1. Republic vs. Court of Appeals, Sept.

30, 1999

G.R. No. 122269 September 30, 1999

REPUBLIC OF THE PHILIPPINES, represented by the SECRETARY OF

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

MENDOZA, J.:

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

The facts are stated in the following portion of the decision of the Court of Appeals:

Sometime in 1957, one Matias Bustamante filed with the then CFI of Pangasinan an
application for registration under Act No. 496, as amended, of a tract of land
containing an area of 880,000 square meters, more or less, situated in Barangay
Malacapas, Dasol, Pangasinan.

Both the Director of Forestry and the Director of Fisheries filed oppositions to the
aforecited application, alleging among others, that "said parcel of land, with the
exception of 97,525 square meters, is a part of the Timber Land Block "A" Land
Classification Project 44, which is converted into fish ponds." Isidro Bustria [private
respondents' predecessor-in-interest] and Julian Bustria, also opposed the said
application for land registration, alleging that they "have in the year 1943 occupied in
good faith their respective portions having a total area of fifty (50) hectares, more or
less . . . converted their respective portions into fish ponds . . . and actually
possessed and occupied their respective portions . . . exclusively against all persons,
except the Director of Forestry & Director of Fishery." After trial, the lower court
rendered a Decision in favor of applicant Bustamante.

On appeal to this Honorable Court, docketed as CA-G.R. No. 30058-R, it was found
that 783,275 square meters of the land applied for were accretions added to
applicant Bustamante's riceland of 9.7525 hectares, and that said accretion was
caused by the sea on the southward portion of said riceland. This Honorable Court
then ruled:

This being so, the said accretion belongs — not to the riparian owner
— but the State. All lands thrown up by the sea and formed upon the
 shores, belong to the national domain and are for public use, in
accordance with the provisions of the Law on Waters of August 3,
1866 (Insular Government vs. Aldecoa, 19 Phil. 505) (p. 20, Decision,
November 16, 1967).

Thus, modifying the judgment of the lower court, this Honorable Court rendered a
Decision on November 16, 1967, disposing:

IN VIEW OF ALL THE FOREGOING, the appealed decision is hereby

modified so that only 9.7525 of the land applied for is hereby
adjudicated and ordered to be registered in the name of the applicant,
the remaining area being hereby declared land of the public domain
belonging to the Republic of the Philippines, without prejudice to
whatever rights oppositors Isidro Bustria and Julian Bustria may have
acquired over portions of the area thus declared as land of the public
domain, with costs against applicant.

SO ORDERED.

When brought up on certiorari to the Supreme Court, the foregoing Judgment was
affirmed in toto in the Resolution in G.R. No. L-18605 dated February 29, 1968.

It is relevant to state at this point that the parcel of land that is presently the subject
of the dispute in the instant case, Lot No. 7764, CAD 624-D (Portion) [Psu-155696,
Lot 3 (Portion)], forms part of the above-mentioned parcel of land declared by this
Honorable Court as belonging to the public domain, classified/zonified land available
for fishpond development, per L.C. Map No. 3175, approved on June 24, 1984,
under administrative Order No. 4-1829 (Annex "D", Petition). The subject lot contains
an area of 49,999 square meters, more or less. This lot has been leased to Mr.
Porfirio Morado by the [Republic of the Philippines], represented by the Secretary of
Agriculture, for a period of twenty-five (25) years, or up to December 31, 2013, under
Fishpond Lease Agreement No. 5132, dated August 17, 1989 (Annex "E", Petition).

On July 6, 1988, however, the late Zenaida Bustria [daughter of Isidro Bustria] filed a
complaint against Porfirio Morado in the Regional Trial Court of Alaminos,
Pangasinan, Branch 55, for ownership and possession over the lot in question
[docketed as Civil Case No. A-1759]. Herein petitioner, the Republic of the
Philippines, was not made a party to that suit.

In her complaint, Zenaida Bustria claimed absolute ownership and quiet and peaceful
possession of several lots under PSU-155696 surveyed in the name of her father,
Isidro Bustria. She further asserted that said Porfirio Morado maliciously applied for a
fishpond permit with the Bureau of Fisheries and Aquatic Resources over Lot 3
thereof (the subject lot), well-knowing that said lot had always been occupied,
possessed and worked by her and her predecessors-in-interest.

Porfirio Morado denied the allegations in the complaint, claiming that the lot in
question is part of the public domain which he developed and converted into a
fishpond. Due, however, to Porfirio Morado's and his counsel's failure to appear at
the pre-trial and subsequent court hearings, the trial court subsequently declared
Porfirio Morado "as in default."
 On December 17, 1991, respondent Judge rendered a decision, the dispositive
portion of which reads:

WHEREFORE, judgment is hereby rendered:

(a) Declaring the plaintiff as the exclusive and

absolute owner of the land in question stated in
paragraph 4 of the Complaint and entitled to the
exclusive and quiet possession of the said land; and

(b) Ordering the defendant to pay the plaintiff the

amount of P15,000.00 as attorney's fees and the sum
of P500.00 per day of hearing of the counsel; plus
costs.

(Annex "A", Petition)

On January 23, 1992, Porfirio Morado filed a Petition for Relief from Judgment which
was denied on July 21, 1992 for lack of merit.

On July 8, 1992, a writ of execution was issued, and it was implemented by Sheriffs
Manuel O. de Asis and Sheriff Cesar A. Gines. Spouses Porfirio Morado and Juliana
Morado thereafter filed with this Honorable Court a Petition for Certiorari with Writ of
Preliminary Injunction, docketed as CA-G.R. No. 28932. In a Resolution dated
December 11, 1992, the Petition was denied for lack of merit. The related Motion for
Reconsideration was denied in the Resolution dated February 18, 1993. (Rollo, pp.
107-112) (emphasis omitted) 2

On April 19, 1994, petitioner, invoking §9 of B.P. Blg. 129, 3 filed with the Court of Appeals a petition for
the annulment of the trial court's decision, dated December 17, 1991. Petitioner alleged that the land in
question is within the classified/zonified alienable and disposable lend for fishpond development, per L.C.
Map No. 3175 approved on June 24, 1984, under Administrative Order No. 4-1829 and that since the
land formed part of the public domain, the Bureau of Fisheries and Aquatic Resources (BFAR) has
jurisdiction over its disposition in accordance with P.D. No 704, §4.

On October 4, 1995 the, Court of Appeals rendered a decision dismissing the petition. 4

Hence, this petition for review.

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

We shall deal with these questions in inverse order.

First, is the question whether petitioner has personality to bring the action below. To begin with, an
action to recover a parcel of land is in personam. As such, it is binding only between the parties
thereto, as this Court explained in Ching v. Court of Appeals,6 viz:
 An action to redeem, or to recover title to or possession of, real property is not an
action in rem or an action against the whole world, like a land registration proceeding
or the probate of a will; it is an action in personam, so much so that a judgment
therein is binding only upon the parties properly impleaded and duly heard or given
an opportunity to be heard. Actions in personam and actions in rem differ in that the
former are directed against specific persons and seek personal judgments, while the
latter are directed against the thing or property or status of a person and seek
judgments with respect thereto as against the whole world. An action to recover a
parcel of land is a real action but it is an action in personam, for it binds a particular
individual only although it concerns the right to a tangible thing.

The appellate court, holding that the proceedings before the trial court were in personam, ruled that
since petitioner was not a party to Civil Case No. A-1759, it is not a real party-in-interest and,
therefore, has no personality to bring the action for annulment of the judgment rendered in that case.
The appellate court said:

Private respondents are correct. Civil Case No. A-1759 was purely for "Ownership
and Possession". The decision sought to be annulled is solely "between the private
respondents [the Bustrias] and Porfirio Morado" (Rollo, p. 142). Petitioner Republic
was not a party in the case and is not bound by the judgment rendered therein.

It is settled, a real party-in-interest is one who stands to be benefited or injured by the

judgment in the suit (Salonga vs. Warner Barnes & Co., Ltd., 88 Phil. 128; University
of the Philippines Board of Regents vs. Ligot-Telan, 227 SCRA 342; Tampingco vs.
Intermediate Appellate Court, 207 SCRA 652; Republic vs. Sandiganbayan, 203
SCRA 310; Travelwide Associated Sales, Inc. vs. Court of Appeals, 199 SCRA 205).

Petitioner Republic not being a party, and the judgment not being in rem, it does not
stand to be benefited or injured by the judgment sought. Petitioner Republic can on
its own, and even without resorting to this petition for annulment of judgment,
institute the proper action to assert its claim that the "subject lot is a land forming part
of the public domain'' (Rollo, p. 145). It need not seek the annulment of the subject
judgment, in Civil Case No. A-1759 in which it was not a party and involves merely a
question of ownership; and possession between plaintiffs Zenaida B. Bustria and
defendant Porfirio Morado and which decision is not binding on it, to be able to assert
its claim or interest in the property. It is clear for this reason that petitioner is not a
real party-in-interest (Section 2, Rule 3, Revised Rules of Court). 7

The appellate court is in error. In Islamic Da'wah Council of the Phils. v. Court of Appeals, 8 this Court
held that a party claiming ownership of a parcel of land which is the subject of foreclosure proceedings
has a sufficient interest to bring an action for annulment of the judgment rendered in the foreclosure
proceedings even though it was not in the party in such proceedings. It was held:

[A] person need not be a party to the judgment sought to be annulled. What is
essential is that he can prove his allegation that the judgment was obtained by the
use of fraud and collusion and he would be adversely affected thereby.

