with the "common good," this becomes a restraint on future enthusiasts
for state capitalism to excuse themselves from the
responsibility of meeting the market test so that they become viable. And
so, Madam President, I reiterate, for the committee's consideration and I
am glad that I am joined in this proposal by Commissioner Foz, the
insertion of the standard of "ECONOMIC VIABILITY OR THE
ECONOMIC TEST," together with the common good. 45
Father Joaquin G. Bernas, a leading member of the Constitutional Commission,
explains in his textbook The 1987 Constitution of the Republic of the Philippines:
A Commentary:
 The second sentence was added by the 1986 Constitutional
Commission. The significant addition, however, is the phrase "in the
interest of the common good and subject to the test of economic
viability." The addition includes the ideas that they must show
capacity to function efficiently in business and that they should not
go into activities which the private sector can do better. Moreover,
economic viability is more than financial viability but also includes
capability to make profit and generate benefits not quantifiable in
financial terms. 46 (Emphasis supplied)
DAEcIS

Clearly, the test of economic viability does not apply to government entities
vested with corporate powers and performing essential public services. The State
is obligated to render essential public services regardless of the economic
viability of providing such service. The non-economic viability of rendering such
essential public service does not excuse the State from withholding such
essential services from the public.
However, government-owned or controlled corporations with special charters,
organized essentially for economic or commercial objectives, must meet the
test of economic viability. These are the government-owned or controlled
corporations that are usually organized under their special charters as stock
corporations, like the Land Bank of the Philippines and the Development
Bank of the Philippines. These are the government-owned or controlled
corporations, along with government-owned or controlled corporations organized
under the Corporation Code, that fall under the definition of "government-owned
or controlled corporations" in Section 2(10) of the Administrative Code.
The MIAA need not meet the test of economic viability because the legislature
did not create MIAA to compete in the market place. MIAA does not compete in
the market place because there is no competing international airport operated by
the private sector. MIAA performs an essential public service as the primary
domestic and international airportof the Philippines. The operation of an
international airport requires the presence of personnel from the following
government agencies:
1. The Bureau of Immigration and Deportation, to document the
arrival and departure of passengers, screening out those
without visas or travel documents, or those with hold
departure orders;
2. The Bureau of Customs, to collect import duties or enforce the
ban on prohibited importations;
3. The quarantine office of the Department of Health, to enforce
health measures against the spread of infectious diseases
into the country;
 4. The Department of Agriculture, to enforce measures against the
spread of plant and animal diseases into the country;
5. The Aviation Security Command of the Philippine National
Police, to prevent the entry of terrorists and the
escape of criminals, as well as to secure the airport
premises from terrorist attack or seizure;
6. The Air Traffic Office of the Department of Transportation and
Communications, to authorize aircraft to enter or leave
Philippine airspace, as well as to land on, or take off from,
the airport; and
7. The MIAA, to provide the proper premises — such as runway
and buildings — for the government personnel, passengers,
and airlines, and to manage the airport operations.
All these agencies of government perform government functions essential to
the operation of an international airport.
MIAA performs an essential public service that every modern State must provide
its citizens. MIAA derives its revenues principally from the mandatory fees and
charges MIAAimposes on passengers and airlines. The terminal fees
that MIAA charges every passenger are regulatory or administrative fees 47 and
not income from commercial transactions.
MIAA falls under the definition of a government instrumentality under Section
2(10) of the Introductory Provisions of the Administrative Code, which provides:
SEC. 2. General Terms Defined. — . . .
(10) Instrumentality refers to any agency of the National Government,
not integrated within the department framework, vested with special
functions or jurisdiction by law,endowed with some if not all corporate
powers, administering special funds, and enjoying operational
autonomy, usually through a charter. . . . (Emphasis supplied)
The fact alone that MIAA is endowed with corporate powers does not
make MIAA a government-owned or controlled corporation. Without a change
in its capital structure,MIAA remains a government instrumentality under
Section 2(10) of the Introductory Provisions of the Administrative Code. More
importantly, as long as MIAA renders essential public services, it need not
comply with the test of economic viability. Thus, MIAA is outside the
scope of the phrase "government-owned or controlled corporations" under
Section 16, Article XII of the 1987 Constitution.
The minority belittles the use in the Local Government Code of the phrase
"government-owned or controlled corporation" as merely "clarificatory or
illustrative." This is fatal. The 1987 Constitution prescribes explicit conditions for
the creation of "government-owned or controlled corporations."
The Administrative Code defines what constitutes a "government-owned or
controlled corporation." To belittle this phrase as "clarificatory or illustrative" is
grave error.
To summarize, MIAA is not a government-owned or controlled corporation under
Section 2(13) of the Introductory Provisions of the Administrative Code because
it is not organized as a stock or non-stock corporation. Neither is MIAA a
government-owned or controlled corporation under Section 16, Article
XII of the 1987 Constitution becauseMIAA is not required to meet the
test of economic viability. MIAA is a government instrumentality vested with
corporate powers and performing essential public services pursuant to Section
2(10) of the Introductory Provisions of the Administrative Code. As a government
instrumentality, MIAA is not subject to any kind of tax by local governments under
Section 133(o) of the Local Government Code. The exception to the exemption in
Section 234(a) does not apply to MIAA because MIAA is not a taxable entity
under the Local Government Code. Such exception applies only if the beneficial
use of real property owned by the Republic is given to a taxable entity.
Finally, the Airport Lands and Buildings of MIAA are properties devoted to public
use and thus are properties of public dominion. Properties of public dominion
are owned by the State or the Republic. 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. (Emphasis supplied)
The term "ports . . . constructed by the State" includes airports and seaports.
The Airport Lands and Buildings of MIAA are intended for public use, and at the
very least intended for public service. Whether intended for public use or public
service, the Airport Lands and Buildings are properties of public dominion. As
properties of public dominion, the Airport Lands and Buildings are owned by the
Republic and thus exempt from real estate tax under Section 234(a) of the Local
Government Code.
4. Conclusion
Under Section 2(10) and (13) of the Introductory Provisions of the Administrative
Code, which governs the legal relation and status of government units, agencies
and offices within the entire government machinery, MIAA is a
government instrumentality and not a government-owned or controlled
corporation. Under Section 133(o) of the Local Government Code, MIAA as a
government instrumentality is not a taxable person because it is not subject to
"[t]axes, fees or charges of any kind" by local governments. The only exception is
when MIAA leases its real property to a "taxable person" as provided in Section
234(a) of the Local Government Code, in which case the specific real property
leased becomes subject to real estate tax. Thus, only portions of the Airport
Lands and Buildings leased to taxable persons like private parties are subject to
real estate tax by the City of Parañaque.

Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA,
being devoted to public use, are properties of public dominion and thus owned
by the State or the Republic of the Philippines. Article 420 specifically mentions
"ports . . . constructed by the State," which includes public airports and seaports,
as properties of public dominion and owned by the Republic. As
properties of public dominion owned by the Republic, there is no doubt
whatsoever that the Airport Lands and Buildings are expressly exempt from real
estate tax under Section 234(a) of the Local Government Code. This Court has
also repeatedly ruled that properties of public dominion are not subject to
execution or foreclosure sale.
WHEREFORE, we GRANT the petition. We SET ASIDE the assailed
Resolutions of the Court of Appeals of 5 October 2001 and 27 September 2002
in CA-G.R. SP No. 66878. We DECLARE the Airport Lands and Buildings of the
Manila International Airport Authority EXEMPT from the real estate tax imposed
by the City of Parañaque. We declare VOID all the real estate tax assessments,
including the final notices of real estate tax delinquencies, issued by the
City of Parañaque on the Airport Lands and Buildings of the Manila International
Airport Authority, except for the portions that the Manila International Airport
Authority has leased to private parties. We also declare VOID the assailed
auction sale, and all its effects, of the Airport Lands and Buildings of the Manila
International Airport Authority.ESHAcI

No costs.
SO ORDERED.
Panganiban, C.J., Puno, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Corona, Carpio Morales, Chico-Nazario, Garcia and Velasco, Jr., JJ., concur.
Austria-Martinez, J., agrees with separate opinion of J. Tinga.
Callejo, Sr., J., concurs with separate opinion of J. Tinga.
Azcuna, J., is on leave.
Tinga, J., please see dissenting opinion.
 (Manila International Airport Authority v. Court of Appeals, G.R. No. 155650,
|||

[July 20, 2006], 528 PHIL 181-309)

 [G.R. No. 149145. March 31, 2006.]

ROMAN CATHOLIC BISHOP OF KALIBO, AKLAN, represented

by BISHOP JUAN N.
NILMAR, petitioner, vs. MUNICIPALITY OF BURUANGA,
AKLAN, represented by the HON. PROTACIO S.
OBRIQUE, respondent.

DECISION

CALLEJO, SR., J : p

Before the Court is the petition for review on certiorari filed by

the Roman Catholic Bishop 1 of Kalibo, Aklan, seeking the partial review of the
Decision 2 dated January 31, 2001 of the Court of Appeals in CA-G.R. CV No. 52626. Likewise sought to be
reviewed is the Resolution dated July 18, 2001 of the appellate court denying the petitioner's motion for
partial reconsideration.

Factual and Procedural Antecedents

Some time in 1990, the Roman Catholic Bishop of Kalibo, Aklan, filed with the
Regional Trial Court (RTC) thereof a complaint for declaration of ownership and
quieting of title to land with prayer for preliminary injunction against
the Municipality of Buruanga, Aklan. The case was docketed as Civil Case No.
4164 and raffled to Branch 1 of the said RTC.
The complaint alleged, among others, that
the Roman Catholic Bishop of Kalibo is the lawful owner and possessor of a
parcel of residential and commercial land (Cadastral LotNo. 138) located at
the poblacion of the Municipality of Buruanga, Aklan. The said lot, with an
area of 9,545 square meters, is a block bounded by four streets on all sides. It is
more particularly described as follows:
A parcel of commercial and residential land known as Cadastral Lot No.
138, GSS-06-00012, located at Poblacion, Buruanga, Aklan, containing
an area of NINE THOUSAND FIVE HUNDRED FORTY-FIVE (9,545)
SQUARE METERS, more or less. Bounded on the North by Viven Ostan
Street; on the East by the Provincial Road; on the South by Nitoy Sualog
Street; and on the West by Emilio Ostan Street, and declared for
taxation purposes in the name of the Roman Catholic Church, Buruanga,
Aklan, under Tax Declaration No. 6339 (1985) and assessed at
P23,850.00, including the improvements thereon. 3
In 1894, the Roman Catholic Church was built in the middle portion of the said lot
and has been in existence since then up to the present.
The complaint further alleged that some time in
1978, 4 the Municipality of Buruanga constructed its municipal building on the
northeastern portion of the subject lot after it obtained the permission of Fr. Jesus
Patiño, then parish priest of Buruanga. The municipality promised to remove all
the improvements it constructed thereon if and when
theRoman Catholic Bishop of Kalibo needed the said land. ScTaEA

In October 1989, the said municipal building was razed by fire allegedly
perpetrated by members of the New People's Army. On November 25, 1989,
the Roman Catholic Bishopof Kalibo, through its counsel, wrote to the Municipal
Mayor of Buruanga requesting the officials of the said municipality to refrain from
constructing its new building on the same site because it is the property of the
church. Further, it needed the said land for its social action projects. The letter
reads in part:
I am writing you on behalf of my client
THE ROMAN CATHOLIC BISHOP OF KALIBO, AKLAN, a corporation
sole and represented by Bishop Juan N. Nilmar requesting you and the
Honorable Members of the Municipal Council (Sangguniang Bayan) to
refrain from constructing your new Municipal Building on the same site
where your old Municipal Building was burned down because it is
constructed on the property of the Church.
Please be informed that the land of the Church is needed for its social
action projects and additional building, hence, kindly relocate your New
Municipal Building in your own land located along Emilio Ostan Street,
known as Cadastral Lot No. 87.
With respect to your other public buildings such as the Rural
Hospital, Buruanga Community Medicare Hospital, the Basketball Court
and the Grandstand which are all occupying the Church property, you
can continue using the same land subject to your recognition of the true
ownership of the property of the Church — The Roman Catholic Church
— ofBuruanga, Aklan, under the Roman Catholic Bishop of Kalibo,
Aklan, the lawful administrator of all church properties in the
Province of Aklan. 5
On March 12, 1990, the Roman Catholic Bishop of Kalibo wrote the
Department of Public Works and Highways of the said province requesting the
said office not to issue any building permit to the Municipal Mayor and/or
the Municipality of Buruanga in connection with the construction of its municipal
building on the land owned by the RomanCatholic Bishop of Kalibo. 6
These letters went unheeded as the construction of the new municipal building
on the same site proceeded. Consequently,
the Roman Catholic Bishop of Kalibo filed the complaint a quo and prayed that it
be declared the lawful owner and possessor of Lot 138. It likewise prayed that a
temporary restraining order be issued to enjoin the saidmunicipality and its
authorized representatives from constructing the new municipal building thereon
and that the latter be directed to pay damages to
the Roman CatholicBishop of Kalibo.
In its Answer, 7 the Municipality of Buruanga, represented by Mayor Protacio
Obrique, denied that the Roman Catholic Bishop of Kalibo ever acquired
ownership and possession over the land subject of the complaint. It raised as
affirmative defenses that the said lot was surveyed as
property of the municipality on February 3, 1909 in accordance with Section
58 of Act 926 by A.W. Bushell and approved by the Bureau of Lands on May 15,
1909. 8 Thereafter, a decree was issued on March 14, 1919 in
favor of the Municipality ofBuruanga under Case No. 12871 of then Court of Land
Registration, Bureau of Lands.
It was further alleged that the said land was again surveyed in the
name of the Municipality of Buruanga under Act No. 2259 and denominated as
Lot No. 138 GSS-06-00012 from the approved cadastral map and that the
said municipality alone had possessed the said land under the claim of title
exclusively for over fifty (50) years, exclusive of all other rights and adverse to all
other claimants.
The Municipality of Buruanga urged the court a quo to dismiss the complaint and,
instead, declare it the absolute and exclusive owner of the disputed lot.
On November 29, 1990, the court a quo issued the Order 9 appointing Geodetic
Engineer Rodrigo Santiago of the Bureau of Lands as Commissioner and
directing him to identify and delineate the lot in question. In compliance therewith,
Engr. Santiago submitted the Commissioner's Report and Sketch stating in part:
That as per order of the court dated November 29, 1990 to delineate the
land [in] question, the undersigned court commissioner notified both
parties and the schedule of survey was January 12, 1991 but it was
postponed and moved to January 15 as requested by the representative
from the Municipality of Buruanga. aEHTSc

That the land in question involved was pointed to me by the Honorable

Mayor of the Municipality of Buruanga, identified on the plan as [L]ot 138
located at Poblacion Buruangawith survey no. GSS-06-00012 approved
by the Director Lands last February 19, 1985, listed as Public Plaza on
file in the CENR Office Land Management Sector, Kalibo, Aklan.
That the Honorable Mayor of the Municipality of Buruanga pointed also
the boundary between the Public Plaza and the Roman Catholic Church.
The Technical Descriptions are as follows:
Lot 138-A (Public Plaza)
 corner 1-2 S86 - 03E 65.54 m.
2-3 S03 - 17E 32.36 m.
3-4 N88 - 54W 71.31 m
4-1 N06 - 33E 35.68 m.
containing an area of 2,319 square meters
Lot 138-B (Roman Catholic Church)
1-2 S86 - 03E 65.54 m.
2-3 S03 - 17E 32.36 m.
3-4 N88 - 54W 71.31 m.
4-1 N06 - 33E 35.68 m.
containing an area of 3,836 square meters
Lot 138-C (Public Plaza)
1-2 N81 - 19W 87.70 m.
2-3 N06 - 33E 38.90 m.
3-4 S83 - 17E 80.35 m.
4-1 S03 - 17E 42.57 m.
containing an area of 3,389 square meters 10
Consistent with the above technical description, the sketch submitted by Engr.
Santiago showed the delineation of Lot 138 into three parts: Lots 138-A, 138-B
and 138-C. The municipal building stood on Lot 138-A;
the Roman Catholic Church stood on Lot 138-B and the municipal health center
and the Buruanga Community Medicare building stood on Lot 138-C. It also
showed that portions of Lots 138-A and 138-C were being used as public plaza.
At the pre-trial, the parties stipulated on the following facts:
1. The identity of the lot in question which is Lot 138 consisting of Lots
138-A, 138-B and 138-C as reflected in the commissioner's
sketch with an area of 9,544 square meters and subdivided as
follows:
Lot 138-A 2,319 square meters
Lot 138-B 3,836 square meters
Lot 138-C 3,389 square meters
2. Lot 138-B is the present
site of the Roman Catholic Church of Buruanga. 11
The parties also agreed that the sole issue for resolution is who between
the Roman Catholic Bishop of Kalibo and the Municipality of Buruanga is the
owner of Lot 138.
After due trial, the court a quo rendered its Decision dated October 30, 1995
declaring the Roman Catholic Bishop of Kalibo as the lawful owner and
possessor of Lot 138-B and the Municipality of Buruanga as the lawful owner and
possessor of Lots 138-A and 138-C, the said lots being public plaza for public
use.
The court a quo found that of the various tax declarations 12 presented by
the Roman Catholic Bishop of Kalibo to support its claim, only one referred to a
portion of Lot 138. Said tax declaration 13 covered the church site and the parish
house situated within Lot 138-B. The other pieces of evidence 14 could not be
relied upon because they contained hearsay information relating to the disputed
lot that occurred before the affiants were born. The affidavit executed by Fr.
Jesus Patiño 15 stating that he was the one who gave verbal permission to then
Municipal Mayor Pedro Omugtong to construct the municipal building on the
vacant lot owned by the church was not accorded any evidentiary value because
he (Fr. Patiño) did not testify during the trial.
aTICAc

On the other hand, the court a quo did not give credence to
the Municipality of Buruanga's Exhibit "1," a microfilm enlargement of a plan
showing that the land consisting of12,615 square meters was subject of Land
Registration Case No. 12871. The plan showed that the survey was approved on
May 15, 1909 and the notations therein indicated that a decree was issued on
March 14, 1919. But no such decree was shown. It was further found by the
court a quo that the plan was requested from the Bureau of Lands Survey
Division on December 22, 1976. However, the same was not duly certified by the
issuing government agency. Even assuming that the disputed lot was indeed
subject of a land registration proceeding and a decree had been issued therefor
in March 1919, the Municipality of Buruanga, despite lapse of decades, failed to
take the necessary judicial steps for the issuance of a title in its name based on
the decree. Neither did it take any other course of action that would render its title
thereto indefeasible.
The court a quo, however, gave probative weight to the testimony of Manuel
Sualog, Chief of the Lands Management Section of the
Department of Environment and National Resources, who was presented by
the Municipality of Buruanga. Sualog testified that the disputed lot was the public
plaza of the said municipality. Standing thereon are theRoman Catholic Church
and its parish house, the new municipal hall, the rural health center, the
barangay community hospital and a basketball court.
During the court a quo's ocular inspection conducted on May 7, 1992, the town
was celebrating its town fiesta. It observed that the public was using the whole
plaza (in Lots 138-A and 138-C) for the festivities. Also, the existence of the
health centers, basketball court and the municipal hall showed that
portions of the disputed lot were being used by the public.
Upon inspection of the church, the court a quo further observed that it was
indeed an old stone structure and probably built in 1894, the year carved on its
left side entrance. It described the church as "vintage turn-of-the century colonial
Filipino church architecture. Moss and ficus grow out of its wall crevices. The
age of the church shows that it has been occupying that particular space for
almost one hundred (100) years long enough for the plaintiff to have possessed it
in the concept of owner continuously, adversely and publicly against the whole
world." 16
The court a quo held that the facts of the present case were similar to those
in Harty v. Municipality of Victoria, 17 where the Court ruled that:
For the above reasons, . . . it should be held, as we do hereby hold, that
the whole of the land not occupied by the church of the town of Victoria
and its parish house, is a public plaza of said town, of public use and
that in consequence thereof, the defendant is absolved of the complaint
without any special ruling as to the costs of both instances. 18
The dispositive portion of the court a quo's decision reads:
WHEREFORE, judgment is hereby rendered as follows:
1. The Roman Catholic Bishop of Kalibo, Aklan, is declared the
lawful owner and possessor of Lot 138-B with an
area of 3,836 square meters in the Commissioner's Report
as against the defendant;
2. Defendant Municipality of Buruanga is declared the lawful
owner and possessor of Lot 138-A with an area of 2,319
square meters and Lot 138-C with an area of3,389 square
meters in the Commissioner's Report, said lots being
public plaza destined for public use. 19
The Roman Catholic Bishop of Kalibo seasonably filed its appeal with the
Court of Appeals. It sought the reversal of that portion of the court a
quo's judgment adjudicating the ownership of Lots 138-A and 138-C to
the Municipality of Buruanga.
During the pendency of the case in the appellate court,
the Roman Catholic Bishop of Kalibo moved to submit additional evidence to
support its claim of ownership over the entire Lot 138. The additional evidence
consisted of affidavits of old residents of Buruanga stating that the municipal
building was constructed on the disputed lot only in the late 1950's. Prior thereto,
the municipal building stood at a place called Sunset Park, a block totally
different from the disputed lot. The said motion was denied by the appellate court
on the ground that the Roman Catholic Bishop of Kalibo had already been
accorded full opportunity to present its evidence in the court a quo.
The Municipality of Buruanga did not file its appellee's brief with the CA. On
January 31, 2001, the appellate court rendered the assailed Decision affirming
with modification the decision of the court a quo. The CA affirmed the
ownership of the Roman Catholic Bishop of Kalibo over Lot 138-B but reversed
the court a quo's ruling relative to the ownershipof Lots 138-A and 138-C. The
appellate court declared the said lots property of public dominion, hence, not
owned by either of the parties.
The CA stated that the court a quo correctly relied on the ruling in Harty, which
was reiterated in Bishop of Calbayog v. Director of Lands, 20 where the Court
held that the public plaza and public thoroughfare were not subject to registration
by the church. In the latter case, it was ruled that since neither the Church nor
the municipality presented positive proof of ownership or exclusive possession
for an appreciable period of time, and the only indubitable fact was the free and
continuous use of the lot in question by the residents of the town, which
had no other public plaza to speak of other than the disputed lot, there was a
strong presumption that the same had been segregated as a public plaza upon
the founding of the municipality therein.AEIHaS

As mentioned earlier, the appellate court reversed that portion of the court a
quo's judgment declaring the Municipality of Buruanga as the owner of Lots 138-
A and 138-C which form part of the public plaza. Citing Articles 419 21 and
420 22 of the Civil Code,the appellate court classified these lots as
property of public dominion; hence, not susceptible to private ownership by
the Municipality of Buruanga. The said lots are merely under its jurisdiction and
administration. Being intended for the common and public welfare, they could not
be appropriated either by the State or by private persons.
The dispositive portion of the assailed CA decision reads:
WHEREFORE, upon the premises, the appealed decision is AFFIRMED
with the MODIFICATION that Lots 138-A and 138-C are declared
property of public dominion not owned by either of the parties. 23
The Roman Catholic Bishop of Kalibo moved for a partial reconsideration of the
appellate court's ruling that Lots 138-A and 138-C, being the public plaza, are
property of public dominion. The Roman Catholic Bishop of Kalibo averred that
the appellate court erred in affirming the finding of the court a quo that these lots
comprise the public plaza. It maintained that it owned the entire Lot 138.
The appellate court denied the motion for partial reconsideration, hence, the
recourse to this Court by the Roman Catholic Bishop of Kalibo (the petitioner).
The Petitioner's Arguments
The present petition for review on certiorari alleges that:
I. THE COURT OF APPEALS GRIEVOUSLY ERRED IN RELYING
UPON THE CASES OF HARTY V. MUNICIPALITY OF VICTORIA,
TARLAC (13 Phil. 152 [1909]) and BISHOP OFCALBAYOG V.
DIRECTOR OF LANDS (45 SCRA 418 [1972]) TO SUPPORT ITS
CONCLUSION THAT THE PETITIONER IS NOT THE
OWNER OF LOTS 138-A AND 138-C.
II. THE COURT OF APPEALS GRIEVOUSLY ERRED IN FINDING
THAT LOTS 138-A AND 138-C [WHICH ARE WITHIN THE ORIGINAL
LOT 138] ARE PROPERTIES OF THE PUBLIC [DOMAIN] AND NOT
SUSCEPTIBLE TO PRIVATE OWNERSHIP BY THE PETITIONER.
III. THE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT
REFUSED TO RECOGNIZE THAT PETITIONER'S
OWNERSHIP OF THE ENTIRE LOT 138 WAS GRANTED AND
RECOGNIZED UNDER SPANISH LAW, AND AFFIRMED IN THE
TREATY OF PARIS. 24
The petitioner clarifies that it is seeking a partial review of the appellate court's
Decision dated January 31, 2001 classifying Lots 138-A and 138-C as
property of public dominion and not susceptible to private ownership and that the
petitioner is not entitled to the possession and ownership thereof. It is not
contesting the portion of the CA decision upholding its ownership over Lot 138-B.
The petitioner opines that the case of Harty, relied upon by the court a quo and
the CA to hold that Lots 138-A and 138-C comprise the public plaza, are
inapplicable because the facts therein are not similar to those of the present
case. The petitioner points out that the public plaza referred to in Harty was the
lot across the street from the church lot. It was not referring to the land
surrounding the Catholic church and the convent of the town of Victoria, which
was bounded by streets on each of its four sides. Thus, when the Court
in Harty limited the ownership of the church to the land "occupied by the
church of the town of Victoria and its parish house," it was not confining the
ownership to a portion of the lot on which the church and parish house were
situated. Rather, the Court in Harty referred to the entire lot or block (bounded by
a street on each of the four sides) on which the church and its parish house were
erected. DTISaH

The petitioner asserts that the following facts that have been established support
its claim of ownership over the entire Lot 138 as against the
claim of the Municipality ofBuruanga (respondent municipality):
[a] The church is built in the middle of Lot 138 (which is now Lot 138-B).
It was built therein in 1894. The church was almost 100 years old (at the
time the case was instituted with the trial court in 1990). . . .
[b] The Municipality of Buruanga is an old municipality constituted or
created during the colonial period, when the Philippine Islands was
under the Spanish sovereignty. . . .
[c] No building was built on Lot 138 earlier than or at about the same
time as the church. No municipal building was built around the church for
many decades after 1894. . . .

[d] The municipal hall of Buruanga was built on what is now Lot 138-A
only in the late 1950's. . . .
[e] It was not controverted by the private respondent that then Mayor
Omugtong of Buruanga sought and obtained the permission of the then
parish priest, Fr. Jesus Patino, to allow the municipal government to
build its municipal hall on Lot 138-A in the late 1950's only. . . .
[f] No evidence was adduced by private respondent that it had obtained
title of Lot 138-A or 138-C from the church (the owner of these lots) or
that its possession of any portion of Lot 138 was adverse to that of the
church. . . .
[g] When the municipal hall was burned down by the NPA rebels in 1989
the church asked the municipal government to relocate the municipal
hall elsewhere since it (church) needed the lot for itself.
[h] Because the municipal government resisted and for the first time
exhibited a possession adverse to the church, the petitioner promptly
filed the instant suit before the lower court for quieting of title to the
subject lot (the entire Lot 138) and to be declared the owner of such
property.
[i] The church has been in continuous, open, adverse, notorious
possession of the entire Lot 138 in the concept of owner since at least
1894 until the late 1950's. . . .
[j] No evidence has been shown that Lots 138-A and 138-C were
devoted for public use or for use as a public plaza before 1894 or even
at about the time the church was built on Lot 138. . . .
[k] The only evidence as to the supposed character of Lot 138-C as a
public plaza is a survey plan allegedly approved on 15 May 1909
denominated as [GSS]-06-00012,Buruanga Settlement Project,
approved only in 1984. Petitioner was not notified of this survey. . . .
 [l] The real property tax declaration presented by private respondent to
establish its supposed possession (Exhs. 4, 4-a, and 4-b, Record, pages
45-47) covered the year 1992 only.
[m] Witness Jaime S. Prado, Sr. (who was born on 17 December 1905
and coming to the age of reason when he was about 10 years old)
testified that as far as he can remember (since he was grade 1) he was
brought to mass by his elders at the church of Buruanga, which was the
very same church as of the time he testified in 1992, and was active in
church activities in that church (e.g., tsn, 9 January 1992, pages 5, 16);
that the property of the church was bounded on all four sides by the very
same streets that bounded it at the time he testified (ibid., at page 6-8).
[n] Private respondent indirectly judicially admitted that it has no title
(Torrens or otherwise) to the subject properties when its star witness
(the incumbent Mayor Protacio Obrique of Buruanga) testified that the
properties in the poblacion of Buruanga are not covered by any title (tsn,
27 July 1992, page 5). 25
The petitioner contends that the pronouncement in Bishop of Calbayog, cited by
the appellate court, does not support its decision. Instead, it actually supports the
petitioner's claim of ownership over Lot 138, including Lots 138-A and 138-C. In
the said case, the lot (Lot 2) that was declared by the Court as plaza was a
separate and distinct lot separated from the church lot (Lot 1) by a provincial
road. Lot 1, held to be owned by the church in the said case, included not only
the space occupied by the church, belfry, convent, parish school and nuns'
residence, but also the empty space which only had concrete benches as
improvements thereon and which was used as a public playground. TaCDIc

The petitioner also cites Roman Catholic Bishop of Jaro v.

Director of Lands, 26 where the Court recognized that under the Laws of the
Indies (Leyes de las Indias), the law in force in the Philippine Islands during the
Spanish regime, the property of the church in the pueblos consisted of one
parcel of land which meant "not only the two buildings but also the land adjacent
and contiguous to said buildings, that is, the parcel which by itself constitutes one
whole piece of land bounded on its four sides by streets, and within which said
buildings, the church and the convent, are situated." 27
According to the petitioner, the appellate court erred in affirming the finding of the
court a quo that Lots 138-A and 138-C comprise the public plaza. Unlike
in Harty, no evidence was allegedly adduced to show that from the time
respondent municipality was created these two lots had been set aside for the
public.
Harty is not applicable, the petitioner expounds, because it was indubitably
established therein that the "plaza was used without let or hindrance by the
public and the residentsof Victoria ever since its creation." In contrast, in the
present case, there was allegedly no evidence to show that Lots 138-A and 138-
C were set aside as the public plaza, or for any public purpose, when
the Municipality of Buruanga was created during the Spanish period. The
evidence, in fact, show that the entire Lot 138, bounded on all its four sides by
streets, belonged to the church and it had continuous use and occupation thereof
since 1894 when it constructed its church in the middle of Lot 138. No such
use of Lot 138-A and 138-C as the public plaza for the same length of time or
from 1894 had been shown.
The petitioner assails the reliance by the appellate court on the court a
quo's statement during its ocular inspection on Lot 138 in 1992 that it observed
that the property was occupied by the Roman Catholic Church, a parish house,
the municipal hall and three of its municipal edifices, and a basketball court.
Based on this observation, the court a quoconcluded, and the appellate court
affirmed, that Lots 138-A and 138-C comprise the public plaza. The petitioner
objects to this conclusion stating that the same cannot overcome the evidence in
favor of the church as to its ownership over these lots traced back to 1894 when
it constructed the church in the middle of Lot 138 or what is now Lot 138-B.
It reiterates that under the Laws of the Indies, when a municipality was created,
the church was assigned a property consisting of a parcel of land bounded on all
its four sides by streets, and that the public plaza was situated not on the same
parcel of land assigned to the church but on a distinct lot separated by a street
from that assigned to the church.
The petitioner likewise argues that even if it, as the owner of the entire Lot 138,
allowed respondent municipality to build its municipal hall on what is now Lot
138-A in the late 1950's by mere tolerance of the parish priest, it does not
necessarily follow that Lot 138-A had become property of public dominion. It
does not allegedly lose its possession or ownership over the property if the
possession or use by another of the same is by mere tolerance.
Respondent municipality, through its Mayor Protacio Obrique during his
testimony, allegedly admitted that respondent municipality's lot was located in a
portion designated as Lot 2 in its Exhibit "1." The said lot was along the beach
and separated from Lot 138 by Emilio Ostan Street. The alleged import of this
admission is that the entire Lot 138 (designated as Lot 1 in Exhibit "1") was
assigned solely to the church since a different lot was assigned to
respondent municipality.
The petitioner avers that Buruanga is an ancient Spanish town and that when it
was created the Spanish authorities assigned a distinct and separate lot for its
municipal government or pueblo where it could build its municipal hall or casa
real. It could thus be assumed that the casa
real of respondent municipality would be built at about the same time as the
church or around 1894. The petitioner contends that nothing in the evidence
suggests that the casa real was built on Lot 138 during the said period. It was
only in the late 1950's that the municipal hall was built thereon upon the
permission granted by the parish priest.
Refuting respondent municipality's view that it is unthinkable that the church
would be given a bigger property than the municipal government, the petitioner
submits that such notion is not far fetched considering that the primary aim of the
Spaniards at the time was to spread the Catholic faith to the colonies. DASCIc

That the entire Lot 138 belonged to the petitioner is allegedly supported by the
practice during the Spanish period, as shown by the layout of the church convent
and church plaza in practically all the old towns in the Philippines and the early
cases 28 decided by the Court, to invariably provide the church with spacious
grounds bounded by the four principal streets of the town.
Even without any document or certificate of title thereto, the petitioner bases its
claim of ownership over Lot 138 under the Spanish Law as recognized and
affirmed under the Treaty of Paris. It cites Roman Catholic Apostolic
Church v. Municipality of Placer 29 where the Court recognized that the church is
entitled not only to possession of its properties but to ownership
thereof. Bishop of Jaro was again invoked by the petitioner as the Court
explained therein that it did not find it strange that the church was unable to
exhibit a written title to its property since the Laws of the Indies in force during
the Spanish regime dictated the layout of the towns and assigned the
locations of the church, square and government administration buildings. The
provisions of the Laws of the Indies pertaining thereto were held to be sufficient
to secure the registration in the name of the churchof its land.
The petitioner asserts that even granting arguendo that Lot 138 was not assigned
to it during the Spanish regime or is not owned by it pursuant to the Laws of the
Indies, still, it had acquired ipso jure or by operation of law a government grant, a
vested title, to the disputed lot by virtue of its open, continuous, exclusive and
notorious possession and occupation thereof since 1894. In support of this
contention, the petitioner cites Subsection 6 of Section 54 of Act No. 926, which
became effective on July 26, 1904, and which provided that:

6. All persons who by themselves or their predecessors in interest have

been in the open, continuous, exclusive and notorious possession and
occupation of agricultural public lands, as defined by said
Act of Congress of July first, nineteen hundred and two, under a bona
fide claim of ownership except as against the Government, for a
period often years next preceding the taking effect of this Act, except
when prevented by war or force majeure, shall be conclusively
 presumed to have performed all the conditions essential to a
government grant and to have received the same, and shall be entitled
to a certificate of title to such land under the provisions of this chapter.
It is allegedly clear that as early as July 26, 1904, when Act No. 926 took effect,
the petitioner had already acquired a government grant, a vested title, to Lot 138.
Subsection b of Section 45 of Act No. 2874, approved on November 9, 1919,
which amended Act No. 926, is similarly cited by the petitioner. It provided that:
(b) Those who by themselves or their predecessors in interest have
been in the open, continuous, exclusive and notorious possession and
occupation of agricultural lands ofthe public domain, under a bona fide
claim of acquisition of ownership, except as against the Government,
since July twenty-sixth, eighteen hundred and ninety-four, except when
prevented by war or force majeure. These shall be conclusively
presumed to have performed all the conditions essential to a
government grant and shall be entitled to a certificate of title under the
provisions of this chapter.
On the basis of the foregoing provisions, a land registration proceeding instituted
would, according to the petitioner, "in truth be little more than a formality, at the
most limited to ascertaining whether the possession claimed is of the required
character and length of time, and registration thereunder would not confer title,
but simply recognize a title already vested."
In addition to its arguments on the merits of the case, the petitioner assails the
appellate court's denial of its motion to submit additional evidence which would
have showed that the casa real of respondent municipality, together with its plaza
(Sunset Park Plaza), was located on a distinct lot (Lot 2) separated from Lot 138
by Emilio Ostan Street.
The petitioner urges the Court to reverse and set aside the portion of the
appellate court's decision declaring Lots 138-A and 138-C as property of public
dominion and to declare the petitioner the absolute owner of the entire Lot 138.
In the alternative, the petitioner prays that it be allowed to submit additional
evidence of its ownership over Lots 138-A and 138-C. DCScaT

Respondent Municipality's Counter-arguments

For its part, respondent municipality contends that, except for the figures 1894
etched on the left wall of the church, the petitioner has not presented any
evidence to show that it had continuous possession of the entire Lot 138 since
the turn of the twentieth century. The petitioner is allegedly of the mistaken belief
that because it possessed Lot 138-B, it must have likewise possessed Lots 138-
A and 138-C. Respondent municipality claims that it is the one that has been
exercising acts of exclusive ownership over the disputed lot.
The petitioner has allegedly misread Harty and Bishop of Calbayog in claiming
that in cases involving the church, the lot adjudicated to it invariably
consisted of the entire block, bounded by a street on each of the four sides, and
the public plazas were situated in separate blocks. While it may true that many
church properties occupy an entire block in certain municipalities, it is allegedly
equally true that other church properties occupy only portions thereof depending
on the exigencies of the locality at the time when the church was being
established.
In those instances that the Court allegedly adjudicated an open space in
favor of the church, the local government was not shown to have exercised
dominion over the property and the church has consistently established some
control over it, like the putting up of a religious monument thereon. On the other
hand, in the present case, respondentmunicipality insists that it has laid adverse
claim over Lot 138 as early as 1909 when it applied for title over it and was even
issued a decree over the said lot. Respondentmunicipality places its actual,
public and adverse possession of Lot 138 at the latest in 1958 when it built its old
municipal hall on the said site. Its occupation prior thereto could also be allegedly
presumed from its actual possession thereof.
The petitioner has allegedly failed to establish that the construction of the old
municipal building in 1958 was by mere tolerance on its part.
Respondent municipality harps on the failure of the petitioner to present as its
witness Fr. Patiño, the parish priest who supposedly gave
respondent municipality permission to construct its municipal building on the
disputed lot. Respondent municipality denies ever seeking such permission.
Further, the tax declaration (Exhibit "B") of the petitioner only pertained to Lot
138-B proving that its ownership was limited to the said lot and did not extend to
Lots 138-A and 138-C.
Respondent municipality avers that it is already contented with the
decision of the appellate court although the latter allegedly erred in concluding
that Lots 138-A and 138-C are property of public dominion without taking into
consideration that respondent municipality applied for the issuance of title
covering the disputed lot and was issued a decree thereto in 1919. The
admission of Mayor Obrique, during his testimony, that
respondent municipality owned the lot along the beach (Lot 2) and situated
across the street from Lot 138 could not be allegedly taken to mean that the
Mayor was disclaiming ownership over Lot 138.
Respondent municipality theorizes that in those cases 30 that the Court upheld
the ownership of the church over a subject property, the same have ever since
remained the property of the church and have been in its peaceful possession.
Further, there were no adverse claimants and the primary issue being resolved
was whether, despite non-compliance with procedural requirements, title may be
granted in favor of the church.
Respondent municipality distinguishes the present case from those cases in that
there is an open contest over the ownership and possession of Lots 138-A and
138-C and respondent municipality has in its favor actual and adverse
possession thereof. It emphasizes that there is nothing in fact and in law that
would support the petitioner's bare claim of ownership and possession over Lots
138-A and 138-C. On the contrary, there is allegedly strong evidence showing
respondent municipality's exercise of proprietary and governmental rights over
the said lots where it has constructed permanent structures, e.g., municipal
building, community hospital, health center, social hall/basketball court, and
where public functions are openly conducted.
Respondent municipality urges the Court to dismiss the petition and, instead, to
affirm the decision of the court a quo declaring it the lawful owner and
possessor of Lots 138-A and 138-C. caADSE

Issue
The substantive issue to be resolved is whether the appellate court correctly
declared Lots 138-A and 138-C as property of public dominion, hence, not
susceptible to ownership by either the petitioner and respondent municipality.
Since respondent municipality no longer sought the review of the assailed
decision of the appellate court, the Court shall mainly resolve the merits of the
petitioner's claim ofownership over Lots 138-A and 138-C vis-à-vis the appellate
court's holding that they are of public dominion, hence, not susceptible to private
ownership.
The Court's Ruling
The petition is denied.
The Laws of the Indies and the cases cited
by the petitioner do not support its claim
of ownership over Lots 138-A and 138-C
The petitioner anchors its claim of ownership over Lots 138-A and 138-C on its
theory that the entire Lot 138, bounded on all its four sides by streets, was
assigned to it as far back as 1894 when the church was built in the middle of the
said lot. The cases it cited allegedly stand for the proposition that "under the
Laws of the Indies, when a municipalitywas created, the church was assigned a
property consisting of a parcel of land bounded on all its (four) sides by streets,
and that the public plaza was situated not on the same parcel of land assigned to
the church but on a distinct parcel of land separated from the parcel of land
assigned to the church by a street." 31
This allegation fails to persuade. The pertinent provision of the Laws of the Indies
relating to the designation of a parcel of land for the church upon the
establishment of a town or pueblo during the Spanish regime reads:
Ley viij. Que se fabriquen el Templo principal en el sitio, y disposicion,
que se ordena, y otras Iglesias, y Monasterios.
En lugares Mediterráneos no se fabrique el Templo en la plaza, sino
algo distante de ella, donde esté separado de otro qualquier edificio,
que no pertenezca á su comodidad y ordenato, y porque de todas partes
sea visto, y mejor venerado, esté algo levantado de suelo, de forma que
se haya de entrar por gradas, y entre la plaza mayor, y Templo se
edifiquen las Casas Reales, Cabildo, ó Concejo, Aduana, y Atarazana,
en tal distancia, que autoricen al Templo, y no le embaracen, y en caso
de necesidad se puedan socorrer, y si la poblacion fuere en Costa,
dispóngase de forma que en saliendo de Mar sea visto, y su fábrica
como defensa del Puerto, señalando solares cerca de él, y no á su
continuacion, en que se fabriquen Casas Reales, y tiendas en la plaza
para propios, imponiendo algun moderado tributo en las mercaderias: y
asimismo sitios en otras plazas menores para Iglesias Parroquiales, y
Monasterios donde sean convenientes. 32
The above provision prescribed that the church be built at some distance from
the square, separate from other buildings in order that it may be better seen and
venerated, and raised from the ground with steps leading to it. It decreed that
government administration buildings, including casas reales, be built between the
main square and the church and at such distance as not to shut the church from
view. In cases of coastal towns, the church was to be constructed in such
location as to be seen by those coming from the sea and serve for the
defense of the port.

The other provisions of the Laws of the Indies on the establishment of new towns
or pueblos in the archipelago, including the designation of lands for the
church, casa reales(municipal buildings) and public squares, had been discussed
by the Court in this wise:
xxx xxx xxx
The executive authorities and other officials who then represented the
Spanish Government in these Islands were obliged to adjust their
procedure, in the fulfillment of their duties with regard to the
establishment and laying out of new towns, to the Laws of the Indies,
which determined the course that they were to pursue for such
purposes, as may be seen by the following:
Law 6, title 5, book 4, of the Recompilation of the Laws of the Indies,
provides, among other things:
"That within the boundaries which may be assigned to it, there must be
at least thirty residents, and each one of them must have a house,"
etc.CcSEIH

Law 7 of the same title and book contains this provision:

"Whoever wishes to undertake to establish a new town in the manner
provided for, of not more than thirty nor less than ten residents, shall be
granted the time and territory necessary for the purpose and under the
same conditions."
It may be affirmed that years afterwards all the modern pueblos of the
Archipelago were formed by taking as a basis for their establishment the
barrios already populated by a large number of residents who, under the
agreement to build the church of the new pueblo, the court-house and
afterwards the schoolhouse, obtained from the GeneralGovernment the
administrative separation of their barrio from the pueblo on which it
depended and in whose territory it was previously comprised. In such
cases procedure analogous to that prescribed by the Laws of the Indies
was observed.
For the establishment, then, of new pueblos, the administrative
authority of the province, in representation of the Governor-General,
designated the territory for their location and extension and the metes
and bounds of the same; and before the allotting the lands among the
new settlers, a special demarcation was made of the places which were
to serve as the public square of the pueblo, for the erection of the
church, and as sites for the public buildings, among others, the municipal
building or the casa real, as well as ofthe lands which were to constitute
the commons, pastures, and propios of the municipality and the streets
and roads which were to intersect the new town were laid out, as may be
seen by the following laws:
Law 7, title 7, book 4, of the Recompilation of the Laws of the Indies,
provides:
"The district or territory to be given for settlement by composition shall
be allotted in the following manner: There shall first be set apart the
portion required for the lots of the pueblo, the exido or public lands, and
pastures amply sufficient for the stock which the residents may have,
and as much more as propios del lugar or common lands of the locality;
the rest of the territory and district shall be divided into four parts —
one of them, of his choice, shall be for him who takes upon himself the
obligation to found the pueblo, and the other three shall be apportioned
equally among the settlers."
Law 8, of the same title and book, prescribes, among other things:
 "That, between the main square and the church, there shall be
constructed the casas reales or municipal buildings, the cabildo,
concejo, customs buildings," etc.
Law 14 of the said title and book, also directs among other things:
"That the viceroys shall have set aside such lands as to them appear
suitable as the common lands (propios) of the pueblos that have none,
therewith to assist in the payment ofthe salaries of the corregidores, and
sufficient public lands (exidos) and pasture lands as provided for and
prescribed by law."
Law 1, title 13 of the aforesaid book, provides the following:
"Such viceroys and governors as have due authority shall designate to
each villa and lugar newly founded and settled the lands and lots which
they may need and may be given to them, without detriment to a third
party, as propios, and a statement shall be sent to us of what was
designated and given to each, in order that we may have such action
approved." 33
Nowhere in the above provisions was it stated that the parcel of land designated
for the church of the town or pueblo was, in all cases, to be an entire block or
bounded on all its four sides by streets. The petitioner thus erroneously
asseverates that the said ancient laws sustain its claim of ownership over the
entire Lot 138.
Neither can it find support in the cases that it cited. A careful review of these
cases reveal that, in those instances where the Court upheld the claim of the
church over a parcel ofland vis-à-vis that of the municipality or national
government, the ownership and possession by the church of the same had been
indubitably established by its exclusive exercise thereon of proprietary acts or
acts of dominion.
For example, in Bishop of Calbayog v. Director of Lands, 34 which according to
the petitioner supports its case, the Court adjudicated in favor of the church the
ownership of Lot 1 (except the portion thereof occupied by a public thoroughfare)
including not only the space occupied by the church, belfry, convent, parish
school and nuns' residence, but also the empty space which only had concrete
benches as improvements thereon. ISTCHE

With respect to the empty space (eastern portion of Lot 1), the Court noted the
following:
. . . The eastern portion of Lot 1, the area in contention, is an empty
space except for concrete benches along the perimeter. A partly
cemented path runs across this lot from east to west leading up to the
front or entrance of the church and appears to be an
extension of Anunciacion St., which runs from the bank of the Catarman
 river up to Mendiola St. In the middle of this path, half-way between
Mendiola St. and the church, is a statue of the Sacred Heart of Jesus.
xxx xxx xxx
. . . The Roman Catholic Church had made no improvements on this
eastern portion of Lot 1, which at present is being used as a public
playground, although a bandstand stood there for about three years after
it was constructed in 1926 by the members of an orchestra which was
organized by a Fr. Ranera and which used to give musical performances
on the bandstand. On the feast of Corpus Christi the parishioners would
construct an altar on this lot and hold the procession there. 35
It is apparent that the Court adjudicated to the church the ownership of Lot 1
(except a portion thereof which was a public thoroughfare) because the latter
was able to establish that it had exercised acts of possession or ownership over
the same including over its empty space. In particular, the empty space was used
for religious functions, such as the Feast of Corpus Christi and the procession
held on the occasion and the church did not ask for any permit from the local
authorities whenever it used the said space for such activities.
In the present case, the petitioner has not shown that, at one time after the
church was built in 1894 in the middle of Lot 138 (now Lot 138-B), it exercised
acts of ownership or possession over Lots 138-A and 138-C as well.
It must be emphasized that the petitioner's allegation that it merely tolerated the
construction of not only the municipal building but also the other improvements
thereon, e.g., the rural health center, Buruanga community Medicare hospital,
basketball court, Rizal monument and grandstand, has remained
unsubstantiated. The affidavit of Fr. Patiño was correctly not given any credence
since he was not presented on the witness stand; thus, considered hearsay.
Hearsay evidence is generally excluded because the party against whom it is
presented is deprived of his right and opportunity to cross-examine the person to
whom the statement or writing is attributed. 36
The testimony of Mr. Jaime S. Prado, Sr., an octogenarian and
resident of Buruanga, cannot likewise be given any credence because it
consisted only of a bare assertion that the church building and the land on which
it was built, bounded by streets on all its four sides, were the petitioner's
property. 37 He based this statement on the fact that as a child he heard masses
at the church with his parents. This assertion, without more or without any
corroborative evidence, is not sufficient to establish the petitioner's ownership
over Lots 138-A and 138-C especially in light of the fact that Mr. Prado is not
competent to testify on the matter because he had no actual personal knowledge
with respect to any transactions involving Lot 138:
FISCAL DEL ROSARIO:
 Q Now, when you were President of the Parish Council, have you
access of any documents relating to church properties
in Buruanga, Aklan?
A Never.
Q Now, you have stated that the boundaries of the property of the
[R]oman [C]atholic [C]hurch in Buruanga, Aklan has previous
names thus, the present name of Viven Ostan, Nitoy Sualog and
Emilio Ostan is at present now. My question is, what was the
previous names of these roads?
A Of Nitoy Sualog, that was Malilipayon Street. The Provincial road
street, before that was Kaaganhon street, West, Emilio Ostan,
before that was Kahaponanon Street and instead of Viven Ostan,
that was Kabulakan Street.
Q So, you will agree with me Mr. Witness so, that previous names is not
in any way related to the names of former parish
priest[s] of Buruanga, Aklan or saints, am I right?
A No, sir.
Q You know very well Rev. Jesus Patinio and Mayor Pedro Omugtong?
A Yes, sir.
Q Now, do you remember if there was any transaction of them during
your lifetime?
A This Padre Patinio and I were close friends. Mr. Omugtong met
Patinio[,] talked together about the land they agreed[,] and I don't
know what is there (sic) agreement but the building was
constructed then.
Q Were you present during the talked (sic) of Rev. Jesus Patinio and
Mayor Pedro Omugtong?

A No, sir. DHEaTS

Q You identified in this Exhibit "F" as Municipal Hall, Rural Health Unit
Hospital, the Buruanga Community Hospital, Basketball Court and
the Grandstand. Now, my question is, are these buildings
constructed by the [R]oman [C]atholic [C]hurch?
A Not one. 38
Even the affidavits of the other residents of Buruanga, which were also properly
considered hearsay, made no mention of any instance where the petitioner
exercised acts ofdominion over Lots 138-A and 138-C. These affidavits uniformly
stated:
 That we have been residing in this Municipality since birth and that we
have full knowledge of the site where the church now stands;
That during the Pre-Spanish time, the site of the town proper was
swampy, fishermen used to fish in the swamp, trees of different kinds
grows (sic) along the beach;
That when the Spaniards arrived in our town, they introduced education
and religion;
That because there was no site for the church, the Spaniards forced the
inhabitants to work for the filling up of the swamp, men are hauling
stones[,] and women[,] sand and gravel;
That after so many years of hard labor the swamp was filled up and then
the friars build a church in the center of the town;
That as far as we are concerned the site where the church now stand
and the surrounding area and the site where the present Municipal
building now stands is even the part ofthe property of the church and not
the property of the municipality as allege (sic) by the Mayor;
That we execute this affidavit with our own free act and voluntary
deed. 39
The information proffered by these affidavits could not have been based on the
personal knowledge of the affiants because they obviously were not yet born
when the events they narrated took place. 40
Like in Bishop of Calbayog, the Court in Hacbang v.
Director of Lands 41 adjudicated to the church the ownership of two
parcels of land, designated as Lots 1 and 2 despite the opposition of the
Director of Lands who claimed that a portion on the eastern part of Lot 1 and the
entire Lot 2 were public plazas. The Court affirmed the ownership of the church
over these lots upon the following findings:
It is inferred from the foregoing facts which are held to have been
indisputably established by the evidence, that the disputed
portion of lot No. 1 as well as the entire lot No. 2belongs to
the Roman Catholic Apostolic Church of the Diocese of Samar and
Leyte. It cannot be denied that said church, for more than half a century,
was in the possession ofsaid lands together with the church, belfry and
convent which existed first on lot No. 1 and later provisionally on
lot No. 2. The fact that the catholic cemetery was located on lotNo. 2 and
that the stone posts and pillars were later erected thereon, thereby
converting it into a place for the celebration of the Way of the Cross,
conclusively proves that the property belonged to the church and that the
latter's possession has constantly been under claim of ownership.
 . . . [I]t must be presumed upon these facts that said portion formed
part of the parcels of land assigned and adjudicated by the authorities to
the Roman Catholic Apostolic Church in said town for the erection of the
church, belfry, convent and cemetery, all of which, as everybody knows,
are necessary for the practice and celebration of the cults ofsaid
religion. 42
The proprietary acts exercised by the church over the disputed lots
consisted of the construction thereon of the church, belfry, convent and
cemetery. Moreover, it conducted thereon the Way of the Cross and other
religious celebrations.
Unlike in the Bishop of Calbayog and Hacbang, in the present case, the
petitioner has not shown that it exercised proprietary acts or acts of dominion
over Lots 138-A and 138-C, to the exclusion of others, to buttress its
claim of ownership over these lots.
Neither can the petitioner rely on Roman Catholic Bishop of Jaro v.
Director of Lands 43 where the Court categorically made the finding that the lot in
question (Lot 3) had been in the possession of the church, as owner, for a time
sufficiently long for purposes of prescription. In a prior case 44 involving the said
lot, the Court adjudged that the church was "entitled to the possession of the
following property situated in the Municipality of Sibalom: The Church of Sibalom,
the convent, contiguous to the same, and the land occupied by these two
buildings."
The Court interpreted the phrase "land occupied by the church . . . and its
convent" to mean "not only the two buildings, but also the land adjacent and
contiguous to said buildings, that is, the parcel which by itself constitutes one
whole piece of land bounded on its four sides by streets, and within which said
buildings, the church and the convent, are situated." 45
Significantly, the parcel of land that was adjudicated in favor of the church was
the "land adjacent and contiguous to said buildings," i.e., church and convent.
The word "adjacent" has been defined as follows:
The word "adjacent" is of Latin derivation. An examination of its original
use clearly indicates that in order that things shall be adjacent they shall
be thrown near together. CSTDIE

Webster in his International Dictionary defines "adjacent" as "lying near,

close or contiguous; neighboring; bordering upon;" and gives as
synonyms the words "adjoining, contiguous, near."
Roque Barcia in his "Diccionario General Etimológico de la Lengua
Española," in defining the word "adjacent," uses as synonyms
"inmediato, junto, próximo." Things cannot be "inmediatas, juntas,
próximas" where other objects intervene.
 Vicente Salva in his "Nuevo Diccionario Francés-Español" defines the
word "adjacent as "qui est situé aupres, aux environs."
Black in his Law Dictionary defines "adjacent" as "lying near or close to;
contiguous. The difference between adjacent and adjoining seems to be
that the former implies that two objects are not widely separated, though
they may not actually touch."
Harpers' Latin Dictionary as revised by Lewis and Short, in defining the
word "adjaceo," which is equivalent to the English word "adjacent," says
it means "to lie at or near, to be contiguous to, to border upon."
The Universal Encyclopedia defines an adjacent angle as "an angle
contiguous to another, so that one side is common to both angles."
In the case of Miller v. Cabell (81 Ky., 184) it was held that where a
change of venue was taken to an adjacent county it must be taken to an
adjoining county.
In the case of Camp Hill Borough (142 Penn. State, 517), it was held that
the word "adjacent" meant adjoining or contiguous.
In the case of In re Municipality, etc. (7 La. Ann., 76), the court said: "We
think the word 'adjacent,' applied to lots, is synonymous with the word
"contiguous.'"
In the case of the People v. Schemerhorne (19 Barber [N.Y.], 576), the
court said: "The interpretations given to the 'adjacent' by Walker are
'lying close, bordering upon something.'" 46
Black's Law Dictionary defines "contiguous" as "in close proximity;
neighboring; adjoining; near in succession; in actual close contact; touching in at
a point or along a boundary; bounded or traversed by." 47
Applying the foregoing definitions, the "land adjacent and contiguous" to the
church and the parish house in the present case is the land comprising Lot 138-
B. On the other hand, Lots 138-A and 138-C are the lands adjacent and
contiguous to the municipal building, rural health center, Buruanga community
Medicare hospital, basketball court, Rizal monument and grandstand thereon.
Roman Catholic Bishop of Jaro therefore is not squarely applicable to the present
case because of significant factual differences. Specifically, in the former, the
buildings or structures on the disputed land all belonged to the church; hence,
this fact was construed by the Court in favor of the church as constituting its
exercise of acts of dominion over the land adjacent and contiguous to these
buildings. On the other hand, the municipal building, rural health
center, Buruanga community Medicare hospital, basketball court, Rizal
monument and grandstand, all standing on Lots 138-A and 138-C, are not owned
by the petitioner. Moreover, the petitioner has not shown that it had, at any time,
exercised acts of dominion over these lots. Consequently, given its tenuous
claim of ownership, Lots 138-A and 138-C, the lands adjacent and contiguous to
the buildings and improvements which admittedly do not belong to the petitioner,
cannot be adjudicated to the latter under the circumstances.
Seminary of San Carlos v. Municipality of Cebu, 48 cited
in Roman Catholic Bishop of Jaro, is also unavailing to the petitioner because the
Court, among others, simply explained therein that the word "church" refers to
the land upon which the church stands, and not to the church building itself. In
the present case, the petitioner's ownership has not been limited by the court a
quo and the appellate court to the church structure itself but also as including Lot
138-B, on which it stands.
In Roman Catholic Apostolic Church v. Municipality of Placer, 49 the Court
definitively recognized the juridical personality and proprietary rights of the
church citing the Treaty ofParis 50 and other pertinent Spanish laws. It held
therein that the church not only was entitled to the possession of the church,
convent and cemetery of Placer but was also the lawful owner thereof.
It bears stressing that the crux in the foregoing cases,
particularly Bishop of Calbayog, Hacbang and Jaro, is that the church had
indubitably established its exercise of exclusive proprietary acts on the lots that
were subject of the controversy. The same cannot be said with respect to the
petitioner in relation to Lots 138-A and 138-C. In fact, not one of the enumeration
([a] to [n]) made by the petitioner in its Petition for Review as allegedly showing
its ownership over Lots 138-A and 138-C categorically establishes that it
exercised thereon exclusive proprietary acts or acts of dominion. AEDCHc

The ruling in Harty v. Municipality of

Victoria is applicable to the present case
Contrary to the stance taken by the petitioner, the ruling
in Harty v. Municipality of Victoria 51 is applicable to the present case. The said
case involved the dispute between the church and the Municipality of Victoria
over the parcel of land that surrounded the parish church of the said town, and
which was called the public plaza of the same. The Court therein held that "the
whole of the land not occupied by the church of the town of Victoria and its parish
house, is a public plaza of the said town, of public use." It justified its conclusion,
thus:
xxx xxx xxx
From the evidence presented by both parties it appears that the
town of Victoria, which was formerly only a barrio of the town of Tarlac
and known as Canarum, was converted into a town in 1855, and named
Victoria; to this end they must have laid out the streets and the
plaza of the town, in the center of which were situated the church and
parish house from the commencement, and at the expiration of about
twelve years the parish of said town was constituted and the priest, who
was to perform the office of curate, was appointed; that from the very
beginning, the large tract of land that surrounds the church and the
parish house was known as a public plaza, destined to the use of all the
residents of the recently founded town; public performances and
religious processions were held thereon without hindrance either on the
part of the local authorities or of the curate of said town.
It must be assumed that the principal residents of the old barrio, being
interested in the conversion of the barrio into a civil town, arranged in
such a way that the barrio, as the center of the future town which was
subsequently called Victoria, should have streets and a public plaza with
its church and parish house, and also a tribunal or building destined for
the use of the municipality and the local official at the time called
the gobernadorcillo and later on capitan municipal, as has occurred in
the foundation of all the towns in these Islands, under the old
administrative laws.
It may be true that the father of the witness Casimiro Tañedo, who
owned the space of land where the church and parish house were
erected, had voluntarily donated it to theCatholic Church, the only one
known at the time, but proper proof is lacking that the donation affirmed
by the said Tañedo comprehended the whole of the large tract which at
the present time constitutes the plaza of the town.
It was a custom observed by all the towns established administratively in
these Islands under the old Laws of the Indies, that on their creation, a
certain amount of land was always reserved for plazas, commons, and
special and communal property, and as it is unquestionable that the said
large space of land was left vacant in the center of the townof Victoria
when it was constituted as a civil town, more than twelve years prior to
the appointment of a permanent curate therein, there are good grounds
to suppose that the late Vicente Tañedo donated the land now occupied
by the church and parish house in said municipality for religious
purposes, or to the church, but not to the parish curate, because at the
time there was no curate at the new town of Victoria.
Even though all the remaining space of land which now forms the great
plaza of the town of Victoria had been owned by the said Tañedo, it must
be presumed that he waived his right thereto for the benefit of the
townspeople, since from the creation or establishment of the town, down
to the present day, all the residents, including the curate of said town,
have enjoyed the free use of said plaza; it has not been satisfactorily
shown that the municipality or the principales of the town of Victoria had
donated the whole of said land to the curate of Victoria or to
the Catholic Church, as alleged, nor could it have been so donated, it
being a public plaza destined to public use and was not private
 ownership, or patrimony of the town of Victoria, or of the
Province of Tarlac. HICATc

It should be noted that, among other things, plazas destined to the public
use are not subject to prescription. (Art. 1936, Civil Code.) That both the
curates and thegobernadorcillos of the said town procured fruit trees and
plants to be set out in the plaza, does not constitute an act of private
ownership, but evidences the public use thereof, or perhaps the intention
to improve and embellish the said plaza for the benefit of the
townspeople.
Certain it is that the plaintiff has not proven that the Catholic Church or
the parish of Victoria was the owner or proprietor of the said extensive
piece of land which now forms the public plaza of said town, nor that it
was in possession thereof under the form and conditions required by
law, inasmuch as it has been fully proven that said plaza has been used
without let or hindrance by the public and the residents of the
town of Victoria ever since its creation. For the above reasons, it is our
opinion that the judgment appealed from should be reversed, and that it
should be held, as we do hereby hold, that the whole of the land not
occupied by the church of the town of Victoria and its parish house, is a
public plaza of the said town, of public use, and that in consequence
thereof, the defendant is absolved of the complaint without any special
ruling as to the costs of both instances. 52
The petitioner argues against the applicability of Harty as it makes much of the
fact that the disputed lot therein was situated across the street from the church
lot. When the Court therein limited the ownership of the church to the land
"occupied by the church of the town of Victoria and its parish house," it did not
allegedly confine its ownership to a portion of the lot on which the church and
parish house were situated but to the block occupied by these structures.
To the Court's mind, however, whether the disputed lot was on the same block as
the church or separated therefrom by a street was not the crucial factor which
constrained the Court in Harty to rule against the church's claim of ownership
over the said property. Rather, it was the fact that the church was not able to
prove its ownership or possession thereof. The ruling on this point is reiterated
below:
Certain it is that the plaintiff has not proven that the Catholic Church or
the parish of Victoria was the owner or proprietor of the said extensive
piece of land which now forms the public plaza of said town, nor that it
was in possession thereof under the form and conditions required by
law, . . . 53
As applied to the present case, that Lots 138-A and 138-C are on the same block
as the lot on which the church and its parish house stand do not necessarily
make them (Lots 138-A and 138-C) also the property of the petitioner absent any
evidence that its ownership or possession extended to these lots and under the
conditions required by law.
Contrary to its submission, the petitioner had
not acquired ipso jure or by operation of law
a government grant or title to the entire Lot 138
The petitioner submits that even granting arguendo that the entire Lot 138 was
not assigned to it during the Spanish regime or it is not the owner thereof
pursuant to the Lawsof the Indies, its open, continuous, exclusive and notorious
possession and occupation of Lot 138 since 1894 and for many decades
thereafter vests ipso jure or by operation oflaw upon the petitioner a government
grant, a vested title, to the subject property. It cites Subsection 6 of Section
54 of Act No. 926 54 and Subsection b of Section 45 of Act No. 2874. 55
This contention is likewise not persuasive.
One of the important requisites for the application of the pertinent
provisions of Act No. 926 and Act No. 2874 is the "open, continuous, exclusive
and notorious possession and occupation" of the land by the applicant. Actual
possession of land consists in the manifestation of acts of dominion over
it of such a nature as a party would naturally exercise over his own
property. 56 The phrase "possession and occupation" was explained as follows:
It must be underscored that the law speaks of "possession and
occupation." Since these words are separated by the conjunction and,
the clear intention of the law is not to make one synonymous with the
order [sic]. Possession is broader than occupation because it includes
constructive possession. When, therefore, the law adds the
word occupation, it seeks to delimit the all-encompassing
effect of constructive possession. Taken together with the words open,
continuous, exclusive and notorious, the word occupation serves to
highlight the fact that for one to qualify under paragraph (b) of the
aforesaid section, his possession of the land must not be mere fiction.
As this Court stated, through then Mr. Justice Jose P. Laurel,
in Lasam v. The Director of Lands:
. . . Counsel for the applicant invokes the doctrine laid down by us
in Ramos v. Director of Lands. But it should be observed that the
application of the doctrine ofconstructive possession in that case
is subject to certain qualifications, and this court was careful to
observe that among these qualifications is "one particularly
relating to the size of the tract in controversy with reference to the
portion actually in possession of the claimant." While, therefore,
"possession in the eyes of the law does not mean that a man has
to have his feet on every square meter of ground before it can be
said that he is in possession," possession under paragraph
6 of section 54 of Act No. 926, as amended by paragraph
 (b) of section 45 of Act No. 2874, is not gained by mere nominal
claim. The mere planting of a sign or symbol of possession
cannot justify a Magellan-like claim of dominion over an immense
tract of territory. Possession as a means of acquiring ownership,
while it may be constructive, is not a mere fiction. . . .

xxx xxx xxx

Possession is open when it is patent, visible, apparent, notorious and not
clandestine. It is continuous when uninterrupted, unbroken and not
intermittent or occasional; exclusive when the adverse possessor can
show exclusive dominion over the land and an appropriation of it to his
own use and benefit; and notorious when it is so conspicuous that it is
generally known and talked of by the public or the people in the
neighborhood.
Use of land is adverse when it is open and notorious. 57
Indisputably, the petitioner has been in open, continuous, exclusive and
notorious possession and occupation of Lot 138-B since 1894 as evidenced by
the church structure built thereon. However, the record is bereft of any evidence
that would tend to show that such possession and occupation extended to Lots
138-A and 138-C beginning the same period. No single instance of the exercise
by the petitioner of proprietary acts or acts of dominion over these lots was
established. Its unsubstantiated claim that the constructionof the municipal
building as well as the subsequent improvements thereon, e.g., the rural health
center, Buruanga community Medicare hospital, basketball court, Rizal
monument and grandstand, was by its tolerance does not constitute
proof of possession and occupation on its (the petitioner's) part.
Absent the important requisite of open, continuous, exclusive and notorious
possession and occupation thereon since 1894, no government grant or title to
Lots 138-A and 138-C had vested upon the petitioner ipso jure or by
operation of law. Possession under paragraph 6 of section 54 of Act No. 926, as
amended by paragraph (b) of section 45 of ActNo. 2874, is not gained by mere
nominal claim. 58
Lots 138-A and 138-C comprise the public
plaza and are property of public dominion;
hence, not susceptible to private ownership
by the petitioner or respondent municipality
The appellate court correctly declared that Lots 138-A and 138-C comprise the
public plaza and are property of public dominion; hence, may not be the
object of appropriation either by the petitioner or respondent municipality. In
support thereof, it cited Bishop of Calbayogratiocinating:
 This ruling [referring to Harty] was, in fact, reiterated
in Bishop of Calbayog v. Director of Lands (45 SCRA 418) involving the
same question of ownership of the land which surrounded the parish
church of the town. The Supreme Court therein declared that the public
plaza and public thoroughfare are not subject to registration by the
church; that since neither the Church nor the municipality presented
positive proof of ownership or exclusive possession for an appreciable
period of time, and the only indubitable fact is the free and continuous
use of Lot 2 by residents of Catarman, and the town had no public plaza
to speak of other than the disputed parcel of land, there was a strong
presumption that the same had been segregated as a public plaza upon
the founding of the municipality of Catarman. . . . 59
As can be gleaned, the above discussion principally pertained to Lot 2, a public
plaza the ownership of which was disputed by the Bishop of Calbayog and
the Municipality ofCatarman. EHaDIC

The appellate court correctly cited Bishop of Calabayog. However, the ruling
therein pertaining to a portion of Lot 1 occupied by a public thoroughfare is more
apropos to the present case. To recall, in the said case, the
application of the Bishop of Calabayog as to the eastern portion of Lot 1 was also
being opposed by the Municipality of Catarman on the ground that it was
part of the public plaza. As mentioned earlier, the Court upheld the
ownership of the church over Lot 1 including not only the space occupied by the
church, belfry, convent, parish school and nuns' residence, but also the empty
space which only had some benches as improvements thereon. Significantly, the
portion of Lot 1 occupied by a public thoroughfare (Nalazon Street) was ordered
excluded from the application for registration filed by the church. The Court
therein made the following findings with respect to the public thoroughfare:
Admittedly Nalazon St. was originally merely a trail used by the
parishioners in going to and from the church. But since 1910, when it
was opened and improved as a public thoroughfare by the municipality,
it had been continuously used as such by the townspeople of Catarman
without objection from the Church authorities. The acacia trees along
both sides of the street were planted by the municipality in 1920,
although these trees were cut down recently upon order of the priest.
There is no proof that the Church merely tolerated and limited the
use of this street for the benefit of its parishioners, considering that the
street traverses the entire length of the poblacion from south to north
and that Lot 1, on which the church stands, is located almost at the
center of the poblacion. The street does not stop on Lot 1 but extends
north toward the sea, passing along the lot occupied by the Central
Elementary School and the Northern Samar General Hospital. Thus, it is
clear that Nalazon St. inside Lot 1 is used by the residents not only in
going to the church but to the public school and the general hospital
north of Lot 1. 60
In the present case, the following improvements now stand on Lots 138-A and
138-C: the municipal building, rural health center, Buruanga community Medicare
hospital, basketball court, Rizal monument and grandstand. Except for the
construction of the municipal building, the other improvements were made on
Lots 138-A and 138-C, and continuously used by the public without the
petitioner's objection. Further, there is no proof that the petitioner merely
tolerated the construction of these improvements. On the other hand, the free
and continuous use by the public of Lots 138-A and 138-C, as found by the
court a quo and affirmed by the appellate court, incontrovertibly establishes that
they are property for public use.
On this point, Articles 420, quoted anew below, and 424 of the Civil Code are
applicable:
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;
xxx xxx xxx
Art. 424. Property for public use, in the provinces, cities, and
municipalities, consist of the provincial roads, city streets, municipal
streets, the squares, fountains, public waters, promenades, and public
works for public service paid for by said provinces, cities or
municipalities.
Property for public use of provinces and towns are governed by the same
principles as property of public dominion of the same character. 61 The
ownership of such property, which has the special characteristics of a collective
ownership for the general use and enjoyment, by virtue of their application to the
satisfaction of the collective needs, is in the social group, whether national,
provincial, or municipal. 62 Their purpose is not to serve the State as a juridical
person, but the citizens; they are intended for the common and public welfare,
and so they cannot be the object of appropriation, either by the State or by
private persons. 63
The appellate court committed no reversible
error in denying the petitioner's motion for
reception of evidence
In denying the petitioner's motion for reception evidence, the appellate court
reasoned that based on the records, the petitioner was already accorded the full
opportunity to present its evidence in the court a quo and that the evidence to be
introduced in the desired hearing would not directly establish its ownership of the
disputed lots. 64
The petitioner's motion for reception of evidence filed with the appellate court
stated that the additional evidence that it sought to submit
consisted of affidavits of old residentsof Buruanga attesting to the fact that "the
old municipal building was in fact at a place called Sunset Park prior to its
transfer to the present site." 65 These affidavits would allegedly establish that
respondent municipality could not be the owner of Lots 138-A and 138-C which it
had neither possessed nor occupied. 66
The appellate court did not err in denying the petitioner's motion for
reception of evidence. Indeed, the petitioner was already given full opportunity
during the trial in the court a quo to adduce any and all relevant evidence to
substantiate its claim of ownership over the entire Lot 138. In no sense,
therefore, may it be argued that it was denied due process of law. 67 With the
reality that those documents were never presented and formally offered during
the trial in the court a quo, their belated admission for purposes ofhaving them
duly considered in the resolution of the case on appeal would certainly collide
with Section 34, Rule 132 of the Rules of Court which reads:
SECTION 34. Offer of Evidence. — The court shall consider no evidence
which has not been formally offered. The purpose for which the evidence
is offered must be specified.68
In any case, as correctly stated by the appellate court, these affidavits would not
directly establish the petitioner's ownership over Lots 138-A and 138-C. HEISca

WHEREFORE, premises considered, the petition is DENIED. The Decision dated

January 31, 2001 of the Court of Appeals and its Resolution dated July 18, 2001
in CA-G.R. CV No. 52626 are AFFIRMED in toto.
SO ORDERED.
Panganiban, C.J., Ynares-Santiago, Austria-Martinez and Chico-Nazario,
JJ., concur.
(Roman Catholic Bishop of Kalibo, Aklan v. Municipality of Buruanga, Aklan,
|||

G.R. No. 149145, [March 31, 2006], 520 PHIL 753-801)

 [G.R. No. L-27873. November 29, 1983.]

HEIRS OF JOSE AMUNATEGUI, petitioners, vs. DIRECTOR OF

FORESTRY, respondent.

[G.R. No. L-30035. November 29, 1983.]

ROQUE BORRE and ENCARNACION

DELFIN, petitioners, vs. ANGEL ALPASAN,
HEIRS OF MELQUIADES BORRE, EMETERIO BEREBER and
HEIRS OF JOSEAMUNATEGUI and THE CAPIZ
COURT OF FIRST INSTANCE, respondents.

SYLLABUS

1. CIVIL LAW; PUBLIC LAND ACT; FOREST LAND; CLASSIFICATION NOT

LOST EVEN IF IT HAS BEEN STRIPPED OF FOREST COVER; UNLESS
RELEASED IN AN OFFICIAL PROCLAMATION AS DISPOSABLE LANDS,
RULES ON CONFIRMATION OF IMPERFECT TITLE DO NOT APPLY. — A
forested area classified as forest land of the public domain does not lose such
classification simply because loggers or settlers may have stripped it of its forest
cover. Parcels of land classified as forest land may actually be covered with
grass or planted to crops by kaingin cultivators or other farmers. "Forest lands"
do not have to be on mountains or in out of the way places. Swampy areas
covered by mangrove trees, nipa palms, and other tress growing in brackish or
sea water may also be classified as forest land. The classification is
descriptive of its legal nature or status and does not have to be
descriptive of what the land actually looks like. Unless and until the land
classified as "forest" is released in an official proclamation to that effect so that it
may form part ofthe disposable agricultural lands of the public domain, the rules
on confirmation of imperfect title do not apply.
2. ID.; ID.; FOREST LANDS; ACQUISITIVE OWNERSHIP NOT ACQUIRED. —
This Court ruled in the leading case of Director of Forestry v. Muñoz (23 SCRA
1184) that possessionof forest lands, no matter how long, cannot ripen into
private ownership. And in Republic v. Animas (56 SCRA 499), we granted the
petition on the ground that the ares covered by the patent and title was not
disposable public land, it being a part of the forest zone and any patent and title
to said area is void ab initio. It bears emphasizing that a positive
act of Government is needed to declassify land which is classified as forest and
to convert it into alienable or disposable land for agricultural or other purposes.
3. ID.; ID.; CONFIRMATION, OF IMPERFECT TITLE CASES;
BURDEN OF PROVING THAT THE REQUIREMENTS OF THE LAW HAVE
BEEN MET, RESTS ON THE APPLICANT. — In confirmation of imperfect title
cases, the applicant shoulders the burden of proving that he meets the
requirements of Section 48, Commonwealth Act No. 141, as amended
byRepublic Act No. 1942. He must overcome the presumption that the land he is
applying for is part of the public domain but that he has an interest therein
sufficient to warrant registration in his name because of an imperfect title such as
those derived from old Spanish grants or that he has had continuous, open, and
notorious possession and occupation of agricultural lands of the public domain
under a bona fide claim of acquisition of ownership for at least thirty (30) years
preceding the filing of his application.

DECISION

GUTIERREZ, JR., J : p

The two petitions for review on certiorari before us question the decision of the
Court of Appeals which declared the disputed property as forest land, not subject
to titling in favor of private persons.
These two petitions have their genesis in an application for
confirmation of imperfect title and its registration filed with the Court of First
Instance of Capiz. The parcel of land sought to be registered is known as Lot No.
885 of the Cadastral Survey of Pilar, Capiz, and has an area of 645,703 square
meters. LexLib

Roque Borre, petitioner in G.R. No, L-30035, and Melquiades Borre, filed the
application for registration. In due time, the heirs of Jose Amunategui, petitioners
in G.R. No. L-27873filed an opposition to the application of Roque and
Melquiades Borre. At the same time, they prayed that the title to a
portion of Lot No. 885 of Pilar Cadastre containing 527,747 square meters be
confirmed and registered in the names of said Heirs of Jose Amunategui.
The Director of Forestry, through the Provincial Fiscal of Capiz, also filed an
opposition to the application for registration of title claiming that the land was
mangrove swamp which was still classified as forest land and part of the public
domain.
Another oppositor, Emeterio Bereber filed his opposition insofar as a
portion of Lot No. 885 containing 117,956 square meters was concerned and
prayed that title to said portion be confirmed and registered in his name.
During the progress of the trial, applicant-petitioner Roque Borre sold whatever
rights and interests he may have on Lot No. 885 to Angel Alpasan. The latter
also filed an opposition, claiming that he is entitled to have said lot registered in
his name.
After trial, the Court of First Instance of Capiz adjudicated 117,956 square meters
to Emeterio Bereber and the rest of the land containing 527,747 square meters
was adjudicated in the proportion of 5/6 share to Angel Alpasan and 1/6 share to
Melquiades Borre.
Only the Heirs of Jose Amunategui and the Director of Forestry filed their
respective appeals with the Court of Appeals, The case was docketed as CA-
G.R. No. 34190-R.
In its decision, the Court of Appeals held:
". . . the conclusion so far must have to be that as to the private litigants
that have been shown to have a better right over Lot 885 are, as to the
northeastern portion of a little less than 117,956 square meters, it was
Emeterio Bereber and as to the rest of 527,747 square meters, it was
the heirs of Jose Amunategui; but the last question that must have to be
considered is whether after all, the title that these two (2) private litigants
have shown did not amount to a registerable one in view of the
opposition and evidence of theDirector of Forestry; . . .
". . . turning back the clock thirty (30) years from 1955 when the
application was filed which would place it at 1925, the fact must have to
be accepted that during that period, the land was a classified forest land
so much so that timber licenses had to be issued to certain licensee
before 1926 and after that; that even Jose Amunategui himself took the
trouble to ask for a license to cut timber within the area; and this can
only mean that the Bureau of Forestry had stood and maintained its
ground that it was a forest land as indeed the testimonial evidence
referred to above persuasively indicates, and the only time when the
property was converted into a fishpond was sometime after 1950; or a
bare five (5) years before the filing of the application; but only after there
had been a previous warning by the District Forester that that could not
be done because it was classified as a public forest; so that having these
in mind and remembering that even under Republic Act 1942 which
came into effect in 1957, two (2) years after this case had already been
filed in the lower Court, in order for applicant to be able to demonstrate a
registerable title he must have shown.
"'open, continuous, exclusive and notorious possession and
occupation of agricultural lands of the public domain under a bona
fide claim of acquisition of ownership for at least thirty (30) years,
preceding the filing of the application;'
 the foregoing details cannot but justify the conclusion that not one of the
applicants or oppositors had shown that during the required
period of thirty (30) years prescribed byRepublic Act 1942 in order for
him to have shown a registerable title for the entire period of thirty (30)
years before filing of the application, he had been in
"'open, continuous, exclusive and notorious possession and
occupation of agricultural lands of the public domain',
it is evident that the Bureau of Forestry had insisted on its claim all
throughout that period of thirty (30) years and even before and
applicants and their predecessors had made implicit recognition of that;
the result must be to deny all these applications; this Court stating that it
had felt impelled notwithstanding, just the same to resolve the conflicting
positions of the private litigants among themselves as to who of them
had demonstrated a better right to possess because this Court foresees
that this litigation will go all the way to the Supreme Court and it is
always better that the findings be as complete as possible to enable the
Highest Court to pass final judgment;
"IN VIEW WHEREOF, the decision must have to be as it is hereby
reversed; the application as well as all the oppositions with the
exception of that of the Director of Forestry which is hereby sustained
are dismissed; no more pronouncement as to costs."
A petition for review on certiorari was filed by the
Heirs of Jose Amunategui contending that the disputed lot had been in the
possession of private persons for over thirty years and therefore in accordance
with Republic Act No. 1942, said lot could still be the subject of registration and
confirmation of title in the name of a private person in accordance with Act No.
496 known as the Land Registration Act. On the other hand, another petition for
review on certiorari was filed by Roque Borre and Encarnacion Delfin, contending
that the trial court committed grave abuse of discretion in dismissing their
complaint against the Heirs of Jose Amunategui. The Borre complaint was for the
annulment of the deed of absolute sale of Lot No. 885 executed by them in
favor of the Heirs of Amunategui. The complaint was dismissed on the
basis of the Court of Appeals' decision that the disputed lot is part of the public
domain. The petitioners also question the jurisdiction of the Court of Appeals in
passing upon the relative rights of the parties over the disputed lot when its final
decision after all is to declare said lot a part of the public domain classified as
forest land.LLpr

The need for resolving the questions raised by Roque Borre and Encarnacion
Delfin in their petition depends on the issue raised by the
Heirs of Jose Amunategui, that is, whether or not Lot No. 885 is public forest
land, not capable of registration in the names of the private applicants.
The Heirs of Jose Amunategui maintain that Lot No. 885 cannot be classified as
forest land because it is not thickly forested but is a "mangrove swamp".
Although conceding that a "mangrove swamp" is included in the
classification of forest land in accordance with Section 1820 of the Revised
Administrative Code, the petitioners argue that no big trees classified in Section
1821 of said Code as first, second and third groups are found on the land in
question. Furthermore, they contend that Lot 885, even if it is a mangrove
swamp, is still subject to land registration proceedings because the property had
been in actual possession of private persons for many years, and therefore, said
land was already "private land" better adapted and more valuable for agricultural
than for forest purposes and not required by the public interests to be kept under
forest classification.
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. Parcelsof land classified as forest land may actually be covered with grass
or planted to crops by kaingin cultivators or other farmers. "Forest lands" do not
have to be on mountains or in out of the way places. Swampy areas covered by
mangrove trees, nipa palms, and other trees growing in brackish or sea water
may also be classified as forest land. The classification is descriptive of its legal
nature or status and does not have to be descriptive of what the land actually
looks like. Unless and until the land classified as "forest" is released in an official
proclamation to that effect so that it may form part of the disposable agricultural
lands of the public domain, the rules on confirmation of imperfect title do not
apply.
This Court ruled in the leading case of Director of Forestry v. Muñoz (23 SCRA
1184) that possession of forest lands, no matter how long, cannot ripen into
private ownership. And in Republic v. Animas (56 SCRA 499), we granted the
petition on the ground that the area covered by the patent and title was not
disposable public land, it being a part of the forest zone and any patent and title
to said area is void ab initio. It bears emphasizing that a positive
act of Government is needed to declassify land which is classified as forest and
to convert it into alienable or disposable land for agricultural or other purposes.
The findings of the Court of Appeals are particularly well-grounded in the instant
petition.
The fact that no trees enumerated in Section 1821 of the Revised Administrative
Code are found in Lot No. 885 does not divest such land of its being classified as
forest land, much less as land of the public domain. The appellate court found
that in 1912, the land must have been a virgin forest as stated by Emeterio
Bereber's witness Deogracias Gavacao, and that as late as 1926, it must have
been a thickly forested area as testified by Jaime Bertolde. The
opposition of the Director of Forestry was strengthened by the appellate court's
finding that timber licenses had to be issued to certain licensees and even
Jose Amunategui himself took the trouble to ask for a license to cut timber within
the area. It was only sometime in 1950 that the property was converted into
fishpond but only after a previous warning from the District Forester that the
same could not be done because it was classified as "public forest." LibLex

In confirmation of imperfect title cases, the applicant shoulders the

burden of proving that he meets the requirements of Section 48, Commonwealth
Act No. 141, as amended byRepublic Act No. 1942. He must overcome the
presumption that the land he is applying for is part of the public domain but that
he has an interest therein sufficient to warrant registration in his name
because of an imperfect title such as those derived from old Spanish grants or
that he has had continuous, open, and notorious possession and
occupation of agricultural lands of the public domain under a bona fide
claim of acquisition of ownership for at least thirty (30) years preceding the
filing of his application.
The decision of the appellate court is not based merely on the presumptions
implicit in Commonwealth Act No. 141 as amended. The records show that
Lot No. 88S never ceased to be classified as forest land of the public domain.
In Republic v. Gonong (118 SCRA 729) we ruled:
"As held in Oh Cho v. Director of Lands, 75 Phil. 890, all lands that were
not acquired from the Government, either by purchase or by grant,
belong to the public domain. An exception to the rule would be any land
that should have been in the possession of an occupant and of his
predecessors in-interests since time immemorial, for such possession
would justify the presumption that the land had never been part of the
public domain or that it had been a private property even before the
Spanish conquest."
In the instant petitions, the exception in the Oh Cho case does not apply. The
evidence is clear that Lot No. 885 had always been public land classified as
forest.
Similarly, in Republic v. Vera (120 SCRA 210), we ruled:
". . . The possession of public land however long the period thereof may
have extended, never confers title thereto upon the possessor because
the statute of limitations with regard to public land does not operate
against the State, unless the occupant can prove possession and
occupation of the same under claim of ownership for the
 requirednumber of years to constitute a grant from the State.
(Director of Lands v. Reyes, 68 SCRA 177, 195)."
We, therefore, affirm the finding that the disputed property Lot No. 885 is
part of the public domain, classified as public forest land. There is no need for us
to pass upon the other issues raised by petitioners Roque Borre and
Encarnacion Delfin, as such issues are rendered moot by this finding. Cdpr

WHEREFORE, the petitions in G. R. No. L-30035 and G. R. No. L-27873 are

DISMISSED for lack of merit. Costs against the petitioners.
SO ORDERED.
Melencio-Herrera, Plana and Relova, JJ., concur.
Teehankee, J., concurs in the result.