In this present case it is true that the heirs of Araneta are not parties to the
foreclosure case. Neither are they principally nor secondarily bound by the judgment
rendered therein. However, in their petition filed with the Court of Appeals they
alleged fraud and connivance perpetuated by and between the Da Silvas and the
Council as would adversely affect them. This allegation, if fully substantiated by
 preponderance of evidence, could be the basis for the annulment of Civil Case No. 4-
43476. 9

This ruling was reiterated in Top Management Programs Corp. v. Court of Appeals. 10

The next question is whether the Regional Trial Court had jurisdiction to declare the land in question to
belong to private respondent. The government asserts that the lot is within the "classified/zonified
alienable and disposable land for fishpond development," hence, it is part of the public domain; 11 that
under P.D. No. 704, §4, jurisdiction over its disposition is vested in the BFAR; that unlike agricultural land,
public lands which are declared suitable for fishpond purposes may only be disposed of by way of
license, concession, or lease; and that possession thereof, no matter how long, cannot ripen into private
ownership. 12

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

We agree with petitioner. The State clearly stands to be adversely affected by the trial court's disposition
of in alienable public land.

The land involved in this case was classified as public land suitable for fishpond development. 15 In
controversies involving the disposition of public land, the burden of overcoming, the presumption of state
ownership of lands of the public domain lies upon the private claimant. 16 Private respondents have not
discharged this burden.

The fact that the land in dispute was transformed into a "fully developed fishpond" does not mean
that it has lost its character as one declared "suitable for fishpond purposes" under the decree. By
applying for a fishpond permit with the BFAR, Isidro Bautista admitted the character of the land as
one suitable for fishpond development since the disposition of such lands is vested in the BFAR.
Consequently, private respondents, as his successors-in-interest, are estopped from claiming
otherwise.

It is settled under the Public Land Law 17 that alienable public land held by a possessor, personally or
through his predecessor-in-interest, openly, continuously, and exclusively for 30 years is ipso
jure converted to private property by the mere lapse of time. 18 However, only public lands classified as
agricultural 19 are alienable. Lands declared for fishery purposes are not alienable 20 and their possession,
no matter how long continued, cannot ripen into ownership.

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

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

Bellosillo, Quisumbing and Buena, JJ., concur.

2. Director of Forestry vs. Villareal, Feb. 27, 1989

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

THE DIRECTOR OF FORESTRY, Petitioner, v. RUPERTO A. VILLAREAL, Respondent.

The Solicitor General for Petitioner.

Quasha, Asperilla, Ancheta, Valmonte, Peña & Marcos for Respondents.

DECISION

CRUZ, J.:

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

The said land consists of 178,113 square meters of mangrove swamps located in the municipality of Sapian,
Capiz. Ruperto Villareal applied for its registration on January 25, 1949, alleging that he and his
predecessors-in-interest had been in possession of the land for more than forty years. He was opposed by
several persons, including the petitioner on behalf of the Republic of the Philippines. After trial, the
application was approved by the Court of First Instance of Capiz. 1 The decision was affirmed by the Court
of Appeals. 2 The Director of Forestry then came to this Court in a petition for review on certiorari claiming
that the land in dispute was forestal in nature and not subject to private appropriation. He asks that the
registration be reversed.

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

For a proper background of this case, we have to go back to the Philippine Bill of 1902, one of the earlier
American organic acts in the country. By this law, lands of the public domain in the Philippine Islands were
classified into three grand divisions, to wit, agricultural, mineral and timber or forest lands. This
classification was maintained in the Constitution of the Commonwealth, promulgated in 1935, until it was
superseded by the Constitution of 1973. That new charter expanded the classification of public lands to
include industrial or commercial, residential, resettlement, and grazing lands and even permitted the
legislature to provide for other categories. 3 This provision has been reproduced, but with substantial
modifications, in the present Constitution. 4

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

In the leading case of Montano v. Insular Government, 6 promulgated in 1909, mangrove swamps or
manglares were defined by the Court as: jgc:chanrobles. com.ph
". . . mud flats, alternately washed and exposed by the tide, in which grows various kindred plants which will
not live except when watered by the sea, extending their roots deep into the mud and casting their seeds,
which also germinate there. These constitute the mangrove flats of the tropics, which exist naturally, but
which are also, to some extent cultivated by man for the sake of the combustible wood of the mangrove and
like trees as well as for the useful nipa palm propagated thereon. Although these flats are literally tidal
lands, yet we are of the opinion that they cannot be so regarded in the sense in which that term is used in
the cases cited or in general American jurisprudence. The waters flowing over them are not available for
purpose of navigation, and they may be disposed of without impairment of the public interest in what
remains.

x x x

"Under this uncertain and somewhat unsatisfactory condition of the law, the custom had grown of converting
manglares and nipa lands into fisheries which became a common feature of settlement along the coast and
at the same time of the change of sovereignty constituted one of the most productive industries of the
Islands, the abrogation of which would destroy vested interests and prove a public disaster." cralaw virtua 1aw lib rary

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: jgc:chanrobles. com.ph

"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." cralaw virtua1aw l ibra ry

It is noteworthy, though, that notwithstanding this definition, the Court maintained the doctrine in the
Montano case when two years later it held in the case of Jocson v. Director of Forestry: 7

". . . the words timber land are always translated in the Spanish translation of that Act (Act of Congress) as
‘terrenos forestales.’ We think there is an error in this translation and that a better translation would be
‘terrenos madereros. 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.’

x x x

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." cralaw virtua1aw li bra ry

More to the point, addressing itself directly to above-quoted Section 1820, the Court declared: jgc:c hanro bles. com.ph

"In the case of Mapa v. 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." cralaw virtua 1aw lib rary

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: jgc:chan roble s.com.p h

"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." cralaw virtua1 aw lib rary

No elaboration was made on this conclusion which was merely based on the cases of Montano and Jocson.
And in 1977, the above ruling was reaffirmed in Tongson v. Director of Forestry, 9 with Justice Fernando
declaring that the mangrove lands in litis were agricultural in nature. The decision even quoted with
approval the statement of the trial court that: jgc:chanrob les.co m.ph

". . . Mangrove swamps where only trees of mangrove species grow, where the trees are small and sparse,
fit only for firewood purposes and the trees growing are not of commercial value as lumber do not convert
the land into public land. Such lands are not forest in character. They do not form part of the public
domain." cralaw virtua 1aw lib rary

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."cralaw virtua 1aw lib rary

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." cralaw virtua 1aw lib rary

Four months later, in Heirs of Amunategui v. Director of Forestry, 13 the Court was more positive when it
held, again through Justice Gutierrez: jg c:chan rob les.com. ph

"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." cralaw virt ua1aw li bra ry

"The petition is without merit.

"A forested area classified as forest land of the public domain does not lose such classification simply
because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land
may actually be covered with grass or planted to crops by kaingin cultivators or other farmers.’Forested
lands’ do not have to be on mountains or in out-of-the-way places. Swampy areas covered by mangrove
trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land.
The classification is descriptive of its legal nature or status and does not have to be descriptive of what the
land actually looks like. Unless and until the land 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." cralaw virtua 1aw lib rary

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: chanrobles law lib rary

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: chanro b1es vi rt ual 1aw li bra ry

(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." cralaw virtua1aw li bra ry

"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: jgc:ch anroble s.com.p h

"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:cha nro b1es vi rtua l 1aw lib ra ry

(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." cralaw virt ua1aw li bra ry

As for timber or forest lands, the Revised Administrative Code states as follows: chan robles v irt ual lawl ibra ry

"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." cralaw vi rtua 1aw lib rary

With these principles in mind, we reach the following conclusion: chan rob1e s virtual 1aw l ib rary

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

Our previous description of the term in question as pertaining to our agricultural lands should be understood
as covering only those lands over which ownership had already vested before the Administrative Code of
1917 became effective. Such lands could not be retroactively legislated as forest lands because this would
be violative of a duly acquired property right protected by the due process clause. So we ruled again only
two months ago in Republic of the Philippines v. Court of Appeals, 15 where the possession of the land in
dispute commenced as early as 1909, before it was much later classified as timberland.

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

The private respondent invokes the survey plan of the mangrove swamps approved by the Director of Lands,
16 to prove that the land is registerable. It should be plain, however, that the mere existence of such a plan
would not have the effect of converting the mangrove swamps, as forest land, into agricultural land. Such
approval is ineffectual because it is clearly 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. chan rob lesvi rtualaw lib rary

Thus we held in the Yngson case: jgc:chanro bles. com.ph

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

"The Bureau of Fisheries has no jurisdiction to administer and dispose of 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." cralaw virtua1aw li bra ry

The same rule was echoed in the Vallarta case, thus: jgc:chanrob les.com. ph

"It is elementary in the law governing natural resources that forest land cannot be owned by private
persons. It is not registerable. The adverse possession which can be the basis of a grant of title in
confirmation of imperfect title cases cannot commence until after the forest land has been declared alienable
and disposable. Possession of forest land, no matter how long cannot convert it into private property." cralaw vi rt ua1aw lib rary

We find in fact that even if the land in dispute were agricultural in nature, the proof the private respondent
offers of prescriptive possession thereof is remarkably meager and of dubious persuasiveness. The record
contains no convincing evidence of the existence of the informacion posesoria allegedly obtained by the
original transferor of the property, let alone the fact that the conditions for acquiring title thereunder have
been satisfied. Nowhere has it been shown that the informacion posesoria has been inscribed or registered
in the registry of property and that the land has been under the actual and adverse possession of the private
respondent for twenty years as required by the Spanish Mortgage Law. 17 These matters are not presumed
but must be established with definite proof, which is lacking in this case.

Significantly, the tax declarations made by the private respondent were practically the only basis used by
the appellate’ court in sustaining his claim of possession over the land in question. Tax declarations are, of
course, not sufficient to prove possession and much less vest ownership in favor of the declarant, as we
have held in countless cases. 18

We hold, in sum, that the private respondent has not established his right to the registration of the subject
land in his name. Accordingly, the petition must be granted. chanrobles vi rt ual lawli bra ry

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

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

SO ORDERED.

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

Fernan, C.J., took no part — my brother-in-law is part of the law firm representing Respondent.