(Heirs of Amunategui v. Director of Forestry, G.R. No. L-27873, L-30035,

|||

[November 29, 1983], 211 PHIL 260-267)

G.R. No. L-14213 August 23, 1919

J. H. ANKRON, petitioner-appellee,
vs.
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, objector-appellant.

Assistant Attorney-General Lacson for appellant.

P. J. Moore for appellee.

JOHNSON, J.:

This action was commenced in the Court of First Instance of the Province of Davao, Department of
Mindanao and Sulu. Its purpose was to have registered, under the Torrens system, a certain piece
or parcel of land situated, bounded and particularly described in the plan and technical description
attached to the complaint and made a part thereof.

The only opposition which was presented was on the part of the Director of Lands.
The oppositor [objector] alleged that the land in question was the property of the Government of the
United States under the control and administration of the Government of the Philippine Islands.

During the trial of the cause two witnesses only were presented by the petitioner. No proof whatever
was offered by the oppositor. After hearing and considering the evidence, the Honorable Francisco
Soriano, judge, reached the following conclusions of fact:

1. That the land sought to be registered consists of one parcel of land as marked and indicated on
the plan and technical description presented;

2. That all of said land, with the exception of a small part at the north, the exact description and
extension of which does not appear, has been cultivated and planted for more than forty-four years
prior to the date of this decision;

3. That said land was formerly occupied, cultivated and planted by Moros, Mansacas and others,
under a claim of ownership, and that they lived thereon and had their houses thereon, and that
portion of the land which was not planted or cultivated was used as pasture land whereon they
pastured their carabaos, cattle, and horses;

4. That all of said Moros and Mansacas sold, transferred and conveyed all their right, title and
interest in said land to the applicant, J. H. Ankron, some eleven years past, at which time all of the
said former owners moved o n to adjoining lands where they now reside;

5. That the possession under claim of ownership of the applicant and his predecessors in interest
was shown to have been open, notorious, actual, public and continuous for more than forty-four
years past, and that their claim was exclusive of any other right adverse to all other claims;

6. That the applicant now has some one hundred fifty (150) hills of hemp, some eight thousand
(8,000) cocoanut trees, a dwelling house, various laborers' quarters, store-building,
large camarin (storehouse of wood, a galvanized iron and other buildings and improvements on said
land.

Upon the foregoing facts the lower court ordered and decreed that said parcel of land be registered
in the name of the said applicant, J. H. Ankron, subject, however, to the right of the Government of
the Philippine Islands to open a road thereon in the manner and conditions mentioned in said
decision. The conditions mentioned with reference to the opening of the road, as found in said
decision, are that the applicant give his consent, which he has already done, to the opening of said
road which should be fifteen (15) meters wide and should follow approximately the line of the road
as it now exists subject to the subsequent survey to be made by the engineer of the province of
Davao.

From that decree the Director of Lands appealed to this court.

The appellant argues, first, that the applicant did not sufficiently identify the land in question. In reply
to that argument, the record shows that a detained and technical description of the land was made a
part of the record. The evidence shows that the boundaries of the land in question were marked by
monuments built of cement. The oppositor neither presented the question of the failure of proper
identification of the land in the lower court nor presented any proof whatever to show that said
cement monuments did not exist.

The appellant, in his second assignment of error, contends that the appellant failed to prove his
possession and occupation in accordance with the provisions of paragraph 6 of section 54 of Act No.
926. The important prerequisites for registration of land imposed by said section 54, paragraph 6,
are (a) that the land shall be agricultural public land as defined by the Act of Congress of July 1,
1902; (b) that the petitioner, by himself or his predecessors in interest, shall have been in the open,
continuous, exclusive and notorious possession and occupation of the same under a bona fide claim
of ownership for a period of ten years next preceding the taking effect of said Act.

In the present case the applicant proved, and there was no effort to dispute said proof, that the land
in question was agricultural land and that he and his predecessors in interest had occupied the same
as owners in good faith for a period of more than forty years prior to the commencement of the
present action. No question is raised nor discussed by the appellant with reference to the right of the
Moros to acquire the absolute ownership and dominion of the land which they have occupied openly,
notoriously, peacefully and adversely for a long period of years. (Cariño vs. Insular Government, 7
Phil. Rep., 132 [212 U. S., 449].)

Accepting the undisputed proof, we are of the opinion that said paragraph 6 of section 54 of Act No.
926 has been fully complied with and that the petitioner, so far as the second assignment of error is
concerned, is entitled to have his land registered under the Torrens system.

Under the third assignment of error the appellant contends that portions of said land cannot be
registered in accordance with the existing Land Registration Law for the reason that they are
manglares. That question is not discussed in the present brief. The appellant, however., refers the
court to his discussion of that question in the case of Jocson vs. Director of Forestry (39 Phil. Rep.,
560). By reference to the argument in the brief in the case, it is found that the appellant relied upon
the provisions of section 3 of Act No. 1148 in relation with section 1820 of Act No. 2711 (second
Administrative Code). Section 3 of Act No. 1148 provides that "the public forests shall include all
unreserved lands covered with trees of whatever age." Said section 1820 (Act No. 2711) provides
that "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."

In the case of Mapa vs. Insular Government (10 Phil. Rep., 175), which decision has been follows in
numerous other decision, the phrase "agricultural public lands" as defined by Act of Congress of July
1, 1902, was held to mean "those public lands acquired from Spain which are neither mineral nor
timber lands" (forestry lands).
Paragraph 6 of section 54 of Act No. 926 only permits the registration, under the conditions therein
mentioned, of "public agricultural lands." It must follow, therefore, that the moment that it appears
that the land is not agricultural, the petition for registration must be denied. If the evidence shows
that it is public forestry land or public mineral land, the petition for registration must be denied. Many
definitions have been given for "agricultural," "forestry," and "mineral" lands. These definitions are
valuable so far as they establish general rules. In this relation we think the executive department of
the Government, through the Bureau of Forestry, may, and should, in view especially of the
provisions of section 4, 8, and 20 of Act No. 1148, define what shall be considered forestry lands, to
the end that the people of the Philippine Islands shall be guaranteed in "the future a continued
supply of valuable timber and other forest products." (Sec. 8, Act No. 1148.) If the Bureau of Forestry
should accurately and definitely define what lands are forestry, occupants in the future would be
greatly assisted in their proof and the courts would be greatly aided in determining the question
whether the particular land is forestry or other class of lands.

In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect that
whether the particular land in question belongs to one class or another is a question of fact. The
mere fact that a tract of land has trees upon it or has mineral within it is not of itself sufficient to
declare that one is forestry land and the other, mineral land. There must be some proof of the extent
and present or future value of the forestry and of the minerals. While, as we have just said, many
definitions have been given for "agriculture," "forestry," and "mineral" lands, and that in each case it
is a question of fact, we think it is safe to say that in order to be forestry or mineral land the proof
must show that it is more valuable for the forestry or the mineral which it contains than it is for
agricultural purposes. (Sec. 7, Act No. 1148.) It is not sufficient to show that there exists some trees
upon the land or that it bears some mineral. Land may be classified as forestry or mineral today,
and, by reason of the exhaustion of the timber or mineral, be classified as agricultural land tomorrow.
And vice-versa, by reason of the rapid growth of timber or the discovery of valuable minerals, lands
classified as agricultural today may be differently classified tomorrow. Each case must be decided
upon the proof in that particular case, having regard for its present or future value for one or the
other purposes. We believe, however, considering the fact that it is a matter of public knowledge that
a majority of the lands in the Philippine Islands are agricultural lands, that the courts have a right to
presume, in the absence of evidence to the contrary, that in each case the lands are agricultural
lands until the contrary is shown. Whatever the land involved in a particular land registration case is
forestry or mineral land must, therefore, be a matter of proof. Its superior value for one purpose or
the other is a question of fact to be settled by the proof in each particular case. The fact that the land
is a manglar [mangrove swamp] is not sufficient for the courts to decide whether it is agricultural,
forestry, or mineral land. It may perchance belong to one or the other of said classes of land. The
Government, in the first instance, under the provisions of Act No. 1148, may, by reservation, decide
for itself what portions of public land shall be considered forestry land, unless private interests have
intervened before such reservation is made. In the latter case, whether the land is agricultural,
forestry, or mineral, is a question of proof. Until private interests have intervened, the Government,
by virtue of the terms of said Act (No. 1148), may decide for itself what portions of the "public
domain" shall be set aside and reserved as forestry or mineral land. (Ramos vs. Director of Lands
(39 Phil. Rep., 175; Jocson vs. Director of Forestry, supra.)

In view of the foregoing we are of the opinion, and so order and decree, that the judgment of the
lower court should be and is hereby affirmed, with the condition that before the final certificate is
issued, an accurate survey be made of the lands to be occupied by the road above mentioned and
that a plan of the same be attached to the original plan upon which the petition herein is based. It is
so ordered, with costs.

Arellano, C.J., Torres, Araullo, Street, Malcolm and Moir, JJ., concur.
 SPECIAL FIRST DIVISION

[G.R. No. 112526. March 16, 2005.]

STA. ROSA REALTY DEVELOPMENT CORPORATION, petitione

r, vs. JUAN B. AMANTE, FRANCISCO L. ANDAL, LUCIA
ANDAL, ANDREA P. AYENDE, LETICIA P. BALAT, FILOMENA
B. BATINO, ANICETO A. BURGOS, JAIME A. BURGOS,
FLORENCIA CANUBAS, LORETO A. CANUBAS, MAXIMO A.
CANUBAS, REYNALDO CARINGAL, QUIRINO C. CASALME,
BENIGNO A. CRUZAT, ELINO A. CRUZAT, GREGORIO F.
CRUZAT, RUFINO C. CRUZAT, SERGIO CRUZAT, SEVERINO
F. CRUZAT, VICTORIA DE SAGUN, SEVERINO DE SAGUN,
FELICISIMO A. GONZALES, FRANCISCO A. GONZALES,
GREGORIO A. GONZALES, LEODEGARIO N. GONZALES,
PASCUAL P. GONZALES, ROLANDO A. GONZALES,
FRANCISCO A. JUANGCO, GERVACIO A. JUANGCO,
LOURDES U. LUNA, ANSELMO M. MANDANAS, CRISANTO
MANDANAS, EMILIO M. MANDANAS, GREGORIO A.
MANDANAS, MARIO G. MANDANAS, TEODORO MANDANAS,
CONSTANCIO B. MARQUEZ, EUGENIO B. MARQUEZ,
ARMANDO P. MATIENZO, DANIEL D. MATIENZO, MAXIMINO
MATIENZO, PACENCIA P. MATIENZO, DOROTEA L.
PANGANIBAN, JUANITO T. PEREZ, MARIANITO T. PEREZ,
SEVERO M. PEREZ, INOCENCIA S. PASQUIZA, BIENVENIDO
F. PETATE, IGNACIO F. PETATE, JUANITO PETATE, PABLO
A. PLATON, PRECILLO V. PLATON, AQUILINO B. SUBOL,
CASIANO T. VILLA, DOMINGO VILLA, JUAN T. VILLA, MARIO
C. VILLA, NATIVIDAD B. VILLA, JACINTA S. ALVARADO,
RODOLFO ANGELES, DOMINGO A. CANUBAS, EDGARDO L.
CASALME, QUIRINO DE LEON, LEONILO M. ENRIQUEZ,
CLAUDIA P. GONZALES, FELISA R. LANGUE, QUINTILLANO
LANGUE, REYNALDO LANGUE, ROMEO S. LANGUE,
MARIANITO T. PEREZ, INOCENCIA S. PASQUIZA, AQUILINO
B. SUBOL, BONIFACIO VILLA, ROGELIO AYENDE, ANTONIO
B. FERNANDEZ, ZACARIAS HERRERA, REYNARIO U. LAZO,
AGAPITO MATIENZO, DIONISIO F. PETATE, LITO G. REYES,
JOSE M. SUBOL, CELESTINO G. TOPI NO, ROSA C. AMANTE,
SOTERA CASALME, REMIGIO M. SILVERIO,
THE COURT OF APPEALS, THE SECRETARY OFAGRARIAN
REFORM, DEPARTMENT OF AGRARIAN REFORM
ADJUDICATION BOARD, LAND BANK OF THE PHILIPPINES,
REGISTER OF DEEDS OF LAGUNA,
DEPARTMENT OF ENVIRONMENT AND NATURAL
RESOURCES REGIONAL EXECUTIVE DIRECTOR FOR
REGION IV and REGIONAL AGRARIAN REFORM OFFICER
FOR REGION IV., respondents.

[G.R. No. 118838. March 16, 2005.]

JUAN B. AMANTE, IGNACIO PETATE, DOMINGO CANUBAS,

FLORENCIO CANUBAS, CRESENCIO AMANTE, QUIRINO
CASALME, LEODEGARIO GONZALES, DOMINGO VILLA,
JAIME BURGOS, NICOMEDES PETATE, MAXIMINO
MATIENZO, MAXIMO CANUBAS, ELINO CRUZAT, RUFINO
CRUZAT, FELICISIMO GONZALES, QUINTILLANO LANGUE,
TEODORO MANDANAS, SERGIO CRUZAT, AGAPITO
MATIENZO and SEVERINO DE SAGUM, petitioners, vs. LUIS
YULO, JESUS MIGUEL YULO, C-J YULO & SONS,
INC., STA. ROSA REALTY DEVELOPMENT CORPORATION,
JOSE LAMBATIN, LAUREANO LAUREL, GALICANO MAILOM,
JR., REYNALDO OPENA, AGAPITO PRECILLA, DANILO
SUMADSAD, ALFREDO SUMADSAD, JUAN CANTAL, INIGO
MENDOZA, ALEJANDRO SANCHEZ, SENADOR RODRIGUEZ,
VICTOR MOLINAR, DANILO CANLOBO, RESTING CARAAN,
IGNACIO VERGARA, HANDO MERCADO, FAUSTINO MAILOM,
CONRADO BARRIENTOS, RENATO VISAYA, DANTE BATHAN,
SERAPIO NATIVIDAD, HONESTO TENORIO, NESTOR
MERCADO, BIENVENIDO OLFATO, RENE LIRAZAN, RUDY
CANLOBO, BASIOLIO MULINGTAPANG, ITO GONZALES,
RENATO RINO, TINOY MABAGA, PACIO PADILLA, JOHNNY
REAMILLO, ROLANDO CARINGAL, IGNOY VILLAMAYOR,
ROMEO TANTENGCO, LODRING CARAAN, FREDO
MERCADO, TOMMY MENDOZA, RAFAEL ONTE, REY MANAIG,
DICK GASPAR, ANTONIO MALLARI, ALFREDO ANIEL, BARIT,
ALBERTO MANGUE, AGATON LUCIDO, ONYONG CANTAL,
BAYANI LACSON, ISKO CABILION, MANGUIAT, IGME OPINA,
VILARETE, PEDRO BENEDICTO, HECTOR BICO, RUFO
SANCHEZ, LARRY DE LEON, BARIVAR SAMSON and ROMEO
NAVARRO, respondents.

AMENDEDDECISION
AUSTRIA-MARTINEZ, J : p

By virtue of the En Banc Resolution issued on January 13, 2004,

the Court authorized the Special First Division to suspend the Rules so as to
allow it to consider and resolve the second Motion for
Reconsideration of respondents, 1 after the motion was heard on oral arguments
on August 13, 2003. On July 9, 2004, 2 the Court resolved to submit for
resolution the second Motion for Reconsideration in G.R. No. 112526 together
with G.R. No. 118338 in view of the Resolution of the Court dated January
15, 2001 issued in G.R.No. 118838, 3 consolidating the latter case
with G.R. No. 112526, the issues therein being interrelated. 4 Hence, the herein
Amended Decision.
The factual background of the two cases is as follows:
The Canlubang Estate in Laguna is a vast landholding previously titled in the
name of the late Speaker and Chief Justice Jose Yulo, Sr. Within this estate are
two parcels of land (hereinafter referred to as the "subject property") covered by
TCT Nos. 81949 and 84891 measuring 254.766 hectares and part of Barangay
Casile, subsequently titled in the
name of Sta. Rosa Realty Development Corporation (SRRDC), the majority
stockholder of which is C.J. Yulo and Sons, Inc.
The subject property was involved in civil suits and administrative proceedings
that led to the filing of G.R. Nos. 112526 and 118838, thus:
Injunction Case Filed by Amante, et al.
On December 6, 1985, Amante, et al., who are the private respondents
in G.R. No. 112526 and petitioners in G.R. No. 118838, instituted an action for
injunction with damages in the Regional Trial Court of Laguna (Branch 24)
against Luis Yulo, SRRDC, and several SRRDC security personnel, docketed
as Civil Case No. B-2333. Amante, et al. alleged that: they are
residents of Barangay Casile, Cabuyao, Laguna, which covers an area of around
300 hectares; in 1910, their ancestors started occupying the area, built their
houses and planted fruit-bearing trees thereon, and since then, have been
peacefully occupying the land; some time in June 3, 1985, SRRDC's security
people illegally entered Bgy. Casile and fenced the area; SRRDC's men also
entered the barangay on November 4, 1985, cut down the trees, burned their
huts, and barred the lone jeepney from entering the Canlubang Sugar Estate; as
a result of these acts, Amante, et al. were deprived of possession and
cultivation of their lands. Thus, they claimed damages, sought the
issuance of permanent injunction and proposed that a right of way be declared. 5
In their Answer, the defendants denied the allegations and disclaimed any control
and supervision over its security personnel. Defendant SRRDC also alleged that
as the real owner of the property, it was the one that suffered damages due to
the encroachment on the property. 6
A writ of preliminary injunction was issued by the trial court on August 17,
1987, 7 but this was subsequently dissolved by the Court of Appeals (CA) on
April 22, 1988 in its decision in CA-G.R. SP No. 13908. 8
After trial on the merits, the trial court, on January 20, 1992, rendered a decision
ordering Amante, et al. to vacate the property, the dispositive portion of which
reads:
WHEREFORE, premises considered, judgment is hereby rendered in
favor of the defendants and against the plaintiffs hereby dismissing the
complaint and amended complaint. ITDHSE

The plaintiffs are hereby ordered to vacate the parcels of land belonging
to the defendants Luis Yulo and Sta. Rosa Realty. They are likewise
enjoined from entering the subject parcels of land.
Although attorney's fees and expenses of litigation are recoverable in
case of a clearly unfounded civil action against the plaintiff
(Enervida vs. De la Torre, 55 SCRA 339), thisCourt resolves not to
award attorney's fees etc. in favor of the defendants because the
plaintiffs appear to have acted in good faith in filing the present civil
action (Salao vs.Salao, 70 SCRA 65) and that it would not be just and
equitable to award the same in the case at bar.
(Liwanag vs. Court of Appeals, 121 SCRA 354)
Accordingly, the other reliefs prayed for by the defendants are hereby
dismissed.
SO ORDERED. 9
Amante, et al. appealed the aforesaid decision to the CA, docketed as CA-
G.R. CV No. 38182.
On June 28, 1994, the CA affirmed with modification the decision of the
trial court in the injunction case. The dispositive portion of the appellate court's
decision 10 reads as follows:
WHEREFORE, the judgment herein appealed from is hereby
AFFIRMED, with the modification that the defendants-appellees are
hereby ordered, jointly and severally, to pay the plaintiffs-appellants
nominal damages in the amount of P5,000.00 per
plaintiff. No pronouncement as to costs.
SO ORDERED. 11
Nominal damages were awarded by the CA because it found that SRRDC
violated Amante, et al.'s rights as possessors of the subject property. 12
Amante, et al. filed a motion for reconsideration thereof, pointing out the
DARAB's decision placing the property under compulsory acquisition, and the
decision of the CA in CA-G.R. SP No. 27234, affirming the same. 13 The CA,
however, denied the motion, with the modification that only SRRDC and the
defendants-security guards should be held jointly and severally liable for the
nominal damages awarded. It also made the clarification that the decision should
not preempt any judgment or prejudice the right of any party in the agrarian
reform case pending before the Supreme Court (G.R. No. 112526). 14
Thus, Amante, et al. filed on March 2, 1995, herein petition, docketed
as G.R. No. 118838 on the following grounds:
4.1. THE COURT OF APPEALS DECIDED THE CASE CONTRARY TO
LAW OR APPLICABLE SUPREME COURT DECISIONS BECAUSE:
4.1.1 FIRST, PETITIONERS MAY NOT BE LAWFULLY EVICTED
FROM THEIR LANDHOLDINGS CONSIDERING THAT:
(A) PETITIONERS ARE ALREADY THE REGISTERED
OWNERS UNDER THE TORRENS SYSTEM OF THE
PROPERTIES IN QUESTION SINCE FEBRUARY 26,
1992 BY VIRTUEOF RA 6657 OR
THE COMPREHENSIVE AGRARIAN REFORM LAW;
(B) THE COURT OF APPEALS HAS AFFIRMED THE
REGIONAL TRIAL COURT OF LAGUNA'S
DISMISSAL OF THE EJECTMENT CASES FILED BY
RESPONDENT SRRDC AGAINST PETITIONERS; AND
(C) ASSUMING FOR THE SAKE OF ARGUMENT ONLY
THAT PETITIONERS ARE NOT YET THE REGISTERED
OWNERS OF THE PROPERTIES IN QUESTION,
RESPONDENTS MAY NOT RAISE THE
ISSUE OF OWNERSHIP IN THIS CASE FOR
INJUNCTION WITH DAMAGES, THE SAME TO BE
VENTILATED IN A SEPARATE ACTION, NOT IN THIS
CASE BROUGHT TO PREVENT RESPONDENTS FROM
COMMITTING FURTHER ACTS OF DISPOSSESSION
[BACAR V. DEL ROSARIO ET AL., 171 SCRA 451
(1989)].

4.1.2 SECOND, PETITIONERS ARE ENTITLED TO MORAL,

EXEMPLARY DAMAGES AND ATTORNEY'S FEES,
INSTEAD OF MERE NOMINAL DAMAGES, CONSIDERING
THAT THE COURT OF APPEALS FOUND RESPONDENTS TO
HAVE UNLAWFULLY AND ILLEGALLY DISTURBED
PETITIONERS' PEACEFUL AND CONTINUOUS
POSSESSION. 15
 Ejectment Cases Filed by SRRDC
Between October 1986 and August 1987, after the injunction case was filed by
Amante, et al., SRRDC filed with the Municipal Trial Court (MTC) of Cabuyao,
Laguna, several complaints for forcible entry with preliminary injunction and
damages against Amante, et al., docketed as Civil Cases Nos. 250, 258, 260,
262 and 266. SRRDC alleged that some time in July 1987, they learned that
Amante, et al., without their authority and through stealth and strategy, were
clearing, cultivating and planting on the subject property; and that despite
requests from SRRDC's counsel, Amante, et al. refused to vacate the property,
prompting them to file the ejectment cases. 16 Amante, et al. denied that SRRDC
are the absolute owners of the property, stating that they have been in peaceful
possession thereof, through their predecessors-in-interest, since 1910. 17
On May 24, 1991, the MTC-Cabuyao rendered its decision in favor of SRRDC.
Amante, et al. were ordered to surrender possession and vacate the subject
property. The decision was appealed to the Regional Trial Court of Biñan,
Laguna (Assisting Court).
On February 18, 1992, the RTC dismissed the ejectment cases on the ground
that the subject property is an agricultural land being tilled by Amante, et al.,
hence it is the Department of Agrarian Reform (DAR), which has jurisdiction over
the dispute. 18 The RTC's dismissal of the complaints was brought to
the CA via a petition for review, docketed as CA-G.R. SP No. 33382. 19 In turn,
the CA dismissed the petition per its Decision dated January 17, 1995 on the
ground that SRRDC failed to show any prior physical possessionof the subject
property that would have justified the filing of the ejectment cases. 20 Also,
the CA did not sustain the RTC's finding that the subject properties are
agricultural lands and Amante, et al. are tenant/farmers thereof, as the evidence
on record does not support such finding. The parties did not file any motion for
reconsideration from the Court ofAppeals' dismissal, hence, it became final and
executory. 21
Administrative Proceedings
While the injunction and ejectment cases were still in process, it appears that in
August, 1989, the Municipal Agrarian Reform Office (MARO) issued a
Notice of Coverage to SRRDC, informing petitioners that the property covered by
TCT Nos. T-81949, T-84891 and T-92014 is scheduled for compulsory
acquisition under the Comprehensive Agrarian Reform
Program (CARP). 22 SRRDC filed its "Protest and Objection" with the MARO on
the grounds that the area was not appropriate for agricultural purposes, as it was
rugged in terrain with slopes of 18% and above, and that the occupants of the
land were squatters, who were not entitled to any land as
beneficiaries. 23 Thereafter, as narrated in the Decision of the Court dated
October 12, 2001 in G.R. No. 112526, the following proceedings ensued:
On August 29, 1989, the farmer beneficiaries together with the BARC
chairman answered the protest and objection stating that the slope of the
land is not 18% but only 5-10% and that the land is suitable and
economically viable for agricultural purposes, as evidenced by the
Certification of the Department of Agriculture, municipality of Cabuyao,
Laguna. EaSCAH

On September 8, 1989, MARO Belen dela Torre made a summary

investigation report and forwarded the Compulsory Acquisition Folder
Indorsement (CAFI) to the Provincial Agrarian Reform Officer (hereafter,
PARO).
On September 21, 1989, PARO Durante Ubeda forwarded his
endorsement of the compulsory acquisition to the Secretary of Agrarian
Reform.
On November 23, 1989, Acting Director Eduardo C. Visperas of the
Bureau of Land Acquisition and Development, DAR forwarded two (2)
Compulsory Acquisition Claim Folders covering the
landholding of SRRDC, covered by TCT Nos. T-81949 and T-84891 to
the President, Land Bank of the Philippines for further review and
evaluation.
On December 12, 1989, Secretary of Agrarian Reform Miriam Defensor
Santiago sent two (2) notices of acquisition to petitioner, stating that
petitioner's landholdings covered by TCT Nos. T-81949 and T-84891,
containing an area of 188.2858 and 58.5800 hectares, valued at
P4,417,735.65 and P1,220,229.93, respectively, had been placed under
theComprehensive Agrarian Reform Program.
On February 6, 1990, petitioner SRRDC in two letters separately
addressed to Secretary Florencio B. Abad and the Director,
Bureau of Land Acquisition and Distribution, sent its formal protest,
protesting not only the amount of compensation offered by DAR for the
property but also the two (2) notices of acquisition.
On March 17, 1990, Secretary Abad referred the case to the DARAB for
summary proceedings to determine just compensation under
R.A. No. 6657, Section 16.
On March 23, 1990, the LBP returned the two (2) claim folders
previously referred for review and evaluation to the Director of BLAD
mentioning its inability to value the SRRDC landholding due to some
deficiencies.
On March 28, 1990, Executive Director Emmanuel S. Galvez wrote the
Land Bank President Deogracias Vistan to forward the two (2) claim
folders involving the property of SRRDC to the DARAB for it to conduct
summary proceedings to determine the just compensation for the land.
On April 6, 1990, petitioner sent a letter to the Land Bank of the
Philippines stating that its property under the aforesaid land titles were
exempt from CARP coverage because they had been classified as
watershed area and were the subject of a pending petition for land
conversion.
On May 10, 1990, Director Narciso Villapando of BLAD turned over the
two (2) claim folders (CACF's) to the Executive Director of the DAR
Adjudication Board for proper administrative valuation. Acting on the
CACF's, on September 10, 1990, the Board promulgated a resolution
asking the office of the Secretary of Agrarian Reform (DAR) to first
resolve two (2) issues before it proceeds with the summary land
valuation proceedings.
The issues that need to be threshed out were as follows: (1) whether the
subject parcels of land fall within the coverage of the Compulsory
Acquisition Program of the CARP; and (2) whether the petition for land
conversion of the parcels of land may be granted.
On December 7, 1990, the Office of the Secretary, DAR, through the
Undersecretary for Operations (Assistant Secretary for Luzon
Operations) and the Regional Director of Region IV, submitted a report
answering the two issues raised. According to them, firstly, by
virtue of the issuance of the notice of coverage on August 11, 1989, and
notice of acquisition on December 12, 1989, the property is covered
under compulsory acquisition. Secondly, Administrative Order No. 1,
Series of 1990, Section IV D also supports the DAR position on the
coverage of the said property. During the consideration of the case by
the Board, there was no pending petition for land conversion specifically
concerning the parcels ofland in question. SIDTCa

On February 19, 1991, the Board sent a notice of hearing to all the
parties interested, setting the hearing for the administrative
valuation of the subject parcels of land on March 6, 1991. However, on
February 22, 1991, Atty. Ma. Elena P. Hernandez-Cueva, counsel for
SRRDC, wrote the Board requesting for its assistance in the
reconstruction of the records of the case because the records could not
be found as her co-counsel, Atty. Ricardo Blancaflor, who originally
handled the case for SRRDC and had possession of all the
records of the case was on indefinite leave and could not be contacted.
The Board granted counsel's request and moved the hearing on April 4,
1991.
On March 18, 1991, SRRDC submitted a petition to the Board for the
latter to resolve SRRDC's petition for exemption from CARP coverage
before any administrative valuation oftheir landholding could be had by
the Board.
 On April 4, 1991, the initial DARAB hearing of the case was held and
subsequently, different dates of hearing were set without objection from
counsel of SRRDC. During the April 15, 1991 hearing, the subdivision
plan of subject property at Casile, Cabuyao, Laguna was submitted and
marked as Exhibit "5" for SRRDC. At the hearing on April 23, 1991, the
Land Bank asked for a period of one month to value the land in dispute.
At the hearing on April 23, 1991, certification from Deputy Zoning
Administrator Generoso B. Opina was presented. The certification
issued on September 8, 1989, stated that the parcels of land
subject of the case were classified as "Industrial Park" per Sangguniang
Bayan Resolution No. 45-89 dated March 29, 1989.
To avert any opportunity that the DARAB might distribute the lands to
the farmer beneficiaries, on April 30, 1991, petitioner filed a petition with
DARAB to disqualify private respondents as beneficiaries. However,
DARAB refused to address the issue of beneficiaries. 24
xxx xxx xxx
On December 19, 1991, the DARAB promulgated a decision, affirming the
dismissal of the protest of SRRDC against the compulsory coverage of the
property covered by TCT Nos. 81949 and 84891. The decretal portion of the
decision reads:
WHEREFORE, based on the foregoing premises, the Board hereby
orders:
1. The dismissal for lack of merit of the protest against the compulsory
coverage of the
landholdings of Sta. Rosa Realty Development Corporation (Tran
sfer Certificates ofTitle Nos. 81949 and 84891 with an
area of 254.766 hectares) in Barangay Casile,
Municipality of Cabuyao, Province of Laguna Under
the Comprehensive Agrarian Reform Program is hereby affirmed;
2. The Land Bank of the Philippines (LBP) to
pay Sta. Rosa Realty Development Corporation the
amount of Seven Million Eight Hundred Forty-One Thousand,
Nine Hundred Ninety Seven Pesos and Sixty-Four centavos
(P7,841,997.64) for its landholdings covered by the two (2)
Transfer Certificates of Title mentioned above. Should there be a
rejection of the payment tendered, to open, if none has yet been
made, a trust account for said amount in the
name of Sta. Rosa Realty Development Corporation;

3. The Register of Deeds of the Province of Laguna to cancel with

dispatch Transfer Certificate of Title Nos. 84891 and 81949 and
 new one be issued in the name of the Republic of the Philippines,
free from liens and encumbrances;
4. The Department of Environment and Natural Resources either
through its Provincial Office in Laguna or the Regional Office,
Region IV, to conduct a final segregation survey on the lands
covered by Transfer Certificate of Title Nos. 84891 and 81949 so
the same can be transferred by the Register of Deeds to the
name of the Republic ofthe Philippines;
5. The Regional Office of the Department of Agrarian Reform through its
Municipal and Provincial Agrarian Reform Office to take
immediate possession on the said landholding after Title shall
have been transferred to the name of the Republic of the
Philippines, and distribute the same to the immediate
issuance of Emancipation Patents to the farmer-beneficiaries as
determined by the Municipal Agrarian Reform Office of Cabuyao,
Laguna. 25
On July 11, 1991, DAR Secretary Benjamin T. Leong issued a memorandum
directing the Land Bank of the Philippines (LBP) to open a trust account in
favor of SRRDC, for P5,637,965.55, as valuation for the SRRDC property.
The titles in the name of SRRDC were cancelled and corresponding TCTs were
issued in the name of the Republic of the Philippines on February 11,
1992, 26 after which Certificates of Land Ownership Award (CLOA) were issued
in the name of the farmers-beneficiaries on February 26, 1992. 27
In the meantime, SRRDC had filed with the CA a petition for review of the
DARAB's decision, docketed as CA-G.R. SP No. 27234.
On November 5, 1993, the CA affirmed the decision of DARAB, to wit:
WHEREFORE, premises considered, the DARAB decision dated
December 19, 1991 is AFFIRMED, without prejudice to
petitioner Sta. Rosa Realty Development Corporationventilating its case
with the Special Agrarian Court on the issue of just compensation. 28
Hence, Sta. Rosa SRRDC petitioner filed on November 24, 1993, herein petition,
docketed as G.R. No. 112526 on the following grounds:
I
THE COURT OF APPEALS COMMITTED A GRAVE
ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF ITS JURISDICTION IN RULING THAT THE SRRDC
PROPERTIES, DESPITE THE UNDISPUTED FACT OF THEIR NON-
AGRICULTURAL CLASSIFICATION PRIOR TO RA 6657, ARE
COVERED BY THE CARP CONTRARY TO THE NATALIA REALTY
DECISIONOF THIS HONORABLE COURT.
 i. The SRRDC properties have been zoned and approved as
'PARK' since 1979.
ii. The SRRDC properties form part of a watershed area.
II
THE COURT OF APPEALS COMMITTED A GRAVE
ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF ITS JURISDICTION IN DISREGARDING ECOLOGICAL
CONSIDERATIONS AS MANDATED BY LAW.
III
THE COURT OF APPEALS COMMITTED A GRAVE
ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF ITS JURISDICTION IN AFFIRMING THE
DISTRIBUTION OF THE SRRDC PROPERTIES TO PRIVATE
RESPONDENTS WHO HAVE BEEN JUDICIALLY DECLARED AS
SQUATTERS AND THEREFORE ARE NOT QUALIFIED
BENEFICIARIES PURSUANT TO THE CENTRAL MINDANAO
UNIVERSITY DECISION OF THIS HONORABLE COURT. CcTIAH

i. The acquisition of the SRRDC properties cannot be valid for

future beneficiaries.
ii. Section 22 of RA 6657 insofar as it expands the
coverage of the CARP to 'landless residents' is
unconstitutional.
IV
THE COURT OF APPEALS COMMITTED A GRAVE
ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF ITS JURISDICTION IN HOLDING THAT THE DARAB HAS
JURISDICTION TO PASS UPON THE ISSUE OF WHETHER THE
SRRDC PROPERTIES ARE SUBJECT TO CARP COVERAGE. 29
On October 12, 2001, the Court rendered its Decision in G.R. No. 112526 only,
setting aside the decision of the CA in CA-G.R. SP No. 27234 and ordering the
remand of the case to the DARAB for re-evaluation and determination of the
nature of the land. The dispositive portion of the Decision reads as follows:
IN VIEW WHEREOF, the Court SETS ASIDE the
decision of the Court of Appeals in CA-G.R. SP No. 27234.
In lieu thereof, the Court REMANDS the case to the DARAB for re-
evaluation and determination of the nature of the parcels of land involved
to resolve the issue of its coverage by the Comprehensive Land Reform
Program.
 In the meantime, the effects of the CLOAs issued by the DAR to
supposed farmer beneficiaries shall continue to be stayed by the
temporary restraining order issued on December 15, 1993, which shall
remain in effect until final decision on the case.
No costs.
SO ORDERED. 30
It is the opinion of the Court in G.R. No. 112526, that the property is part of a
watershed, and that during the hearing at the DARAB, "there was proof that the
land may be excluded from the coverage of the CARP because of its high
slopes." 31 Thus, the Court concluded that a remand of the case to the DARAB
for re-evaluation of the issue ofcoverage is appropriate in order to resolve the
true nature of the subject property. 32
In their Memorandum, Amante, et al. argues that there exist compelling reasons
to grant the second motion for reconsideration of the assailed
decision of the Court, to wit:
2.1 Only QUESTIONS OF LAW are admittedly and undeniably at issue;
yet the Honorable Court reviewed
the findings of facts of the Court of Appeals and the DARAB although the
case does not fall into any of the well-recognized exceptions to conduct
a factual review. Worse, the 12 October 2001 Decision assumed facts
not proven before any administrative, quasi-judicial or judicial bodies;
2.2 The DARAB and the Court of Appeals already found the land to be
CARPable; yet the Honorable Court remanded the case to DARAB to re-
evaluate if the land is CARPable;
2.3 The Decision did not express clearly and distinctly the facts and the
law on which it is based;
2.4 The Decision renewed the Temporary Restraining Order issued on
15 December 1993, issuance of which is barred by Sec. 55 of R.A. 6657;
and
2.5 This Honorable Court denied private respondents' Motion for
Reconsideration although issues raised therein were never passed
upon in the 12 October 2001 Decision or elsewhere. 33
The DAR and the DARAB, through the Office of the Solicitor General, did not
interpose any objection to the second motion for reconsideration. It also
maintained that if SRRDC's claim that the property is watershed is true, then it is
the DENR that should exercise control and supervision in the disposition,
utilization, management, renewal and conservation of the property. 34
SRRDC meanwhile insists that there are no compelling reasons to give due
course to the second motion for reconsideration. 35
At the outset, the Court notes that petitioner designated its petition
in G.R. No. 112526 as one for review on certiorari of the decision of the CA. In
the same breath, it likewise averred that it was also being filed as a special civil
action for certiorari as public respondents committed grave
abuse of discretion. 36 Petitioner should not have been allowed, in the first place,
to pursue such remedies simultaneously as these are mutually exclusive. 37
It is SRRDC's claim that the CA committed grave abuse of discretion in holding
that the subject property is agricultural in nature. In support of its contention, it
argued, among others, that the subject property had already been classified as
"park" since 1979 under the Zoning Ordinance of Cabuyao, as approved by the
Housing and Land Use Regulatory Board (HLURB); that it forms part of a
watershed; and that the CA disregarded ecological considerations. 38 SRRDC
also claimed that Amante, et al. are not qualified beneficiaries.39
Clearly, these issues are factual in nature, which the Court, as a rule, should not
have considered in this case. However, there are recognized exceptions, e.g.,
when the factual inferences of the appellate court are manifestly mistaken; the
judgment is based on a misapprehension of facts; or the CA manifestly
overlooked certain relevant and undisputed facts that, if properly considered,
would justify a different legal conclusion. 40 The present cases fall under the
above exceptions.
Thus, in order to finally set these cases to rest, the Court shall resolve the
substantive matters raised, which in effect comes down to the issue of the
validity of the acquisition ofthe subject property by the Government
under Republic Act (R.A.) No. 6657, or the Comprehensive Agrarian Reform
Law of 1988 (CARL).
As noted earlier, the DARAB made its finding regarding the nature of the property
in question, i.e., the parcels of land are agricultural and may be the
subject of compulsory acquisition for distribution to farmer-beneficiaries, thus:
Ocular inspections conducted by the Board show that the subject
landholdings have been under the possession and tillage of the DAR
identified potential beneficiaries which they inherited from their forebears
(workers of the Yulo Estate). They are bonafide residents and registered
voters (DARAB Exhibits "C" and "J") of Barangay Casile, Cabuyao,
Laguna. There is a barangay road leading toward the barangay school
and sites and the settlement has a barangay hall, church, elementary
school buildings (DARAB Exhibit "Q"), Comelec precincts (DARAB
Exhibits "J-1" and "J-2"), and other structures extant in progressive
communities. The barangay progressive development agencies, like the
DECS, DA, COMELEC, DAR and Support Services of Land Bank,
DPWH, DTI and the Cooperative Development Authority have extended
support services to the community (DARAB Exhibits "I", "K" to "K-3", "L",
 "M", "N", "O", "P" to "P-6"). More importantly, subject landholdings
are suitable for agriculture. Their topography is flat to undulating 3-
15% slope. (Testimony of Rosalina Jumaquio, Agricultural
Engineer, DAR, TSN, June 21, 1991, DARAB Exhibits "F" and "H").
Though some portions are over 18% slope, nevertheless, clearly
visible thereat are fruit-bearing trees, like coconut, coffee, and
pineapple plantations, etc. (see Petitioners Exhibits "A" to "YYY"
and DARAB Exhibits "A" to "S", Records). In other words, they are
already productive and fully developed.

xxx xxx xxx

As the landholdings of SRRDC subject of the instant proceedings
are already developed not only as a community but also as an
agricultural farm capable of sustaining daily existence and growth,
We find no infirmity in placing said parcels of land under
compulsory coverage. They do not belong to the exempt
class of lands. The claim that the landholding of SRRDC is a
watershed; hence, belonging to the exempt class of lands is
literally "throwing punches at the moon" because the DENR
certified that "the only declared watershed in Laguna Province and
San Pablo City is the Caliraya-Lumot Rivers (Petitioner's Exhibit
"A"). A sensu contrario, the landholdings subject herein are
not. 41 (Emphasis supplied)
The evidence on record supports these findings, to wit:
l. Certification dated January 16, 1989 by the OIC Provincial
Environment and Natural Resources Office of Laguna that the
only declared watershed in the Laguna province and San Pablo
City is the Caliraya-Lumot Rivers No. 1570 dated September 1,
1976; 42
2. Map prepared by Agricultural Engineer Rosalina H. Jumaquio showing
that: a) the topography of the property covered by TCT No. T-
84891 topography is flat to undulating with a 5 to 10% slope; (b) it
is suitable to agricultural crops; and (c) the land is presently
planted with diversified crops; 43
3. Certification dated August 28, 1989 by APT Felicito Buban of the
Department of Agriculture of Laguna that, per his ocular
inspection, the subject property is an agricultural area, and that
the inhabitants' main occupation is farming; 44
4. Pictures taken by MARO Belen La Torre of Cabuyao, Laguna,
showing that the property is cultivated and inhabited by the
farmer-beneficiaries; 45
SRRDC however, insists that the property has already been classified as a
"municipal park" and beyond the scope of CARP. To prove this, SRRDC
submitted the following:
1. Certification dated March 1, 1991 by the Municipality of Cabuyao,
Laguna that the entire barangay of Casile is delineated as
Municipal Park; 46
2. Certification dated March 11, 1991 by the Housing and Land Use
Regulatory Board that the parcels of land located in Barangay
Casile are within the Municipal Park, based on the municipality's
approved General Land Use Plan ratified by the Housing and
Land Use Regulatory Board as per Resolution No. 38-2 dated
June 25, 1980; 47
3. Photocopies of pictures taken by Mr. Ernesto Garcia, Officer-in
Charge of the Special Project Section of CJ Yulo and Sons,
Inc., of portions of Barangay Casile; 48
The Court recognizes the power of a local government to reclassify and convert
lands through local ordinance, especially if said ordinance is approved by the
HLURB. 49 Municipal Ordinance No. 110-54 dated November 3, 1979, enacted
by the Municipality of Cabuyao, divided the municipality into residential,
commercial, industrial, agricultural and institutional districts, and districts and
parks for open spaces. 50 It did not convert, however, existing agricultural lands
into residential, commercial, industrial, or institutional. While it classified
Barangay Casile into a municipal park, as shown in its permitted uses of land
map, the ordinance did not provide for the retroactivity of its classification.
In Covs. Intermediate Appellate Court, 51 it was held that an ordinance converting
agricultural lands into residential or light industrial should be given prospective
application only, and should not change the nature of existing agricultural lands
in the area or the legal relationships existing over such lands. Thus, it was stated:
A reading of Metro Manila Zoning Ordinance No. 81-01, series of 1981,
does not disclose any provision converting existing agricultural lands in
the covered area into residential or light industrial. While it declared that
after the passage of the measure, the subject area shall be used only for
residential or light industrial purposes, it is not provided therein that it
shall have retroactive effect so as to discontinue all rights previously
acquired over lands located within the zone which are neither residential
nor light industrial in nature.This simply means that, if we apply
the general rule, as we must, the ordinance should be given
prospective operation only. The further implication is that it should
not change the nature of existing agricultural lands in the area or
the legal relationships existing over such lands . . . 52 (Emphasis
supplied)
Under Section 3(c) of R.A. No. 6657, agricultural land is defined as land devoted
to agricultural activity and not classified as mineral, forest, residential,
commercial or industrial land. Section 3(b) meanwhile defines agricultural activity
as the cultivation of the soil, planting of crops, growing of fruit trees,
raising of livestock, poultry or fish, including the harvesting of such products, and
other farm activities, and practices performed by a farmer in conjunction with
such farming operations done by persons whether natural or juridical. CIScaA

Before Barangay Casile was classified into a municipal park by the local
government of Cabuyao, Laguna in November 1979, it was part of a vast
property popularly known as the Canlubang Sugar Estate. SRRDC claimed that
in May 1979, "the late Miguel Yulo . . . allowed the employees of the Yulo
group of companies to cultivate a maximum area of one hectare each subject to
the condition that they should not plant crops being grown by the Canlubang
Sugar Estate, like coconuts and coffee, to avoid confusion as to
ownershipof crops." 53 The consolidation and subdivision plan surveyed for
SRRDC on March 10-15, 1984 54 also show that the subject property is sugar
land. Evidently, the subject property is already agricultural at the time the
municipality of Cabuyao enacted the zoning ordinance, and such ordinance
should not affect the nature of the land. More so since the
municipality of Cabuyao did not even take any step to utilize the property as a
park.
SRRDC cites the case of Natalia Realty, Inc. vs. DAR, 55 wherein it was ruled
that lands not devoted to agricultural activity and not classified as mineral or
forest by the DENR and its predecessor agencies, and not classified in town
plans and zoning ordinances as approved by the HLURB and its preceding
competent authorities prior to the enactment ofR.A. No. 6657 on June 15, 1988,
are outside the coverage of the CARP. Said ruling, however, finds no application
in the present case. As previously stated, Municipal OrdinanceNo. 110-54 of the
Municipality of Cabuyao did not provide for any retroactive application nor did it
convert existing agricultural lands into residential, commercial, industrial, or
institutional. Consequently, the subject property remains agricultural in nature
and therefore within the coverage of the CARP.
Only on March 9, 2004, SRRDC filed with the Court a Manifestation pointing out
DAR Order No. (E)4-03-507-309 dated February 17, 2004, exempting from
CARP coverage two parcels of land owned by SRRDC and covered by TCT Nos.
T-85573 and T-92014. 56 The DAR found that these properties have been re-
classified into Municipal Parks by the Municipal Ordinance of Cabuyao, Laguna,
and are part of the Kabangaan-Casile watershed, as certified by the DENR. 57
The Court notes however that the said DAR Order has absolutely no bearing on
these cases. The herein subject property is covered by TCT Nos. 81949 and
34891, totally different, although adjacent, from the property referred to in said
DAR Order.
SRRDC also contends that the property has an 18% slope and over and
therefore exempt from acquisition and distribution under Section 10 of R.A. No.
6657. What SRRDC opted to ignore is that Section 10, as implemented by
DAR Administrative Order No. 13 dated August 30, 1990, also provides that
those with 18% slope and over but already developed for agricultural purposes
as of June 15, 1988, may be allocated to qualified occupants. 58 Hence, even
assuming that the property has an 18% slope and above, since it is already
developed for agricultural purposes, then it cannot be exempt from acquisition
and distribution. Moreover, the topography maps prepared by Agricultural
Engineer Rosalina H. Jumaquio show that the property to be acquired has a 5-
10% flat to undulating scope; 59 that it is suitable to agricultural crops; 60 and it is
in fact already planted with diversified crops. 61
Also, the Certification dated July 1, 1991 by Geodetic Engineer Conrado R. Rigor
that the top portion of Barangay Casile has a 0 to 18% slope while the side of the
hill has a 19 to 75% slope, 62 was presented by SRRDC only during the
proceedings before the CA which had no probative value in a petition for review
proceedings. The Court notes that SRRDC had been given ample time and
opportunity by the DARAB to prove the grounds for its protest and objection but
miserably failed to take advantage of such time and opportunity63 in the DARAB
proceedings.
SRRDC also contends that the property is part of a watershed, citing as
evidence, the Certification dated June 26, 1991 by the Laguna
Lake Development Authority that Barangay Casile is part of the watershed
area of the Laguna Lake Basin, 64 and the Final Report for Watershed Area
Assessment Study for the Canlubang Estate dated July 1991 undertaken by the
Engineering & Development Corporation of the Philippines. 65 It must be noted,
however, that these pieces of evidence were likewise brought to record only
when petitioner filed its petition for review with the CA. The DARAB never had
the opportunity to assess these pieces of evidence.
The DARAB stated:
Noting the absence of evidence which, in the nature of things, should
have been submitted by landowner SRRDC and to avoid any
claim of deprivation of its right to prove its claim to just compensation
(Uy v. Genato, 57 SCRA 123). We practically directed its counsel in not
only one instance, during the series of hearings conducted, to do so. We
even granted continuances to give it enough time to prepare and be
ready with the proof and documents. To Our dismay, none was
submitted and this constrained Us to take the failure/refusal of SRRDC
 to present evidence as a waiver or, at least, an implied
acceptance of the valuation made by the DAR. 66

The same goes with the CA, which did not have the discretion to consider
evidence in a petition for certiorari or petition for review on certiorari outside than
that submitted before the DARAB. The CA noted petitioner's failure to present
evidence in behalf of its arguments, thus:
. . . It must be recalled that petitioner Sta. Rosa Realty itself had asked
the DARAB in a petition dated March 18, 1991 to allow it 'to adduce
evidence in support of its position that the subject parcels of land are not
covered by the CARP beginning on the scheduled hearing dated April 4,
1991.' And DARAB obliged as in fact the petitioner commenced to
introduce evidence. If petitioner failed to complete the
presentation of evidence to support its claim of exemption from CARP
coverage, it has only itself to blame for which DARAB cannot be
accused of not being impartial. 67
Consequently, there is no need to order the remand of the case to the DARAB
"for re-evaluation and determination of the nature of the parcels of land involved."
It runs contrary to orderly administration of justice and would give petitioner
undue opportunity to present evidence in support of its stance, an opportunity it
already had during the DARAB proceedings, and which opportunity it regrettably
failed to take advantage of. TCacIA

More significantly however, it is the DAR Secretary that originally declared the
subject property as falling under the coverage of the CARP.
Moreover, DAR Administrative Order No. 13, Series of 1990 (Rules and
Procedure Governing Exemption of Lands from CARP Coverage under
Section 10, R.A. No. 6657) provides:
I. LEGAL MANDATE
The general policy under CARP is to cover as much lands suitable for
agriculture as possible. However, Section 10, RA 6657 excludes and
exempts certain types of lands from the coverage of CARP, to wit:
A. Lands actually, directly and exclusively used and found to be
necessary for parks, wildlife, forest reserves, reforestation, fish
sanctuaries and breeding grounds, watershedsand mangroves,
national defense, school sites and campuses including
experimental farm stations operated by public or private schools
for educational purposes, seeds and seedlings research and pilot
production centers, church sites and convents appurtenant
thereto, mosque sites and Islamic centers appurtenant thereof,
communal burial grounds and cemeteries, penal colonies and
 penal farms actually worked by the inmates, government and
private research and quarantine centers; and
xxx xxx xxx
II. POLICIES
In the application of the aforecited provision of law, the following
guidelines shall be observed:
A. For an area in I.A to be exempted from CARP coverage, it must be
"actually, directly and exclusively used and found to be
necessary" for the purpose so stated.
xxx xxx xxx
C. Lands which have been classified or proclaimed, and/or actually
directly and exclusively used and found to be necessary for parks,
wildlife, forest reserves, fish sanctuaries and breeding grounds,
and watersheds and mangroves shall be exempted from the
coverage of CARP until Congress, taking into account ecological,
developmental and equity considerations, shall have determined
by law, the specific limits of public domain, as provided for under
Sec. 4(a) of RA 6657, and a reclassification of the said areas or
portions thereof as alienable and disposable has been approved.
(Emphasis supplied)
In order to be exempt from coverage, the land must have been classified or
proclaimed and actually, directly and exclusively used and found to be
necessary for watershed purposes. 68 In this case, at the time the DAR issued
the Notices of Coverage up to the time the DARAB rendered its decision on the
dispute, the subject property is yet to be officially classified or proclaimed as a
watershed and has in fact long been used for agricultural purposes. SRRDC
relies on the case of Central Mindanao University (CMU) vs.DARAB, 69 wherein
the Court ruled that CMU is in the best position to determine what property is
found necessary for its use. SRRDC claims that it is in the best position to
determine whether its properties are "necessary" for development as park and
watershed area. 70
But SRRDC's reliance on the CMU case is flawed. In the CMU case, the subject
property from the very beginning was not alienable and disposable
because Proclamation No. 476issued by the late President Carlos P. Garcia
already reserved the property for the use of the school. Besides, the subject
property in the CMU case was actually, directly and exclusively used and found
to be necessary for educational purposes.
In the present case, the property is agricultural and was not actually and
exclusively used for watershed purposes. As records show, the subject property
was first utilized for the purposes of the Canlubang Sugar Estate. 71 Later,
petitioner claimed that the occupants were allowed to cultivate the area so long
as they do not plant crops being grown by the Canlubang Sugar Estate in order
to avoid confusion as to ownership thereof. 72 Thus, based on its own assertions,
it appears that it had benefited from the fruits of the land as agricultural land.
Now, in a complete turnaround, it is claiming that the property is part of a
watershed.
Furthermore, in a belated attempt to prove that the subject property is part of a
watershed that must be environmentally protected, SRRDC submitted before
the Court a Final Report dated February 1994 undertaken by the Ecosystems
Research and Development Bureau (ERDB) of the DENR entitled,
"Environmental Assessment of the Casile and Kabanga-an River
Watersheds." 73 The study, according to SRRDC, was made pursuant to a
handwritten instruction issued by then President Fidel V. Ramos. The study
noted that, "the continuing threat of widespread deforestation and unwise land
use practices have resulted in the deteriorating condition of the
watersheds." 74 But the Court also notes the Memorandum for the President
dated September 1993 by then DENR Secretary Angel C. Alcala that, after a field
inspection conducted by the DENR's Regional Executive Director and the
Provincial. and Community Natural Resource Officers, it was found that:
xxx xxx xxx
2. Many bankal trees were found growing in the watershed/CARP areas,
including some which have been coppiced, and that water conduits for
domestic and industrial uses were found installed at the watershed area
claimed by the Yulos. Records further show that in the 1970s, a Private
Land Timber Permit was issued to Canlubang Sugar Estate thru its
marketing arm, the Sta. Rosa Realty Devpt. Corp.
3. Resident farmers denied that they have been cutting bankal trees and
volunteered the information that one of the Estates' security guards was
dismissed for cutting and transporting bankal trees. The trees cut by the
dismissed security guard were found stacked adjacent to the Canlubang
Security Agency's headquarters. 75
Evidently, SRRDC had a hand in the degradation of the area, and now wants to
put the entire blame on the farmer-beneficiaries. It is reasonable to conclude that
SRRDC is merely using "ecological considerations" to avert any disposition of the
property adverse to it.
SRRDC also objects to the identification of Amante, et al. as beneficiaries of the
subject property. Suffice it to say that under Section 15 of R.A. No. 6657, the
identification ofbeneficiaries is a matter involving strictly the administrative
implementation of the CARP, a matter which is exclusively vested in the
Secretary of Agrarian Reform, through its authorized offices. Section 15 reads:
 SECTION 15. Registration of Beneficiaries. — The DAR in coordination
with the Barangay Agrarian Reform Committee (BARC) as organized in
this Act, shall register all agricultural lessees, tenants and farmworkers
who are qualified to be beneficiaries of the CARP. These potential
beneficiaries with the assistance of the BARC and the DAR shall provide
the following data:
(a) names and members of their immediate farm household;
(b) owners or administrators of the lands they work on and the
length of tenurial relationship;
(c) location and area of the land they work;
(d) crops planted; and
(e) their share in the harvest or amount of rental paid or wages
received. EATCcI

A copy of the registry or list of all potential CARP beneficiaries in the

barangay shall be posted in the barangay hall, school or other public
buildings in the barangay where it shall be open to inspection by the
public at all reasonable hours.
Meanwhile, Administrative Order No. 10 (Rules and Procedures Governing the
Registration of Beneficiaries), Series of 1989, provides:
SUBJECT: I. PREFATORY STATEMENT
Pursuant to Section 15, Chapter IV, of the Comprehensive Agrarian
Reform Law of 1988, the DAR, in coordination with the Barangay
Agrarian Reform Committee (BARC), as organized pursuant to RA 6657,
shall register all agricultural lessees, tenants and farmworkers who are
qualified beneficiaries of the CARP. This Administrative Order provides
the Implementing Rules and Procedures for the said registration.
xxx xxx xxx
B. Specific
1. Identify the actual and potential farmer-beneficiaries of the CARP.
In Lercana vs. Jalandoni, 76 the Court categorically stated that:
. . . the identification and selection of CARP beneficiaries are matters
involving strictly the administrative implementation of the CARP, a matter
exclusively cognizable by the Secretary of the Department of Agrarian
Reform, and beyond the jurisdiction of the DARAB. 77
The farmer-beneficiaries have already been identified in this case. Also, the DAR
Secretary has already issued Notices of Coverage and Notices of Acquisition
pertaining to the subject property. It behooves the courts to exercise great
caution in substituting its own determination of the issue, unless there is grave
abuse of discretion committed by the administrative agency, 78 which in these
cases the Court finds none.

SRRDC questions the constitutionality of Section 22 of R.A. No. 6657, which

reads in part:
SECTION 22. Qualified Beneficiaries. — The lands covered by the
CARP shall be distributed as much as possible to landless
residents of the same barangay, or in the absence thereof, landless
residents of the same municipality in the following order of priority.
(a) agricultural lessees and share tenants;
(b) regular farmworkers;
(c) seasonal farmworkers;
(d) other farmworkers;
(e) actual tillers or occupants of public lands;
(f) collectives or cooperatives of the above beneficiaries; and
(g) others directly working on the land.
xxx xxx xxx
SRRDC argues that Section 22 "sweepingly declares landless residents as
beneficiaries of the CARP (to mean also squatters)," in violation of Article XIII,
Section 4 of the Constitution, which aims to benefit only the landless farmers and
regular farmworkers. 79
The Court cannot entertain such constitutional challenge. The requirements
before a litigant can challenge the constitutionality of a law are well-
delineated, viz.:
(1) The existence of an actual and appropriate case;
(2) A personal and substantial interest of the party raising the
constitutional question;
(3) The exercise of judicial review is pleaded at the earliest
opportunity; and
(4) The constitutional question is the lis mota of the case. 80 (Emphasis
supplied)
Earliest opportunity means that the question of unconstitutionality of the act in
question should have been immediately raised in the proceedings in
the court below, 81 in this case, the DAR Secretary. It must be pointed out that all
controversies on the implementation of the CARP fall under the jurisdiction of the
DAR, even though they raise questions that are also legal or constitutional in
nature. 82 The earliest opportunity to raise a constitutional issue is to raise it in
the pleadings before a competent court that can resolve the same, such that, "if it
is not raised in the pleadings, it cannot be considered at the trial, and, if not
considered at the trial, it cannot be considered on appeal." 83 Records show that
SRRDC raised such constitutional challenge only before this Court despite the
fact that it had the opportunity to do so before the DAR Secretary. The DARAB
correctly refused to deal on this issue as it is the DAR Secretary who, under the
law, has the authority to determine the beneficiaries of the CARP. This Court will
not entertain questions on the invalidity of a statute where that issue was not
specifically raised, insisted upon, and adequately argued 84 in the DAR.
Likewise, the constitutional question raised by SRRDC is not the very lis mota in
the present case. Basic is the rule that every law has in its favor the
presumption ofconstitutionality, and to justify its nullification, there must be a
clear and unequivocal breach of the Constitution, and not one that is doubtful,
speculative or argumentative. 85The controversy at hand is principally anchored
on the coverage of the subject property under the CARP, an issue that can be
determined without delving into the constitutionality of Section 22 of R.A. No.
6657. While the identification of Amante, et al. as farmer-beneficiaries is a
corollary matter, yet, the same may be resolved by the DAR.
SRRDC questions the DARAB's jurisdiction to entertain the question of whether
the subject property is subject to CARP coverage.
According to SRRDC, such authority is vested with the DAR Secretary who has
the exclusive prerogative to resolve matters involving the administrative
implementation of the CARP and agrarian laws and regulations. 86
There is no question that the power to determine whether a property is subject to
CARP coverage lies with the DAR Secretary. Section 50 of R.A. No.
6657 provides that:
SEC. 50. Quasi-Judicial Powers of the DAR. — The DAR is hereby
vested with primary jurisdiction to determine and adjudicate agrarian
reform matters and shall have exclusive original jurisdiction over all
matters involving the implementation of agrarian reform, except those
falling under the exclusive jurisdiction of the Department ofAgriculture
(DA) and the Department of Environment and Natural Resources
(DENR).
xxx xxx xxx
The DAR's jurisdiction under Section 50 of R.A. No. 6657 is two-fold. The first is
essentially executive and pertains to the enforcement and administration of the
laws, carrying them into practical operation and enforcing their due observance,
while the second is judicial and involves the determination of rights and
obligations of the parties. 87
Pursuant to its judicial mandate of achieving a just, expeditious and inexpensive
determination of every action or proceeding before it, 88 the DAR adopted
the DARAB Revised Rules, Rule II (Jurisdiction of the Adjudication
Board) of which provides:
SECTION 1. Primary, Original and Appellate Jurisdiction. — The
Agrarian Reform Adjudication Board shall have primary jurisdiction, both
original and appellate, to determine and adjudicate all agrarian disputes,
cases, controversies, and matters or incidents involving the
implementation of the Comprehensive Agrarian Reform
Program under RepublicAct No. 6657, Executive Order Nos. 229, 228
and 129-A, Republic Act No. 3844 as amended by Republic Act No.
6389, Presidential Decree No. 27 and other agrarian laws and their
implementing rules and regulations.
Specifically, such jurisdiction shall extend over but not be limited to the
following:
a) Cases involving the rights and obligations of persons engaged in the
cultivation and use of agricultural land covered by the Comprehensive
Agrarian Reform Program(CARP) and other agrarian laws;
b) Cases involving the valuation of land, and determination and
payment of just compensation, fixing and collection of lease rentals,
disturbance compensation, amortization payments, and similar disputes
concerning the functions of the Land Bank;
c) Cases involving the annulment or cancellation of orders or
decisions of DAR officials other than the Secretary, lease contracts or
deeds of sale or their amendments under the administration and
disposition of the DAR and LBP;
d) Cases arising from, or connected with membership or representation
in compact farms, farmers' cooperatives and other registered farmers'
associations or organizations, related to land covered by the CARP and
other agrarian laws;
e) Cases involving the sale, alienation, mortgage, foreclosure, pre-
emption and redemption of agricultural lands under the coverage of the
CARP or other agrarian laws;
f) Cases involving the issuance of Certificate of Land Transfer (CLT),
Certificate of Land Ownership Award (CLOA) and Emancipation Patent
(EP) and the administrative correction thereof;
g) And such other agrarian cases, disputes, matters or concerns referred
to it by the Secretary of the DAR. SaTAED
 Provided, however, that matters involving strictly the administrative
implementation of the CARP and other agrarian laws and
regulations, shall be the exclusive prerogative of and cognizable by
the Secretary of the DAR. (Emphasis supplied)
On the other hand, Administrative Order No. 06-00, 89 which provides for the
Rules of Procedure for Agrarian Law Implementation (ALI) Cases, govern the
administrative functionof the DAR. Under said Rules of Procedure, the DAR
Secretary has exclusive jurisdiction over classification and
identification of landholdings for coverage under the CARP, including protests or
oppositions thereto and petitions for lifting of coverage. Section 2 of the said
Rules specifically provides, inter alia, that:
SECTION 2. Cases Covered. — These Rules shall govern cases falling
within the exclusive jurisdiction of the DAR Secretary which shall include
the following:
(a) Classification and identification of landholdings for coverage
under the Comprehensive Agrarian Reform Program (CARP),
including protests or oppositions thereto aid petitions for
lifting of coverage;
(b) Identification, qualification or disqualification of potential
farmer-beneficiaries;
(c) Subdivision surveys of lands under CARP;
(d) Issuance, recall or cancellation of Certificates of Land Transfer
(CLTs) and CARP Beneficiary Certificates (CBCs) in cases outside the
purview of Presidential Decree (PD) No. 816, including the issuance,
recall or cancellation of Emancipation Patents (EPs) or
Certificates of Land Ownership Awards (CLOAs) not yet registered with
the Register of Deeds;
(e) Exercise of the right of retention by landowner; . . . (Emphasis
supplied)
Thus, the power to determine whether a property is agricultural and subject to
CARP coverage together with the identification, qualification or
disqualification of farmer-beneficiaries lies with the DAR Secretary. 90
Significantly, the DAR had already determined that the properties are subject to
expropriation under the CARP and has distributed the same to the farmer-
beneficiaries.
Initially, the LBP forwarded the two Compulsory Acquisition Claim Folders
(CACF) covering the subject properties to the DARAB for summary proceedings
for the sole purpose ofdetermining just compensation. SRRDC then sent a letter
to the LBP claiming that the subject properties were exempt from CARP
coverage and subject of a pending petition for land conversion. As a
consequence, the DARAB asked the DAR Secretary to first resolve the issues
raised by SRRDC before it can proceed with the land valuation proceedings. In
response, the DAR, through the Undersecretary for Operations and the Regional
Director of Region IV, submitted its report stating that: (1) the property is subject
to compulsory acquisition by virtue of the Notice of Coverage issued on August
11, 1989, and Notice of Acquisition issued on December 12, 1989, and that it
was subject to CARP coverage per Section IV D of DAR Administrative
Order No. 1, Series of 1990; and (2) there was no pending petition for land
conversion involving the subject property. When SRRDC petitioned the DARAB
to resolve the issue of exemption from coverage, it was only then that the
DARAB took cognizance of said issue. 91

As the DARAB succinctly pointed out, it was SRRDC that initiated and invoked
the DARAB's jurisdiction to pass upon the question of CARP coverage. As stated
by the DARAB:
4.5.2.2. The ISSUE ON CARP COVERAGE was initiated and
incorporated in said proceeding, at the instance of petitioner itself,
by filing a petition dated March 18, 1991, . . . Prayed therein were that
DARAB:
1. Take cognizance and assume jurisdiction over the
question of CARP coverage of the subject parcels of land;
2. Defer or hold in abeyance the proceedings for administrative
valuation of the subject properties pending determination of the
question of CARP coverage;
3. Allow respondent SRRDC to adduce evidence in support of its
position that the subject parcels of land are not covered by the CARP
beginning on the scheduled hearing date of April 4, 1991" (p. 3;
emphasis and underscoring supplied).
Upon persistent request of petitioner SRRDC, it was accommodated by
DARAB and a counsel of SRRDC even took the witness stand. Its
lawyers were always in attendance during the scheduled hearings until it
was time for SRRDC to present its own evidence.
4.5.2.3. But, as earlier stated, despite the open session proddings
by DARAB for SRRDC to submit evidence and the rescheduling
for, allegedly, they are still collating the evidence, nay, the request
that it be allowed to adduce evidence, none was adduced and this
constrained public respondent to declare SRRDC as having
waived its right to present evidence. And, after the remaining
parties were heard, the hearing was formally terminated.
xxx xxx xxx
 4.5.3. Needless to state, the jurisdictional objection (CARP
coverage), now being raised herein was not one of the original
matters in issue. Principally, DARAB was called upon under
Section 16 of Republic Act No. 6657 to resolve a land valuation
case. But SRRDC itself insisted that DARAB should take
cognizance thereof in the same land valuation proceeding. And,
SRRDC, through its lawyers, actively participated in the hearings
conducted.
4.5.4. It was only when an adverse decision was rendered by
DARAB that the jurisdictional issue was raised in the petition for
review it filed with the HonorableCourt of Appeals. It was also only
then that petitioner presented proof/evidence.
xxx xxx xxx
4.5.6. Public respondents (DAR/DARAB) are not unmindful of the
rule that matter of jurisdiction may be raised at any stage of the
proceeding. But for two serious considerations, the applicability
thereof in the case at bar should not be allowed.
4.5.6.1. The fact [part (municipal/industrial) and/or watershed] upon
which the jurisdictional issue interchangeably hinges were not
established during the hearing of the case. No proof was adduced.
That the matter of CARP coverage is strictly administrative
implementation of CARP and, therefore, beyond the
competence of DARAB, belonging, as it does, to the DAR
Secretary, was not even alleged, either before DARAB or the
Honorable Court of Appeals, the numerous petitions/incidents filed
notwithstanding. Be it that as it may, the records of the case show
that initially DARAB refused to take cognizance thereof and, in fact,
forwarded the issue of CARP coverage to the office of the DAR
Secretary. It was only when it was returned to DARAB by said
office that proceedings thereon commenced pursuant to Section
1(g) of Rule II of the DARAB Revised Rules of Procedure.
4.5.6.2. Petitioner is now estopped from assailing the
,jurisdiction of DARAB. First, it expressly acknowledged the same,
in fact invoked it, when it filed its petition (Annex "4"); and, second,
during the scheduled hearings, SRRDC, through its counsel,
actively participated, one of its counsel (sic) even testifying. It may
not now be allowed to impugn the jurisdiction of public
respondent . . . 92 (Emphasis Supplied)
In CA-G.R. SP No. 27234, the CA likewise found that it was SRRDC that called
upon the DARAB to determine the issue and it, in fact, actively participated in the
proceedings before it. 93 It was SRRDC's own act of summoning the DARAB's
authority that cured whatever jurisdictional defect it now raises. It is elementary
that the active participation of a party in a case pending against him before
a court or a quasi-judicial body, is tantamount to a recognition of that court's or
body's jurisdiction and a willingness to abide by the resolutionof the case and will
bar said party from later on impugning the court's or body's jurisdiction. 94
Moreover, the issue of jurisdiction was raised by SRRDC only before the CA. It
was never presented or discussed before the DARAB for obvious reasons, i.e., it
was SRRDC itself that invoked the latter's jurisdiction. As a rule, when a party
adopts a certain theory, and the case is tried and decided upon that theory in
the court below, he will not be permitted to change his theory on
appeal. 95 Points of law, theories, issues and arguments not brought to the
attention of the lower court need not be, and ordinarily will not be, considered by
a reviewing court, as these cannot be raised for the first time at such late
stage. 96 To permit SRRDC to change its theory on appeal would not only be
unfair to Amante, et al. but would also be offensive to the basic scales of fair
play, justice and due process. 97
Finally, the Court notes that then DAR Secretary Benjamin T. Leong
issued a Memorandum on July 11, 1991, ordering the opening of a trust
account in favor of SRRDC. InLand Bank of the
Philippines vs. Court of Appeals, this Court struck down as void DAR
Administrative Circular No. 9, Series of 1990, providing for the opening of trust
accounts in lieu of the deposit in cash or in bonds contemplated in Section
16(e) of R.A. No. 6657. As a result, the DAR issued Administrative Order No.
2, Series of 1996, converting trust accounts in the name of landowners into
deposit accounts. 98 Thus, the trust account opened by the LBP per
instructions of DAR Secretary Benjamin T. Leong should be converted to a
deposit account, to be retroactive in application in order to rectify the error
committed by the DAR in opening a trust account and to grant the landowners
the benefits concomitant to payment in cash or LBP bonds prior to the
ruling of the Court in Land Bank of the Philippines vs. Court of Appeals. The
account shall earn a 12% interest per annum from the time the LBP opened a
trust account up to the time said account was actually converted into cash and
LBP bonds deposit accounts.
Given the foregoing conclusions, the petition filed in G.R. No. 118838, which
primarily rests on G.R. No. 112526, should be granted. CTAIHc

The judgments of the trial court in the injunction case (Civil Case No. B-2333)
and the CA in CA-G.R. SP No. 38182 were premised on SRRDC's transfer
certificates of title over the subject property. The trial court and the CA cannot be
faulted for denying the writ of injunction prayed for by Amante, et al. since at the
time the trial court rendered its decision in the injunction case on January 20,
1992, SRRDC was still the holder of the titles covering the subject property. The
titles in its name were cancelled and corresponding TCTs were issued in the
name of the Republic of the Philippines on February 11, 1992, and CLOAs were
issued to the farmer-beneficiaries on February 26, 1992. When Amante, et al., in
their motion for reconsideration filed in CA-G.R. SP No. 38182, brought to
the CA's attention the issuance of the CLOAs, the CA, per Resolution dated
January 19, 1995, reiterated its ruling that "whether or not the subject property is
covered by the Comprehensive Agrarian Reform Law (R.A. No. 6657) is the
subject matter of a separate case, and we cannot interfere with the same at the
present time." The CA further stated that "(O)ur present decision is, therefore, not
intended to preempt any judgment or prejudice the right of any party in the said
case." 99 It must be noted that at that juncture, the DARAB Decision and
the CA decision in CA-G.R. SP No. 27234, finding the subject property covered
by the CARP Law, is yet to be finally resolved by
this Court in G.R. No. 112526 and in fact, a temporary restraining order was
issued by the Court on December 15, 1993, enjoining the DARAB from enforcing
the effects of the CLOAs. Amante, et al. was likewise restrained from further
clearing the subject property. 100 Hence, the decision of the trialcourt and
the CA denying the writ of injunction was warranted.
Nevertheless, considering that the subject property is agricultural and may be
acquired for distribution to farmer-beneficiaries identified by the DAR under the
CARP, the transfer certificates of title issued in the name of the Republic of the
Philippines and the CLOAs issued by the DAR in the names of Amante, et
al., 101 are valid titles and therefore must be upheld. By virtue thereof, Amante, et
al. who have been issued CLOAs are now the owners of the subject property.
Consequently, the decisions of the trial court in the injunction case and
the CA in CA-G.R. SP No. 38182 must now be set aside, insofar as it orders
Amante, et al. to vacate and/or enjoins them from entering the subject property.
The Court, however, agrees with the CA that Amante, et al. is not entitled to
actual, moral and exemplary damages, as well as attorney's fees. SRRDC's
right of possession over the subject property was predicated on its
claim of ownership, and it cannot be sanctioned in exercising its rights or
protecting its interests thereon. As was ruled by the CA, Amante, et al. is merely
entitled to nominal damages as a result of SRRDC's acts. 102
All is not lost in this case. In its Memorandum dated September 29, 1993, to the
DAR Secretary, the DENR manifested that:
. . . the farmers themselves could be tapped to undertake watershed
management and protection. This community-based approach in natural
resource management, is in fact, being used in numerous watershed
management projects nationwide. Adopting the same approach in the
area is deemed the best possible solution to the case since it will not
prejudice the CLOAs issued to the farmer-beneficiaries. They should,
 however, be required to undertake the necessary reforestation and other
watershed management/rehabilitation measures in the area.

In view of the foregoing, we recommend that a watershed management

plan for the area espousing the community-based approach be drawn-up
jointly by the DAR and DENR. . . . 103
If SRRDC sincerely wants to preserve the property for ecological considerations,
it can be done regardless of who owns it. After all, we are all stewards of this
earth, and it rests on all of us to tend to it.
WHEREFORE, the Second Motion for Reconsideration is GRANTED.
The Court's Decision dated October 12, 2001 in G.R. No. 112526 is SET ASIDE
and the Decision of the Court ofAppeals dated November 5, 1993 in CA-
G.R. SP No. 27234 is AFFIRMED with MODIFICATION, in that the Land
Bank of the Philippines is ordered to convert the trust account in the
name of Sta. Rosa Realty Development Corporation to a deposit account,
subject to a 12% interest per annum from the time the LBP opened a trust
account up to the time said account was actually converted into cash and LBP
bonds deposit accounts. The temporary restraining order issued by the Court on
December 15, 1993, is LIFTED. caAICE

The petition filed by Amante, et al. in G.R. No. 118838 is GRANTED in

that Sta. Rosa Realty Development Corporation is hereby ENJOINED from
disturbing the peaceful possessionof the farmer-beneficiaries with CLOAs. The
Decision of the Court of Appeals dated June 28, 1994 in CA-
G.R. CV No. 38182 is AFFIRMED insofar as the award of nominal damages is
concerned.
The Department of Environment and Natural Resources and the
Department of Agrarian Reform, in coordination with the farmer-beneficiaries
identified by the DAR, are URGED to formulate a community-based watershed
plan for the management and rehabilitation of Barangay Casile.
SO ORDERED.
Davide, Jr., C.J., Ynares-Santiago, Corona and Carpio Morales, JJ., concur.

(Sta. Rosa Realty Development Corp. v. Amante, G.R. No. 112526, 118838,
|||

[March 16, 2005], 493 PHIL 570-615)

 [G.R. No. 107764. October 4, 2002.]

EDNA COLLADO, BERNARDINA TAWAS, JORETO C.

TORRES, JOSE AMO, SERGIO L. MONTEALEGRE, VICENTE
C. TORRES, JOSEPH L. NUÑEZ, GLORIA SERRANO, DANILO
FABREGAS, FERNANDO T. TORRES, LUZ G. TUBUNGBANUA,
CARIDAD T. TUTANA, JOSE C. TORRES, JR., IMELDA
CAYLALUAD, ROSALIE TUTANA, NORMA ASTORIAS, MYRNA
M. LANCION, NORBERTO CAMILOTE, CECILIA MACARANAS,
PEDRO BRIONES, REMEDIOS BANTIGUE, DANTE L.
MONTEALEGRE, AIDA T. GADON, ARMANDO T. TORRES and
FIDELITO ECO, petitioners, vs. COURT OF APPEALS and
REPUBLIC OF THE PHILIPPINES, thru the
Director ofLands, respondents.

BOCKASANJO ISF AWARDEES ASSOCIATION, INC., LITA

MENDOZA, MORADO PREFIDIGNO, TERESITA CRUZ and
CALOMA MOISES, respondents/intervenors.

Britanico Law Office for petitioners.

J.P. Villanueva & Associates for private respondents.
The Solicitor General for public respondents.

SYNOPSIS

On April 25, 1985, petitioners filed with the Land Registration Court an
application for registration of a parcel of land situated in Barangay San Isidro,
Antipolo, Rizal and covered by Survey Plan Psu-162620. At the time petitioners
filed their application, the lot has been reserved as a watershed under EO 33 for
81 years prior to the filing of petitioner's application. The Republic of the
Philippines opposed the application. Thereafter, the Land Registration Court held
that petitioners had adduced sufficient evidence to establish their registrable
rights over the lot. Accordingly, it rendered a decision confirming the imperfect
title of petitioners. The Solicitor General sought the annulment of the decision on
the ground of lack of jurisdiction over the case, specifically over the lot, which he
claimed to be not alienable and disposable. The Court of Appeals granted the
petition and declared the decision of the Land Registration Court null and void
ruling that the Director of Lands has jurisdiction over the subject property
inasmuch as the subject lot is part ofthe public domain.
Hence, the instant petition.
The Supreme Court found the petition bereft of merit. The Court held that the
Land Registration Court has no jurisdiction over non-registrable properties, such
as public navigable rivers which are parts of the public domain, and cannot
validly adjudged the registration of title in favor of private applicant. In this case,
the Court found that the subject lot, being a watershed reservation, is not
alienable and disposable public land. It held that once a parcel of land is included
within a watershed reservation duly established by Executive Proclamation, a
presumption arises that the land continues to be a part of such Reservation until
clear and convincing evidence of subsequent reclassification is shown. The
evidence of the petitioners do not clearly and convincingly show that the lot had
been officially released from the Marikina Watershed Reservation to form
part of the alienable and disposable lands of the public domain. Hence, any title
to the lot is void ab initio. The Land Registration Court never acquired jurisdiction
over the subject lot. Thus, all proceedings of the Land
Registration Court involving the subject lot were, therefore, null and void.