3. Republic vs. CA & Dela Rosa, Apr. 15, 1980

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

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

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

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

BENGUET CONSOLIDATED, INC., petitioner,

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

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

ATOK-BIG WEDGE MINING COMPANY, petitioner,

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

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

These cases arose from the application for registration of a parcel of land filed on February 11,
1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin
and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and
covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa
and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2

The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big
Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the
Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3

In support of the application, both Balbalio and Alberto testified that they had acquired the subject
land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after
the Liberation. She testified she was born in the land, which was possessed by her parents under
claim of ownership. 4 Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who
declared that the land was planted by Jaime and his predecessors-in-interest to bananas, avocado,
nangka and camote, and was enclosed with a barbed-wire fence. She was corroborated by Felix
Marcos, 67 years old at the time, who recalled the earlier possession of the land by Alberto's
father. 5 Balbalio presented her tax declaration in 1956 and the realty tax receipts from that year to
1964, 6 Alberto his tax declaration in 1961 and the realty tax receipts from that year to 1964. 7

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

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

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

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

The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be
registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated
February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the
Constitutions of 1935 and 1973. 10

The trial court * denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the
land sought to be registered. 11 The applicants appealed to the respondent court, * which reversed the trial court and recognized the claims of
the applicant, but subject to the rights of Benguet and Atok respecting their mining claims. 12 In other words, the Court of Appeals affirmed
the surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of
their mining claims.

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

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

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

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

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

It is not disputed that the location of the mining claim under

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

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

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

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

We agree likewise with the oppositors that having complied with all the requirements
of the mining laws, the claims were removed from the public domain, and not even
the government of the Philippines can take away this right from them. The reason is
obvious. Having become the private properties of the oppositors, they cannot be
deprived thereof without due process of law. 13

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

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

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

Any provision of existing laws, executive order, proclamation to the contrary

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

The perfection of the mining claim converted the property to mineral land and under the laws then in
force removed it from the public domain. 14 By such act, the locators acquired exclusive rights over
the land, against even the government, without need of any further act such as the purchase of the
land or the obtention of a patent over it. 15 As the land had become the private property of the
locators, they had the right to transfer the same, as they did, to Benguet and Atok.

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

First, the trial court found that the evidence of open, continuous, adverse and exclusive possession
submitted by the applicants was insufficient to support their claim of ownership. They themselves
had acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier
alleged possession of their predecessors-in-interest. 16 The trial judge, who had the opportunity to
consider the evidence first-hand and observe the demeanor of the witnesses and test their credibility
was not convinced. We defer to his judgment in the absence of a showing that it was reached with
grave abuse of discretion or without sufficient basis. 17

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

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

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

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

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

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

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

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

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

The flaw in the reasoning of the respondent court is in supposing that the rights over the land could
be used for both mining and non-mining purposes simultaneously. The correct interpretation is that
once minerals are discovered in the land, whatever the use to which it is being devoted at the time,
such use may be discontinued by the State to enable it to extract the minerals therein in the exercise
of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any
private party, including the registered owner thereof, for any other purpose that will impede the
mining operations to be undertaken therein, For the loss sustained by such owner, he is of course
entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings. 21

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

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

SO ORDERED.

Teehankee, C.J., Narvasa, Gancayco and Griño-Aquino, JJ., concur.

4. Director of Lands vs. CA & Sps. Bisnar, Oct. 26, 1989

G.R. No. 83609 October 26, 1989

DIRECTOR OF LANDS, petitioner,

vs.
COURT OF APPEALS, IBARRA BISNAR and AMELIA BISNAR, respondents.

Ibarra L. Bisnar for himself and for and in behalf of co-private respondent Amelia Bisnar.

GRIÑO-AQUINO, J.:

Petitioner Director of Lands, through the Solicitor General, seeks a review of the decision dated May
27, 1988, of the Court of Appeals in CA-G.R. CV No. 66426, entitled "Ibarra Bisnar, et al. vs. Director
of Lands," affirming in toto the decision of the Court of First Instance of Capiz, granting the private
respondents' application for confirmation and registration of their title to two (2) parcels of land in
LRC Cad. Rec. 1256.

In their joint application for registration of title to two (2) parcels of land filed on July 20,1976, the
applicants Ibarra and Amelia Bisnar claimed to be the owners in fee simple of Lots 866 and 870 of
the Pilar Cadastre Plan AP-06-000869, respectively containing an area of 28 hectares (284,424 sq.
m.) and 34 hectares (345,385 sq. m.) situated in barrio Gen. Hizon, Municipality of President Roxas,
Province of Capiz (p. 14, Rollo). The applicants alleged that they inherited those parcels of land (p.
41, Rollo) and they had been paying the taxes thereon (p. 40, Rollo).

On December 16,1976, the Director of Lands and the Director of the Bureau of Forest Development,
opposed the application on the grounds that:

1. Neither the applicants nor their predecessors-in-interest possess sufficient title to

acquire ownership in fee simple of the land or lots applied for, the same not having
been acquired by any of the various types of title issued by the Spanish Government,
such as, (1) 'titulo real' or royal grant, (2) the 'concession especial' or special grant,
(3) the 'composicion con el estado titulo' or adjustment title, (4) the 'titulo de
compra 'or title by purchase, and (5) the 'informacion possessoria' or possessory
 information under the Royal Decree of 13 February 1894, or any other recognized
mode of acquisition of title over realty under pertinent applicable laws.

2. Neither the applicants nor their predecessors-in-interest have been in open,

continuous, exclusive and notorious possession and occupation of the land in
question for at least thirty (30) years immediately preceding the filing of the
application.

3. The properties in question are a portion of the public domain belonging to the
Republic of the Philippines, not subject to private appropriation, (pp. 17-19, Record
on Appeal). (pp. 14-15, Rollo.)

On February 24,1977, the applicants filed an amended application, which was approved on March
14, 1977, and included the following allegation:

Should the Land Registration Act invoked be not applicable to the case, they hereby
apply for the benefits of Chapter 8, Commonwealth Act 141, as amended, as they
and their predecessors-in-interest have been in possession of the land as owners for
more than fifty (50) years. (p. 16, Rollo.)

After hearing, the trial court ordered the registration of the title of the lots in the names of the
applicants, herein private respondents. It found that applicants and their predecessors- in-interest
have been in open, public, continuous, peaceful and adverse possession of the subject parcels of
land under bona fide claims of ownership for more than eighty (80) years (not only 30) prior to the
filing of the application for registration, introduced improvements on the lands by planting coconuts,
bamboos and other plants, and converted a part of the land into productive fishponds (p. 68, Rollo).

On appeal, the Appellate Court affirmed the trial court's decision. It held that the classification of the
lots as timberland by the Director of Forestry cannot prevail in the absence of proof that the said lots
are indeed more valuable as forest land than as agricultural land, citing as authority the case
of Ankron vs. Government of the Philippine Islands (40 Phil. 10). In this petition, the government
alleges that:

1. the classification or reclassification of public lands into alienable or disposable

agricultural land, mineral land or forest land is a prerogative of the Executive
Department of the government and not of the courts;

2. that possession of forest lands, no matter how long, cannot ripen into private
ownership; and

3. that an applicant for registration of title has the burden of proving that he meets the
requirements of Section 48 of Com. Act No. 141, as amended. (p. 19, Rollo.)

The principal issue in this appeal is whether the lots in question may be registered under Section 48
(b) of CA 141, as amended.

The petition is impressed with merit.

In the case of Bureau of Forestry vs. Court of Appeals, 153 SCRA 351, we ruled:
 As provided for under Section 6 of Commonwealth Act 141, which was lifted from Act
2874, the classification or reclassification of public lands into alienable or disposable,
mineral or forest lands is now a prerogative of the Executive Department of the
government and not the courts. With these rules, there should be no more room for
doubt that it is not the court which determines the classification of lands of the public
domain into agricultural, forest or mineral but the Executive Branch of the
government, through the Office of the President. Hence, it was grave error and/or
abuse of discretion for respondent court to ignore the uncontroverted facts that (1)
the disputed area is within a timberland block, and (2) as certified to by the then
Director of Forestry, the area is needed for forest purposes. (pp. 21-22, Rollo.)

It bears emphasizing that a positive act of the government is needed to declassify land which is
classified as forest and to convert it into alienable or disposable land for agricultural or other
purposes (Republic vs. Animas, 56 SCRA 499). Unless and until the land classified as forest is
released in an official proclamation to that effect so that it may form part of the disposable
agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply
(Amunategui vs. Director of Forestry, 126 SCRA 69; Director of Lands vs. Court of Appeals, 129
SCRA 689; Director of Lands vs. Court of Appeals, 133 SCRA 701; Republic vs. Court of Appeals,
148 SCRA 480; Vallarta vs. Intermediate Appellate Court, 151 SCRA 679).

Thus, possession of forest lands, however long, cannot ripen into private ownership (Vano vs.
Government, 41 Phil. 161 [1920]; Adorable vs. Director of Forestry, 107 Phil. 401 [1960]). A parcel of
forest land is within the exclusive jurisdiction of the Bureau of Forestry and beyond the power and
jurisdiction of the cadastral court to register under the Torrens System (Republic vs. Court of
Appeals, 89 SCRA 648; Republic vs. Vera, 120 SCRA 210 [1983]; Director of Lands vs. Court of
Appeals, 129 SCRA 689 [1984]).

Section 48 (b) of Commonwealth Act No. 141, as amended, applies exclusively to public agricultural
land. Forest lands or areas covered with forests are excluded (p. 26, Rollo). We reiterate our ruling
in Amunategui that:

In confirmation of imperfect title cases, the applicant shoulders the burden of proving
that he meets the requirements of Section 48, Commonwealth Act No. 141, as
amended by Republic Act 1942. He must overcome the presumption that the land he
is applying for is part of the public domain but that he has an interest therein
sufficient to warrant registration in his name because of an imperfect title such as
those derived from old Spanish grants or that he has had continuous, open and
notorious possession and occupation of agricultural lands of the public domain under
a bona fide claim of acquisition of ownership for at least thirty (30) years preceding
the filing of his application. (Heirs of Amunategui vs. Director of Forestry, 126 SCRA
69.)