SYLLABUS

1. CIVIL LAW; LAND TITLES AND DEEDS; REGISTRATION OF PUBLIC

LANDS; JUDICIAL CONFIRMATION OF IMPERFECT TITLE; APPLICANT
MUST OVERCOME THE PRESUMPTION THAT THE LAND HE IS APPLYING
FOR IS PART OF THE PUBLIC DOMAIN. — An applicant for
confirmation of imperfect title bears the burden of proving that he meets the
requirements of Section 48 of CA 141, as amended. He must overcome the
presumption that the land he is applying for is part of the public domain and that
he has an interest therein sufficient to warrant registration in his name arising
from an imperfect title. An imperfect title may have been derived from old
Spanish grants such as a titulo real or royal grant, a concession especial or
special grant, a composicion con el estado or adjustment title, or a titulo de
compra or title through purchase. Or, that he has had continuous, open and
notorious possession and occupation of agricultural lands of the public domain
under a bona fide claim of ownership for at least thirty years preceding the
filing of his application as provided by Section 48 (b) CA 141.
2. ID.; ID.; ID.; REQUISITES; CASE AT BAR. — Originally, Section 48(b) of CA
141 provided for possession and occupation of lands of the public domain since
July 26, 1894. This was superseded by RA 1942 which provided for a simple
thirty-year prescriptive period of occupation by an applicant for judicial
confirmation of an imperfect title. The same, however, has already been
amended by Presidential Decree No. 1073, approved on January 25, 1977, the
law prevailing at the time petitioners' application for registration was filed on April
25, 1985. As amended, Section 48 (b) now reads: . . . "(b) Those who by
themselves or through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of agricultural
lands of the public domain, under a bona fide claim of acquisition or ownership,
for at least thirty years immediately preceding the filing of the application for
confirmation of title, except when prevented by wars or force majeure. Those
shall be conclusively presumed to have performed all the conditions essential to
a Government grant and shall be entitled to a certificate of title under the
provisions of this chapter." Interpreting Section 48 (b) of CA 141, the Court stated
that the Public Land Act requires that the applicant must prove the following: "(a)
that the land is alienable public land and (b) that his open, continuous, exclusive
and notorious possession and occupation of the same must either be since time
immemorial or for the period prescribed in the Public Land Act. When the
conditions set by law are complied with, the possessor of the land, by
operation of law, acquires a right to a grant, a government grant, without the
necessity of a certificate of title being issued." Petitioners do not claim to have
documentary title over the Lot. Their right to register the Lot is predicated mainly
upon continuous possession since 1902. Clearly, petitioners were unable to
acquire a valid and enforceable right or title because of the failure to complete
the required period of possession, whether under the original Section 48
(b) of CA 141 prior to the issuance of EO 33, or under the amendment by RA
1942 and PD 1073. There is no proof that prior to the issuance of EO 33 in 1904,
petitioners had acquired ownership or title to the Lot either by deed or by any
other mode of acquisition from the State, as for instance by acquisitive
prescription. As of 1904, Sesinando Leyva had only been in possession for two
years. Verily, petitioners have not possessed the parcel of land in the manner
and for the number of years required by law for the confirmation of imperfect title.
3. ID.; ID.; ID.; POSSESSION OF FOREST LANDS OR OTHER INALIENABLE
PUBLIC LANDS CANNOT RIPEN INTO PRIVATE OWNERSHIP; LOT
RESERVED AS WATERSHED IS NOT SUSCEPTIBLE TO OCCUPANCY,
DISPOSITION, CONVEYANCE OR ALIENATION. — Assuming that the Lot was
alienable and disposable land prior to the issuance of EO 33 in 1904,EO
33 reserved the Lot as a watershed. Since then, the Lot became non-disposable
and inalienable public land. At the time petitioners filed their application on April
25, 1985, the Lot has been reserved as a watershed under EO 33 for 81 years
prior to the filing of petitioners' application. The period of occupancy after the
issuance of EO 33 in 1904 could nolonger be counted because as a watershed
reservation, the Lot was no longer susceptible of occupancy, disposition,
conveyance or alienation. Section 48 (b) of CA 141, as amended, applies
exclusively to alienable and disposable public agricultural land. Forest lands,
including watershed reservations, are excluded. It is axiomatic that the
possessionof forest lands or other inalienable public lands cannot ripen into
private ownership. In Municipality of Santiago, Isabela vs. Court of Appeals,
the Court declared that inalienable public lands — ". . . cannot be acquired by
acquisitive prescription. Prescription, both acquisitive and extinctive, does not run
against the State. 'The possession of public land, however long the period may
have extended, never confers title thereto upon the possessor because the
statute of limitations with regard to public land does not operate against the
State, unless the occupant can prove possession and occupation of the
same under claim of ownership for the required number of years to constitute a
grant from the State.''
4. ID.; ID.; ID.; RULES WITH RESPECT THERETO DO NOT APPLY UNLESS
AND UNTIL THE LAND CLASSIFIED AS WATERSHED RESERVATION IS
RELEASED IN AN OFFICIAL PROCLAMATION SO THAT IT MAY FORM
PART OF THE DISPOSABLE AGRICULTURAL LANDS OF THE PUBLIC
DOMAIN. — Proclamation No. 1283 has since been amended
byProclamation No. 1637 issued on April 18, 1977. Proclamation No.
1637 revised the area and location of the proposed townsite. According to then
DENR Secretary Victor O. Ramos, Proclamation No. 1637 excluded Lot A
(of which the Lot claimed by petitioners is part) for townsite purposes and
reverted it to MWR coverage. A positive act (e.g., an official proclamation) of the
Executive Department is needed to declassify land which had been earlier
classified as a watershed reservation and to convert it into alienable or
disposable land for agricultural or other purposes. Unless and until the land
classified as such is released in an official proclamation so that it may form
part of the disposable agricultural lands of the public domain, the rules on
confirmation of imperfect title do not apply.
5. ID.; ID.; ID.; ONCE A PARCEL OF LAND IS INCLUDED WITHIN A
WATERSHED RESERVATION DULY ESTABLISHED BY EXECUTIVE
PROCLAMATION, A PRESUMPTION ARISES THAT THE LAND CONTINUES
TO BE PART OF SUCH RESERVATION UNTIL CLEAR AND CONVINCING
EVIDENCE OF SUBSEQUENT DECLASSIFICATION IS SHOWN. — The
principal document presented by petitioners to prove the private character of the
Lot is the Certification of the Bureau of Forest Development dated March 18,
1986 that the Lot is excluded from the Marikina Watershed (Exh. R). The
certification on which petitioners rely that a reclassification had occurred, and that
the Lot is covered by the reclassification, is contradicted by several documents
submitted by the Solicitor General before the land registration court. The
Solicitor General submitted to the land registration court a Report dated March 2,
1988, signed by Administrator Teodoro G. Bonifacio of the then National Land
Titles and Deeds Registration Administration, confirming that the Lot described in
Psu-162620 forms part of the MWR. He thus recommended the dismissal of the
application for registration. Likewise, in a letter dated November 11, 1991, the
Deputy Land Inspector, DENR, Region IV, Community Environment and Natural
Resources Office, Antipolo, Rizal, similarly confirmed that the Lot is within the
MWR. Lastly, the Solicitor Generalpointed out that attached to petitioner Edna
T. Collado's [as original applicant] application is the technical description of the
Lot signed by Robert C. Pangyarihan, Officer-in-Charge of the Survey
Division of the Bureau of Lands. This technical description categorically stated
that the Lot "is inside IN-12 Mariquina Watershed." The evidence of record thus
appears unsatisfactory and insufficient to show clearly and positively that the Lot
had been officially released from the Marikina Watershed Reservation to form
part of the alienable and disposable lands of the public domain. We hold that
once a parcel of land is included within a watershed reservation duly established
by Executive Proclamation, as in the instant case, a presumption arises that the
land continues to be part of such Reservation until clear and convincing
evidence of subsequent declassification is shown.

6. ID.; ID.; ID.; APPLICANT MUST BE IN OPEN, CONTINUOUS, EXCLUSIVE

AND NOTORIOUS POSSESSION AND OCCUPATION OF THE LOT FOR AT
LEAST THIRTY YEARS IMMEDIATELY PRECEDING THE FILING OF THE
APPLICATION. — It is obvious, based on the facts on record that neither
petitioners nor their predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of the Lot for at least thirty
years immediately preceding the filing of the application for confirmation oftitle.
Even if they submitted sufficient proof that the Lot had been excluded from the
MWR upon the issuance of Proclamation No. 1283 on June 21, 1974, petitioners'
possession as of the filing of their application on April 25, 1985 would have been
only eleven years counted from the issuance of the proclamation in 1974. The
result will not change even if we tack in the two years Sesinando Leyva allegedly
possessed the Lot from 1902 until the issuance of EO 33 in 1904. Petitioners'
case falters even more because of the issuanceof Proclamation No. 1637 on
April 18, 1977. According to then DENR Secretary Victor
Ramos, Proclamation No. 1637 reverted Lot A or the townsite reservation, where
petitioners' Lot is supposedly situated, back to the MWR.
7. ID.; ID.; ID.; A FORESTED AREA CLASSIFIED AS FOREST
LAND OF PUBLIC DOMAIN DOES NOT LOSE SUCH CLASSIFICATION
SIMPLY BECAUSE LOGGERS OR SETTLERS MAY HAVE STRIPPED
IT OF ITS FOREST COVER. — It is of no moment if the areas of the MWR are
now fairly populated and vibrant communities as claimed by petitioners. The
following ruling may be applied to this case by analogy: "A forested area
classified as forest land of the public domain does not lose such classification
simply because loggers or settlers may have stripped it of its forest cover.
Parcels of land classified as forest land may actually be covered with grass or
planted to crops by kaingin cultivators or other farmers. 'Forest lands' do not
have to be on mountains or in out of the way places. Swampy areas covered by
mangrove trees, nipa palms and other trees growing in brackish or sea water
may also be classified as forest land. The classification is descriptive of its legal
nature or status and does not have to be descriptive of what the land actually
looks like. Unless and until the land classified as 'forest' is released in an official
proclamation to that effect so that it may form part of the disposable agricultural
lands of the public domain, the rules on confirmation of imperfect title do not
apply."
8. REMEDIAL LAW; COURTS; LAND
REGISTRATION COURT; NO JURISDICTION OVER NON-REGISTRABLE
PROPERTIES. — It is now established that the Lot, being a watershed
reservation, is not alienable and disposable public land. The evidence of the
petitioners do not clearly and convincingly show that the Lot, described as Lot
Psu-162620, ceased to be a portion of the area classified as a watershed
reservation of the public domain. Any title to the Lot is void ab initio. In
view of this, the alleged procedural infirmities attending the filing of the petition
for annulment of judgment are immaterial since the land registration court never
acquired jurisdiction over the Lot. All proceedings of the land
registration court involving the Lot are therefore null and void. We apply our
ruling in Martinez vs. Court of Appeals, as follows: "The Land
Registration Court has no jurisdiction over non-registrable properties, such as
public navigable rivers which are parts of the public domain, and cannot validly
adjudge the registration of title in favor of private applicant. Hence, the
judgment of the Court of First Instance of Pampanga as regards the Lot No.
2 of certificate of Title No. 15856 in the name of petitioners may be attacked at
any time, either directly or collaterally, by the State which is not bound by any
prescriptive period provided for by the Statute of Limitations."
9. ID.; ACTIONS; DOCTRINE OF RES JUDICATA AND ESTOPPEL; DOES
NOT APPLY TO SILENCE THE STATE'S CLAIM OVER PUBLIC LANDS;
RIGHT OF REVERSION OR RECONVEYANCE TO THE STATE OF PUBLIC
PROPERTIES REGISTERED AND WHICH ARE NOT CAPABLE OF PRIVATE
APPROPRIATION DOES NOT PRESCRIBE. — We also hold that environmental
consequences in this case override concerns over technicalities and
rules of procedure. In Republic vs. De los Angeles, which involved the
registration of public lands, specifically parts of the sea, the Court rejected the
principle of res judicata and estoppel to silence the Republic's claim over public
lands. The Court said: "It should be noted further that the doctrine of estoppel or
laches does not apply when the. Government sues as a sovereign or asserts
governmental rights, nor does estoppel or laches validate an act that
contravenes law or public policy, and that res judicata is to be disregarded if its
application would involve the sacrifice of justice to technicality." The Courtfurther
held that "the right of reversion or reconveyance to the State of the public
properties registered and which are not capable of private appropriation or
private acquisition does not prescribe."
10. ID.; INTERVENTION; RULE; EXCEPTION; CASE AT BAR. — As a rule,
intervention is allowed "before rendition of judgment by the trial court," as Section
2, Rule 19 expressly provides. However, the Court has recognized exceptions to
this rule in the interest of substantial justice. Mago vs. Court of Appeals reiterated
the ruling in Director of Lands vs.Court of Appeals, where the Court allowed the
motions for intervention even when the case had already reached this Court.
Thus, in Mago the Court held that: "It is quite clear and patent that the motions
for intervention filed by the movants at this stage of the proceedings where trial
had already been concluded . . . and on appeal . . . the same affirmed by
the Court of Appeals and the instant petition for certiorari to review said judgment
is already submitted for decision by the Supreme Court, are obviously and,
manifestly late, beyond the period prescribed under . . . Section 2, Rule 12 of the
Rules of Court. But Rule 12 of the Rules of Court, like all other Rules therein
promulgated, is simply a rule of procedure, the whole purpose and
object of which is to make the powers of the Court fully and completely available
for justice. The purpose of procedure is not to thwart justice. Its proper aim is to
facilitate the application of justice to the rival claims of contending parties. It was.
created not to hinder and delay but to facilitate and promote the
administration of justice. It does not constitute the thing itself which courts are
always striving to secure to litigants. It is designed as the means best adopted to
obtain that thing. In other words, it is a means to an end."

DECISION

CARPIO, J : p

The Case
This Petition 1 seeks to set aside the Decision of the Court of Appeals, 2 dated
June 22, 1992, in CA-G.R. SP No. 25597, which declared null and void the
Decision 3 dated January 30, 1991 of the Regional Trial Court of Antipolo, Rizal,
Branch 71, in LRC No. 269-A, LRC Rec. No. N-59179, confirming the imperfect
title of petitioners over a parcel of land.
The Facts
On April 25, 1985, petitioner Edna T. Collado filed with the land
registration court an application for registration of a parcel of land with an
approximate area of 1,200,766 square meters or 120.0766 hectares ("Lot" for
brevity). The Lot is situated in Barangay San Isidro (formerly known as Boso-
boso), Antipolo, Rizal, and covered by Survey Plan Psu-162620. Attached to the
application was the technical description of the Lot as Lot Psu-162620 signed by
Robert C. Pangyarihan, Officer-in-Charge of the Survey Division,
Bureau of Lands, which stated, "[t]his survey is inside IN-12 Mariquina
Watershed." On March 24, 1986, petitioner Edna T. Collado filed an Amended
Application to include additional co-applicants.4 Subsequently, more applicants joined
(collectively referred to as "petitioners" for brevity). 5

The Republic of the Philippines, through the Solicitor General, and the
Municipality of Antipolo, through its Municipal Attorney and the Provincial
Fiscal of Rizal, filed oppositions to petitioners' application. In due course, the land
registration court issued an order of general default against the whole world with
the exception of the oppositors.
Petitioners alleged that they have occupied the Lot since time immemorial. Their
possession has been open, public, notorious and in the concept of owners. The
Lot was surveyed in the name of Sesinando Leyva, one of their predecessors-in-
interest, as early as March 22, 1902. Petitioners declared the Lot for taxation
purposes and paid all the corresponding real estate taxes. According to them,
there are now twenty-five co-owners in pro-indiviso shares of five hectares each.
During the hearings, petitioners submitted evidence to prove that there have
been nine transfers of rights among them and their predecessors-in-interest, as
follows:
"1. SESINANDO LEYVA was the earliest known predecessor-in-
interest of the Applicants who was in actual, open, notorious and
continuous possession of the property in the concept of owner.
He had the property surveyed in his name on 22 March
1902 (Exhibit "W" and "W-1" testimonies of J. Torres on 16
December 1987 and Mariano Leyva on 29 December 1987).
2. DIOSDADO LEYVA, is the son of Sesinando Leyva, who inherited the
property. He had the property resurveyed in his name on May 21-
28, 1928 (Exhibit "X" and "X-1"; testimony of Mariano Leyva, a
son of Diosdado Leyva).
3. GREGORIO CAMANTIQUE bought the property from Diosdado Leyva
before the Japanese Occupation of the Philippines during World
War II. He owned and possessed the property until 1958. He
declared the property for tax purposes, the latest of which was
under Tax Declaration No. 7182 issued on 3 February
1957 (Exhibit "I" and testimony of Mariano Leyva, supra).
4. ANGELINA REYNOSO, bought the property from Gregorio
Camantique by virtue of a Deed of Sale on 3 February
1958 (Exhibit "H"). During the ownership of the property by
Angelina Reynoso, Mariano Leyva the grandson of Sesinando
Leyva, the previous owner, attended to the farm.
 (Testimony of Mariano Leyva, supra). Angelina Reynoso declared
the property in her name under Tax Declaration No.
7189 in 4 February 1958, under Tax Declaration No. 8775 on 3
August 1965, under Tax Declaration No. 16945on 15 December
1975, and under Tax Declaration No. 03-06145 on 25 June 1978.

5. MYRNA TORRES bought the property from Angelina Reynoso on 16

October 1982through a Deed of Sale (Exhibit "G").
6. EDNA COLLADO bought the property from Myrna Torres in
a Deed of Sale dated 28 April 1984 (Exhibit "P-1" to "P-3").
7. Additional owners BERNARDINA TAWAS, JORETO TORRES, JOSE
AMO, VICENTE TORRES and SERGIO MONTEALEGRE who
bought portions of the property from Edna Colladothrough
a Deed of Sale on 6 November 1985 (Exhibit "Q" to "Q-3").
8. And more additional Owners JOSEPH NUÑEZ, DIOSDADO
ARENOS, DANILO FABREGAS, FERNANDO TORRES, LUZ
TUBUNGBANUA, CARIDAD TUTANA, JOSE TORRES JR.,
RODRIGO TUTANA, ROSALIE TUTANA, NORMA ASTORIAS,
MYRNA LANCION, CHONA MARCIANO, CECILIA
MACARANAS, PEDRO BRIONES, REMEDIOS BANTIQUE,
DANTE MONTEALEGRE, ARMANDO TORRES, AIDA GADON
and AMELIA M. MALAPAD bought portions of the property in
a Deed of Sale on 12 May 1986 (Exhibit "S" to "S-3").
9. Co-owners DIOSDADO ARENOS, RODRIGO TUTANA, CHONA
MARCIANO and AMELIA MALAPAD jointly sold their shares to
new OWNERS GLORIA R. SERRANO, IMELDA CAYLALUAD,
NORBERTO CAMILOTE and FIDELITO ECO through
a Deed of Sale dated 18 January 1987 (Exhibit "T" to "T-9")." 6
During the hearing on January 9, 1991, only the assistant provincial prosecutor
appeared without the Solicitor General. For failure of the oppositors to present
their evidence, the land registration court issued an order considering the case
submitted for decision based on the evidence of the petitioners. The court later
set aside the order and reset the hearing to January 14, 1991 for the
presentation of the evidence of the oppositors. On this date, counsel for
oppositors failed to appear again despite due notice. Hence, thecourt again
issued an order submitting the case for decision based on the evidence of the
petitioners.
The Trial Court's Ruling
After appraisal of the evidence submitted by petitioners, the land
registration court held that petitioners had adduced sufficient evidence to
establish their registrable rights over the Lot. Accordingly, the court rendered a
decision confirming the imperfect title of petitioners. We quote the pertinent
portions of the court's decision, as follows:
"From the evidence presented, the Court finds that from the
testimony of the witnesses presented by the Applicants, the property
applied for is in actual, open, public and notorious possession by the
applicants and their predecessor-in-interest since time immemorial and
said possession had been testified to by witnesses Jimmy Torres,
Mariano Leyva, Sergio Montealegre, Jose Amo and one Chona who
were all cross-examined by Counsel for Oppositor Republic of the
Philippines.
Evidence was likewise presented that said property was declared for
taxation purposes in the names of the previous owners and the
corresponding taxes were paid by the Applicants and the previous
owners and said property was planted to fruit bearing trees; portions to
palay and portions used for grazing purposes.
To the mind of the Court, Applicants have presented sufficient evidence
to establish registrable title over said property applied for by them.
On the claim that the property applied for is within the Marikina
Watershed, the Court can only add that all Presidential Proclamations
like the Proclamation setting aside the Marikina Watershed are subject
to "private rights."
In the case of Municipality of Santiago vs. Court of Appeals, 120 SCRA
734, 1983 "private rights" is proof of acquisition through (sic) among
means of acquisition of public lands.
In the case of Director of Lands vs. Reyes, 68 SCRA 193-195, by
"private rights" means that applicant should show clear and convincing
evidence that the property in question was acquired by applicants or
their ancestors either by composition title from the Spanish government
or by Possessory Information title, or any other means for the
acquisition ofpublic lands . . ." (Italics supplied).
The Court believes that from the evidence presented as above stated,
Applicants have acquired private rights to which the Presidential
Proclamation setting aside the Marikina Watershed should be subject to
such private rights.
At any rate, the Court notes that evidence was presented by the
applicants that as per Certification issued by the Bureau of Forest
Development dated March 18, 1980, the area applied for was verified to
be within the area excluded from the operation of the Marikina
Watershed Lands Executive Order No. 33 dated July 26, 1904
per Proclamation No. 1283 promulgated on June 21, 1974 which
established the Boso-boso Town Site Reservation, amended
 by Proclamation No. 1637 dated April 18, 1977 known as the Lungsod
Silangan Townsite Reservation. (Exhibit "K")." 7
In a motion dated April 5, 1991, received by the Solicitor General on April 6,
1991, petitioners alleged that the decision dated January 30, 1991 confirming
their title had become final after the Solicitor General received a copy of the
decision on February 18, 1991. Petitioners prayed that the land
registration court order the Land Registration Authority to issue the necessary
decree in their favor over the Lot.
On April 11, 1991, the Solicitor General inquired from the Provincial
Prosecutor of Rizal whether the land registration court had already rendered a
decision and if so, whether the Provincial Prosecutor would recommend an
appeal. However, the Provincial Prosecutor failed to answer the query.
According to the Solicitor General, he received on April 23, 1991 a copy of the
land registration court's decision dated January 30, 1991, and not on February
18, 1991 as alleged by petitioners in their motion.
In the meantime, on May 7, 1991, the land registration court issued an order
directing the Land Regulation Authority to issue the corresponding
decree of registration in favor ofthe petitioners.
On August 6, 1991, the Solicitor General filed with the Court of Appeals a Petition
for Annulment of Judgment pursuant to Section 9(2) of BP Blg. 129 on the
ground that there had been no clear showing that the Lot had been previously
classified as alienable and disposable making it subject to private appropriation.
On November 29, 1991, Bockasanjo ISF Awardees Association, Inc., an
association of holders of certificates of stewardship issued by the
Department of Environment and Natural Resources ("DENR" for brevity) under
its Integrated Social Forestry Program ("ISF" for brevity), filed with
the Court of Appeals a Motion for Leave to Intervene and to Admit Petition-In-
Intervention. They likewise opposed the registration and asserted that the Lot,
which is situated inside the Marikina Watershed Reservation, is inalienable. They
claimed that they are the actual occupants of the Lot pursuant to the
certificates of stewardship issued by the DENR under the ISF for tree planting
purposes.
The Court of Appeals granted the motion to intervene verbally during the
preliminary conference held on April 6, 1992. During the preliminary conference,
all the parties as represented by their respective counsels agreed that the only
issue for resolution was whether the Lot in question is part of the public domain. 8
The Court of Appeals' Ruling
In a decision dated June 22, 1992, the Court of Appeals granted the petition and
declared null and void the decision dated January 30, 1991 of the land
registration court. TheCourt of Appeals explained thus:
"Under the Regalian Doctrine, which is enshrined in the 1935 (Art. XIII,
Sec. 1), 1973 (Art. XIV, Sec. 8), and 1987 Constitution (Art. XII, Sec. 2),
all lands of the public domain belong to the State. An applicant, like the
private respondents herein, for registration of a parcel of land bears the
burden of overcoming the presumption that the land sought to be
registered forms part of the public domain (Director of Lands vs.
Aquino, 192 SCRA 296).
A positive Act of government is needed to declassify a public land and to
convert it into alienable or disposable land for agricultural or other
purposes (Republic vs. Bacas, 176 SCRA 376).
In the case at bar, the private respondents failed to present any
evidence whatsoever that the land applied for as described in Psu-
162620 has been segregated from the bulk ofthe public domain and
declared by competent authority to be alienable and disposable. Worse,
the technical description of Psu-162620 signed by Robert C.
Pangyarihan, Officer-in-Charge, Survey Division, Bureau of Lands,
which was attached to the application of private respondents,
categorically stated that "This survey is inside IN-12 Mariquina
Watershed.""
That the land in question is within the Marikina Watershed Reservation is
confirmed by the Administrator of the National Land Titles and Deeds in
a Report, dated March 2, 1988, submitted to the respondent Court in LR
Case No. 269-A. These documents readily and effectively negate the
allegation in private respondent Collado's application that "said
parcel of land known as Psu-162620 is not covered by any form of title,
nor any public land application and are not within any government
reservation (Par. 8, Application; Italics supplied). The
respondent court could not have missed the import of these vital
documents which are binding upon the courts inasmuch as it is the
exclusive prerogative of the Executive Department to classify public
lands. They should have forewarned the respondent judge from
assuming jurisdiction over the case.
". . . inasmuch as the said properties applied for by petitioners are
part of the public domain, it is the Director of Lands who has
jurisdiction in the disposition of the same (subject to the
approval of the Secretary of Natural Resources and
Environment), and not the courts. . . . Even assuming that
petitioners did have the said properties surveyed even before the
same was declared to be part of the Busol Forest Reservation,
the fact remains that it was so converted into a forest
 reservation, thus it is with more reason that this action must
fail. Forest lands are inalienable and possession
thereof, no matter how long, cannot convert the same into private
property. And courts are without jurisdiction to adjudicate lands
within the forest
zone. (Heirs of Gumangan vs. Court of Appeals. 172 SCRA 563;
Italics supplied).

Needless to say, a final judgment may be annulled on the

ground of lack of jurisdiction, fraud or that it is contrary to law
(Panlilio vs. Garcia, 119 SCRA 387, 391) and a decision rendered
without jurisdiction is a total nullity and may be struck down at any time
(Suarez vs. Court of Appeals, 186 SCRA 339)." 9
Hence, the instant petition.
The Issues
The issues raised by petitioners are restated as follows:
I
WHETHER THE COURT OF APPEALS ERRED OR GRAVELY
ABUSED ITS DISCRETION IN REVERSING THE DECISION OF THE
TRIAL COURT GRANTING THE APPLICATION OF THE
PETITIONERS FOR CONFIRMATION OF TITLE;
II
WHETHER THE COURT OF APPEALS ERRED OR GRAVELY
ABUSED ITS DISCRETION IN GIVING DUE COURSE TO THE
PETITION FOR ANNULMENT OF JUDGMENT FILED BY THE
REPUBLIC LONG AFTER THE DECISION OF THE
TRIAL COURT HAD BECOME FINAL;
III
WHETHER THE COURT OF APPEALS ERRED OR GRAVELY
ABUSED ITS DISCRETION IN GIVING DUE COURSE TO THE
INTERVENORS' PETITION FOR INTERVENTION WHICH WAS FILED
OUT OF TIME OR LONG AFTER THE DECISION OF THE
TRIAL COURT HAD BECOME FINAL.
The Court's Ruling
The petition is bereft of merit.
First Issue: whether petitioners have registrable title over the Lot.
There is no dispute that Executive Order No. 33 ("EO 33" for brevity) dated July
26, 1904 10 established the Marikina Watershed Reservation ("MWR" for brevity) situated in the
Municipality of Antipolo, Rizal. Petitioners even concede that the Lot, described as Lot Psu-162620, is inside
the technical, literal description of the MWR. However, the main thrust of petitioners' claim over the Lot is
that "all Presidential proclamations like the proclamation setting aside the Marikina Watershed Reservation
are subject to private rights." They point out that EO 33 contains a saving clause that the
reservations are "subject to existing private rights, if any there be." Petitioners contend
that their claim of ownership goes all the way back to 1902, when their known
predecessor-in-interest, Sesinando Leyva, laid claim and ownership over the Lot. They
claim that the presumption of law then prevailing under the Philippine Bill of 1902
and Public Land Act No. 926 was that the land possessed and claimed by individuals as
their own are agricultural lands and therefore alienable and disposable. They conclude
that private rights were vested on Sesinando Leyva before the issuance of EO 33, thus
excluding the Lot from the Marikina Watershed Reservation.
Petitioners' arguments find no basis in law.
The Regalian Doctrine: An Overview
Under the Regalian Doctrine, all lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State. 11 The Spaniards
first introduced the doctrine to the Philippines through the Laws of the Indies and
the Royal Cedulas, specifically, Law 14, Title 12, Book 4 of the Novisima
Recopilacion de Leyes de las Indias 12 which laid the foundation that "all lands
that were not acquired from the Government, either by purchase or by grant,
belong to the public domain." 13 Upon the Spanish conquest ofthe Philippines,
ownership of all "lands, territories and possessions" in the Philippines passed to
the Spanish Crown. 14
The Laws of the Indies were followed by the Ley Hipotecaria or the Mortgage
Law of 1893. The Spanish Mortgage Law provided for the systematic
registration of titles and deeds as well as possessory claims. The Royal
Decree of 1894 or the "Maura Law" partly amended the Mortgage Law as well as
the Law of the Indies. The Maura Law was the last Spanish land law promulgated
in the Philippines. It required the "adjustment" or registration of all agricultural
lands, otherwise the lands would revert to the state. 15
Four years later, Spain ceded to the government of the United States all rights,
interests and claims over the national territory of the Philippine Islands through
the Treaty of Parisof December 10, 1898. In 1903, the United States colonial
government, through the Philippine Commission, passed Act No. 926, the
first Public Land Act, which was described as follows:
"Act No. 926, the first Public Land Act, was passed in pursuance of the
provisions of the Philippine Bill of 1902. The law governed the
disposition of lands of the public domain. It prescribed rules and
regulations for the homesteading, selling and leasing of portions of the
public domain of the Philippine Islands, and prescribed the terms and
conditions to enable persons to perfect their titles to public lands in the
Islands. It also provided for the "issuance of patents to certain native
settlers upon public lands," for the establishmentof town sites and
 sale of lots therein, for the completion of imperfect titles, and for the
cancellation or confirmation of Spanish concessions and grants in the
Islands." In short,the Public Land Act operated on the assumption that
title to public lands in the Philippine Islands remained in the government;
and that the government's title to public land sprung from the
Treaty of Paris and other subsequent treaties between Spain and the
United States. The term "public land" referred to all lands of the public
domain whose title still remained in the government and are thrown open
to private appropriation and settlement, and excluded the patrimonial
property of the government and the friar lands." 16
Thus, it is plain error for petitioners to argue that under the Philippine
Bill of 1902 and Public Land Act No. 926, mere possession by private
individuals of lands creates the legal presumption that the lands are alienable
and disposable.
Act 2874, the second Public Land Act, superseded Act No. 926 in 1919. After the
passage of the 1935 Constitution, Commonwealth Act No. 141 ("CA 141" for
brevity) amended Act 2874 in 1936. CA 141, as amended, remains to this day as
the existing general law governing the classification and
disposition of lands of the public domain other than timber and mineral lands. 17
In the meantime, in order to establish a system of registration by which recorded
title becomes absolute, indefeasible and imprescriptible, the legislature
passed Act 496, otherwise known as the Land Registration Act, which took effect
on February 1, 1903. Act 496 placed all registered lands in the Philippines under
the Torrens system. 18 The Torrens system requires the government to issue a
certificate of title stating that the person named in the title is the owner of the
property described therein, subject to liens and encumbrances annotated on the
title or reserved by law. The certificate of title is indefeasible and imprescriptible
and all claims to the parcel of land are quieted upon issuanceof the
certificate. 19 PD 1529, known as the Property Registration Decree enacted on
June 11, 1978, 20 amended and updated Act 496.
The 1935, 1973, 1987 Philippine Constitutions
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine
substituting, however, the state, in lieu of the King, as the owner of all lands and
waters of the public domain. 21 Justice Reynato S. Puno, in his separate opinion
in Cruz vs. Secretary of Environment and Natural Resources, 22 explained thus:
"One of the fixed and dominating objectives of the 1935 Constitutional
Convention was the nationalization and conservation of the natural
resources of the country. There was an overwhelming sentiment in the
Convention in favor of the principle of state ownership of natural
resources and the adoption of the Regalian doctrine. State
ownership ofnatural resources was seen as a necessary starting point to
 secure recognition of the state's power to control their disposition,
exploitation, development, or utilization. The delegates to the
Constitutional Convention very well knew that the concept of State
ownership of land and natural resources was introduced by the
Spaniards, however, they were not certain whether it was continued and
applied by the Americans. To remove all doubts, the Convention
approved the provision in the Constitution affirming the Regalian
doctrine."
Thus, Section 1, Article XIII 23 of the 1935 Constitution, on "Conservation and
Utilization of Natural Resources" barred the alienation of all natural resources
except public agricultural lands, which were the only natural resources the State
could alienate. The 1973 Constitution reiterated the Regalian doctrine in Section
8, Article XIV 24 on the "National Economy and the Patrimony of the
Nation". The 1987 Constitution reaffirmed the Regalian doctrine in Section
2 of Article XII 25 "National Economy and Patrimony."
Both the 1935 and 1973 Constitutions prohibited the alienation of all natural
resources except agricultural lands of the public domain. The 1987
Constitution readopted this policy. Indeed, all lands of the public domain as well
as all natural resources enumerated in the Philippine Constitution belong to the
State.
Watershed Reservation is a Natural Resource
The term "natural resource" includes "not only timber, gas, oil coal, minerals,
lakes, and submerged lands, but also, features which supply a human need and
contribute to the health, welfare, and benefit of a community, and are essential to
the well-being thereof and proper enjoyment of property devoted to park and
recreational purposes." 26
In Sta. Rosa Realty Development Corp. vs. Court of Appeals, et
al., 27 the Court had occasion to discourse on watershed areas.
The Court resolved the issue of whether the parcelof land which the
Department of Environment and Natural Resources had assessed to be a
watershed area is exempt from the coverage of RA No. 6657 or
the Comprehensive Agrarian Reform Law ("CARL" for
brevity). 28 The Court defined watershed as "an area drained by a river and its
tributaries and enclosed by a boundary or divide which separates it from adjacent
watersheds." However, the Court also recognized that:
"The definition does not exactly depict the complexities of a watershed.
The most important product of a watershed is water which is one of the
most important human necessit(ies). The protection of watershed
ensures an adequate supply of water for future generations and the
control of flashfloods that not only damage property but also cause
 loss of lives. Protection of watersheds is an "intergenerational"
responsibility that needs to be answered now."

Article 67 of the Water Code of the Philippines (PD 1067) provides:

"Art. 67. Any watershed or any area of land adjacent to any surface
water or overlying any ground water may be declared by the
Department of Natural Resources as a protected area. Rules and
Regulations may be promulgated by such Department to prohibit or
control such activities by the owners or occupants thereof within the
protected area which may damage or cause the deterioration of the
surface water or ground water or interfere with the investigation, use,
control, protection, management or administration of such waters."
The Court in Sta. Rosa Realty also recognized the need to protect watershed
areas and took note of the report of the Ecosystems Research and Development
Bureau (ERDB), a research arm of the DENR, regarding the environmental
assessment of the Casile and Kabanga-an river watersheds involved in that
case. That report concluded as follows:
"The Casile barangay covered by CLOA in question is situated in the
heartland of both watersheds. Considering the barangays proximity to
the Matangtubig waterworks, the activities of the farmers which are in
conflict with proper soil and water conservation practices jeopardize and
endanger the vital waterworks. Degradation of the land would have
double edge detrimental effects. On the Casile side this would mean
direct siltation of the Mangumit river which drains to the water
impounding reservoir below. On the Kabanga-an side, this would mean
destruction of forest covers which acts as recharged areas of the
Matangtubig springs. Considering that the people have little if no direct
interest in the protection of the Matangtubig structures they couldn't care
less even if it would be destroyed.
The Casile and Kabanga-an watersheds can be considered a most vital
life support system to thousands of inhabitants directly and indirectly
affected by it. From these watersheds come the natural God-given
precious resource — water. . . .
Clearing and tilling of the lands are totally inconsistent with sound
watershed management. More so, the introduction of earth disturbing
activities like road building and erectionof permanent infrastructures.
Unless the pernicious agricultural activities of the Casile farmers are
immediately stopped, it would not be long before these watersheds
would cease to be of value. The impact of watershed degradation
threatens the livelihood of thousands of people dependent upon it.
Toward this, we hope that an acceptable comprehensive watershed
 development policy and program be immediately formulated and
implemented before the irreversible damage finally happens."
The Court remanded the case to the Department of Agriculture and
Adjudication Board or DARAB to re-evaluate and determine the nature of the
parcels of land involved in order to resolve the issue of its coverage by
the CARL.
Sta. Rosa Realty gives us a glimpse of the dangers posed by the
misuse of natural resources such as watershed reservations which are akin to
forest zones. Population growth and industrialization have taken a heavy toll on
the environment. Environmental degradation from unchecked human activities
could wreak havoc on the lives of present and future generations. Hence, by
constitutional fiat, natural resources remain to this day inalienable
properties of the State.
Viewed under this legal and factual backdrop, did petitioners acquire, as they
vigorously argue, private rights over the parcel of land prior to the issuance of EO
33 segregating the same as a watershed reservation?
The answer is in the negative.
First. An applicant for confirmation of imperfect title bears the burden of proving
that he meets the requirements of Section 48 of CA 141, as amended. He must
overcome the presumption that the land he is applying for is part of the public
domain and that he has an interest therein sufficient to warrant registration in his
name arising from an imperfect title. An imperfect title may have been derived
from old Spanish grants such as a titulo real or royal grant, a concession
especial or special grant, a composition con el estado or adjustment title, or
a titulo de compra or title through purchase. 29 "Or, that he has had continuous,
open and notorious possession and occupation of agricultural lands of the public
domain under a bona fide claim of ownership for at least thirty years preceding
the filing of his application as provided by Section 48 (b) CA 141.
Originally, Section 48(b) of CA 141 provided for possession and
occupation of lands of the public domain since July 26, 1894. This was
superseded by RA 1942 which provided for a simple thirty-year prescriptive
period of occupation by an applicant for judicial confirmation of an imperfect title.
The same, however, has already been amended byPresidential Decree No.
1073, approved on January 25, 1977, the law prevailing at the time petitioners'
application for registration was filed on April 25, 1985. 30 As amended, Section 48
(b) now reads:
"(b) Those who by themselves or through their predecessors-in-interest
have been in open, continuous, exclusive and notorious possession and
occupation of agricultural lands of the public domain, under a bona fide
claim of acquisition or ownership, for at least thirty years immediately
 preceding the filing of the application for confirmation oftitle, except when
prevented by wars or force majeure. Those shall be conclusively
presumed to have performed all the conditions essential to a
Government grant and shall be entitled to a certificate of title under the
provisions of this chapter."
Interpreting Section 48 (b) of CA 141, the Court stated that the Public Land
Act requires that the applicant must prove the following:
"(a) that the land is alienable public land and (b) that his open,
continuous, exclusive and notorious possession and occupation of the
same must either be since time immemorial or for the period prescribed
in the Public Land Act. When the conditions set by law are complied
with, the possessor of the land, by operation of law, acquires a right to a
grant, a government grant, without the necessity of a certificate of title
being issued." 31
Petitioners do not claim to have documentary title over the Lot. Their right to
register the Lot is predicated mainly upon continuous possession since 1902.
Clearly, petitioners were unable to acquire a valid and enforceable right or title
because of the failure to complete the required period of possession, whether
under the original Section 48 (b) of CA 141 prior to the issuance of EO 33, or
under the amendment by RA 1942 and PD 1073.
There is no proof that prior to the issuance of EO 33 in 1904, petitioners had
acquired ownership or title to the Lot either by deed or by any other
mode of acquisition from the State, as for instance by acquisitive prescription.
As of 1904, Sesinando Leyva had only been in possession for two years. Verily,
petitioners have not possessed the parcel of land in the manner and for
the number of years required by law for the confirmation of imperfect title.
Second, assuming that the Lot was alienable and disposable land prior to the
issuance of EO 33 in 1904, EO 33 reserved the Lot as a watershed. Since then,
the Lot became non-disposable and inalienable public land. At the time
petitioners filed their application on April 25, 1985, the Lot has been reserved as
a watershed under EO 33 for 81 years prior to the filing of petitioners' application.
The period of occupancy after the issuance of EO 33 in 1904 could no longer be
counted because as a watershed reservation, the Lot was no longer
susceptible of occupancy, disposition, conveyance or alienation. Section 48
(b) of CA 141, as amended, applies exclusively to alienable and disposable
public agricultural land. Forest lands, including watershed reservations, are
excluded. It is axiomatic that the possession of forest lands or other inalienable
public lands cannot ripen into private ownership.
In Municipality ofSantiago, Isabela vs. Court of Appeals, 32 the Court declared
that inalienable public lands —
 ". . . cannot be acquired by acquisitive prescription. Prescription, both
acquisitive and extinctive, does not run against the State.
'The possession of public land, however long the period may have
extended, never confers title thereto upon the possessor because
the statute of limitations with regard to public land does not
operate against the State, unless the occupant can prove
possession and occupation of the same under claim of ownership
for the requirednumber of years to constitute a grant from the
State.'"
Third, Gordula vs. Court of Appeals 33 is in point. In Gordula, petitioners did not
contest the nature of the land. They admitted that the land lies in the heart of the
Caliraya-Lumot River Forest Reserve, which Proclamation No. 573 classified as
inalienable. The petitioners in Gordula contended, however, that
Proclamation No. 573 itself recognizes private rights of landowners prior to the
reservation. They claim to have established their private rights to the subject
land. The Court ruled:
"We do not agree. No public land can be acquired by private persons
without any grant, express or implied from the government; it is
indispensable that there be a showing of a title from the state. The facts
show that petitioner Gordula did not acquire title to the subject land prior
to its reservation under Proclamation No. 573. He filed his application for
free patent only in January, 1973, more than three (3) years after the
issuance of Proclamation No. 573 in June, 1969. At that time, the land,
as part of the Caliraya-Lumot River Forest Reserve, was no longer open
to private ownership as it has been classified as public forest reserve for
the public good.
Nonetheless, petitioners insist that the term, "private rights," in
Proclamation No. 573, should not be interpreted as requiring a title. They
opine that it suffices if the claimant "had occupied and cultivated the
property for so many number of years, declared the land for taxation
purposes, [paid] the corresponding real estate taxes [which are]
accepted by the government, and [his] occupancy and possession [is]
continuous, open and unmolested and recognized by the government.
Prescinding from this premise, petitioners urge that the 25-year
possession by petitioner Gordula from 1944 to 1969, albeit five (5) years
short of the 30-year possession required under Commonwealth Act
(C.A.) No. 141, as amended, is enough to vest upon petitioner Gordula
the "private rights" recognized and respected in Proclamation No. 573.

The case law does not support this submission. In Director of Lands vs.
Reyes, we held that a settler claiming the protection of "private rights" to
exclude his land from a military or forest reservation must show ". . . by
 clear and convincing evidence that the property in question was acquired
by [any] . . . means for the acquisition of public lands."
In fine, one claiming "private rights" must prove that he has complied
with C.A. No. 141, as amended, otherwise known as the Public Land
Act, which prescribes the substantive as well as the procedural
requirements for acquisition of public lands. This law requires at least
thirty (30) years of open, continuous, exclusive and notorious possession
and possession of agricultural lands of the public domain, under a bona
fide claim of acquisition, immediately preceding the filing of the
application for free patent. The rationale for the 30-year period lies in the
presumption that the land applied for pertains to the State, and that the
occupants and/or possessors claim an interest therein only by
virtue oftheir imperfect title or continuous, open and notorious
possession."
Next, petitioners argue that assuming no private rights had attached to the Lot
prior to EO 33 in 1904, the President of the Philippines had subsequently
segregated the Lot from the public domain and made the Lot alienable and
disposable when he issued Proclamation No. 1283 on June 21, 1974. Petitioners
contend that Proclamation No. 1283 expressly excluded an area of 3,780
hectares from the MWR and made the area part of the Boso-boso Townsite
Reservation. Petitioners assert that Lot Psu-162620 is a small part of this
excluded town site area. Petitioners further contend that town sites are
considered alienable and disposable under CA 141.
Proclamation No. 1283 reads thus:
"PROCLAMATION NO. 1283
EXCLUDING FROM THE OPERATION EXECUTIVE ORDER NO. 33,
DATED JULY 26, 1904, AS AMENDED BY EXECUTIVE
ORDERS NOS. 14 AND 16, BOTH SERIES OF 1915, WHICH
ESTABLISHED THE WATERSHED RESERVATION SITUATED IN THE
MUNICIPALITY OF ANTIPOLO, PROVINCE OF RIZAL,
ISLAND OF LUZON, A CERTAIN PORTION OF THE LAND
EMBRACED THEREIN AND RESERVING THE SAME, TOGETHER
WITH THE ADJACENT PARCEL OF LAND OF THE PUBLIC DOMAIN,
FOR TOWNSITE PURPOSES UNDER THE
PROVISIONSOF CHAPTER XI OF THE PUBLIC LAND ACT.
Upon recommendation of the Secretary of Agriculture and Natural
Resources and pursuant to the authority vested in me by law, I,
FERDINAND E. MARCOS, President of the Philippines, do hereby,
exclude from the operation of Executive Order No. 33 dated July 26,
1904, as amended by Executive Orders Nos. 14 and 16, both
series of 1915, which established the Watershed Reservation situated in
the Municipality of Antipolo, Province of Rizal, Island of Luzon, certain
portions of land embraced therein and reserve the same, together with
the adjacent parcel of land, of the public domain, for townsite purposes
under the provisions of Chapter XI of the Public Land Act, subject to
private rights, if any there be, and to future subdivision survey in
accordance with the development plan to be prepared and approved by
the Department of Local Government and Community Development,
which parcels are more particularly described as follows:
Lot A (Part of Watershed Reservation)
A parcel of land (Lot A of Proposed Poor Man's Baguio, being a
portion of the Marikina Watershed, IN-2), situated in the
municipality of Antipolo, Province of Rizal, Island of Luzon, beginning at
a point marked "1" on sketch plan, being N-74'-30 E, 8480.00 meters
more or less, from BLLM 1, Antipolo, Rizal; thence N 33' 28 W 1575.00
m. to point 2; thence N 40' 26 W 1538.50 m. to point 3; thence N 30'
50W 503.17 m. to point 4; thence N 75' 02 W 704.33 m. to point 5;
thence N 14' 18 W 1399.39 m. to point 6; thence N 43' 25 W 477.04 m.
to point 7; thence N 71' 38 W 458.36 m. to point 8; thence N 31' 05 W
1025.00 m. to point 9; thence Due North 490.38 m. to point 10; thence
Due North 1075.00 m. to point 11; thence Due East 1000.00 m. to point
12; thence Due East 1000.00 m. to point 13; thence Due East 1000.00
m. to point 14; thence Due East 1000.00 m. to point 15; thence Due East
1000.00 m. to point 16; thence Due East 1000.00 m. to point 17; thence
Due East 1075.00 m. to point 18; thence Due South 1000.00 m. to point
19; thence Due South 1000.00 m. to point 20; thence Due South
1000.00 m. to point 21; thence Due South 1000.00 m. to point 22;
thence Due South 1000.00 m. to point 23; thence Due South 1000.00 m.
to point 24; thence Due South 1075.00 m. to point 25; thence Due West
1000.00 m. to point 26; thence Due West 1000.00 m. to point 27; thence
Due West 636.56 m. to pointof beginning. Containing an area of three
thousand seven hundred eighty (3,780) Hectares, more or less.
Lot B (Alienable and Disposable Land)
A parcel of land (Lot B of Proposed Poor Man's Baguio, being a
portion of alienable and disposable portion of public domain) situated in
the municipality of Antipolo, Province ofRizal, Island of Luzon. Beginning
at a point marked "1" on sketch plan being N 74' 30 E., 8430.00 m.,
more or less, from BLLM 1. Antipolo, Rizal; thence Due West 363.44 m.
to point 2; thence Due West 1000.00 m. to point 3; thence Due West
100.00 m. to point 4; thence Due West 1000.00. m. to point 5; thence
Due West 1075.00 m. to point 6; thence Due North 1000.00 m. to point
7; thence Due North 1000.00 m. to point 8; thence Due North 1000.00
m. to point 9; thence Due North 1000.00 m. to point 10; thence Due
North 1000.00 m. to point 11; thence Due North 509.62 m. to point 12;
thence S. 31' 05 E 1025.00 m. to point 13; thence S 71' 38 E 458.36 m.
to point 14; thence S 43' 25 E 477.04 m. to point 15; thence S 14' 18 E
 1399.39 m. to point 16; thence S 75' 02 E 704.33 m. to point 17; thence
S. 30' 50 E 503.17 m. to point 18; thence S 40' 26 E 1538.50 m. to point
19; thence s 33' 23 e 1575.00 m to point of beginning. Containing an
area of one thousand two hundred twenty five (1,225) Hectares, more or
less.
Note: All data are approximate and subject to change based on future
survey.
IN WITNESS WHEREOF, I Have hereunto set my hand and caused the
seal of the Republic of the Philippines to be affixed.
Done in the City of Manila, this 21st day of June, in the year of Our Lord,
nineteen hundred and seventy-four.
(Sgd.) FERDINAND E. MARCOS
President
Republic of the Philippines"
Proclamation No. 1283 has since been amended by Proclamation No. 637
issued on April 18, 1977. Proclamation No. 1637 revised the area and
location of the proposed townsite. According to then DENR Secretary Victor O.
Ramos, Proclamation No. 1637 excluded Lot A (of which the Lot claimed by
petitioners is part) for townsite purposes and reverted it to MWR
coverage. 34 Proclamation No. 1637 reads:
"PROCLAMATION NO. 1637
AMENDING PROCLAMATION NO. 1283, DATED JUNE 21, 1974,
WHICH ESTABLISHED THE TOWNSITE RESERVATION IN THE
MUNICIPALITIES OF ANTIPOLO AND SAN MATEO,
PROVINCE OF RIZAL, ISLAND OF LUZON BY INCREASING THE
AREA AND REVISING THE TECHNICAL DESCRIPTION OF THE
LAND EMBRACED THEREIN, AND REVOKING PROCLAMATION NO.
765 DATED OCTOBER 26, 1970 THAT RESERVED
PORTIONS OF THE AREA AS RESETTLEMENT SITE.
Upon recommendation of the Secretary of Natural Resources and
pursuant to the authority vested in me by law, I, FERDINAND E.
MARCOS, President of the Philippines, do hereby
amend Proclamation No. 1283, dated June 21, 1974 which established
the townsite reservation in the municipalities of Antipolo and San Mateo,
Province of Rizal, Island ofLuzon, by increasing the area and revising
the technical descriptions of the land embraced therein, subject to
private rights, if any there be, which parcel of land is more particularly
described as follows:
(Proposed Lungsod Silangan Townsite)
 A PARCEL OF LAND (Proposed Lungsod Silangan Townsite
Reservation amending the area under SWO-41762 establishing the
Bagong Silangan Townsite Reservation) situated in the
Municipalities of Antipolo, San Mateo, and Montalban, Province of Rizal,
Island of Luzon. Bounded on the E., along lines 1-2-3-4-5-6-7-8-9-10-11-
12-13-14-15-16-17-18-19-20-21-22-23 by the Marikina Watershed
Reservation (IN-12); on the S., along lines 23-24-25 by the
portion of Antipolo; on the W., along lines 25-26-27-28-29-30 by the
Municipalitiesof Montalban, San Mateo; and on the N., along lines 30-31-
32-33-34-35-36-37-38-39-40-41-42-43-44 by the Angat Watershed
Reservation. Beginning at a point marked "1" on the Topographic Maps
with the Scale of 1:50,000 which is the identical corner 38 IN-12,
Marikina Watershed Reservation.
xxx xxx xxx
NOTE: All data are approximate and subject to change based on future
survey.
Proclamation No. 765 dated October 26, 1970, which covered areas
entirely within the herein Lungsod Silangan Townsite, is hereby revoked
accordingly.
IN WITNESS WHEREOF, I have hereunto set my hand and caused the
seal of the Republic of the Philippines to be affixed.
Done in the City of Manila, this 18th day of April, in the year of Our Lord,
nineteen hundred and seventy-seven.
(Sgd.) FERDINAND E. MARCOS
President of the Philippines"
A positive act (e.g., an official proclamation) of the Executive Department is
needed to declassify land which had been earlier classified as a watershed
reservation and to convert it into alienable or disposable land for agricultural or
other purposes. 35 Unless and until the land classified as such is released in an
official proclamation so that it may form partof the disposable agricultural
lands of the public domain, the rules on confirmation of imperfect title do not
apply. 36
The principal document presented by petitioners to prove the private
character of the Lot is the Certification of the Bureau of Forest Development
dated March 18, 1986 that the Lot is excluded from the Marikina Watershed
(Exh. R). The Certification reads:
"Republic of the Philippines
Ministry of Natural Resources
BUREAU OF FOREST DEVELOPMENT
 REGION IV

EL — AL Building
100 Quezon Avenue, Quezon City
MAR 18 1986
VERIFICATION ON THE STATUS OF LAND:
TO WHOM IT MAY CONCERN:
This is to certify that the tract of land situated in Barangay San Isidro,
Antipolo, Rizal, containing an area of 1,269,766 square meters, as
shown and described on the reverse side hereof, surveyed by Geodetic
Engineer Telesforo Cabading for Angelina C. Reynoso, is verified to be
within the area excluded from the operation of Marikina Watershed
Reservation established under Executive Order No. 33 dated July 26,
1904 per Proclamation No. 1283, promulgated on June 21, 1974, which
established the Boso-Boso Townsite Reservation, amended
by proclamation No. 1637 dated April 18, 1977 known as Lungsod
Silangan Townsite Reservation.
Subject area also falls within the bounds of Bagong Lipunan Site
under P.D. 1396 dated June 2, 1978 under the sole jurisdiction of the
Ministry of Human Settlements, to the exclusion of any other government
agencies.
This verification is made upon the request of the Chief, Legal Staff, R-
4 as contained in his internal memorandum dated March 18, 1986.
Verified by:
(Sgd) ROMEO C. PASCUBILLO
Cartographer II
Checked by:
(Sgd) ARMENDO R. CRUZ
Supervising Cartographer
ATTESTED:
(Sgd) LUIS G. DACANAY
Chief, Forest Engineering &
Infrastructure Section"
The above certification on which petitioners rely that a reclassification had
occurred, and that the Lot is covered by the reclassification, is contradicted by
several documents submitted by the Solicitor General before the land
registration court.
The Solicitor General submitted to the land registration court a Report 37 dated
March 2, 1988, signed by Administrator Teodoro G. Bonifacio of the then
National Land Titles and Deeds Registration Administration, confirming that the
Lot described in Psu-162620 forms part of the MWR. He thus recommended the
dismissal of the application for registration. The Report states:
"COMES NOW the Administrator of the National Land Titles and Deeds
Registration Commission and to this Honorable Court respectfully
reports that:
1. A parcel of land described in plan Psu-162620 situated in the
Barrio of San Isidro, Municipality of Antipolo, Province of Rizal, is
applied for registration of title in the case at bar.
2. After plotting plan Psu-162620 in our Municipal Index Map it was
found that a portion of the SW, described as Lot 3 in plan Psu-
173790 was previously the subject ofregistration in Land Reg.
Case No. N-9578, LRC Record No. N-55948 and was issued
Decree No. N-191242 on April 4, 1986 in the name of Apolonia
Garcia, et al., pursuant to the Decision and Order for
Issuance of the Decree dated February 8, 1984 and March 6,
1984, respectively, and the remaining portion of plan Psu-162620
is inside IN-12 Marikina Watershed. . . .
"WHEREFORE, this matter is respectfully submitted to the
Honorable Court for its information and guidance with the
recommendation that the application in the instant proceedings be
dismissed, after due hearing (Italics supplied)."
Likewise, in a letter 38 dated November 11, 1991, the Deputy Land Inspector,
DENR, Region IV, Community Environment and Natural Resources Office,
Antipolo, Rizal, similarly confirmed that the Lot is within the MWR. The letter
states:
"That the land sought to be registered is situated at San Isidro (Boso-
boso), Antipolo, Rizal, with an area of ONE HUNDRED TWENTY SIX
POINT ZERO SEVEN SIXTY SIX (126.0766) hectares, more particularly
described in Psu-162620, which is within the Marikina Watershed
Reservation under Executive Order No. 33 dated July 2, 1904 which
established the Marikina Watershed Reservation (IN-12) . . . .
"xxx xxx xxx
"That the land sought to be registered is not a private property of the
Registration Applicant but part of the public domain, not subjected to
disposition and is covered by Proclamation No. 585 for Integrated Social
Forestry Program hence, L.R.C. No. 269-A is recommended for
 rejection (Italics supplied)." Copy of the letter is attached herewith as
Annex "3" and made an integral part hereof."
Lastly, the Solicitor General pointed out that attached to petitioner Edna
T. Collado's [as original applicant] application is the technical description 39 of the
Lot signed by Robert C. Pangyarihan, Officer-in-Charge of the Survey
Division of the Bureau of Lands. This technical description categorically stated
that the Lot "is inside IN-12 Mariquina Watershed."
The evidence of record thus appears unsatisfactory and insufficient to show
clearly and positively that the Lot had been officially released from the Marikina
Watershed Reservation to form part of the alienable and disposable lands of the
public domain. We hold that once a parcel of land is included within a watershed
reservation duly established by Executive Proclamation, as in the instant case, a
presumption arises that the land continues to be part of such Reservation until
clear and convincing evidence ofsubsequent declassification is shown.
It is obvious, based on the facts on record that neither petitioners nor their
predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of the Lot for at least thirty years immediately
preceding the filing of the application for confirmation of title. Even if they
submitted sufficient proof that the Lot had been excluded from the MWR upon
the issuance of Proclamation No. 1283 on June 21, 1974, petitioners' possession
as of the filing of their application on April 25, 1985 would have been only eleven
years counted from the issuance of the proclamation in 1974. The result will not
change even if we tack in the two years Sesinando Leyva allegedly possessed
the Lot from 1902 until the issuance of EO 33 in 1904. Petitioners' case falters
even more because of the issuance of Proclamation No. 1637 on April 18, 1977.
According to then DENR Secretary Victor Ramos, Proclamation No.
1637 reverted Lot A or the townsite reservation, where petitioners' Lot is
supposedly situated, back to the MWR.
Finally, it is of no moment if the areas of the MWR are now fairly populated and
vibrant communities as claimed by petitioners. The following ruling may be
applied to this case by analogy:
"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. Parcelsof land classified as forest land may
actually be covered with grass or planted to crops by kaingin cultivators
or other farmers. "Forest lands" do not have to be on mountains or in
out of the way places. Swampy areas covered by mangrove trees, nipa
palms and other trees growing in brackish or sea water may also be
classified as forest land. The classification is descriptive of its legal
nature or status and does not have to be descriptive of what the land
actually looks like. Unless and until the land classified as "forest" is
 released in an official proclamation to that effect so that it may form
part of the disposable agricultural lands of the public domain, the rules
on confirmation of imperfect title do not apply." 40
Second Issue: Whether the petition for annulment of judgment should have been
given due course.
Petitioners fault the Court of Appeals for giving due course to the Republic's
petition for annulment of judgment which was filed long after the decision of the
land registrationcourt had allegedly become final and executory. The land
registration court rendered its decision on January 30, 1991 and the
Solicitor General received a copy of the decision on April 23, 1991. 41 Petitioners
point out that the Solicitor General filed with the Court of Appeals the petition for
annulment of judgment invoking Section 9(2) of BP Blg. 129 42 only on August 6,
1991, after the decision had supposedly become final and executory. Moreover,
petitioners further point out that the Solicitor General filed the petition for
annulment after the land registration court issued its order of May 6, 1991
directing the Land Registration Authority to issue the corresponding
decree of registration.
The Solicitor General sought the annulment of the decision on the ground that
the land registration court had no jurisdiction over the case, specifically, over the
Lot which was not alienable and disposable. The Solicitor General maintained
that the decision was null and void.
Petitioners argue that the remedy of annulment of judgment is no longer
available because it is barred by the principle of res judicata. They insist that the
land registration courthad jurisdiction over the case which involves private land.
They also argue that the Republic is estopped from questioning the land
registration court's jurisdiction considering that the Republic participated in the
proceedings before the court.
It is now established that the Lot, being a watershed reservation, is not alienable
and disposable public land. The evidence of the petitioners do not clearly and
convincingly show that the Lot, described as Lot Psu-162620, ceased to be a
portion of the area classified as a watershed reservation of the public domain.
Any title to the Lot is void ab initio. In view of this, the alleged procedural
infirmities attending the filing of the petition for annulment of judgment are
immaterial since the land registration court never acquired jurisdiction over the
Lot. All proceedings of the land registration court involving the Lot are therefore
null and void.
We apply our ruling in Martinez vs. Court of Appeals, 43 as follows:
"The Land Registration Court has no jurisdiction over non-registrable
properties, such as public navigable rivers which are parts of the public
domain, and cannot validly adjudge the registration of title in
 favor of private applicant. Hence, the judgment of the Court of First
Instance of Pampanga, as regards the Lot No. 2 of certificate of Title No.
15856 in the name of petitioners may be attacked at any time, either
directly or collaterally, by the State which is not bound by any
prescriptive period provided for by the Statute ofLimitations."

We also hold that environmental consequences in this case override concerns

over technicalities and rules of procedure.
In Republic vs. De los Angeles, 44 which involved the registration of public lands,
specifically parts of the sea, the Court rejected the principle of res judicata and
estoppel to silence the Republic's claim over public lands. The Court said:
"It should be noted further that the doctrine of estoppel or laches does
not apply when the Government sues as a sovereign or asserts
governmental rights, nor does estoppel or laches validate an act that
contravenes law or public policy, and that res judicata is to be
disregarded if its application would involve the sacrifice of justice to
technicality."
The Court further held that "the right of reversion or reconveyance to the
State of the public properties registered and which are not capable of private
appropriation or private acquisition does not prescribe."
Third issue: Whether the petition-in-intervention is proper.
The Bockasanjo ISF Awardees Association, Inc., an
association of holders of certificates of stewardship issued by the DENR under its
Integrated Social Forestry Program, filed with the Court of Appeals on November
29, 1991 a Motion for Leave to Intervene and to Admit Petition-In-Intervention.
According to intervenors, they are the actual occupants of the Lot which
petitioners sought to register. Aware that the parcels of land which their
forefathers had occupied, developed and tilled belong to the Government, they
filed a petition with then President Corazon C. Aquino and then DENR Secretary
Fulgencio S. Factoran, to award the parcelsof land to them.
Secretary Factoran directed the Director of Forest Management Bureau to take
steps for the segregation of the aforementioned area from the MWR for
development under the DENR's ISF Programs. Subsequently, then President
Aquino issued Proclamation No. 585 dated June 5, 1990 excluding 1,430
hectares from the operation of EO 33 and placed the same under the DENR's
Integrated Social Forestry Program. Proclamation No. 585 reads:
PROCLAMATION NO. 585
AMENDING FURTHER EXECUTIVE ORDER NO. 33, DATED JULY 26,
1904 WHICH ESTABLISHED THE MARIKINA WATERSHED
 RESERVATION (IN-12) AS AMENDED, BY EXCLUDING CERTAIN
PORTIONS OF LANDS EMBRACED THEREIN SITUATED AT SITIOS
BOSOBOSO, KILINGAN, VETERANS, BARANGAYS SAN JOSEPH
AND PAENAAN, MUNICIPALITY OFANTIPOLO,
PROVINCE OF RIZAL, ISLAND OF LUZON.
Upon recommendation of the Secretary of Environment and Natural
Resources and pursuant to the authority vested in me by law, I,
CORAZON C. AQUINO, President of the Philippines, do hereby exclude
from the operation of Executive Order No. 33, which established the
Marikina Watershed Reservation, certain parcel of land of the public
domain embraced therein situated in Sitios Bosoboso, Veterans,
Kilingan and Barangay San Joseph and Paenaan,
Municipality of Antipolo, Province of Rizal and place the same under the
Integrated Social Forestry Program of the Department of Environment
and Natural Resources in accordance with existing laws, rules and
regulations, which parcel of land is more particularly described as
follows:
"A PARCEL OF LAND, within the Marikina Watershed
Reservation situated in the Municipality of Antipolo,
Province of Rizal, beginning at point "1" on plan, being identical to
corner 1 of Marikina Watershed Reservation; thence
xxx xxx xxx
Containing an area of One Thousand Four Hundred Thirty (9,430)
Hectares.
All other lands covered and embraced under Executive Order No.
33 as amended, not otherwise affected by this Proclamation, shall
remain in force and effect.
IN WITNESS WHEREOF; I have hereunto set my hand and caused the
seal of the Republic of the Philippines to be affixed.
Done in the City of Manila, this 5th day of June, in the year of Our Lord,
nineteen hundred and ninety.

(Sgd.) CORAZON C. AQUINO

President of the Philippines"
Pursuant to Proclamation No. 585, the chief of the ISF Unit, acting through the
Regional Executive Director of the DENR (Region IV), issued sometime between
the years 1989 to 1991 certificates of stewardship contracts to bona fide
residents of the barangays mentioned in the proclamation as qualified
recipients of the ISF programs. Among those awarded were intervenors. The
certificates of stewardship are actually contracts of lease granted by the DENR to
actual occupants of parcels of land under its ISF programs for a period of twenty-
five (25) years, renewable for another twenty-five (25) years. 45 The DENR
awarded contracts of stewardship to ISF participants in Barangay San Isidro (or
Boso-boso) and the other barangays based on the Inventory of Forest Occupants
the DENR had conducted. 46
According to intervenors, they learned only on July 31, 1991 about the
pendency of LRC Case No. 269-A before the Regional Trial Court of Antipolo,
Rizal. On August 8, 1991, they filed a Motion for Leave to Intervene and to Admit
Opposition in Intervention before the land registration court to assert their rights
and to protect their interests.
However, shortly after the filing of their opposition, intervenors learned that the
land registration court had already rendered a decision on January 30, 1991
confirming petitioners' imperfect title. Intervenors' counsel received a copy of the
decision on August 9, 1991.
On August 14, 1991, intervenors filed a motion to vacate judgment and for new
trial before the land registration court. According to intervenors, the land
registration court could not act on its motions due to the restraining order issued
by the Court of Appeals on August 8, 1991, enjoining the land
registration court from executing its decision, as prayed for by the
Solicitor General in its petition for annulment of judgment. The intervenors were
thus constrained to file a petition for intervention before
the Court of Appeals which allowed the same.
Rule 19 of the 1997 Rules of Civil Procedure 47 provides in pertinent
parts:
Section 1. Who may intervene. – A person who has a legal interest in the
matter in litigation, or in the success of either of the parties, or, an
interest against both, or is so situated as to be adversely affected by a
distribution or other disposition of property in the custody of the court, or
an officer thereof may, with leave of court, be allowed to intervene in the
action. The Court shall consider whether or not the intervention will
unduly delay or prejudice the adjudication of the rights of the original
parties, and whether or not the intervenor's rights may be fully protected
in a separate proceeding.
Sec. 2. Time to intervene. – The motion to intervene may be filed at any
time before rendition of judgment by the trial court. A copy of the
pleading-in-intervention shall be attached to the motion and served on
the original parties.
As a rule, intervention is allowed "before rendition of judgment by the trial court,"
as Section 2, Rule 19 expressly provides. However, the Court has recognized
exceptions to this rule in the interest of substantial
justice. Mago vs. Court of Appeals 48 reiterated the ruling
in Director of Lands vs. Court of Appeals, where the Court allowed the motions
for intervention even when the case had already reached this Court. Thus,
in Mago the Court held that:
"It is quite clear and patent that the motions for intervention filed by the
movants at this stage of the proceedings where trial had already been
concluded . . . and on appeal . . . the same affirmed by
the Court of Appeals and the instant petition for certiorari to review said
judgment is already submitted for decision by the Supreme Court, are
obviously and, manifestly late, beyond the period prescribed under . .
. Section 2, Rule 12 of the rules of Court.
But Rule 12 of the Rules of Court, like all other Rules therein
promulgated, is simply a rule of procedure, the whole purpose and
object of which is to make the powers of theCourt fully and completely
available for justice. The purpose of procedure is not to thwart justice. Its
proper aim is to facilitate the application of justice to the rival
claims ofcontending parties. It was created not to hinder and delay but to
facilitate and promote the administration of justice. It does not constitute
the thing itself which courts are always striving to secure to litigants. It is
designed as the means best adopted to obtain that thing. In other words,
it is a means to an end."
To be sure, the Court of Appeals did not pass upon the actual
status of intervenors in relation to the Lot as this was not in issue. Neither was
the validity of the certificates ofstewardship contracts which intervenors allegedly
possessed inquired into considering this too was not in issue. In fact, intervenors
did not specifically seek any relief apart from a declaration that the Lot in
question remains inalienable land of the public domain. We cannot fault
the Court of Appeals for allowing the intervention, if only to provide the rival
groups a peaceful venue for ventilating their sides. This case has already
claimed at least five lives due to the raging dispute between the rival
camps of the petitioners on one side and those of the DENR awardees on the
other. It also spawned a number of criminal cases between the two rival groups
including malicious mischief, robbery and arson. A strict application of the rules
would blur this bigger, far more important picture.
WHEREFORE, the Petition is DENIED. The
Decision of the Court of Appeals dated June 22, 1992 declaring null and void the
Decision dated January 30, 1991 of Branch 71, Regional Trial Court of Antipolo,
Rizal, in LRC No. 269-A, LRC Rec. No. N-59179 is AFFIRMED.
SO ORDERED.
Vitug and Ynares-Santiago, JJ., concur.
Davide, Jr. C.J., is on official leave.
 (Collado v. Court of Appeals, G.R. No. 107764, [October 4, 2002], 439 PHIL
|||

149-191)
 [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, Peña & Marcos for respondents.

DECISION

CRUZ, J : p

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. 2The 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 ofcontention 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.
xxx xxx xxx
"Under this uncertain and somewhat unsatisfactory condition of the law,
the custom had grown of converting manglares and nipa lands into
fisheries which became a common feature of settlement along the coast
and at the same time of the change of sovereignty constituted one of the
most productive industries of the Islands, the abrogation of which would
destroy vested interests and prove a public disaster."
Mangrove swamps were thus considered agricultural lands and so
susceptible of private ownership.
Subsequently, the Philippine Legislature categorically declared, despite the
above-cited case, that mangrove swamps form part of the public forests of this
country. This it did in the Administrative Code of 1917, which became effective
on October 1 of that year, thus:
"Section 1820. Words and phrase defined. — For the purpose of this
chapter 'public forest' includes, except as otherwise specially indicated,
all unreserved public land, including nipa and mangrove swamps, and all
forest reserves of whatever character."
It is noteworthy, though, that notwithstanding this definition, the Court maintained
the doctrine in the Montano case when two years later it held in the
case of Jocson v. Directorof 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. Timber land in English means land with trees
growing on it. The manglar plant would never be cited 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. I, 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. Directorof 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 ofcommercial 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 swamplands 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 a 'mangrove swamp' is
included in the classification of forest land in accordance with Section
1820 of the Revised Administrative Code, the petitioners argue
that no big trees classified in Section 1821 of 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 proceeding 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. Parcelsof 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 classified as 'forest' is
released in an official proclamation to that effect so that it may form
part of the disposable agricultural lands of the public domain, the rules
on confirmation of imperfect 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: LLphil

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) Timber, 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:
cdphil

"Sec. 1826. Regulation setting apart forest reserves —

Revocation of same. — Upon the
recommendation 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 haveno 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 possessionof 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 inofficious.
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. cdll

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 ofLands 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 swamplands 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 basisof 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, nomatter how 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 ofdubious 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.Cdpr

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 ofprivate 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.
Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla,
Bidin, Sarmiento, Cortés, Griño-Aquino, Medialdea and Regalado, JJ ., concur.

(Director of Forestry v. Villareal, G.R. No. L-32266, [February 27, 1989], 252
|||

PHIL 622-636)
G.R. No. 88883 January 18, 1991

ATOK-BIG WEDGE MINING COMPANY, INC., petitioner,

vs.
COURT OF APPEALS, and LIWAN CONSI, respondents.

Mario C.V. Jalandoni for petitioner.

Joy B. Labiaga for private respondent.

PARAS, J.:

This is a petition for review on certiorari which seeks to annul and set aside; (a) the decision* of the
Court of Appeals dated March 13, 1989 in CA-G.R. No. SP No. 13528 entitled "Liwan Consi vs. Hon.
Judge Ruben C. Ayson, et al." declaring that both the petitioner and private respondent hold
possessory titles to the land in question, and (b) the resolution denying the motion for
reconsideration.

The facts of the case are as follows:

Fredia Mineral claim of about nine (9) hectares situated in Tuding, Itogon, Benguet, was located
sometime between December 25, 1930 and December 31, 1930, a period of six (6) days, by A.I.
Reynolds in accordance with the provisions of the Act of Congress of July 1, 1902, better known as
the Philippine Bill of 1902, in a so-called Declaration of Location. The said Declaration of Location of
mineral claim was duly recorded in the Office of the Mining Recorder sometime on January 2, 1931.
Fredia mineral claim, together with other mineral claims, was sold by A.I. Reynolds to Big Wedge
Mining Company, the earlier corporate name of Atok Big Wedge Mining Company, Inc. (Atok for
short; herein petitioner) in a Deed of Sale executed on November 2, 1931. Since then petitioner Atok
has been in continuous and exclusive ownership and possession of said claim up to the present
(Rollo, Annex "B", p. 21).

Atok has paid the realty taxes and occupation fees for the Fredia mineral claim. The Fredia mineral
claim together with other mineral claims owned by Atok has been declared under Tax Declaration
No. 9535 and that in view of Presidential Decree No. 1214 an application for lease was filed by Atok
covering the Fredia mineral claim (Rollo, Ibid., p. 22).

On the other hand, private respondent Liwan Consi has a lot below the land of a certain Mr. Acay at
Tuding Slide, Itogon, Benguet. He constructed a house thereon sometime in 1964. The lot is
covered by Tax Declaration No. 9462. When he first constructed his house below the lot of Mr. Acay
he was told that it was not necessary for him to obtain a building permit as it was only a nipa hut.
And no one prohibited him from entering the land so he was constructing a house thereon. It was
only in January 1984 when private respondent Consi repaired the said house that people came to
take pictures and told him that the lot belongs to Atok. Private respondent Consi has been paying
taxes on said land which his father before him had occupied (Rollo, Ibid., p. 22).

On January 1984, the security guards of Atok informed Feliciano Reyes, Security Officer of Atok,
that a construction was being undertaken at the area of the Fredia mineral claim by private
respondent Liwan Consi. Feliciano Reyes instructed the cashier to go and take pictures of the
construction. Feliciano Reyes himself and other security guards went to the place of the construction
to verify and then to the police to report the matter (Rollo, Ibid.).

On March 1, 1984, Atok filed a complaint for forcible entry and detainer against Liwan Consi (Rollo,
Annex "C", p. 32).

On January 29, 1987, after due hearing, the Municipal Trial Court of Itogon, presided over by Judge
Irving rendered a decision, the dispositive portion of which reads:

WHEREFORE, this case against Liwan Consi is hereby ordered dismissed. (Rollo, Annex
"A", p. 20).

Petitioner ATOK appealed the decision to the Regional Trial Court (RTC) of Baguio and Benguet,
Branch VI, presided over by Judge Ruben Ayson (Rollo, Petition, p. 3). On December 5, 1987, the
RTC rendered its decision, the dispositive portion of which reads:

WHEREFORE, in view of all the foregoing the decision of the Municipal Trial Court of Itogon
dated January 29, 1987 appealed from is hereby reversed and set aside and a new one
entered in its place ordering the defendant Liwan Consi and all those claiming under him to
vacate the premises of the Fredia Mineral claim at Tuding, Itogon, Benguet immediately, and
to restore possession thereof to the plaintiff Atok Big Wedge Mining Company.

The defendant, Liwan Consi, is further ordered to remove and demolish his house
constructed in the premises of the land of Fredia mineral claim at Tuding, Benguet, and to
pay the costs.

SO ORDERED. (Rollo, p. 30).

From said decision, Liwan Consi filed with the Court of Appeals a petition for review (Rollo, Petition,
p. 4). On March 13, 1989, the Court of Appeals rendered its decision, the dispositive portion of which
reads:

WHEREFORE, judgment is hereby rendered dismissing the subject forcible entry action.
Costs against private respondent.

SO ORDERED. (Rollo, Annex "C" p. 48).

The Court of Appeals further ruled in part to wit:

The determination of whether the subject lot is mineral land or agricultural awaits the
decision of the Secretary of Natural Resources in a proceeding called for that purpose. Thus,
there is a chance that the subject property may be classified as alienable agricultural land. At
any rate, the mining company may not so readily describe Liwan Consi as a "squatter" he
also has possessory rights over the property. Such rights may mature into ownership on the
basis of long-term possession under the Public Land Law,

Thus it is Our holding, that both Consi and ATOK are of equal legal footing with regards the
subject lot. Both hold possessory titles to the land in question — the petitioner through his
long term occupancy of the same; the respondent mining firm by virtue of its being the claim
locator and applicant for a lease on the mineral claim within which the subject lot is found.
But it was established that the petitioner has been in actual and beneficial possession of the
 subject lot since before the Second World War in the concept of owner and in good faith.
(Rollo, Annex "C", pp. 47-48).

On June 16, 1989, the Court of Appeals denied the motion for reconsideration filed by petitioner
ATOK (Rollo, Annex "D", p. 50).

Hence, the petition.

The main issue in this case is whether or not an individual's long term occupation of land of the
public domain vests him with such rights over the same as to defeat the rights of the owner of that
claim.

The petition is impressed with merit.

It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold Creek
Mining Corporation 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 (Republic v. Court of
Appeals, 160 SCRA 228 [1988]).

In the case at bar, the evidence on record pointed that the petitioner Atok has faithfully complied with
all the requirements of the law regarding the maintenance of the said Fredia Mineral Claim.

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. 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. 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 (Ibid.).

As in the instant petition, the record shows that the lot in question was acquired through a Deed of
Sale executed between Atok and Fredia Mineral Claim.

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 mining claim, the area becomes segregated from the public and
the property of the locator. 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 right by virtue of his location made in compliance with the mining laws, the
fee remains in the government until patent issues. (St. Louis Mining & Mineral Co. v.
Montana Mining Co., 171 U.S. 605, 655; 43 Law ed., 320, 322)

It is, therefore, evident 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 (Ibid).
On the matter of possession, private respondent contends that his predecessor-in-interest has been
in possession of said lot even before the war and has in fact cultivated the same.

In the case of Republic v. Court of Appeals, 160 SCRA 288 1988, this Court held:

. . . even if it be assumed that the predecessor-in-interest of the de la Rosas had already

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 are claiming it as agricultural land. They were not disputing the
rights of the mining locators nor where they seeking to oust them as such and to replace
them in the mining of the land. . . .

Since the subject lot is mineral land, private respondent's possession of the subject lot no matter
how long did not confer upon him possessory rights over the same.

Furthermore, Article 538 of the New Civil Code provides:

Art. 538. Possession as a fact cannot be recognized at the same time in two different
personalities except in the cases of co-possession. Should a question arise regarding the
fact of possession, the present possessor shall be preferred; if there are two possessors, the
one longer in possession; if the dates of the possession are the same, the one who presents
a title; and if all these conditions are equal, the thing shall be placed in judicial deposit
pending determination of its possession or ownership through proper proceedings.

Since 1931 up to the present, petitioner ATOK has been in continuous and exclusive possession of
the Fredia mineral claim while private respondent's possession started only sometime in 1964 when
he constructed a house thereon. Clearly, ATOK has superior possessory rights than private
respondent, Liwan Consi, the former being "the one longer in possession."

It is therefore clear that from the legal viewpoint it was really petitioner who was in actual physical
possession of the property. Having been deprived of this possession by the private respondent,
petitioner has every right to sue for ejFectment.

With this ruling enunciated by the Court, it can further be declared and held that petitioner Atok has
the exclusive right to the property in question.

PREMISES CONSIDERED, the petition is GRANTED and the questioned decision of the Court of
Appeals dated March 13, 1989 is REVERSED and SET ASIDE and the decision of the Regional
Trial Court of Baguio and Benguet dated June 16, 1989 is REINSTATED.

SO ORDERED.

Melencio-Herrera, Padilla and Regalado, JJ., concur.

Sarmiento, J., took no part
 [G.R. No. 95608. January 21, 1997.]

SPOUSES IGNACIO PALOMO and TRINIDAD PASCUAL, and

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

Kallos Law Office for petitioners.

SYLLABUS

1. CIVIL LAW; LAW ON NATURAL RESOURCES;

MODES OF ACQUISITION OF LANDS DURING THE SPANISH REGIME. —
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.
2. REMEDIAL LAW; CIVIL ACTIONS; LACHES; FAILURE FOR 83 YEARS TO
ASSAIL INCLUSION OF CLAIMED PROPERTIES TO FOREST
RESERVATION. — 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.
3. ID.; ID.; ESTOPPEL; DOES NOT OPERATE AGAINST THE GOVERNMENT
FOR ACT OF ITS AGENTS. — 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.
4. CIVIL LAW; LAW ON NATURAL RESOURCES; FOREST LAND, NOT
REGISTRABLE. — 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.
5. REMEDIAL LAW; EVIDENCE; TAX DECLARATIONS; NOT CONCLUSIVE
PROOF OF OWNERSHIP. — 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. 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, 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.
6. ID.; CIVIL ACTIONS; ANNULMENT OF TITLE; TITLE SHOULD BE
ANNULLED ONLY WITH RESPECT TO AREA FALLING WITHIN THE FOREST
RESERVATION. — 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.
7. ID.; ID.; INJUNCTION WITH DAMAGES; ABSENCE OF LIABILITY FOR
DAMAGES WHERE BAMBOOS CUT BY THE EMPLOYEES OF THE
BUREAU OF FOREST DEVELOPMENT WERE WITHIN THE
PERIMETER OF THE NATIONAL PARK. — 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 for the Original Plan No. II-9299 filed in the Bureau of Lands dated
September 11, 1948 contains the following note, "in conflict with provincial
reservation." In any case, petitioners are presumed to know the law and the
failure of the government to oppose the registration of lands in question
is no justification for the petitioners to plead good faith in introducing
improvements on the lots. Inasmuch as the bamboo groves leveled in TCT 3913
and subject of Civil Case T-143, were within the perimeter of the national
park, nopronouncement as to damages is in order.