WHEREFORE, the appealed decision is reversed and set aside. The application for registration in
LRC Cad. Rec. 1256 of the former Court of First Instance, is hereby dismissed without costs.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

 5. San Miguel Corp. vs. Court of Appeals, May 28, 1990

G.R. No. 57667 May 28, 1990

SAN MIGUEL CORPORATION, petitioner,

vs.
COURT OF APPEALS and DIRECTOR OF LANDS, respondents.

Ciriaco Lopez, Jr. & Associates for petitioner.

FERNAN, C.J.:

In this petition for review on certiorari, San Miguel Corporation seeks the reversal of the decision of the Court of Appeals 1 denying its
application for registration of a parcel of land in view of its failure to show entitlement thereto.

On December 23, 1975, petitioner San Miguel Corporation (SMC for brevity) purchased from Silverio
Perez Lot 684, a 14,531 square-meter parcel of land located in Sta. Anastacia, Sto. Tomas,
Batangas, in consideration of the sum of P133,084.80. 2 On February 21,1977, claiming ownership in
fee simple of the land, SMC filed before the then Court of First Instance, now Regional Trial Court of
Batangas an application for its registration under the Land Registration Act.

The Solicitor General, appearing for the Republic of the Philippines, opposed the application for
registration contending that SMC's claim of ownership in fee simple on the basis of a Spanish title or
grant could no longer be availed of by the applicant as the six-month period from February 16, 1976
prescribed by Presidential Decree No. 892 had elapsed; that the parcel of land in question is part of
the public domain, and that SMC, being a private corporation, is disqualified under Section 11,
Article XIV of the Constitution from holding alienable lands of the public domain. The Solicitor
General thereafter authorized the Provincial Fiscal of Batangas to appear in said case, subject to his
supervision and control.

At the initial and only hearing held on October 12, 197 7, the Court, upon motion of SMC and there
being no opposition to the application except that of the Republic of the Philippines, issued an order
of general default. SMC was allowed to mark documentary evidence to establish jurisdictional facts
and to present additional evidence before the Clerk of Court who was appointed Commissioner for
that purpose.

On December 12, 1977, the lower court, presided by Judge Eduardo C. Abaya, rendered a decision
granting the application for registration and adjudicating the property in favor of SMC.

The Solicitor General appealed to the Court of Appeals. In its decision of March 23, 1981, said court
reversed the decision of the lower court and declared the parcel of land involved as public land.
Hence, the instant petition with SMC submitting the following alleged "grave errors" of the Court of
Appeals for this Court's resolution: (1) the Court of Appeals' failure to hold that "prescription is a
mode of acquiring title or ownership of land and that the title thus acquired is registrable"; (2) the
Court of Appeals' disregard of SMC's evidence "not on the basis of controverting evidence but on the
basis of unfounded suppositions and conjectures," and (3) the Court of Appeals' reversal of the
factual findings of the trial court which had the opportunity of observing the demeanor and sincerity
of the witnesses. 3
We need not dwell lengthily on the third "error" assigned by petitioner. Suffice it to state that while
trial courts may have the opportunity to observe the demeanor of witnesses, their factual findings
may nonetheless be reversed by the Court of Appeals, the appellate court vested by law to resolve
both legal and factual issues, if, by the evidence on record, it appears that the trial court involved
erred. What is of primary concern to us in this case is the issue of whether or not the evidence
presented by the petitioner is sufficient to warrant a ruling that SMC and/or its predecessor-in-
interest has a registrable right over Lot 684.

Open, exclusive and undisputed possession of alienable public land for the period prescribed by law
creates the legal fiction whereby the land, upon completion of the requisite period ipso-jure and
without the need of judicial or other sanction, ceases to be public land and becomes private
property. 4 Such open, continuous, exclusive and notorious occupation of the disputed properties for
more than 30 years must, however, be conclusively established. 6 This quantum of proof is
necessary to avoid the erroneous validation of actually fictitious claims of possession over the
property in dispute.

In this case, petitioner's claim that its predecessor-in-interest had open, exclusive and undisputed
possession of Lot 684 for more than thirty years is anchored on certain documentary and testimonial
evidence. Its documentary evidence consist of tax declaration No. 923 wherein it appears that in
1974, Silverio Perez declared as his own for taxation purposes, a certain riceland with an area of
1.5657 hectares located in Sta. Anastacia, Sto. Tomas, Batangas, 6 and a certification of the Office
of the Treasurer of Sto. Tomas to the effect that in 1977, Silverio Perez paid realty taxes for the land
subject of tax declaration no. 923. 7

Tax declarations and receipts are not conclusive evidence of ownership or right of possession over a
piece of land. 8 They are merely indicia of a claim of ownership. 9 Tax declarations only become
strong evidence of ownership of land acquired by prescription, a mode of acquisition of ownership
relied upon by petitioner in this case, when accompanied by proof of actual possession. 10

Such proof of actual possession was sought to be provided by the testimony of vendor Silverio
Perez that he had been in possession of the property since 1933 until he sold it to SMC in 1975; that
the property was given to him by his parents when he got married; that no document evidenced that
transfer; that it had been in the possession of his parents since 1925; that he had declared the
property in his name for taxation purposes; that he had paid taxes therefor, and that he was in
peaceful, continuous and exclusive possession of the property until its sale to SMC. 11

Petitioner did not present other witnesses to corroborate Perez' testimony. Its other witness, Antonio
M. de las Alas, Jr., a lawyer of the petitioner, simply testified that he handled the negotiations for the
purchase of the property; that SMC was authorized to own and acquire property as shown by its
articles of incorporation and by-laws; that since its acquisition in 1975, the property had been used
as a hatchery farm of SMC; that SMC's possession in the concept of an owner had been continuous,
adverse and against the whole world, and that the land was declared for taxation purposes still in the
name of Silverio Perez .12

We hold that there is paucity of evidence of actual, notorious and exclusive possession of the
property on the part of vendor Silverio Perez so as to attach to it the character of an express grant
from the govemment. 13 Indeed, as correctly held by the Court of Appeals, Silverio Perez's testimony,
being uncorroborated, is simply self-serving and hence, undeserving of any weight.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Costs against the
petitioner.
SO ORDERED.

Gutierrez, Jr., Feliciano, Bidin and Cortes, JJ., concur.

6. Republic vs. Intermediate Appelate Court, Nov. 29, 1988

G.R. No. 75042 November 29, 1988

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
INTERMEDIATE APPELLATE COURT, ROMAN CATHOLIC BISHOP OF LUCENA, represented
by Msgr. Jose T. Sanchez, and REGIONAL TRIAL COURT, BRANCH LIII, LUCENA
CITY, respondents.

The Solicitor General for petitioner.

Gilbert D. Camaligan for private respondent.

BIDIN, J.:

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

The factual background of the case as found by the Intermediate Appellate Court are as follows:

On February 2, 1979, the ROMAN CATHOLIC BISHOP of Lucena, represented by

Msgr. Jose T. Sanchez, filed an application for confirmation of title to four (4) parcels
of land. Three of said parcels, denominated as Lots 1, 2 and 3, respectively, of plan
PSU-65686 are situated in Barrio Masin, Municipality of Candelaria, Quezon
Province. The fourth parcels under plan PSU-112592 is located in Barrio Bucal
(Taguan), same municipality and province. As basis for the application, the applicant
claimed title to the various properties through either purchase or donation dating as
far back as 1928.

The legal requirements of publication and posting were duly complied with, as was
the service of copies of notice of initial hearing on the proper government officials.

In behalf of the Director of Lands and the Director of the Bureau of Forest
Development, the Solicitor General filed an Opposition on April 20, 1979, alleging
therein among others, that the applicant did not have an imperfect title or title in fee
simple to the parcel of land being applied for.
At the initial hearing held on November 13, 1979, only the Provincial Fiscal in
representation of the Solicitor General appeared to interpose personal objection to
the application. Hence, an Order of General Default against the whole world was
issued by the Court a quo except for the Director of Lands and the Director of the
Bureau of Forest Development.

The preliminaries dispensed with, the applicant then introduced its proofs in support
of the petition, summed up by the lower court as follows:

With respect to Lots 1, 2, and 3, plan PSU-65686.

Lots 1, 2 and 3 of plan PSU-65686 respectively containing an area of

18,977, 6,910 and 16,221 square meters, are adjoining lots & are
situated in the Barrio of Masin, Municipality of Candelaria, Province of
Quezon (formerly Tayabas) (Exhibits F, F-1, F-2 and F-3). Said lots
were surveyed for the Roman Catholic Church on November 3, 1928
(Exhibit P-5) and the survey plan approved on October 20, 1929
(Exhibit F-6).

Lot 1 was acquired by the Roman Catholic Church thru Rev. Father
Raymundo Esquenet by purchase from the spouses Atanacio Yranso
and Maria Coronado on October 20, 1928 (Exhibits G, G-1), portion
of Lot 2 also by purchase thru Rev. Father Raymundo Esquenet from
the spouses Benito Maramot and Venancia Descaller on May 22,
1969 (Exhibits M, N-1), while the remaining portion of Lot 2 and Lot 3
were already owned and possessed by the Roman Catholic Church
even prior to the survey of the said three lots in 1928.

Records of burial of the Roman Catholic Church of Candelaria,

Quezon showed that even as early as November 1918, Lot 3 has
already been utilized by the Roman Catholic Church as its cemetery
in Candelaria, Quezon (Exhibit N, N-1 to N-5). <äre||anº• 1àw>

These three lots presently constituted the Roman Catholic Church

cemetery in Candelaria, Quezon.

Lots 1, 2 and 3 are declared for taxation purposes in the name of the
Roman Catholic Church under Tax Declaration Nos. 22-19-02-079,
22-19-02-077 and 22-19-02-082 as 'cemetery site' (Exhibit S, V and
T).