DECISION

ROMERO, J : p

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 OrderNo. 40 in the name of Diego Palomo on December 9,
1916; 2 December 28, 1916; 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 Instanceof 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 ofAlbay 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 TitleNos. 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 ofParis 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) Concession 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; ExpedienteNo. 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 validityof 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. cdt

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 21781of 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 ofLands 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
failureof 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.
Footnotes

(Spouses Palomo v. Court of Appeals, G.R. No. 95608, [January 21, 1997], 334
|||

PHIL 357-368)
 [G.R. No. 156951. September 22, 2006.]

REPUBLIC OF THE
PHILIPPINES, petitioner, vs. SOUTHSIDE HOMEOWNERS ASS
OCIATION, INC. and the REGISTER OF DEEDS OF PASIG,
RIZAL, respondents.

BASES CONVERSION DEVELOPMENT AUTHORITY, intervenor,

DEPARTMENT OF NATIONAL DEFENSE, represented by HON.

SECRETARY ANGELO T. REYES, and the ARMED FORCES OF
THE PHILIPPINES, represented by CHIEF OF STAFF,
AFP, GENERAL NARCISO L. ABAYA, intervenors.

[G.R. No. 173408. September 22, 2006.]

RENE A.V. SAGUISAG, MGEN. MARCIANO ILAGAN (Ret.),

MGEN. PONCIANO MILLENA (Ret.), BGEN. JUANITO MALTO
(Ret.), BGEN. RAYMUNDO JARQUE (Ret.) and COL.
DOMINADOR P. AMADOR (Ret.), petitioners, vs. L/T. GEN.
HERMOGENES C. ESPERON, JR., respondent.

DECISION

GARCIA, J : p

Before the Court are these two petitions having, as common denominator, the
issue of ownership of a large tract of land.
In the first, a petition for review under Rule 45 of the Rules of Court and docketed
as G.R. No. 156951, the petitioner Republic of the Philippines seeks to
nullify and set aside the Decision 1 dated January 28, 2003 of the Court of
Appeals (CA) in CA-G.R. CV No. 59454, affirming the dismissal by the Regional
Trial Court (RTC) of Pasig City, Branch 71, of the Republic's complaint for
declaration of nullity and cancellation of a land title against the herein private
respondent, the Southside Homeowners Association, Inc. (SHAI).
In the second, docketed as G.R. No. 173408, petitioners Rene Saguisag and five
(5) retired military officers pray that Lt. Gen. Hermogenes C. Esperon, Jr., the
present Chief of Staff of the Armed Forces of the Philippines (AFP), be asked to
show cause why he should not be cited for contempt for having announced time
and again that the military officers and their families in the contempt action would
be ousted and evicted from the property subject of the main petition even before
the issue of ownership thereof is finally resolved by the Court.
After the private respondent SHAI had filed its Comment 2 to the petition in
G.R. No. 156951, the Bases Conversion Development Authority (BCDA),
followed by the Department of National Defense (DND) and the AFP, joined
causes with the petitioner Republic and thus sought leave to intervene. The
Court, per its Resolutions dated September 3, 2003, 3and September 29,
2003, 4 respectively, allowed the intervention and admitted the corresponding
petitions-for-intervention.
Per Resolution of the Court dated August 09, 2006, both petitions were ordered
consolidated.
The Republic's recourse in G.R. No. 156951 is cast against the following
backdrop:
On July 12, 1957, then President Carlos P. Garcia issued Proclamation No.
423 5 establishing a military reservation known as Fort William McKinley — later
renamed Fort Andres Bonifacio Military Reservation (FBMR). The
proclamation "withdr[ew] from sale or settlement and reserve[d] for military
purposes, under the administration of the Chief of Staff of the [AFP] . . . the
[certain] parcels of the public domain [indicated in plan Psu-2031]" situated in the
several towns and a city of what was once the Province of Rizal. On its face, the
proclamation covers three (3) large parcels of land, to wit: Parcel No. 2 (portion),
Parcel No. 3 (or 3-A) and Parcel No. 4 (or 4-A). Parcel No. 3 with an area of
15,912,684 square meters and Parcel No. 4 with an area of 7,660,128 square
meters are described in the proclamation as situated inside Fort McKinley, Rizal.
Specifically mentioned as excluded from Parcel No. 4 albeit within its boundaries
are the American Battle Monument Cemetery (606,985 sq. m.), the Traffic Circle
(7,093 sq. m.) and the Diplomatic and Consular area (100,000 sq.m.). caSDCA

Several presidential proclamations would later issue excluding certain defined

areas from the operation of Proclamation No. 423 and declaring them open for
disposition. These are Proclamation No. 461 6 and Proclamation No. 462, 7 both
series of 1965, excluding portions of the reservation and declaring them the AFP
Officers' Village and the AFP EM's Village, respectively, to be disposed of
under Republic Act (R.A.) 274 8 and R.A. 730 9 in relation to the Public Land Act (C.A. 141,
as amended). Excluded, too, under Proclamation No. 172 dated October 16, 1987 and to be
disposed pursuant to the same laws aforementioned, save those used or
earmarked for public/quasi-public purposes, are portions of the reservation
known as Lower and Upper Bicutan, Western Bicutan and the Signal Village, all
in Taguig, Metro Manila.
In 1992, Congress enacted the Bases Conversion and Development Act (R.A.
7227, as amended), investing the BCDA the power to own, hold and administer
portions of Metro Manila military camps that may be transferred to it by the
President 10 and to dispose, after the lapse of a number of months, portions of Fort Bonifacio. 11
At the core of the instant proceedings for declaration of nullity of title are parcels
of land with a total area of 39.99 hectares, more or less, known as or are
situated in what is referred to as the JUSMAG housing area in Fort Bonifacio. As
may be gathered from the pleadings, military officers, both in the active and
retired services, and their respective families, have been occupying housing units
and facilities originally constructed by the AFP on the JUSMAG area.
Private respondent SHAI is a non-stock corporation organized mostly by wives of
AFP military officers. Records show that SHAI was able to secure from
the Registry of Deeds of the Province of Rizal a title — Transfer Certificate of
Title (TCT) No. 15084 12 — in its name to the bulk of, if not the entire, JUSMAG
area. TCT No. 15084 particularly describes the property covered thereby as
follows:
A parcel of land (Lot 3-Y-1, Psd-76057, being a portion of Parcel 3 of
plan Psu-2031) situated in Jusmang (sic) Area, Fort Bonifacio, Province
of Rizal. . . . containing an area of . . . (398,602) SQUARE METERS. . . .
.
A parcel of land (Lot 3-Y-2, Psd-76057 as shown on subdivision Plan
Psd 76057, being a portion of parcel 3 of plan Psu-2031, LRC Rec. No.)
situated in Jusmang (sic) Area, Fort Bonifacio, Province of Rizal. . . .
containing an area of . . . (1,320) SQUARE METERS . . . . .
(Underscoring added.)
The Rizal Registry issued TCT No. 15084 on October 30, 1991 on the basis of a
notarized Deed of Sale 13 purportedly executed on the same date by then
Director Abelardo G. Palad, Jr. (Palad, for brevity) of the Lands Management
Bureau (LMB) in favor of SHAI. The total purchase price as written in the
conveying deed was P11,997,660.00 or P30.00 per square meter.
It appears that in the process of the investigation conducted by the Department
of Justice on reported land scams at the FBMR, a copy of the aforesaid October
30, 1991 deed of sale surfaced and eventually referred to the National Bureau of
Investigation (NBI) for examination. The results of the examination undertaken by
NBI Document Examiner Eliodoro Constantino are embodied in his Questioned
Documents Report (QDR) No. 815-1093. 14 Its highlights:
QUESTIONED SPECIMENS:
1. Original copy of the Deed of Sale . . . issued in favor of the Navy
Officers Village Association (NOVA) . . . containing the . . . signature of
"ABELARDO G. PALAD, JR." . . . designated as "Q-961" . . . .
 2. Original copy of the Deed of Sale . . . issued in favor of SHAI . . .
containing the signature of "ABELARDO G. PALAD, JR." . . . designated
as "Q-962. . . .
xxx xxx xxx
PURPOSE OF EXAMINATION:
To determine whether or not the questioned and sample/specimen
signatures "ABELARDO G. PALAD, JR." were written by one and the
same person.
FINDINGS:
Scientific comparative examination and analysis of the specimens,
submitted, under stereoscopic microscope and magnifying lens, with the
aid of photographic enlargement . . . reveals that there exist
fundamental, significant differences in writing characteristics between
the questioned and the standard/sample signatures "ABELARDO G.
PALAD, JR." such as in:
— The questioned signatures show slow, drawn, painstaking laborious
manner in execution of strokes; that of the standard/sample signatures
show free, rapid coordinated and spontaneous strokes in the manner of
execution of letters/elements.
xxx xxx xxx
Furthermore, the questioned signature "ABELARDO G. PALAD, JR."
marked "Q-961" is a product of TRACING PROCESS by CARBON-
OUTLINE METHOD.
CONCLUSION:
Based on the above FINDINGS, the questioned and the
standard/sample signatures "ABELARDO G. PALAD, JR." were not
written by one and the same person. THEcAS

The questioned signature "ABELARDO G. PALAD, JR." marked "Q-961"

is a TRACED FORGERY by carbon process.
REMARKS:
The other questioned Deeds of Sale containing the signatures of
"ABELARDO G. PALAD, JR." are still in the process of examination. 15
On October 16, 1993, then President Fidel V. Ramos issued Memorandum
Order No. 173 16 directing the Office of the Solicitor General (OSG) to institute
action towards the cancellation of TCT No. 15084 and the title acquired by the
Navy Officer's Village Association (NOVA) over a bigger parcel within the
reservation. A month later, the OSG, in behalf of the petitioner Republic, filed
with the RTC of Pasig City the corresponding nullification and cancellation of title
suit against the private respondent SHAI. In its complaint, docketed as Civil
Case No. 63883 and eventually raffled to Branch 71 of the court,
the Republic alleged that fraud attended SHAI's procurement of TCT No. 15084.
In paragraphNo. 5 of the complaint, the Republic alleged that TCT No. 15084 is
void owing, inter alia, to the following circumstances: a) the conveying deed is
spurious as the purported signature thereon of Palad is a forgery; b) there
are no records with the LMB of (i) the application to purchase and (ii) the alleged
payment of the purchase price; and c) the property in question is inalienable,
being part of a military reservation established under Proclamation No. 423. 17

In its ANSWER with counterclaim, respondent SHAI denied the material

allegations of the complaint and countered that the impugned title as well as the
October 30, 1991 Deed of Sale are valid documents which the Republic is
estopped to deny. 18 SHAI also alleged paying in full the purchase price indicated
in the deed as evidenced by Official ReceiptNo. 6030203-C dated October 29,
1991.
On October 19, 1994, the case was heard on pre-trial in the course of which
the Republic, as plaintiff therein, marked (and later offered in evidence) the Deed
of Sale dated October 30, 1991 as its Exhibit "A," and TCT No. 15084
as Exhibit "B." Respondent, then defendant SHAI adopted Exhibits "A" and "B"
as its Exhibits "1" and "2," respectively. As the pre-trial order was written, it
would appear that the parties agreed to limit the issue to the due execution and
genuineness of Exhs. "A" and "B." 19
During the trial, the Republic presented as expert witness NBI Document
Examiner Eliodoro Constantino who testified on NBI QDR No. 815-1093 and
asserted that the signature of Palad in Exhibit "A" is a forgery. For his part,
Palad dismissed as forged his signature appearing in the same document and
denied ever signing the same, let alone in front of a notary public holding office
outside of the LMB premises. Pressing the point, Palad stated that he could not
have had signed the conveying deed involving as it did a reservation area which,
apart from its being outside of the LMB's jurisdiction, is inalienable in the first
place. The testimony of other witnesses revolved around the absence of bureau
records respecting SHAI's application to acquire, payment of the purchase price
and Psd-76057, the plan described in TCT No. 15084. 20
For its part, then defendant SHAI presented an opposing expert witness in the
person of Police Inspector Redencion Caimbon who brought with him PNP
QDR No. 001-96 and testified that Palad's signature in Exhibit "A" (same as
Exh. "1") is genuine. Mrs. Virginia Santos, then SHAI president, likewise
testified, saying that applications to purchase were signed and then filed with the
LMB by one Engr. Eugenia Balis, 21 followed by the payment in full of the
contract price. Atty. Vicente Garcia, the then Register of Deeds of Rizal, also
testified about his having endorsed to Palad a letter-inquiry he received from
SHAI respecting the authenticity of TCT No. 15084. Palad's response-letter dated
January 23, 1992 (Exh. "10"), according to Atty. Garcia, is to the effect that
TCT No. 15084 must be genuine as it emanated from the Registry's office on the
basis of the October 30, 1991 Deed of Sale. 22
On rebuttal, Palad would deny authorship of Exhibit "10" and an LMB official
would disclaim transmitting the same to Atty. Garcia.
Eventually, in a decision 23 dated October 7, 1997, the trial court rendered
judgment dismissing the Republic's complaint, to wit:
WHEREFORE, in view of the foregoing, the Complaint dated November
15, 1991 is hereby DISMISSED without pronouncement as to costs.
The counterclaims are also DISMISSED.
SO ORDERED.
In not so many words, the trial court considered the parcels covered by the deed
in question as no longer part of the FBMR.
Therefrom, the Republic went on appeal to the CA whereat its appellate recourse
was docketed as CA-G.R. CV No. 59454.
In the herein assailed Decision 24 dated January 28, 2003, the appellate court
affirmed in toto that of the trial court.
Hence, this petition of the Republic on the threshold abstract submission that the
CA "completely ignored, overlooked and/or grossly misappreciated facts of
substance which, if duly considered, will materially affect the outcome of this
case."
In its COMMENT To Petition, private respondent SHAI parlays the "what-can-be-
raised" line. It urges the dismissal of the petition on the ground that the issues
raised therein, particularly those bearing on the authenticity of Exhibit
"A"/"1," are mainly questions of fact, adding that the matter of the inalienability
of the area purportedly sold is outside the issue agreed upon during the pre-trial
stage.
The desired dismissal cannot be granted on the bases of the reasons proffered
above.
While the Court, in a petition for review of CA decisions under Rule 45 of the
Rules of Court, usually limits its inquiry only to questions of law, this rule is far
from absolute. Reyesv. Court of Appeals, 25 citing Floro v. Llenado, 26 for one,
suggests as much. In Floro, we wrote:
 . . . There are, however, exceptional circumstances that would compel
the Court to review the finding of facts of the [CA], summarized in . . .
and subsequent cases as follows: 1) when the inference made is
manifestly mistaken, absurd or impossible; 2) when there is grave abuse
of discretion; 3) when the finding is grounded entirely on speculations,
surmises or conjectures; 4) when the judgment of the [CA] are based on
misapprehension of facts; 5) when the findings of facts are conflicting; 6)
. . .; 7) . . .; 8) . . .; 9) when the [CA] manifestly overlooked certain
relevant facts not disputed by the parties and which if properly
considered would justify a different conclusion; and 10) when the
findings of facts . . . are premised on the absence of evidence and are
contradicted by the evidence on record. (Words in bracket, added.) cIaHDA

To the mind of the Court, the instant case is within the purview of at least three of
the exceptions listed above, foremost of which is item #9.
Private respondent SHAI's stance about the petitioner Republic being barred
from raising the issue of inalienability since it failed to plead or assert the same at
the pre-trial proceedings is, to a degree, correct. For the general rule, as
articulated in Permanent Concrete Products, Inc. v. Teodoro, 27 is that the
determination of issues at a pre-trial conference bars the consideration of others
on appeal. It should be pointed out, however, that the rationale for such
preliminary, albeit mandatory, conference is to isolate as far as possible the trial
out of the realm of surprises and back-handed maneuverings. And lest it be
overlooked, the adverted rule on the procedure to be observed in pre-trials is,
asBergano v. Court of Appeals 28 teaches, citing Gicano v. Gegato, 29 subject to
exceptions. And without meaning to diminish the importance of the same rule,
the Court is possessed with inherent power to suspend its own rules or to except
a particular case from its operations whenever the demands of justice so
require. 30
Given the foregoing considerations, the rule to be generally observed in pre-trial
conferences hardly poses an insurmountable obstacle to tackling the question of
inalienability which, under the premises, is an issue more legal than factual. As it
were, the element of surprise is not really present here. For the issue of
inalienability, which is central to theRepublic's cause of action, was raised in its
basic complaint, passed upon by the CA and, before it, by the trial court 31 and of
which at least one witness (Palad) was examined as follows:
Q: Mr. Witness you stated that the parcel of land in question at the time
of the land alleged sale was part of the . . . [FBMR]. Now as part
of the . . . [FBRM] do you know whether the said parcel of land
can be the subject of disposition?
A: If it is part of the reservation it cannot be sold and it is already part of
those government lands that has been assigned to other
government agencies that is no longer within my jurisdiction.
 Meaning to say I have no more say on that because the
proclamation to the effect was reserving this for particular purpose
under the DND . . . . 32(Words in bracket added.)
At any rate, Palad's testimony drew nary an objection from private respondent
SHAI. It even cross-examined said witness. 33 The rule obtains that the
introduction of evidence bearing on an issue not otherwise included in the pre-
trial order amounts to implied consent conferring jurisdiction on the court to try
such issue. 34
Digressing from the procedural aspects of this case, we now consider the
clashing assertions regarding the JUSMAG area. Was it, during the period
material, alienable or inalienable, as the case may be, and, therefore, can or
cannot be subject of a lawful private conveyance?
Petitioner Republic, as do the intervenors, asserts the inalienable character of
the JUSMAG area, the same having not effectively been separated from the
military reservation and declared as alienable and disposable.
The Republic's and the intervenor's parallel assertions are correct.
The President, upon the recommendation of the Secretary of Environment and
Natural Resources, may designate by proclamation any tract or tracts of land of
the public domain as reservations for the use of the Republic or any of its
branches, or for quasi-public uses or purposes. 35 Such tract or tracts of land
thus reserved shall be non-alienable and shall not be subject to sale or other
disposition until again declared alienable. 36 Consistent with the foregoing
postulates, jurisprudence teaches that a military reservation, like the FBMR, or a
part thereof is not open to private appropriation or disposition and, therefore, not
registrable, 37 unless it is in the meantime reclassified and declared as
disposable and alienable public land. 38 And until a given parcel of land is
released from its classification as part of the military reservation zone and
reclassified by law or by presidential proclamation as disposable and alienable,
its status as part of a military reservation remains, 39 even if incidentally it is
devoted for a purpose other than as a military camp or for defense. So it must be
here.
There can be no quibbling that the JUSMAG area subject of the questioned
October 30, 1991 sale formed part of the FBMR as originally established
under Proclamation No. 423. And while private respondent SHAI would
categorically say that the petitioner Republic had not presented evidence that
"subject land is within military reservation," 40 and even dared to state that the
JUSMAG area is the private property of the government and therefore removed
from the concept of public domain per se, 41 its own evidence themselves belie
its posture. We start with its Exhibit "2" (petitioner's Exh. "B"), a copy of TCT No.
15084, which described the area covered thereby measuring 399,922 square
meters as a "portion of Parcel 3 of plan Psu-2031 situated in Jusmang (sic) area
Fort Bonifacio." Complementing its Exhibit "2" is its Exhibit "1" — the deed of
sale — which technically described the property purportedly being conveyed to
private respondent SHAI as follows:

A PARCEL OF LAND (Lot 3-Y-1, Psd-76067, being a portion of Parcel

3 of plan Psu-2031) situated in Jusmag (sic) area, Fort Bonifacio,
Province of Rizal. . . . (Emphasis added) . . .
As the Court distinctly notes, the disputed property, as described in private
respondent's Exhibits "1" and "2," formed part of that wide expanse
under Proclamation No. 423which lists, as earlier stated, three (3) parcels of land
of the public domain as falling within its coverage. These include, inter alia, the
entire 15,912,684-square meter area constituting Parcel No. 3 of Plan Psu
2031 located inside the now renamed Fort Mckinley which, to a redundant point,
was declared a military reservation. cSEaTH

The Court has, on the issue of inalienability, taken stock of the Compilation Map
of Approved Surveys Plan inside Parcels 1, 2, 3 and 4, of plan Psu
2031 42 prepared in September 1995 and certified by the Department of
Environment and Natural Resources (DENR). It indicates in colored ink the
outlines of Parcels 2, 3 and 4 covered by Proclamation No. 423. As there also
shown, the 399,992-square meter area embraced by SHAI's TCT No. 15084,
defined in the legend by red-colored stripes, is within the violet-colored borders of
Parcel No. 3 and Parcel No. 4 of Proclamation No. 423.
Indubitably, the area covered by SHAI's TCT No. 15084 was and is still part of
the FBMR, more particularly within the 15,912,684-square meter Parcel No. 3 of
the reservation. The petitioner Republic, joined by the intervenors BCDA, DND
and AFP in this appellate proceedings, has maintained all along this thesis.
Towards discharging its burden of proving that the disputed property is part of the
reservation, the petitioner Republic need only to demonstrate that all of the
15,912,684 square meters of Parcel No. 3 of Plan Psu 2031 have been reserved
for military purposes. The evidence, however, of the fact of reservation is the law
or, to be more precise, Proclamation No. 423 itself, the contents and issuance of
which courts can and should take judicial notice of under Section 1, Rule 129 of
the Rules of Court. 43
The Republic has, since the filing of its underlying complaint,
invoked Proclamation No. 423. In the process, it has invariably invited attention
to the proclamation's specific area coverage to prove the nullity of TCT No.
15084, inasmuch as the title embraced a reserved area considered inalienable,
and hence, beyond the commerce of man. In this regard, the appellate court
seemed to have glossed over, if not entirely turned a blind eye on, certain
admissions made by the private respondent, the most basic being those made in
its answer to the Republic's allegations in paragraph 5 (e) and (g) of its
complaint. To the Republic's allegations that the property covered by TCT No.
15084 was and remains part the FBMR, SHAI's answer thereto reads:
2. It specifically denies the allegations in paragraphs . . . 5 of the
complaint, the truth of the matter being that — in the Deed of Sale . . .,
the Director of Lands Certificate (sic) that he is "authorized under the law
to sell" the subject property and that the "lots were duly awarded by the
[LBM] to the vendee. 44 (Emphasis and word in bracket added.)
In net effect, private respondent SHAI admitted what the
petitioner Republic alleged in par. 5 (e) and (g) of the complaint, the former's
denial to such allegations on the inalienable nature of the property covered by
TCT No. 15084 being in the nature of a general denial. Under the rules on
pleadings, a specific, not a general, denial is required; a denial is not specific
because it is so qualified or termed "specific" by the pleader. 45 The defendant
must specify each material factual allegation the truth of which he absolutely
denies and, whenever practicable, shall set forth the substance of the matters
upon which he will rely to support his denial. 46 Else, the denial will be regarded
as general and will, therefore, be regarded as an admission of a given material
fact/s stated in the complaint.
What private respondent SHAI did under the premises was to enter what, under
the Rules, is tantamount to a general denial of the Republic's averments that
what SHAI's TCTNo. 15084 covers is part of the military reservation. In the
process, private respondent SHAI is deemed to admit the reality of such
averment.
To be sure, the petitioner Republic, as plaintiff below, had more than sufficiently
established its claim on the inalienability of the parcels of land covered by
TCT No. 15084. In fine, it had discharged the burden of proof on the issue of
inalienability. Be that as it may, the burden of evidence to disprove inalienability
or, to be precise, that said parcels of land had, for settlement purposes,
effectively been withdrawn from the reservation or excluded from the coverage
of Proclamation No. 423, devolves upon the private respondent. This is as it
should be for the cogency of SHAI's claim respecting the validity of both the
underlying deed of sale (Exh. "A"/"1") and its TCT No. 15084 (Exh. "B"/"2") rests
on the postulate that what it purportedly bought from the LMB had ceased to be
part of the reserved lands of the public domain. Elsewise put, SHAI must prove
that the JUSMAG area had been withdrawn from the reservation and declared
open for disposition, failing which it has no enforceable right over the area as
against the State.
Private respondent SHAI has definitely not met its burden by reason of lack of
evidence. To be sure, it has not, because it cannot even if it wanted to, pointed to
any presidential act specifically withdrawing the disputed parcels from the
coverage of Proclamation No. 423. Worse still, its own Exhibit "5," 47 a letter
dated March 19, 1991 of then PA Commanding General, M/Gen Lisandro
Abadia, to one Mrs. Gabon, then President of the SHAI, cannot but be viewed as
a party's judicial admission that the disputed land has yet to be excluded from the
military reservation. The Abadia letter, with its feature dis-serving to private
respondent SHAI, reads in part as follows:
Dear Mrs. Gabon:
This is in connection with your move to make a petition to President
Aquino regarding the possible exclusion of Southside Housing Area from
the military reservation and for its eventual allotment to the . . . military
officers presently residing thereat. Allow me to state that I
interpose no objection . . . . I find it . . . helpful to our officers to be
provided a portion of the Fort Bonifacio military reservation . . . .
(Underscoring added.)
Owing to the foregoing considerations, the Court is hard put to understand how
the CA could still have found for SHAI. The appellate court, apparently swayed
by what SHAI said in its Brief for the Appellees 48 that:
Appellant [petitioner Republic] is probably unaware that . . ., then
President Diosdado Macapagal . . . issued Proclamation 461 when he
excluded from the operation ofProclamation No. 423 . . . an area of
2,455,810 square meters more or less. . . . Likewise on October 16,
1987, then President Corazon Aquino issued Proclamation No.
172excluding five (5) parcels of land from the operation
of Proclamation No. 423 also located at Fort Bonifacio containing an
area of 4,436, 478 . . . . So if we deduct the 6,892,288 [2,455,810 +
4,436,478 = 6,892,288] square meters covered by Proclamation Nos.
461 and 172 of the areas reserved for military purposes of 7,053,143
square meters, what is only left is 160,857 square meters or more or
less 16 hectares . . . . 49
justified its holding on the alienability of the disputed land with the following
disquisition:
The foregoing admission aside, appellant's [now petitioner's] reliance on
Proclamation No. 493 [should be 423] in insisting that the land in
litigation is inalienable because it is part of the [FBMR] is too general to
merit serious consideration. While it is true that, under the said July 12,
1957 Proclamation, then President Carlos P. Garcia reserved the area
now known as Fort Bonifacio for military purposes, appellee [now
respondent] correctly calls our attention to the fact, among other matters,
that numerous exceptions thereto had already been declared through
the years. The excluded areas under Proclamation No. 461, dated
September 29, 1965 and Proclamation No. 172, dated October 16, 1987
 alone already total 6,892,338 square meters. (Figures in bracket
added.) IaEACT

The CA's justifying line does not commend itself for concurrence.
For one, it utilizes SHAI's misleading assertion as a springboard to justify
speculative inferences. Per our count, Proclamation 423 reserved for military
purposes roughly a total area of 25,875,000 square meters, not 7,053,143. On
the other hand, Proclamation Nos. 461 and 172 excluded a combined area
of 6,892,338 square meters. Now then, the jump from an acknowledgment of the
disputed parcels of land having been reserved for military purposes to a
rationalization that they must have been excluded from the reservation because
6,892,338 square meters had already been withdrawn from Proclamation 423 is
simply speculative. Needless to stress, factual speculations do not make for
proof.
Corollary to the first reason is the fact that private respondent SHAI — and quite
understandably, the appellate court — had not pointed to any proclamation, or
legislative act for that matter, segregating the property covered by TCT No.
15084 from the reservation and classifying the same as alienable and disposable
lands of the public domain. To reiterate what we earlier said, lands of the public
domain classified as a military reservation remains as such until, by presidential
fiat or congressional act, the same is released from such classification and
declared open to disposition. 50 The October 30, 1991 Deed of Sale purportedly
executed by Palad, assuming for the nonce its authenticity, could not plausibly be
the requisite classifying medium converting the JUSMAG area into a disposable
parcel. And private respondent SHAI's unyielding stance that would have
the Republicin estoppel to question the transfer to it by the LMB Director of the
JUSMAG area is unavailing. It should have realized that the Republic is not
usually estopped by the mistake or error on the part of its officials or agents. 51

Since the parcels of land in question allegedly sold to the private respondent are,
or at least at the time of the supposed transaction were, still part of the FBMR,
the purported sale is necessarily void ab initio.
The Court can hypothetically concede, as a matter of fact, the withdrawal of the
JUSMAG area from the ambit of Proclamation No. 423 and its reclassification as
alienable and disposable lands of the public domain. Still, such hypothesis would
not carry the day for private respondent SHAI. The reason therefor is basic:
Article XII, Section 3 52 of the 1987 Constitution forbids private corporations from
acquiring any kind of alienable land of the public domain, except through lease
for a limited period. While Fr. Bernas had stated the observation that the reason
for the ban is not very clear under existing jurisprudence, 53 the fact remains that
private corporations, like SHAI, are prohibited from purchasing or otherwise
acquiring alienable public lands.
Even if on the foregoing score alone, the Court could write finis to this
disposition. An appropriate closure to this case could not be had, however,
without delving to an extent on the issue of the validity of the October 30, 1991
Deed of Sale which necessarily involves the question of the authenticity of what
appears to be Palad's signature thereon.
With the view we take of the case, the interplay of compelling circumstances and
inferences deducible therefrom, would, as a package, cast doubt on the
authenticity of such deed, if not support a conclusion that the deed is spurious.
Consider:
1. Palad categorically declared that his said signature on the deed is a
forgery. The Court perceives no reason why he should lie, albeit
respondent states, without elaboration, that Palad's declaration is aimed
at avoiding "criminal prosecution". 54 The NBI signature expert
corroborated Palad's allegation on forgery. 55 Respondent SHAI's expert
witness from the PNP, however, disputes the NBI's findings. In net
effect, both experts from the NBI and the PNP cancel each other out.
2. Palad signed the supposed deed of sale in Manila, possibly at the
LMB office at Plaza Cervantes, Binondo. Even if he acted in an official
capacity, Palad nonetheless proceeded on the same day to Pasig
City to appear before the notarizing officer. The deed was then brought
to the Rizal Registry and there stamped "Received" by the entry clerk.
That same afternoon, or at 3:14 p.m. of October 30, 1991 to be precise,
TCT No. 15084 was issued. In other words, the whole conveyance and
registration process was done in less than a day. The very unusual
dispatch is quite surprising. Stranger still is why a bureau head, while in
the exercise of his functions as the bureau's authorized contracting
officer, has to repair to another city just to have a deed notarized.
3. There is absolutely no record of the requisite public land application to
purchase required under Section 89 of the Public Land Act. 56 There is
also no record of the deed of sale and of documents usually
accompanying an application to purchase, inclusive of the investigation
report and the property valuation. The Certification under the seal of the
LMB bearing date November 24, 1994 and issued/signed by Alberto
Recalde, OIC, Records Management Division of the LMB pursuant to
a subpoena issued by the trial court 57attest to this fact of absence of
records. Atty. Alice B. Dayrit, then Chief, Land Utilization and Disposition
Division, LMB, testified having personally looked at the bureau record
book, but found no entry pertaining to SHAI. 58
4. In its Answer as defendant a quo, respondent SHAI states that the
"deed of sale specifically meritorious Official Receipt No. 6030203 — C
 dated 29 October 1991, (sic) as evidence of full payment . . . of the
agreed purchase price. . . . ." An official receipt (O.R.) is doubtless the
best evidence to prove payment. While it kept referring to O.R. No.
6030203 as its evidence of the required payment, 59 it failed to present
and offer the receipt in evidence. A Certification under date September
15, 1993 of the OIC Cash Division, LMB, states that "OR # 6030203 in
the amount of P11,977,000.00 supposedly paid by [SHAI] is not among
the series of [ORs] issued at any time by the National Printing Office to
the Cashier, LMB, Central Office." 60 A copy of the OR receipt is not
appended to any of the pleadings filed before the Court. We can thus
validly presume that no such OR exists or, if it does, that its presentation
would be adverse to SHAI. aIHSEc

A contract of sale is void where the price, which appears in the

document as paid has, in fact, never been paid. 61
5. The purchase price was, according to the witnesses for SHAI, paid in
full in cash to the cashier of the LMB the corresponding amount
apparently coming in a mix of P500 and P100 denominations. Albeit
plausible, SHAI's witnesses' account taxes credulity to the limit.
A final consideration in G.R. No. 156951. This case could not have come to pass
without the participation of a cabal of cheats out to make a dishonest buck at the
expense of the government and most likely the members of SHAI. No less than
its former president (Ms. Virginia Santos) testified that a "facilitator" did, for a fee,
the necessary paper and leg work before the LMB and the Registry of Deeds that
led to the execution of the Deed of Sale and issuance of the certificate of title in
question. 62 Ms. Santos identified Eugenia Balis, a geodetic engineer, as
the "facilitator" 63 who "facilitated all these presentation" of documents, 64 and
most of the time, "directly transacted" with the LMB and the Register of Deeds
leading to acquisition of title. 65 Engr. Balis was, in the course of Ms. Santos'
testimony, directly mentioned by name for at least fifteen (15) times. Not
surprisingly, Engr. Balis did not appear in court, despite SHAI's stated intention to
present her as witness. 66
The extent of the misappropriation of the Fort Bonifacio land involved in this and
the NOVA area litigations is, as described in the Report of the Fact-Finding
Commission, 67 "so epic in scale as to make the overpricing of land . . .
complained of in the two hundred AFP [Retirement and Separation Benefits
System] RSBS cases (P703 million) seem like petty shoplifting in
comparison." 68 The members of private respondent SHAI may very well have
paid for what they might have been led to believe as the purchase price of the
JUSMAG housing area. The sad reality, however, is that the over P11 Million
they paid, if that be the case, for a piece of real estate contextually outside the
commerce of man apparently fell into the wrong hands and did not enter the
government coffers. Else, there must be some memorials of such payment.
At bottom, this disposition is nothing more than restoring the petitioner Republic,
and eventually the BCDA, to what rightfully belongs to it in law and in fact. There
is nothing unjust to this approach.
With the foregoing disquisitions, the petition for contempt in G.R. No.
173408 need not detain us long. As it were, the question raised by the petitioners
therein respecting the ownership of the JUSMAG area and, accordingly, of the
right of the petitioning retired military officers to remain in the housing units each
may be occupying is now moot and academic. However, contempt petitioners'
expressed revulsion over the efforts of the military establishment, particularly the
AFP Chief of Staff, to oust them from their respective dwellings, if that really be
the case, even before G.R. No. 156951 could be resolved, is understandable as
it is justified. We thus end this ponencia with a reminder to all and sundry that
might is not always right; that ours is still a government of laws and not of men,
be they in the civilian or military sector. Accordingly, the Court will not treat lightly
any attempt to trifle, intended or otherwise, with its processes and proceedings. A
becoming respect to the majesty of the law and the prerogatives of the Court is a
must for the orderly administration of justice to triumph.
WHEREFORE, the petition in G.R. No. 156951 is GRANTED and the appealed
CA Decision is REVERSED and SET ASIDE. Accordingly, the Deed of Sale
dated October 30, 1991 (Exh. "A"/"1") purportedly executed in favor of private
respondent SHAI and TCT No. 15084 (Exh. "B"/"2") of the Registry of Deeds of
Rizal issued on the basis of such deed are declared VOID. The Register of
Deeds of Pasig or Taguig, as the case may be, is hereby ordered to CANCEL
TCT No. 15084 in the name of SHAI and the area covered thereby is
DECLARED part of the Fort Bonifacio Military Reservation, unless the same has,
in the interim, been duly excluded by law or proclamation from such reservation.
Private respondent SHAI, its members, representatives and/or their assigns shall
vacate the subject parcels of land immediately upon the finality of this decision,
subject to the provisions of Republic Act No. 7227, otherwise known as
the Bases Conversion and Development Act.
Cost against the private respondent SHAI.
Having said our piece in G.R. No. 173408, we need not speak any further
thereon other than to deny as we hereby similarly DENY the same. IDTHcA

SO ORDERED.
Sandoval-Gutierrez, Corona and Azcuna, JJ., concur.
Puno, J., took no part. Brother is with intervenors.
 (Republic v. Southside Homeowners Association, Inc., G.R. No. 156951,
|||

173408, [September 22, 2006], 534 PHIL 8-34)

 SECOND DIVISION

[G.R. No. 66807. January 26, 1989.]

REPUBLIC OF THE PHILIPPINES, represented by the

DIRECTOR OF LANDS, petitioner, vs. MELITONA ALAGAD,
SPOUSES CARMEN ALAGAD AND ESPIRIDION KOLIMLIM,
JUSTO ALAGAD, CARLOS ALAGAD, SPOUSES
LIBRADA ALAGAD AND EMERSON ABANO,
DEMETRIO ALAGAD, ANTONIO ALAGAD, REGISTER OF
DEEDS OF LAGUNA, and the INTERMEDIATE APPELLATE
COURT (Fourth Civil Cases Division), respondents.

The Solicitor General for petitioner.

Alberto, Salazar & Associates for private respondents.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; FAILURE OF THE AGENTS OF THE

OF THE STATE TO APPEAR IN PRE-TRIAL; STATE NOT BOUND BY OR
ESTOPPED BY MISTAKES OF ITS OFFICIALS OR NON-SUITED BY REASON
THEREOF. — It is well-established that the State cannot be bound by, or
estopped from, the mistakes or negligent acts of its official or agents, much more,
non-suited as a result thereof.
2. ID.; ID.; RES JUDICATA: NOT AN IMPEDIMENT TO ACTION FOR
REVERSION OF PROPERTY WHERE COURT LOOKED JURISDICTION
OVER THE SUBJECT MATTER. — Certificate of title may be ordered cancelled
(Republic v. Animus, et al., supra), and the cancellation may be pursued through
an ordinary action therefor. This action cannot be barred by the prior judgment of
the land registration court, since the said court had no jurisdiction over the
subject matter.
3. CIVIL LAW; LAND REGISTRATION; FORESHORE LAND DEFINED. — 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.
4. REMEDIAL LAW; SUPREME COURT; NOT BEING A TRIER OF FACT,
QUESTION AS TO WHETHER OR NOT PROPERTIES IN DISPUTE ARE
FORESHORE LANDS, BEST REMANDED TO THE TRIAL COURT FOR
PROPER DETERMINATION OF THE ISSUE. — Whether or not the properties in
question are foreshore lands, is the core of controversy. The Supreme Court not
being a trier of facts, not in possession of evidence to enable it to record a
conclusive determination, remanded the case to the trial court for further
proceedings.