With respect to the parcel of land described in plan PSU-112592:

This parcel of land situated in the barrio of Bucal (Taguan),

Municipality of Candelaria, Province of Quezon (formerly Tayabas)
and more particularly described in plan PSU-1 12592 and its
technical description with an area of 3,221 square meters (Exhibit 1)
was formerly owned and possessed by the spouses Paulo G.
Macasaet, and Gabriela V. de Macasaet. Said spouses, on February
26, 1941, donated this lot to the Roman Catholic Church represented
by Reverend Father Raymundo Esquenet (Exhibit J, J-1 to J-4). It
was surveyed for the Roman Catholic Church on Aug. 16, 1940 as
 church site and the corresponding survey plan approved on Jan. 15,
1941 (Exhibits I-1, I-2, 1-3).

Previously erected on this Lot was an old chapel which was

demolished and new chapel now stands in its place on the same site.

For his part, the Fiscal in a Manifestation dated July 22, 1980, said 'the State will not
adduce evidence in support of its opposition and will submit the instant case for
decision.'

Evaluating the applicant's submitted proofs, the court a quo concluded, on the basis
of acquisitive prescription at the very least, that the former had adequately shown
title to the parcels of land being claimed.

Since the acquisition of these four (4) lots by the applicant, it has
been in continuous possession and enjoyment thereof, and such
possession, together with its predecessors-in interest, covering a
period of more than 52 years (at least from the date of the survey in
1928) with respect to lots 1 and 2, about 62 years with respect to lot
3, all of plan PSU- 65686; and more than 39 years with respect to the
fourth parcel described in plan PSU-112592 (at least from the date of
the survey in 1940) have been open, public, continuous, peaceful,
adverse against the whole world, and in the concept of owner.

Accordingly, the court ordered the registration of the four parcels together with the
improvements thereon "in the name of the ROMAN CATHOLIC BISHOP OF
LUCENA, INC., a religious corporation sole duly registered and existing under the
laws of the Republic of the Philippines."

Against this decision, the Solicitor General filed a Motion for reconsideration on the
following grounds:

1. Article XIV, Section 11 of the New Constitution(1973) disqualifies a private

corporation from acquiring alienable lands for the public domain.

2. In the case at bar the application was filed after the effectivity on the New
Constitution on January 17, 1973.

which was denied by the lower court for lack of merit.

Still insisting of the alleged unconstitutionality of the registration (a point which,

incidentally, the appellant never raised in the lower court prior to its Motion for
Reconsideration), the Republic elevated this appeal. (Rollo, pp. 25-28)

On May 13, 1986, the first Civil Cases Division of the Intermediate Appellate Court rendered its
Decision the dispositive part of which reads:

WHEREFORE, finding the judgment a quo to be supported by law and the evidence
on record, the same is hereby AFFIRMED. No pronouncement as to costs.

SO ORDERED. (Rollo p. 30)

A reconsideration of the aforequoted Decision was sought by Appellant Republic of the Philippines,
but for lack of merit, its motion for reconsideration was denied on June 19, 1986, by Resolution of
the First Civil Case Division, Intermediate Appellate Court which resolution reads in full:

Considering appellant Republic of the Philippines "Motion for reconsideration" filed

on June 4, 1986; the Court RESOLVED to DENY the Motion for Reconsideration for
lack of merit, grounds raised therein having all been considered in the decision.
(Rollo, p. 31)

Hence, this petition.

The following are the assigned errors raised by the petitioner in its petition:

1. The decision and the resolution in question are contrary to law and decisions of
this honorable Court in Meralco vs. Castro-Bartolome and Republic, 114 SCRA 799
(prom. June 29,1982); Republic vs. Judge Villanueva and Iglesia ni Cristo, 114
SCRA 875, June 29, 1982); and Republic vs. Judge Gonong and Iglesia ni Cristo,
118 SCRA 729-733 (November 25,1982); Director of Lands vs. Hermanos y
Hermanas, Inc. 141 SCRA 21-25 (Jan. 7,1986).

2. The lands applied for registration were the subject of a previous registration case
where a decree of registration was already issued.

3. Respondent corporation failed to establish the indentity of the lands applied for.
(Rollo, pp. 14-15)

The issue raised in this case involves the question of whether the Roman Catholic Bishop of Lucena,
as a corporation sole is qualified to apply for confirmation of its title to the four (4) parcels of land
subject of this case.

Corollary thereto is the question of whether or not a corporation sole should be treated as an
ordinary private corporation, for purpose of the application of Art. XIV, Sec. 11 of the 1973
Constitution.

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

Sec. 11. .... No private corporation or association may hold alienable lands of the
public domain except by lease not to exceed one thousand hectares in area; nor may
any citizen hold such lands by lease in excess of five hundred hectares....

Sec. 48 of the Public Land Act, in part, provides:

Sec. 48. The following described citizens of the Philippines occupying lands of the
public domain or claiming to own any such lands or an interest therein, but whose
titles have not been perfected or completed, may apply to the Court of First Instance
of the province where the land is located for confirmation of their claims and the
issuance of a Certificate of title therefor, under the Land Registration Act, to wit:

(a) ...
 (b) Those who by themselves or through their predecessor-in-interest
have been in open, continuous, exclusive, and notorious possession
and occupation of agricultural lands of the public domain under a
bona fide claim of acquisition of ownership for at least thirty years
immediately preceding the filing of the application for confirmation of
title except when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions essential
to a Government grant and shall be entitled to a certificate of title
under the provisions of this chapter.

(c) ...

In its Motion for Reconsideration, petitioner contends that the Roman Catholic Bishop of Lucena
(private respondent herein) which is admittedly a corporation sole is disqualified to own and register
its title over the parcels of land involved herein. (Rollo, p. 41)

In its petition it likewise argued that being a juridical entity, private respondent cannot avail of the
benefits of Sec. 48(b) of the public land law which applies to FILIPINO citizens or NATURAL
persons. On the other hand, private respondent in its MEMORANDUM espoused the contrary view.

There is no merit in this petition.

The parties herein do not dispute that since the acquisition of the four (4) lots by the applicant, it has
been in continuous possession and enjoyment thereof, and such possession, together with its
predecessors-in-interest, covering a period of more than 52 years (at least from the date of survey in
1928) with respect to lots 1 and 2, about 62 years with respect to lot 3, all of plan PSU-65686; and
more than 39 years with respect to the fourth parcel described in plan PSU-11 2592 (at least from
the date of the survey in 1940) have been open, public, continuous, peaceful, adverse against the
whole world, and in the concept of owner.

Being disputed before this Court is the matter of the applicability of Art. XIV Sec. 11 of the 1973
Constitution to the case at bar.

Petitioner argues that considering such constitutional prohibition, private respondent is disqualified to
own and register its title to the lots in question. Further, it argues that since the application for
registration was filed only on February 2, 1979, long after the 1973 Constitution took effect on
January 17, 1973, the application for registration and confirmation of title is ineffectual because at
the time it was filed, private corporation had been declared ineligible to acquire alienable lands of the
public domain pursuant to Art. XIV, Sec. 11 of the said constitution. (Rollo, p. 41)

The questioned posed before this Court has been settled in the case of DIRECTOR OF LANDS vs.
Intermediate Appellate Court (146 SCRA 509 [1986]) which reversed the ruling first enunciated in
the 1982 case of Manila Electric Co. vs. CASTRO BARTOLOME, (114 SCRA 789 [1982]) imposing
the constitutional ban on public land acquisition by private corporations which ruling was declared
emphatically as res judicata on January 7, 1986 in Director of Lands vs. Hermanos y Hermanas de
Sta. Cruz de Mayo, Inc., (141 SCRA 21 [1986]). In said case, (Director of Lands v. IAC, supra), this
<äre|| anº•1àw>

Court stated that a determination of the character of the lands at the time of institution of the
registration proceedings must be made. If they were then still part of the public domain, it must be
answered in the negative.

If, on the other hand, they were already private lands, the constitutional prohibition against their
acquisition by private corporation or association obviously does not apply. In affirming the Decision
of the Intermediate Appellate Court in said case, this Court adopted the vigorous dissent of the then
Justice, later Chief Justice Claudio Teehankee, tracing the line of cases beginning with CARINO, 1 in
1909, thru SUSI, 2 in 1925, down to HERICO, 3 in 1980, which developed, affirmed and reaffirmed
the doctrine that open, exclusive and undisputed possession of alienable public land for the period
prescribed by law creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to be public land and
becomes' private property. (DIRECTOR OF LANDS vs. IAC, supra, p. 518).

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

The open, continuous and exclusive possession of the four lots by private respondent can clearly be
gleaned from the following facts on record: Lot 1 and portion of Lot 2 was acquired by purchase in
1928 and 1929, respectively. The remaining portion of lots 2 and 3 was already owned and
possessed by private respondent even prior to the survey of said lots in 1928. In fact, records of
burial of the Roman Catholic Church of Candelaria, Quezon showed that as early as 1919, Lot 3 has
already been utilized by the Roman Catholic Church as its cemetery. That at present, said three lots
are utilized as the Roman Catholic Church of Candelaria, Quezon. That said lots are declared for
taxation purposes in the name of the Roman Catholic Church. The fourth parcel of land was
acquired by donation in 1941 and same lot is utilized as church site.

It must be emphasized that the Court is not here saying that a corporation sole should be treated like
an ordinary private corporation.

In Roman Catholic Apostolic Administration of Davao, Inc. vs. Land Registration Commission, et al.
(L-8451, December 20,1957,102 Phil. 596). We articulated:

In solving the problem thus submitted to our consideration, We can say the following:
A corporation sole is a special form of corporation usually associated with the clergy.
Conceived and introduced into the common law by sheer necessity, this legal
creation which was referred to as "that unhappy freak of English Law" was designed
to facilitate the exercise of the functions of ownership carried on by the clerics for and
on behalf of the church which was regarded as the property owner (See 1 Bouvier's
Law Dictionary, p. 682-683).