DECISION

SARMIENTO, J : p

The Republic appeals from the decision of the Court of Appeals 1 affirming two
orders of the defunct Court of First Instance of Laguna 2 dismissing its petition for
"annulment of title and reversion". 3 The facts appear in the decision appealed
from:
On or about October 11, 1951, defendants filed an application for
registration of their title over a parcel of land situated at Linga, Pila,
Laguna, with an area of 8.1263 hectares, reflected in survey plan Psu-
116971, which was amended after the land was divided into two parcels,
namely, Lot 1 with an area of 5.2476 hectares and Lot 2 with an area of
2.8421 hectares, reflected in survey plan Psu-226971, amd. 2.
The Republic opposed the application on the stereo-typed ground that
applicants and their predecessors have not been in possession of the
land openly, continuously, publicly and adversely under a bona fide
claim of ownership since July 26, 1894 and the land has not ceased to
be a part of the public domain. It appears that barrio folk also opposed
the application. (LRC Case No. 189. G.L.R.O. Rec. No. 4922 of the
Court of First Instance of Laguna).
By virtue of a final judgment in said case, promulgated January 16,
1956, supplemented by orders issued on March 21, 1956 and August
13, 1956, defendants were declared owners of Lot 1 and the remaining
portion, or Lot 2, was declared public land. Decree No. N-51479 was
entered and Original Certificate of Title No. 0-401, dated October 18,
1956, was issued in the names of defendants. LexLib

In August, 1966, Civil Case No. 52 of the Municipal Court of Pila,

Laguna, was filed by defendants to evict the barrio folk occupying
portions of Lot 1. On August 8, 1968, judgment was rendered in the
eviction case ordering the defendants therein to return possession of the
premises to herein defendants, as plaintiffs therein. The defendants
therein did not appeal.
The foregoing anterior proceedings triggered the filing of the instant
case. On October 6, 1970, as prayed for in the complaint, a writ of
preliminary injunction was issued enjoining the Provincial Sheriff of
 Laguna or his deputies from enforcing the writ of execution issued in
Civil Case No. 52, and the defendants from selling, mortgaging,
disposing or otherwise entering into any transaction affecting the area.
This case was set for pre-trial on July 6, 1971. Despite notice of the pre-
trial, Atty. Alejandro A. Ponferada, Special Attorney, Bureau of Lands,
representing plaintiff Republic, did not appear. On July 16, 1971, the
court a quo dismissed the complaint. The Republic filed a motion for
reconsideration, was set for hearing, and finally denied by the court a
quo, Hence, this appeal.
Plaintiff filed its record on appeal on March 13, 1972. It appears that the
appeal was dismissed by this Court for failure to show in the record on
appeal that the appeal was perfected on time. Plaintiff went to the
Supreme Court on a petition for review on the action of this Court. On
November 19, 1982, the Supreme Court set aside the dismissal
resolution of this Court and ordered Us to reinstate and give due course
to plaintiff's appeal. 4
In commencing proceedings below, the Republic claims that "the decree and title
[rendered and issued in LRC Case No. 189, G.L.R.O. Rec. No. L-4922] insofar
as the 1.42 hectare northwestern portion on end of Lot 1, Psu-116971, Amd. 2, is
concerned, are void ab initio, 5 for the following reasons:
(a) That said 1.42 hectare northwestern portion or end of Lot 1, Psu-
116971, Amd, 2, like the adjoining Lot 2 of the same survey plan
containing 2.8421 hectares, had since time immemorial, been foreshore
land reached and covered by the waters of the Laguna de Bay
(Republic vs. Ayala y Cia, L-20950, May 31, 1965; Antonio Dizon, et
al., vs. Juan de G. Rodriguez, et al., L-20355-56, April 30, 1965);
(b) That moreover said 1.42 hectare portion is actually now the site of
Barrio Aplaya, formerly a sitio of Linga, Pila, Laguna, having been
occupied by the barrio people since the American occupation of the
country in the early 1900's where they established their houses;
(c) That the barrio people of Aplaya thru the years since the early 1900's
have filled up and elevated the land to its present condition of being
some feet above the level of the adjoining Lot 2 of plan Psu-116971 and
the rest of Lot 1 of the same survey plan so much so that this barrio site
of Aplaya where there are now sixty-eight (68) houses occupied by more
than one hundred (100) families is no longer reached and covered by the
waters of the Laguna de Bay; and
(d) That were it not for the fillings made by the barrio people, the land in
question would not have been fit for human habitation, so much so that
defendants and their predecessors-in-interest could not have acquired
an imperfect title to the property which could be judicially confirmed in a
registration case, as in fact said defendants and their predecessors-in-
 interest have never been in actual possession of the land in question,
the actual occupants thereof being the barrio people of Aplaya; 6
In sustaining the trial court, the Court of Appeals held that under Section 20, of
Rule 20, of the Rules of Court, dismissal was proper upon failure of
the Republic to appear for pre-trial. It likewise ruled that the judgment,
dated January 16, 1956, in the said LRC No. 189 has long become final, titles to
the properties had been issued (in favor of the private respondents), and that res
judicata, consequently, was a bar. prLL

In its petition, the Republic assails the decision insofar as it sustained the lower
court: (1) in dismissing the petition for failure of the Republic to appear for pre-
trial; and (2) in holding that res judicata is an obstacle to the suit.
I.
With respect to the first question, we hold that the Court of Appeals has been
guilty of grave abuse of discretion. It is well-established that the State cannot be
bound by, or estopped from, the mistakes or negligent acts of its official or
agents, 7 much more, non-suited as a result thereof.
This is so because:
. . . [T]he state as a persona in law is the judicial entity, which is the
source of any asserted right to ownership in land under the basic
doctrine embodied in the 1935 Constitutionas well as the present
charter. It is charged moreover with the conservation of such patrimony.
There is need therefore of the most rigorous scrutiny before private
claims to portions thereof are judicially accorded recognition, especially
so where the matter is sought to be raked up anew after almost fifty
years. Such primordial consideration, not the apparent carelessness,
much less the acquiescence of public officials, is the controlling norm . .
.8
The cases of Ramos v. Central Bank of the Philippines 9 and Nilo v.
Romero, 10 cited by the Court of Appeals in support of its decision, are not
applicable. In Ramos, we applied estoppel upon finding of bad faith on the part of
the State (the Central Bank) in deliberately reneging on its promises. In Nilo, we
denied efforts to impugn the jurisdiction of the court on the ground that the
defendant had been "erroneously" represented in the complaint by the City
Attorney when it should have been the City Mayor, on a holding that the City
Attorney, in any event, could have ably defended the City (Davao City). In both
cases, it is seen that the acts that gave rise to estoppel were voluntary and
intentional in character, in which cases, it could not be said that the Government
had been prejudiced by some negligent act or omission.
There is no merit either, in claims that res judicata is an impediment to reversion
of property. In Republic v. Court of Appeals, 11 this Court stated:
 . . . [a] certificate of title may be ordered cancelled (Republic v.
Animus, et al., supra), and the cancellation may be pursued through an
ordinary action therefor. This action cannot be barred by the prior
judgment of the land registration court, since the said court
had no jurisdiction over the subject matter. And if there was no such
jurisdiction, then the principle of res judicata does not apply. For it is a
well-settled rule that for a prior judgment to constitute a bar to a
subsequent case, the following requisites must concur; (1) it must be a
final judgment; (2) it must have been rendered by a court having
jurisdiction over the subject matter and over the parties; (3) it must be a
judgment on the merits; and (4) there must be, between the first and
second actions, identity of parties, identity of subject matter and identity
of cause of action (Municipality of Daet vs. C4 93 SCRA 503;
Mendoza vs. Arrieta, et al., 91 SCRA 113) . . . 12

In the case at bar, if the parcel registered in the names of the private
respondents were foreshore land, the land registration court could not have
validly awarded title thereto. It would have been without the authority to do so.
The fact that the Bureau of Lands had failed to appeal from the decree of
registration could not have validated the court's decision, rendered without
jurisdiction.
II.
"Property", according to the Civil Code, "is either of public dominion or of private
ownership." 13 Property is of public dominion if it is:
(1) . . . 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; 14
or if it:
(2) . . . belong[s] to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth. 15
"All other property of the State," it is provided further, "which is not of the
character mentioned in . . . article [420], is patrimonial property," 16 meaning to
say, property "open to disposition" 17 by the Government, or otherwise, property
pertaining to the national domain, or public lands. 18 Property of the public
dominion, on the other hand, refers to things held by the State by regalian right.
They are things res publicae in nature and hence, incapable of private
appropriation. Thus, under the present Constitution, "[w]ith the exception of
agricultural lands, all other natural resources shall not be alienated." 19
Specifically:
 ART. 502. The following are of public dominion:
(1) Rivers and their natural beds;
(2) Continuous or intermittent waters of springs and brooks running in
their natural beds and the beds themselves;
(3) Waters rising continuously or intermittently on lands of public
dominion;
(4) Lakes and lagoons formed by Nature on public lands, and their beds;
(5) Rain waters running through ravines or sand beds, which are also of
public dominion;
(6) Subterranean waters on public lands;
(7) Waters found within the zone of operation of public works, even if
constructed by a contractor;
(8) Waters rising continuously or intermittently on lands belonging to
private persons, to the State, to a province, or to a city or municipality
from the moment they leave such lands;
(9) The waste waters of fountains, sewers and public establishments. 20

So also is it ordained by the Spanish Law of Waters of August 3, 1866:

Art. 44. Natural ponds and lakes existing upon public lands and fed by
public waters, belong to the public domain.
Lakes, ponds, and pools existing upon the lands of private individuals, or
the State or provinces, belong to the respective owners of such lands,
and those situated upon lands of communal use belong to their
respective "pueblos." 21
Assuming, therefore, for purposes of this petition, that the lands subject of
the Republic's reversion efforts are foreshore in nature, the Republic has
legitimate reason to demand reconveyance. In that case, res judicata or estoppel
is no defense. 22
Of course, whether or not the properties in question are, indeed, foreshore lands
is the core of controversy. According to the trial court, "the aforementioned
parcel of land is a portion of the public domain belonging to the Republic of the
Philippines," 23 and hence, available for disposition and registration. As we have
pointed out, the Government holds otherwise, and that as foreshore land, it is not
registerable.Cdpr

The question, so it follows, is one of fact: Is the parcel foreshore or is it part and
parcel of the public domain?
Laguna de Bay has long been recognized as a lake. 24 Thus:
 Laguna de Bay is a body of water formed in depressions of the earth; it
contains fresh water coming from rivers and brooks or springs, and is
connected with Manila Bay by the Pasig River. According to the
definition just quoted, Laguna de Bay is a lake. 25
And, "[i]nasmuch as Laguna de Bay is a lake," so Colegio de San Jose further
tells us, "we must resort to the legal provisions governing the ownership and use
of lakes and their beds and shores, in order to determine the character and
ownership of the parcels of land in question." 26 The recourse to legal provisions is
necessary, for under Article 74 of the Law of Waters,[T]he natural bed or basin of lakes ..
is the ground covered by their waters when at their highest ordinary
depth." 27 and in which case, it forms part of the national dominion. When Laguna
de Bay's waters are at their highest ordinary depth has been defined as:
. . . the highest depth of the waters of Laguna de Bay during the dry
season, such depth being the "regular, common, natural, which occurs
always or most of the time during the year . . . 28
Otherwise, where the rise in water level is due to the "extraordinary" action of
nature, rainfall for instance, the portions inundated thereby are not considered
part of the bed or basin of the body of water in question. It cannot therefore be
said to be foreshore land but land outside of the public dominion, and land
capable of registration as private property.
A foreshore land, on the other hand, has been defined as follows:
". . . that part of (the land) which is between high and low water and left
dry by the flux and reflux of the tides . . ." 29
"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." 30
If the submergence, however, of the land is due to precipitation, it does not
become foreshore, despite its proximity to the waters.
The case, then, has to be decided alongside these principles and regretfully, the
Court cannot make a ruling, in the first place, because it is not a trier of facts, and
in the second, it is in possession of no evidence to assist it in arriving at a
conclusive disposition. 31 We therefore remand the case to the court a quo to
determine whether or not the property subject of controversy is foreshore. We,
consequently, reverse both the Court of Appeals and the trial court and reinstate
the Republic's complaint.
WHEREFORE, this case is hereby REMANDED to the trial court for further
proceedings.
Melencio-Herrera (Chairman), Paras, Padilla and Regalado, JJ., concur.

||| (Republic v. Alagad, G.R. No. 66807, [January 26, 1989], 251 PHIL 406-416)
G.R. No. 146616 August 31, 2006

SIAIN ENTERPRISES, INC., Petitioner,

vs.
F.F. CRUZ & CO., INC., Respondent.

DECISION

CARPIO MORALES, J.:

Western Visayas Industrial Corporation (WESVICO) filed on September 18, 1973 a foreshore lease
application over the foreshore land adjacent to certain lots registered in its name, located in Loboc,
Lapuz, La Paz, Iloilo City, including Lot 3309. It eventually withdrew the application and filed on
March 1976 a petition for registration over the same foreshore land with the then Court of First
Instance of Iloilo. The case was, however, archived as WESVICO’s representative could no longer
be contacted.

It appears that WESVICO ceased to hold operations and its properties including Lot 3309 were
foreclosed by the Development Bank of the Philippines (DBP) which later consolidated its ownership
thereon. 1

On July 7, 1983, F.F. Cruz & Co. (F.F. Cruz) filed with the Bureau of Lands, Iloilo City, District Land
Office VI-1 a foreshore lease application 2 over a foreshore land, a portion of which is adjacent to Lot
3309. The application was docketed as FLA (VI-1) 176.

In the preliminary investigation report 3 on F.F. Cruz’ FLA (VI-1) 176, Senior Special Investigator
Ramon Torre who personally visited and examined the land applied for recommended that the
application be given due course.

District Land Officer Norberto Bernas thereafter submitted to the Director of Lands a
report, 4 together with relevant documents including the preliminary investigation report. The
pertinent portion of Bernas’ report reads:

. . . I personally visited the area applied for by the herein applicant and found that the same is
actually occupied and used by them as a sanctuary of their marine equipment which they are using
in their construction work of the Iloilo Port. The applicant has also introduced some facilities on the
area applied for in the repair and maintenance of said equipment. A portion of the land applied for
has already been filled up by the applicant as they are in need of a land area for the repair and
maintenance of their equipment and in the loading and unloading of materials that they use in the
construction of the Iloilo City Port.

x x x x 5 (Emphasis and underscoring supplied)

Petitioner Siain Enterprises Inc. (SIAIN), who purchased from the DBP the properties previously
owned by WESVICO including Lot 3309, 6 filed on September 29, 1986 a foreshore lease
application 7 over the foreshore land adjacent to the properties it bought from DBP.

Upon learning that 130 linear meters of the foreshore land subject of F.F. Cruz’s foreshore lease
application overlapped that covered by its foreshore lease application, SIAIN filed on January 9,
1987 a protest 8 alleging that it being the owner of the property adjoining the overlapping area, it
should be given preference in its lease.
On March 6, 1987, the Sangguniang Panglungsod of Iloilo City, by Resolution No. 174, 9 approved
the recommendation of its Committee on Finance that "for the mutual interest" of F.F. Cruz and
SIAIN, SIAIN would get 70 linear meters and F.F. Cruz would get 60 linear meters of the disputed
area, in light of its finding that, among other things, both SIAIN and F.F. Cruz would "contribute
substantially to the economic growth of the City of Iloilo."

Concurring with the Sangguniang Panglungsod, the Land Management Bureau (LMB) through its
Director, by Order 10 of July 15, 1989, dismissed SIAIN’s protest in this wise:

. . . While it cannot be denied that protestant is now the registered owner of the property adjoining
the foreshore in question, the disputed foreshore cannot be considered to have been built or formed
by means of accretion but is a reclaimed land made by respondent F.F. Cruz and Company for
the purpose of utilizing the same in the loading and unloading of their equipment and materials and
for the repair and maintenance of said equipment which respondents use in the reclamation of the
Iloilo City Port. This is supported by the findings of the District Land Officer Norberto Bernas who, in
his letter dated February 18, 1984 to this Office, reported that he personally visited the foreshore in
question and found that the same is now actually occupied and used by the respondent
company as a sanctuary of its marine equipment which it is using in its construction work of the
Iloilo City Port and that a portion of the land applied for has already been filled up by the
applicant to be utilized in the repair and maintenance of its equipment and in the loading and
unloading of materials it uses in the construction of the Iloilo City Port. It is therefore clear that the
foreshore in question is neither an accretion nor an accessory to protestants’ property. While
protestant SEI appears to be owner of the property adjacent to the disputed foreshore, it cannot be
considered as a riparian owner within the contemplation of the aforementioned law. 11 (Emphasis
and underscoring supplied)

Accordingly, the LMB disposed:

WHEREFORE, it is ordered that the protest of SIAIN Enterprises, Inc. be, as it hereby it is,
dismissed and this case, dropped from the records. Both Foreshore Lease Application Nos. (VI-5)
220 and (VI-1) 176 of SIAIN Enterprises, Inc. and F.F. Cruz and Co., Inc. respectively, shall be
amended in such a way that SIAIN’s application shall cover SEVENTY (70) linear meters of the
disputed foreshore adjoining Lot 3309 while F.F. Cruz’s application shall cover SIXTY (60) linear
meters thereof. Accordingly, both applications shall be give due course in accordance with the
provisions of the Public Land Law, otherwise known as Commonwealth Act No. 141, as
amended. 12 (Underscoring supplied)

SIAIN appealed to the Secretary of the Department of Environment and Natural Resources (DENR),
arguing that the LMB:

1. . . . made [a] false assumption of fact when it considered the foreshore area under . . . controversy
as reclaimed land;

2. . . . committed a grave error in not considering the preferential right of the riparian owner/littoral
owner, . . . to apply for a lease over the foreshore under controversy; [and]

3. . . . erred in awarding sixty (60) linear meters of the foreshore under controversy to [F.F. Cruz]. 13

By Decision 14 of May 6, 1997, then DENR Acting Secretary Antonio G.M. La Viña set aside the LMB
Order, the pertinent portions of which decision read:
It is blatant error to consider the contested area as reclaimed land as it has no basis in fact, in law
and jurisprudence.

The area in question is unquestionably a natural foreshore for which various applicants prior
to the herein parties have applied. CRUZ’s F.L.A. No. (VI-1) 176 itself which was filed on July
7, 1983, long after it had allegedly filled up the area undeniably shows CRUZ’s admission that
it is a foreshore and not something else.

The assumption that the contested area is a reclaimed land runs smack against the provision of
Article 5 of the Spanish Law on Waters of August 3, 1866 stating that:

"Lands reclaimed from the sea in consequence of works constructed by the State, or by provinces,
pueblos or private persons, with proper permission, shall become the property of the party
constructing such works, unless otherwise provided by the terms of the grant of authority."

We cannot find in the records anything to show that a "permission" was ever sought by or granted to,
CRUZ for the alleged reclamation of the land in question.

xxxx

It is by reason of the Director of Lands’ erroneous classification of the contested area as

"reclaimed" that he awarded 60 linear meters thereof to CRUZ. However, as heretofore
discussed, the said area in question is clearly a natural foreshore and SIAIN is correct in
claiming it to be so. Hence, the law that applies in this case is Section 32 of Lands Administrative
Order No. 7-1 which was issued by the Secretary of the then Department of Agriculture and Natural
Resources . . .

xxxx

It is an undisputed fact that SIAIN is the registered owner of the land adjoining the foreshore area in
controversy. Hence SIAIN is the riparian/littoral owner insofar as the contested foreshore area is
concerned and should enjoy the preferential right to lease the entire one hundred thirty (130) linear
meters of said area adjoining its property, which includes the sixty (60) linear meters thereof
awarded to CRUZ in the questioned Order.

x x x x 15 (Emphasis supplied; underscoring partly in the original and partly supplied)

The DENR Acting Secretary thus ordered that the application of F.F. Cruz be amended to exclude
the disputed foreshore area adjacent to Lot 3309 and that SIAN’s application be given due course.

F.F. Cruz appealed to the Office of the President, contending that the DENR Acting Secretary acted
with grave abuse of discretion:

I. IN DISREGARDING THE FINDINGS OF THE DIRECTOR OF LANDS MANAGEMENT BUREAU

THAT THE CONTROVERTED AREA IS A RECLAIMED LAND UNDERTAKEN BY APPELLANT
F.F. CRUZ . . .

II. IN RULING THAT [SIAIN] HAS A PREFERENTIAL RIGHT OVER THE PROPERTY IN DISPUTE;
[and]
III. IN ISSUING THE SUBJECT DECISION CONSIDERING THAT HE IS NOT EMPOWERED BY
LAW OR RULE TO ISSUE THE SAME. 16

By Decision 17 of March 12, 1999, the Office of the President, through then Executive Secretary
Ronaldo B. Zamora, reversed the decision of the DENR Acting Secretary and reinstated that of the
LMB in this wise:

Records reveal that WESVICO, who may be considered as the real riparian owner, had
previously availed itself of the preferential right to apply for the foreshore area adjacent to its
property. However, it withdrew its application, and instead sought the titling of said property
via a petition for registration filed with the court, which eventually archived the case for
petitioner’s lack of interest. In net effect, WESVICO’s preferential right adverted to, albeit
initially pursued, was thereafter abandoned due to its voluntary withdrawal of the
corresponding application and its erroneous resort to some other mode of acquisition, i.e.,
the filing of a petition for registration. Consequent to such abandonment, it may be said that
WESVICO had already waived its preferential right over the controverted area at the time
SIAIN purchased the adjacent property. As vendee, SIAIN was subrogated not only to the
rights and actions of its predecessor-in-interest, WESVICO, but also to the absence/lack of
those.

Also decidedly going for CRUZ is the fact that it applied for the disputed area, occupied the
same and introduced improvements thereon long before SIAIN filed its own lease application.
Subject to certain exceptions, it is axiomatic in public land grant that he who is first in time is
preferred or stronger in law – Priore in tempore, potior jure.

It may be, as stated by the DENR, that the contested area abuts upon the titled property of SIAIN, a
circumstance which ordinarily would accord that firm a preferential right to lease the property in
question, the rule being that a riparian/littoral owner enjoys preference over the abutting foreshore
lands formed by accretion or alluvial deposits.

xxxx

. . . The principle thus enunciated in Santulan properly applies where the adjoining lot is a natural
foreshore, meaning that the foreshore was formed by what may rightfully be considered as
accretion, or the settling down, by natural causes, of soil, earth and other deposits. But such is not
what it obtains in this case, contrary to the bare assertion of the DENR Acting Secretary that the
"area in question is unquestionably a natural foreshore." . . .

xxxx

Not being the product of accretion, the disputed strip of foreshore land cannot be the proper subject
of a riparian or littoral claim.

xxxx

The actuality of the DENR not formally granting CRUZ a permit to undertake reclamation works on
the disputed area can be conceded. But in the light of the Bernas report, . . . there can be no
quibbling that CRUZ occupied and raised, thru filling, the area to its present level, with the implicit
consent, if not approval, of lands authorities. That consent and/or approval have been given may be
deduced from the fact that the Bureau of Lands required the payment of, and received from
appellant, the amount of P40,032.00 as occupation fee. Any suggestion that CRUZ, after paying the
occupational fee, merely planted itself on the disputed area without as much as dredging and filling
the same is unacceptable. In a very real sense, therefore, the reclamation work undertaken by
CRUZ was with the proper permission, or at least the acquiescence of the Bureau of Lands, the
agency which, following Insular Government v. Aldecoa (19 Phil. 505), is empowered to grant such
permit in behalf of the DENR Secretary. 18 (Emphasis and underscoring supplied)

In its petition for review before the Court of Appeals, SIAIN raised the issues of 1) whether the
disputed area is reclaimed land or foreshore land and if found to be foreshore land, 2) whether SIAIN
has preferential right to lease the same. 19

By Decision of July 3, 2000, 20 the appellate court dismissed SIAIN’s petition, ruling that there is no
justification to digress from the findings and conclusions of the Office of the President and the LMB
and that administrative matters within the executive jurisdiction can only be set aside on proof of
gross abuse of discretion, fraud or error of law.

Hence, the present petition for review filed by SIAIN.

SIAIN contends that the evidence overwhelmingly proves that the disputed area is foreshore land
and not reclaimed land as found by the Office of the President. It invites attention to F.F. Cruz’s own
declaration in its foreshore lease application that the disputed area is a "parcel of foreshore land." To
SIAIN, this declaration is equivalent to a judicial admission which does not require proof and is
conclusive as to it.

Further, SIAIN argues that the records reveal that the only evidence relied upon by the Office of the
President is the Bernas report which speaks of a portion allegedly filled-up by F.F. Cruz, the identity,
location and size of which were never established; and that there is no evidence to prove that the
filled-up portion is one and the same as the disputed area, but that even assuming that it is, F.F.
Cruz cannot have a better right over it as the reclamation was made without the necessary permit,
hence, it cannot be allowed to benefit from its own wrongdoing.

Furthermore, SIAIN contends that there can be no waiver of preferential right over the disputed
property, no advice from the Director of Lands having been communicated to WESVICO, DBP or
SIAIN of their preferential right to lease the adjacent foreshore land, and therefore, the 60 days
within which they are supposed to apply 21has not begun to run.

The key to the present controversy lies in the classification of the disputed area.

The DENR Secretary found that the disputed area is a "natural foreshore," hence, it concluded that
SIAIN, being a littoral owner (owner of land bordering the sea or lake or other tidal waters 22), has
preferential right to lease it as provided in paragraph 32 of Lands Administrative Order No. 7-1 dated
April 30, 1936 which reads:

32. Preference of Riparian Owner. – The owner of the property adjoining foreshore lands or
lands covered with water bordering upon shores or banks of navigable lakes or rivers, shall
be given preference to apply for such lands adjoining his property as may not be needed for
the public service, subject to the laws and regulations governing lands of this nature, provided that
he applies therefore within sixty (60) days from the date he receives a communication from the
Director of Lands advising him of his preferential right. 23 (Emphasis supplied)

The DENR Secretary found the LMB’s classification of the disputed area as "reclaimed" erroneous
for lack of basis in fact, law and jurisprudence.
On the other hand, while the Office of the President recognized the preferential right of littoral owner
WESVICO, it held that it had waived its preferential right and SIAIN, as successor-in-interest, was
subrogated to WESVICO’s right or lack of it.

The Office of the President went on to hold that since the disputed area is already reclaimed land, it
cannot be subject to littoral claim, SIAIN, not being the littoral owner within the contemplation of the
law, citing Santulan v. The Executive Secretary 24 which elucidated on the principal reason for giving
a riparian or littoral owner preferential right, thus:

Now, then, is there any justification for giving to the littoral owner the preferential right to lease the
foreshore land abutting on his land?

That rule in paragraph 32 is in consonance with article 4 of the Spanish Law of Waters of 1866
which provides that, while lands added to the shores by accretions and alluvial deposits caused by
the action of the sea form part of the public domain, such lands, when they are no longer washed by
the waters of the sea are not necessary for purposes of public utility, or for the establishment of
special industries, or for the coast guard service," shall be declared by the Government "to be the
property of the owners of the estates adjacent thereto and as increment thereof."

In other words, article 4 recognizes the preferential right of the littoral (riparian according to
paragraph 32) to the foreshore land formed by accretions or alluvial deposits due to the
action of the sea.

The reason for the preferential right is the same as the justification for giving accretions to the
riparian owner for the diminutions which his land suffers by reason of the destructive force of the
waters. So, in the case of littoral lands, he who loses by the encroachments of the sea should gain
by its recession. 25 (Emphasis and underscoring supplied)

Furthermore, as reflected above, the Office of the President, finding that F.F. Cruz’s occupation and
introduction of improvements on the contested area long before SIAIN filed its lease application, held
that "it is axiomatic in public land grant that he who is first in time is preferred or stronger in law."

The petition is impressed with merit.

That the foreshore area had been reclaimed does not remove it from its classification of foreshore
area subject to the preferential right to lease of the littoral owner.

It bears noting that it was not the reclamation that brought the disputed foreshore area into
existence. Such foreshore area existed even before F.F. Cruz undertook its reclamation. It was
"formed by accretions or alluvial deposits due to the action of the sea." Following Santulan, the
littoral owner has preferential right to lease the same.

Contrary to the ruling of the Office of the President, as affirmed by the appellate court, littoral owner
WESVICO cannot be considered to have waived or abandoned its preferential right to lease the
disputed area when it subsequently filed an application for registration thereover. For being a part of
the public domain, ownership of the area could not be acquired by WESVICO. Its preferential right
remained, however. Its move to have the contested land titled in its name, albeit a faux pas, in fact
more than proves its interest to utilize it.

As correctly argued by SIAIN, were WESVICO’s petition for registration which, as stated earlier, was
archived by the trial court, pursued but eventually denied, WESVICO would not have been barred
from filing anew a foreshore lease application. Parenthetically, the petition for registration of
WESVICO was archived not on account of lack of interest but because it ceased operations due to
financial reasons.

WHEREFORE, the Court of Appeals Decision dated July 3, 2000 is REVERSED and SET ASIDE.

The May 6, 1997 Decision of then Acting Secretary Antonio G.M. La Viña of the Department of
Environment and Natural Resources is REINSTATED.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

WE CONCUR:
CADASTRAL

[G.R. No. 14869. October 27, 1920.]

THE DIRECTOR OF LANDS, applicant-appellee, vs.

THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, objector-
appellant. JUSTA DE GUZMAN, ET AL., objectors-appellees.

Hartigan & Welch for appellant.

Gregorio C. Concepcion for appellees.

SYLLABUS

1. CADASTRAL PROCEEDINGS; NATURE; TRIALS. — A cadastral

petition is in the nature of a proceeding in rem, promoted by
the Director of Lands, somewhat akin to a judicial inquiry and investigation
leading to a judicial decree.
2. ID.; ID.; ID. — In one sense, in cadastral proceedings, there
is no plaintiff and there is no defendant. In another sense, the Government is
the plaintiff and all the claimants are defendants.
3. ID.; ID.; ID. — The usual rules of practice, procedure, and evidence
govern registration proceedings.
4. PLEADING AND PRACTICE; ORDER OF TRIAL; REBUTTAL
EVIDENCE. — The strict rule is that the plaintiff must try his case out when he
commences.
5. ID.; ID.; ID. — A relaxation of the rule is permitted in the sound
discretion of the court.
6. ID; ID.; ID. — The proper rule, for the exercise of discretion by the
court, is that material testimony should not be excluded, because offered by
the plaintiff after the defendant has rested, although in rebuttal, unless it has
been kept back by a trick, and for the purpose of deceiving the defendant and
affecting his case injuriously.
7. ID.- ID.; ID. — While in the Philippine Code of Civil Procedure
the general rule is rightly recognized, yet it also authorizes the judge "for
special reasons" to change the order of the trial and "for good reason, in the
furtherance of justice" to permit the parties "to offer evidence upon their
original case. (Sec. 132.)
 8. ID.; ID.; ID.; CADASTRAL. PROCEEDINGS. — The trial opened with
a stipulation that the composition title of the church with the Spanish
Government included the land in question. The church presented one witness
and rested. The private oppositors then called their respective witnesses to
prove title by possession, and rested. Counsel for the church thereupon made
an offer to present additional testimony intended to show that the
possession of the private claimants had been interrupted and that it was
merely possession through the tolerance of the church. Held: That the
offer of counsel for the church could properly be classified as rebuttal
evidence and that in the interestof justice and the ascertainment of the truth, it
should have been received.

DECISION

MALCOLM, J : p

In 1913, cadastral proceedings were begun to settle the title to a

considerable tract of land situated in the Province of Rizal. Thirteen of the
cadastral lots were claimed by the municipality of Cainta, Province of Rizal,
the Roman Catholic Archbishop of Manila, and various private individuals.
The judgment of the trial court adjudicated the parcels in question to the
private claimants. From this judgment both
the Roman Catholic Archbishop of Manila and the municipality of Cainta
appealed, but subsequently the appeal of the latter was dismissed for failure
to prosecute. The contest has thus narrowed down to one between the
Church as appellant and various individuals as appellees.
A ruling as to four of the lots can quickly be made. By stipulation during
the trial, and by admission of counsel for appellant, Policarpio Buenviaje is
conceded to have title to lot 2187. As to lot 2186, the only evidence before us,
confirmed by the findings of the trial court, is, that Mamerta Roxas went into
possession of the same in 1895; and when counsel for the Church made his
offer to present rebuttal testimony, he failed to mention this lot. Likewise, as to
lots 2213 and 2214, the only evidence before us, confirmed by the
findings of the trial court, is, that Antonio, Benito, and Gervasio de la Paz went
into possession of the same in -1896; the record states that "ambas partes
dan por terminadas sus pruebas," while counsel for the Church in making his
offer of rebuttal testimony again failed to include these two lots.
A more difficult situation has arisen with reference to the nine remaining
cadastral lots. To understand it, a brief narration of the course of the
proceedings in the trial court will have to be made.
 The trial as to the land now before us opened with a stipulation to the
effect that the composition title of the Church with the Spanish Government
included this land. The Church presented one witness and rested. The private
oppositors then called their respective witnesses. Each endeavored to prove
title by possession, best understood by the following table:

Parcel No. Oppositor Possession Acts of possession

began.

2176, 2191, 2182 Justa de Guzman 1895 Planted rice; paid taxes
Melecio S.
2178, 2180, 2190 1882 Planted rice
Buenaventura
2184, 2185 Justo S. Buenaventura 1885 Cultivation and harvest
2192 Justo Javier 1885 Planted rice; harvested

Counsel for the Church, thereupon, made an offer to present additional

testimony with reference to lots 2176, 2178, 2180,2182, 2184, 2185, 2190,
2191, and 2192, or the above enumerated in the table. Three witnesses were
called to the stand, but each time, before any pertinent testimony could be
secured from them, an objection was made by counsel for the oppositors that
the proof related to the evidence in chief of the Church, and this was
sustained by the court.
To resolve the facts into their simplest terms, it is evident that when an
admission was made of the royal title, the Church had shown that it was the
legitimate owner ofthe land to which it refers. The most perfect title could,
however, be lost by abandonment. When, therefore, the private oppositors
showed possession for the prescriptive period, they had made their case, and
the burden of proof had shifted. To overcome this burden, it was then
incumbent upon the Church to demonstrate that such possession had been
interrupted, or that it was merely possession through the tolerance of the
Church.
This brings us to the specific consideration of assignment of error No.
2 of the appellant to the effect that the court erred in refusing to admit
evidence tendered by this claimant and appellant in answer to rival claims. A
correct ruling can most appropriately be arrived at by a consideration of the
nature of cadastral proceedings, with reference to the usual rules of trial
practice and evidence.
The object of a cadastral petition, as all know, is, that the title to the
various lots embraced in the survey may be settled and adjudicated. It is in
the nature of a proceeding in rem, promoted by the Director of Lands,
somewhat akin to a judicial inquiry and investigation leading to a judicial
decree. In one sense, there is no plaintiff and there is no defendant. In
another sense, the Government is the plaintiff and all the- claimants are
defendants. (Act No. 2259, sec. 10.) The trial is conducted in the same
manner as ordinary trials and proceedings in the Court of Land Registration.
(Sec. 11.) As to this court, now abolished, the Land Registration Act provides
that it "shall conform, as near as may be, to the practice in special
proceedings in courts of first instance." (Act No. 496, sec. 2.) The
Code of Civil Procedure, which is thus brought into relation with the Cadastral
Act, prescribes the order in which the trial must proceed. (Secs. 56, 132.) The
usual rules of practice, procedure, and evidence govern registration
proceedings.
Obviously, orderly procedure must be followed if injurious surprises and
annoying delays in the administration of justice are to be avoided. Evidence
cannot be given piecemeal. The strict rule is that the plaintiff must try his case
out when he commences. Nevertheless, a relaxation of the rule is permitted in
the sound discretion of the court. "The proper rule for the exercise of this
discretion," it has been said by an eminent author, "is, that material testimony
should not be excluded because offered by the plaintiff after the defendant
has rested, although not in rebuttal, unless it has been kept back by a trick,
and for the purpose of deceiving the defendant and affecting his case
injuriously." (1 Thompson on Trials, sec. 346.)
These principles find their echo in Philippine remedial law. While
the general rule is rightly recognized, the Code of Civil Procedure authorizes
the judge "for special reasons," to change the order of the trial, and "for good
reason, in the furtherance of justice," to permit the parties "to offer evidence
upon their original case." (Sec. 132.) These exceptions are made stronger
when one considers the character of registration proceedings and the fact that
where so many parties are involved, and action is taken quickly and abruptly,
conformity with precise legal rules should not always be expected. Even at the
risk of violating legal formulae, an opportunity should be given to parties to
submit additional corroborative evidence in support of their claims of title, if
the ends of justice so require. (Rodriguez vs. Director of Lands [1915], 31
Phil., 272; Government of the Philippine Islands vs. Abural [1919], 39 Phil.,
996.)
We believe that the offer of counsel for the Church could properly be
classified as evidence in denial of an affirmative fact but that even if not
technically rebuttal evidence, yet in the interest of justice and the
ascertainment of the truth it should be received. Whether such evidence
would be sufficient to overcome the case which exists in favor of the
claimants of the nine lots cannot now be determined.
In so far as the judgment relates to lots Nos. 2186, 2187, 2213, and
2214, it is affirmed, and in so far as it relates to lots Nos. 2176, 2178, 2180,
 2182, 2184, 2185, 2190, 2191, and 2192, it is reversed, and the record shall
be returned to the lower court for the taking of additional evidence under the
offer of counsel for the Church found on page 83 of the stenographic
notes. No finding as to costs is made in this instance. So ordered.

Mapa, C.J., Johnson, Araullo, Avanceña and Villamor, JJ., concur.

(Director of Lands v. Roman Catholic Archbishop of Manila, G.R. No. 14869,
|||

[October 27, 1920], 41 PHIL 120-125)

 [ G.R. No. L-2269, March 14, 1950 ]

FABIAN B. S. ABELLERA, PLAINTIFF AND APPELLANT, VS. NARCISO

DE GUZMAN ET AL., DEFENDANTS AND APPELLEES.

DECISION

PADILLA, J.:
On 22 March 1918 this Court affirmed a judgment rendered by the court of
first instance of La Union dismissing the complaint, by which the plaintiff
sought to eject nineteen (19) alleged trespassers or squatters from a tract of
land described in the complaint, "on the ground that plaintiff failed to
establish title in himself to the hacienda upon which he could maintain an
action of ejectment." Plaintiff claimed title to the hacienda by virtue of a
donation which he failed to accept in a public instrument as required in
article 633 of the Civil Code (Abellera vs. Balanag, 37 Phil. 865). After the
dismissal of the complaint, the plaintiff brought another action against the
same defendants for ejectment (civil case No. 936 of the court of first
instance of La Union). This second action was dismissed, on the ground
that the title to the tract of land from which he sought to eject the
defendants might well be litigated in the cadastral case then pending in the
same court which included the tract of land, divided into lots and claimed
by both the plaintiff and the defendants, the court of first instance being of
the opinion that, should title to the tract of land be confirmed and decreed
in the name of the plaintiff, the latter could bring an action against the
defendants for damages. From this order of dismissal, the plaintiff did not
appeal. When in the cadastral case, however, the answers of the plaintiff
claiming the lots, into which the tract of land claimed by him as his
property had been divided, were striken out and he was prevented from
presenting evidence to prove his title to the tract of land or to the lots into
which it had been divided, he applied to the Supreme Court for a writ
of certiorari, which was granted (Fabian B. S. Abellera vs. Hon. Meynardo
M. Farol, Narciso de Guzman et al., G.R, No. 48480, 30 July 1943).[1] This
Court in the last mentioned case reversed the order of the respondent
cadastral court and directed it to allow the petitioner "to present evidence
to prove his claim over the lots in question;" and, commenting on the
judgment rendered in the previous case (Abellera vs. Balanag et al., supra),
it made the following pronouncement: "* * * and we clearly refused to
prevent Abellera from instituting a new action based upon his assertion
that he had acquired title to the estate since the dismissal of his original
action." So the plaintiff's claim in the cadastral case No. 5 of the
municipality of Aringay, province of La Union, to the lots into which the
tract of land was divided and from which he had sought defendants'
ejectment in the two previous actions brought by him in the court of first
instance of La Union, was pending when the record of the cadastral case
was destroyed as a result of the battle for liberation; and, in view of the
failure of the interested parties or of the Director of Lands to institute
proceedings for its reconstitution, on 5 February 1946 the plaintiff in the
two previous cases brought the present action for ejectment against the
same defendants in the two previous cases (civil cases Nos. 773 and 936 of
the court of first instance of La Union), or their successors-in-interest,
including new or additional defendants who are the claimants of lots Nos.
5009, 5010 and 5540 in the cadastral case, which lie within the area of the
tract of land claimed by the plaintiff, and prayed for judgment declaring
him the owner of the tract of land from which he had sought defendants'
ejectment in the two previous cases; for the possession of the lots
unlawfully occupied or detained by the defendants; for the recovery of
damages from each and everyone of the defendants, amounting all in all to
P40,000 and costs; and for general relief. Instead of answering the
complaint the defendants moved for its dismissal, on the ground (1) that it
states no cause of action; and (2) that there is another action pending
between the same parties for the same cause. On 18 June 1946, acting upon
the motion to dismiss filed by the defendants, the trial court sustained the
second ground of the motion and dismissed the complaint without costs. In
dismissing the complaint, the trial court was of the belief that in the
certiorari case (Fabian B. 3. Abellera vs. Hon. Meynardo M. Farol, Narciso
de Guzman et al., G. R. No. 48480, supra), this Court directed the plaintiff
"not to file a new action, to have his claim over the lots in question asserted,
but to present evidence to prove his claim over said lots in the Cadastral
Proceedings, Cadastral Case No. 5, of Aringay, La Union." The plaintiff has
appealed from this order of dismissal to the Court of Appeals. After
reviewing the evidence, the latter court certified the appeal to this Court for
the reason that only questions of law are raised or involved.
Although the present action is entitled "Recurso Declaratorio" and in
paragraph seven (7) of the complaint, reference is made to section 1, Rule
66, of the Rules, it is really for ejectment and damages. The plaintiff asserts
title to the tract of land which was divided into several lots when it was
surveyed for the institution of cadastral proceedings and he filed answers to
claim the lots as his property in the cadastral case. It is the third action
brought to have the court declare that he is the owner and entitled to the
possession of the tract of land divided into lots in the cadastral case, which
are also claimed by the defendants, and to recover its possession and
damages for the unlawful occupation and detention thereof. The complaint
may appear clumsily drawn up, but there is no question that it is not for
declaratory relief, as provided for in Rule 66 of the Rules of Court, but for
ejectment (reivindicacion) and for damages. So, the first ground of the
motion to dismiss the complaint is not well taken. The court below has
made no comment on it, for it must have been of the opinion that the
complaint states a cause of action.
The second ground for the dismissal of the complaint, to wit: that there is
another action pending between the same parties for the same cause, upon
which the order of dismissal appealed from is predicated, is likewise
without merit, because even if the record of the cadastral case, where the
lots into which the tract of land was divided, could be reconstituted, and for
that reason plaintiff could present his claim and evidence to prove his title
to the lots, nevertheless, the cadastral court possesses no authority to award
damages, for its power is confined to the determination as to whether the
claimants are really entitled to the lots, as alleged in their answers; and,
after finding that they are, to the confirmation of their title to, and
registration of, the lots in their name. In the present action for ejectment,
not only does the plaintiff seek to have a judicial pronouncement that he is
the owner of the tract of land which he claims is unlawfully occupied by the
defendants but also to recover damages. After hearing, the cadastral court
may declare the plaintiff the owner of the lots and entitled to their
possession and may issue a writ directing the sheriff to put him in
possession thereof, but it cannot award damages to the plaintiff. Where
there is a case for ejectment between parties who, one against the other,
claim the same parcel of land or lot in a cadastral case, it has been
customary or the practice of courts to hold a joint hearing of both the
ejectment and the cadastral cases in which the same parcel of land is
litigated and to render a decision in both cases in its double role, as court of
first instance of general jurisdiction and as cadastral court of limited
jurisdiction.
The other question which might have been raised is whether the judgment
rendered in the first case between the same parties, as reported in Volume
37, p. 865, of the Philippine Reports, bars the institution of the present
action. In view of the fact that the defendants did not rely on that ground in
their motion to dismiss, we do not deem it proper to take it up and pass
upon it.
The order of dismissal appealed from is reversed, without pronouncement
as to costs.
Ozaeta, Pablo, Bengzon, Tuason, Montemayor, and Reyes, JJ., concur.