A corporation sole consists of one person only, and his successors (who will always
be one at a time), in some particular station, who are incorporated by law in order to
give them some legal capacities and advantages, particulary that of perpetuity, which
in their natural persons they could not have had. In this sense, the King is a sole
 corporation; so is a bishop, or deans distinct from their several chapters (Reid vs.
Barry, 93 fla. 849, 112 So. 846).

Pertinent to this case is the provision of Sec. 113 Batas Pambansa Blg. 68 which reads as follows:

Sec. 113. Acquisition and alienation of property. — Any corporation sole may
purchase and hold real estate and personal property for its church, charitable,
benevolent or educational purposes, and may receive bequests or gifts for such
purposes. Such corporation may mortgage or sell real property held by it upon
obtaining an order for that purpose from the Court of First Instance of the province
where the property is situated; but before the order is issued, proof must be made to
the satisfaction of the Court that notice of the application for leave to mortgage or sell
has been given by publication or otherwise in such manner and for such time as said
court may have directed, and that it is to the interest of the corporation that leave to
mortgage or sell should be granted. The application for leave to mortgage or sell
must be made by petition, duly verified by the chief archbishop, bishop, priest,
minister, rabbi or presiding elder acting as corporation sole, and may be opposed by
any member of the religious denomination, sect or church represented by the
corporation sole: Provided, That in cases where the rules, regulations and discipline
of the religious denomination, sect or church religious society or order concerned
represented by such corporation sole regulate the method of acquiring, holding,
selling and mortgaging real estate and personal property, such rules, regulations and
discipline shall control and the intervention of the courts shall not be necessary.

There is no doubt that a corporation sole by the nature of its Incorporation is vested with the right to
purchase and hold real estate and personal property. It need not therefore be treated as an ordinary
private corporation because whether or not it be so treated as such, the Constitutional provision
involved will, nevertheless, be not applicable.

In the light of the facts obtaining in this case and the ruling of this Court in Director of Lands vs. IAC,
(supra, 513), the lands subject of this petition were already private property at the time the
application for confirmation of title was filed in 1979. There is therefore no cogent reason to disturb
the findings of the appellate court.

WHEREFORE, the petition is dismissed for lack of merit and the appealed decision and Resolution
of the Intermediate Appellate Court is hereby AFFIRMED.

SO ORDERED.

Fernan, C.J., Gutierrez, Jr., Feliciano and Cortes, JJ., concur.

7. Director of Lands vs. Iglesia ni Cristo, Aug. 16, 1991

[G.R. No. 54276. August 16, 1991.]

DIRECTOR OF LANDS, Petitioner, v. IGLESIA NI KRISTO and HON. DOMINGO D. PANIS, Presiding
Judge, Court of First Instance of Zambales and Olongapo, Br. III, Respondents.
 RESOLUTION

NARVASA, J.:

Application of the doctrine laid down in 1986 in Director of Lands v. I.A.C . 1 is all that is necessary to
resolve the issue presented in the appeal at bar.

The petitioner takes no issue with the factual findings of the Registration Court. In its petition, 2 it makes
the following recitation of the relevant facts, viz.:
jgc:chanro bles. com.ph

"Respondent Iglesia ni Kristo filed an application for the registration and confirmation of title over a parcel of
land, with an area of 280 sq. meters, situated at Barrio Consuelo Sur, Municipality of San Marcelino,
Province of Zambales. The application . . . was docketed in the Court of First Instance of Zambales &
Olongapo, Branch III (presided by respondent Judge) as LRC No. N-187-O.

Petitioner (Republic) opposed the application on the Found that the . . . Iglesia ni Kristo is a private
corporation, and that under Art. XIV, sec. 11, of the Constitution, private corporations cannot acquire lands
of the public domain but can only hold them by lease in an area not exceeding 1,000 hectares. . . . It
appears that the applicant acquired the property in question from Gregorio Rolls and Romualdo Rolls (both
of San Marcelino, Zambales) on May 23, 1946, as shown by the Deed of Sale (Exhibit ‘I’). After acquiring the
land, applicant had it declared for taxation purposes. . . . The latest tax declaration of this same parcel of
land starts with the year 1974 as per Tax Dec. No. 4763 . . . . The land is exempt from payment of Realty
Tax, being devoted primarily for religious purposes (Exhibit N).

Without passing upon the Government’s contention that respondent Iglesia ni Kristo was disqualified from
acquiring the land in question, the trial court rendered judgment on June 2, 1980 decreeing the registration
of the land in the name of the respondent (Iglesia). The dispositive portion of the decision reads: chan rob 1es vi rtual 1aw lib rary

WHEREFORE, judgment is hereby rendered registering and confirming the title of the applicant, Iglesia ni
Kristo with its Executive Minister Eraño G. Manalo as corporation sole with office and postal address at
corner of Central and Don Mariano Marcos Avenues, Diliman, Quezon City, over the parcel of land situated at
Barrio Consuelo Sur, Municipality of San Marcelino, Province of Zambales, with an area of 280 sq. m.
covered by Plan PSU-03-000947. (Exhibit `F’).

SO ORDERED." cralaw virt ua1aw lib ra ry

(N.B. The decision also makes the finding that since acquiring the land, the Iglesia in Kristo "has been in
open, public, adverse, peaceful and continuous possession in the concept of an owner thereof to the present
time," having in fact "put up a chapel made of concrete materials and galvanized iron for its roofing;" and
that the "land is not also within any military or naval reservation.")

It is this decision of June 2, 1980 that is subject of the Government’s petition for review on certiorari at bar.

The petition will have to be denied, in accordance with the judgment of this Court en banc in Director of
Lands v. Intermediate Appellate Court handed down on December 29, 1986, 3 involving substantially similar
facts. That judgment reconsidered and declared "no longer . . . binding precedent," Manila Electric Company
v. Castro-Bartolome, Et Al., promulgated on June 29, 1982, 4 and instead adopted the dissenting opinion
therein 5 (based on a line of cases beginning with Cariño v. Insular Government in 1909 6 thru Susi v.
Razon in 1925 7 down to Herico v. Dar in 1980. 8

In that case, Director of Lands v. I.A.C., a private corporation, Acme Plywood & Veneer Co., Inc. purchased
a tract of land in 1962 from Mariano Infiel and Acer Infiel, two members of the Dumagat tribe, but applied
with the Court for registration of its title over the land under the Torrens Act only in July, 1981, long after
the effectivity of the 1973 Constitution — which inter alia prohibits private corporations from holding
alienable lands of the public domain, except by lease not to exceed 1,000 hectares (a prohibition not found
in the 1935 Constitution, in force in 1962 when Acme purchased the land in question). There being no
question that Acme and its predecessors-in-interest had possessed and occupied the land for more than the
required 30-year period prescribed in Section 48 of the Public Land Act (Commonwealth Act No. 141, as
amended), 9 the question presented to the Court en banc was whether or not the title that Acme had
acquired in 1962 could be confirmed in its favor in proceedings instituted by it in 1981 when the 1973
Constitution was already in effect, having in mind the prohibition therein against private corporations
holdings lands of the public domain. That question the Court en banc answered in this wise: jgc:cha nrob les.co m.ph

". . . (The weight of authority is) that open, exclusive and undisputed possession of alienable public land for
the period prescribed by law creates the legal fiction whereby the land, upon completion of the requisite
period ipso jure and without the need of judicial or other sanction, ceases to be public land and becomes
private property. . . .

"x x x

Herico (supra), in particular, appears to be squarely affirmative: chan rob1es v irt ual 1aw l ibra ry

‘. . . Secondly, under the provisions of :Republic Act No. 1942, which the respondent Court held to be
inapplicable to the petitioner’s case, with the latter’s proven occupation and cultivation for more than 30
years since 1914, by himself and by his predecessors-in-interest, title over the lands has vested on
petitioner so as to segregate the land from the mass of public land. Thereafter, it is no longer disposable
under the Public Land Act as by free patent. . . .

‘As interpreted in several cases, when the conditions as specified in the foregoing provision are complied
with, the possessor is deemed to have acquired, by operation of law, a right to a grant, a government grant,
without the necessity of a certificate of title being issued. The land, therefore, ceased to be of the public
domain and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a
mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by
the patent and the Torrens title to be issued upon the strength of said patent.

"Nothing can more clearly demonstrate the logical inevitability of considering possession of public land which
is of the character and duration prescribed by statute as the equivalent of an express grant from the State
than the dictum of the statute itself (Section 48 (b) of C.A. No. 141) that the possession(s) ‘. . . shall be
conclusively presumed to have performed all the conditions essential to a Government grant and shall be
entitled to a certificate of title . . ..’No proof being admissible to overcome a conclusive presumption,
confirmation proceedings would, in truth, be little more than a formality, at the most limited to ascertaining
whether the possession claimed is of the required character and length of time; and registration thereunder
would not confer title, but simply recognize a title already vested. The proceedings would not originally
convert the land from public to private land, but only confirm such a conversion already effected by
operation of law from the moment the required period of possession became complete. As was so well put in
Cariño, ‘. . . (T)here are indications that registration was expected from all, but none sufficient to show that,
for want of it, ownership actually gained would be lost. The effect of the proof, wherever made, was not to
confer title, but simply to establish it, as already conferred by the decree, if not by earlier law.’

"x x x

". . . The purely accidental circumstance that confirmation proceedings were brought under the aegis of the
1973 Constitution which forbids corporations from owning lands of the public domain cannot defeat a right
already vested before that law came into effect or invalidate transactions then perfectly valid and proper.
This Court has already held in analogous circumstances that the Constitution cannot impair vested rights."
libra ry
cralaw vi rtua 1aw

The substantial identity of the facts and issues between the case at bar and Director of Lands v. I.A.C. being
undeniable, and being cited to no persuasive reason to decline to apply the doctrine in the latter to the
former, the Court, as aforesaid, has no alternative except to rule adversely to the petitioner.

WHEREFORE, the petition is DENIED and the judgment of the respondent Court dated June 2, 1980 in LRC
No. N-187-0 entitled, "Iglesia ni Kristo, etc. v. Director of Lands, Et Al.," is AFFIRMED. No costs.

SO ORDERED.

Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.

 8. Almeda vs. Court of Appeals, April 30, 1991

G.R. No. 85322 April 30, 1991

ALFREDO M. ALMEDA, LEONARDO M. ALMEDA and ERNESTO M. ALMEDA, petitioners,

vs.
HON. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, representative represented
by THE DIRECTOR OF LANDS, respondents.

Leonardo M. Almeda for petitioners.

GRIÑO-AQUINO, J.:

This petition for review assails the Court of Appeals' decision dated May 9, 1988 in CA-G.R. No.
09309-CV reversing the judgment dated January 6, 1986 of the Regional Trial Court in LRC Case
No. N-10771 entitled, "Alfredo M. Almeda, Leonardo M. Almeda and Ernesto M. Almeda, Applicants
versus Republic of the Philippines, represented by the Director of Lands, Oppositor."

The case involves a parcel of land with an area of 1,208 square meters located in Barrio Pampangin
Pateros, Rizal, and described in Survey Plan Psu-128539. It was originally owned and possessed by
Emiliano Almeda, father of the petitioners, by virtue of an "Escritura de Particion Extrajudicial" (Exh.
G) executed on June 15, 1935, between him and his brother Adriano wherein they attested the fact
that the land in question was inherited from their parents, Vedasto Almeda and Josefa C.
Concepcion, who had inherited the same from their own parents (great-grandparents of herein
petitioners).

After Emiliano's death on May 1, 1948 at the age of 67, his wife, Ana Menguito and their children
received the produce of the land and rented out to third persons portions of the property where
Emiliano had three houses built. Upon Ana's death on April 3, 1950, her children with Emiliano
inherited the property and the lessees moved out. On June 9, 1980, the brothers Alfredo, Leonardo
and Ernesto executed an extrajudicial partition adjudicating the land to themselves (Exh. J).

On September 12, 1984, the Almeda brothers applied for the registration of the land in the Regional
Trial Court of Pasig, Branch CLVI, where the case was docketed as LRC Case No. N-10771, LRC
Record No. N-58761 entitled, "Alfredo M. Almeda, Leonardo M. Almeda and Ernesto M. Almeda,
Applicants." Their application was set for hearing on December 20, 1984. The notice of hearing
dated October 10, 1984 was duly published in the Official Gazette and posted by the deputy sheriff.

On the date of the hearing, no one appeared to oppose the application except the Director of Lands,
through the Solicitor General, who had earlier filed a formal opposition. An order of general default
was issued against the whole world, except the aforementioned oppositor, and the case was set for
hearing.

The report of the Bureau of Lands stated that the land is not included in any military area or naval
reservation nor is it covered by any land patent or public land application. The Land Registration
Commission Report also stated that Plan Psu-128539, when plotted in the Municipal Index map,
does not overlap with any previously plotted titled properties under Act 496 as amended by PD
1525, and that the survey books do not show that the subject lot had been applied for except in this
case.

The Director of Lands, through the Office of the Solicitor General, presented Corazon Calamno
senior forester of the Bureau of Forest Development, who stated that she prepared the inspection
report on November 26, 1984; that the land fags within the alienable and disposable land under
Project No. 29 of Pateros, Metro Manila, as per BFD Map LC 2623, certified and declared as such
on January 23, 1968.

The Court found that the applicants' possession of the parcel of land sought to be registered,
together with that of their predecessors-in-interest, has been public, peaceful, continuous, adverse to
the whole world and in the concept of an owner for a period of more than thirty (30) years, and, that
the land is not located within any forest reservation nor mortgaged or encumbered in favor of any
person or lending institution.

In a decision dated January 18, 1986, the trial court affirmed the order of general default and
confirmed the title of the applicants to the parcel of land covered by the plan, Psu-128539, and
ordered its registration in the names of Alfredo, Leonardo and Ernesto Almeda pro-indiviso (pp. 42-
45, Rollo).

From that decision, the Republic of the Philippines, represented by the Solicitor General, appealed
to the Court of Appeals in CA-G.R. CV No. 09309, alleging that the applicants-appellees have not
met the statutory requirements on possession under Section 48(b) of CA 141, mainly because the
land applied for was inalienable forest land before its release as alienable and disposable land on
January 3, 1968. The applicants' possession thereof prior to January 3, 1968 was invalid for
purposes of a grant under Section 48(b) of the Public Land Act.

The Court of Appeals, in a decision dated May 9, 1988, reversed the lower court and denied the
application for registration. It held that private respondents had not qualified for a grant under
Section 48(b) of Commonwealth Act 141 which requires public, peaceful, continuous, adverse
possession by the applicants in the concept of an owner, for a period of at least 30 years. They have
to their credit only seventeen (17) years possession and occupation of the land, counted from
January 23, 1968, when it was declared alienable and disposable, up to September 12, 1984, when
their application for registration was filed.

After their motion for reconsideration was denied by the Court of Appeals, the applicants filed this
petition for review under Rule 45 of the Rules of Court.

Petitioners allege that the Court of Appeals erred:

1. in not holding that the land, classification made by the Director of Forestry (Bureau of
Forest Development) could not affect the vested rights of the applicants and their
predecessors-in-interest who had continuously occupied and profited from the land since
1918 or very much earlier, as in this case; and

2. in denying the motion for reconsideration despite the ruling in "The Director of Lands vs.
The Honorable Court of Appeals and Iglesia ni Cristo," 158 SCRA 568 promulgated on
March 14, 1988, which allowed registration even when the land applied for was within
the proposed alienable or disposable block of a proposed LC project.

There is no merit in the petition.

The Court of Appeals correctly ruled that the private respondents had not qualified for a grant under
Section 48(b) of the Public Land Act because their possession of the land while it was still
inalienable forest land, or before it was declared alienable and disposable land of the public domain
on January 13, 1968, could not ripen into private ownership, and should be excluded from the
computation of the 30-year open and continuous possession in concept of owner required under
Section 48(b) of Com. Act 141. It accords with our ruling in Director of Lands vs. Court of Appeals,
Ibarra Bishar et al., 178 SCRA 708, that:

Unless and until the land classified as forest is released in an official proclamation to that
effect so that it may form part of the disposable agricultural lands of the public domain, the
rules on confirmation of imperfect title do not apply Amunategai vs. Director of Forestry, 126
SCRA 69; Director of Lands vs. Court of Appeals, 129 SCRA 689; Director of Lands vs.
Court of Appeals, 133 SCRA 701; Republic vs. Court of Appeals, 148 SCRA 480; Vallarta vs.
Intermediate Appellate Court, 151 SCRA 679).

Thus, possession of forest lands, however long, cannot ripen into private ownership (Vamo
vs. Government, 41 Phil. 161 [1920]; Adorable vs. Director of Forestry, 107 Phil. 401 [1960]).
A parcel of forest land is within the exclusive jurisdiction of the Bureau of Forestry and
beyond the power and jurisdiction of the cadastral court to register under the Torrens System
(Republic vs. Court of Appeals, 89 SCRA 648; Republic vs. Vera, 120 SCRA 210 [19831;
Director of Lands vs. Court of Appeals, 129 SCRA 689 [1984]).

The petitioners have erroneously cited our decisions in Director of Forestry vs. Villareal, 170 SCRA
598 and Republic vs. Court of Appeals, Miguel Marcelo, et al., 168 SCRA 77, in support of their
position in this case. In those cases, the applicants' possession of the land antedated its
classification as forest land. We held that such lands could not be retroactively legislated or
classified as forest lands because it would violate previously acquired property lights protected by
the due process clause of the Constitution.

The situation of the land in this case is the reverse of the Villareal and Marcelo cases. The land here
was already forest land when occupied by the petitioners but it was later released on January 23,
1968 from its forest classification. In other words, the petitioners here occupied forest land before it
was released as alienable and disposable, while the applicants in the Villareal and Marcelo cases
possessed parcels of land long before they were reserved as forest land. The subsequent
reservation did not prejudice their vested rights therein.

Petitioner's recourse to the decision of this Court in Director of Lands vs. Court of appeals and
Iglesia Ni Cristo, 158 SCRA 568, is inappropriate. That case did not involve forest land, but
agricultural land of the public domain within the proposed alienable or disposable block.

WHEREFORE, the petition for review is denied for lack of merit. Costs against the petitioners.

SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.

9. Francisco Chavez vs Public Estates Authority & Amari

G. R. No. 133250 - May 6, 2003

FRANCISCO I. CHAVEZ, Petitioner, v. PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY
DEVELOPMENT CORPORATION, respondents.

RESOLUTION

CARPIO, J.:

For resolution of the Court are the following motions: (1) Motion to Inhibit and for Re-Deliberation
filed by respondent Amari Coastal Bay Development Corporation ("Amari" for brevity) on September
13, 2002; (2) Motion to Set Case for Hearing on Oral Argument filed by Amari on August 20, 2002;
(3) Motion for Reconsideration and Supplement to Motion for Reconsideration filed by Amari on July
26, 2002 and August 20, 2002, respectively; (4) Motion for Reconsideration and Supplement to Motion
for Reconsideration filed by respondent Public Estates Authority ("PEA" for brevity) on July 26, 2002
and August 8, 2002, respectively; and (5) Motion for Reconsideration and/or Clarification filed by the
Office of the Solicitor General on July 25, 2002. Petitioner Francisco I. Chavez filed on November 13,
2002 his Consolidated Opposition to the main and supplemental motions for reconsideration.

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

We can now summarize our conclusions as follows:

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

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

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

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

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution.
Under Article 1409 of the Civil Code, contracts whose "object or purpose is contrary to law," or whose
"object is outside the commerce of men," are "inexistent and void from the beginning." The Court
must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA
null and void ab initio.
Amari seeks the inhibition of Justice Antonio T. Carpio, ponente of the Decision, on the ground that
Justice Carpio, before his appointment to the Court, wrote in his Manila Times column of July 1, 1997,
"I have always maintained that the law requires the public bidding of reclamation projects." Justice
Carpio, then a private law practitioner, also stated in the same column, "The Amari-PEA reclamation
contract is legally flawed because it was not bid out by the PEA." Amari claims that because of these
statements Justice Carpio should inhibit himself "on the grounds of bias and prejudgment" and that
the instant case should be "re-deliberated" after being assigned to a new ponente.

The motion to inhibit Justice Carpio must be denied for three reasons. First, the motion to inhibit came
after Justice Carpio had already rendered his opinion on the merits of the case. The rule is that a
motion to inhibit must be denied if filed after a member of the Court had already given an opinion on
the merits of the case,1 the rationale being that "a litigant cannot be permitted to speculate upon the
action of the Court xxx (only to) raise an objection of this sort after a decision has been rendered."
Second, as can be readily gleaned from the summary of the Decision quoted above, the absence of
public bidding is not one of the ratio decidendi of the Decision which is anchored on violation of
specific provisions of the Constitution. The absence of public bidding was not raised as an issue by the
parties. The absence of public bidding was mentioned in the Decision only to complete the discussion
on the law affecting reclamation contracts for the guidance of public officials. At any rate, the Office of
the Solicitor General in its Motion for Reconsideration concedes that the absence of public bidding in
the disposition of the Freedom Islands rendered the Amended JVA null and void.2 Third, judges and
justices are not disqualified from participating in a case just because they have written legal articles
on the law involved in the case. As stated by the Court in Republic v. Cocofed,3 -

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

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

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

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

In its Supplement to Motion for Reconsideration, Amari argues that the Decision should be made to
apply prospectively, not retroactively to cover the Amended JVA. Amari argues that the existence of a
statute or executive order prior to its being adjudged void is an operative fact to which legal
consequences are attached, citing De Agbayani v. PNB,4 thus:

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

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

xxx

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

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

Amari likewise asserts that a new doctrine of the Court cannot operate retroactively if it impairs
vested rights. Amari maintains that the new doctrine embodied in the Decision cannot apply
retroactively on those who relied on the old doctrine in good faith, citing Spouses Benzonan v. Court
of Appeals,5 thus:

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

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

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

The buyers in good faith from DBP had a right to rely on our rulings in Monge and Tupas when they
purchased the property from DBP in 1979 or thirteen (13) years ago. Under the rulings in these two
cases, the period to repurchase the disputed lot given to respondent Pe expired on June 18, 1982. He
failed to exercise his right. His lost right cannot be revived by relying on the 1988 case of Belisario.
The right of petitioners over the subject lot had already become vested as of that time and cannot be
impaired by the retroactive application of the Belisario ruling.
Amaris reliance on De Agbayani and Spouses Benzonan is misplaced. These cases would apply if the
prevailing law or doctrine at the time of the signing of the Amended JVA was that a private corporation
could acquire alienable lands of the public domain, and the Decision annulled the law or reversed this
doctrine. Obviously, this is not the case here.

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

Likewise, Spouses Benzonan is inapplicable because it refers to a doctrine of the Court that is
overruled by a subsequent decision which adopts a new doctrine. In the instant case, there is no
previous doctrine that is overruled by the Decision. Since the case of Manila Electric Company v. Judge
Castro-Bartolome,6 decided on June 29, 1982, the Court has applied consistently the constitutional
provision that private corporations cannot hold, except by lease, alienable lands of the public domain.
The Court reiterated this in numerous cases, and the only dispute in the application of this
constitutional provision is whether the land in question had already become private property before
the effectivity of the 1973 Constitution.7 If the land was already private land before the 1973
Constitution because the corporation had possessed it openly, continuously, exclusively and adversely
for at least thirty years since June 12, 1945 or earlier, then the corporation could apply for judicial
confirmation of its imperfect title. But if the land remained public land upon the effectivity of the 1973
Constitution, then the corporation could never hold, except by lease, such public land. Indisputably,
the Decision does not overrule any previous doctrine of the Court.

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

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

There are, of course, decisions of the Court which, while recognizing a violation of the law or
Constitution, hold that the sale or transfer of the land may no longer be invalidated because of
"weighty considerations of equity and social justice."8 The invalidation of the sale or transfer may also
be superfluous if the purpose of the statutory or constitutional ban has been achieved. But none of
these cases apply to Amari.

Thus, the Court has ruled consistently that where a Filipino citizen sells land to an alien who later sells
the land to a Filipino, the invalidity of the first transfer is corrected by the subsequent sale to a
citizen.9 Similarly, where the alien who buys the land subsequently acquires Philippine citizenship, the
sale is validated since the purpose of the constitutional ban to limit land ownership to Filipinos has
been achieved.10 In short, the law disregards the constitutional disqualification of the buyer to hold
land if the land is subsequently transferred to a qualified party, or the buyer himself becomes a
qualified party. In the instant case, however, Amari has not transferred the Freedom Islands, or any
portion of it, to any qualified party. In fact, Amari admits that title to the Freedom Islands still remains
with PEA.11

The Court has also ruled consistently that a sale or transfer of the land may no longer be questioned
under the principle of res judicata, provided the requisites for res judicata are present. 12 Under this
principle, the courts and the parties are bound by a prior final decision, otherwise there will be no end
to litigation. As the Court declared in Toledo-Banaga v. Court of Appeals,13 "once a judgement has
become final and executory, it can no longer be disturbed no matter how erroneous it may be." In the
instant case, there is no prior final decision adjudicating the Freedom Islands to Amari.

There are, moreover, special circumstances that disqualify Amari from invoking equity principles.
Amari cannot claim good faith because even before Amari signed the Amended JVA on March 30,
1999, petitioner had already filed the instant case on April 27, 1998 questioning precisely the
qualification of Amari to acquire the Freedom Islands. Even before the filing of this petition, two
Senate Committees14 had already approved on September 16, 1997 Senate Committee Report No.
560. This Report concluded, after a well-publicized investigation into PEAs sale of the Freedom Islands
to Amari, that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the
Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended
JVA.

Amari has also not paid to PEA the full reimbursement cost incurred by PEA in reclaiming the Freedom
Islands. Amari states that it has paid PEA only P300,000,000.0015 out of the P1,894,129,200.00 total
reimbursement cost agreed upon in the Amended JVA. Moreover, Amari does not claim to have even
initiated the reclamation of the 592.15 hectares of submerged areas covered in the Amended JVA, or
to have started to construct any permanent infrastructure on the Freedom Islands. In short, Amari
does not claim to have introduced any physical improvement or development on the reclamation
project that is the subject of the Amended JVA. And yet Amari claims that it had already spent a
"whopping P9,876,108,638.00" as its total development cost as of June 30, 2002. 16 Amari does not
explain how it spent the rest of the P9,876,108,638.00 total project cost after paying
PEA P300,000,000.00. Certainly, Amari cannot claim to be an innocent purchaser in good faith and for
value.

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

As the central implementing agency tasked to undertake reclamation projects nationwide, with
authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged with
leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or sold by
PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands,
does not dispose of private lands but alienable lands of the public domain. Only when qualified private
parties acquire these lands will the lands become private lands. In the hands of the government
agency tasked and authorized to dispose of alienable or disposable lands of the public domain, these
lands are still public, not private lands.

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

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

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

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

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

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

Finally, the Office of the Solicitor General and PEA argue that the cost of reclaiming deeply submerged
areas is "enormous" and "it would be difficult for PEA to accomplish such project without the
participation of private corporations."19 The Decision does not bar private corporations from
participating in reclamation projects and being paid for their services in reclaiming lands. What the
Decision prohibits, following the explicit constitutional mandate, is for private corporations to acquire
reclaimed lands of the public domain. There is no prohibition on the directors, officers and
stockholders of private corporations, if they are Filipino citizens, from acquiring at public auction
reclaimed alienable lands of the public domain. They can acquire not more than 12 hectares per
individual, and the land thus acquired becomes private land.
Despite the nullity of the Amended JVA, Amari is not precluded from recovering from PEA in the
proper proceedings, on a quantum meruit basis, whatever Amari may have incurred in implementing
the Amended JVA prior to its declaration of nullity.

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

SO ORDERED.

Davide, Jr., C.J., Vitug, Panganiban, Quisumbing, Austria- Martinez, Carpio-Morales, and Callejo, Sr.,
JJ., concur.
Bellosillo, J., please see separate opinion, concurring and dissenting.
Puno, J., please see separate opinion.
Ynares-Santiago, and Sandoval-Gutierrez, JJ., please see dissenting opinion.
Corona, J., I dissent.
Azcuna, J., I take no part.

10. Coastal Bay Dev’t. Corp., July 9, 2002

G.R. No. 133250 July 9, 2002

FRANCISCO I. CHAVEZ, petitioner,

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

CARPIO, J.:

This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a
temporary restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for
brevity) to disclose all facts on PEA's then on-going renegotiations with Amari Coastal Bay and
Development Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition
further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation.

The Facts

On November 20, 1973, the government, through the Commissioner of Public Highways, signed a
contract with the Construction and Development Corporation of the Philippines ("CDCP" for brevity)
to reclaim certain foreshore and offshore areas of Manila Bay. The contract also included the
construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry out
all the works in consideration of fifty percent of the total reclaimed land.

On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084
creating PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged areas,"
and "to develop, improve, acquire, x x x lease and sell any and all kinds of lands."1 On the same
date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the "lands
reclaimed in the foreshore and offshore of the Manila Bay"2 under the Manila-Cavite Coastal Road
and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its
contract with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by
PEA." Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December 29,
1981, which stated:

"(i) CDCP shall undertake all reclamation, construction, and such other works in the
MCCRRP as may be agreed upon by the parties, to be paid according to progress of works
on a unit price/lump sum basis for items of work to be agreed upon, subject to price
escalation, retention and other terms and conditions provided for in Presidential Decree No.
1594. All the financing required for such works shall be provided by PEA.

xxx

(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and
transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and to all
the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have
not yet been sold, transferred or otherwise disposed of by CDCP as of said date, which
areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473)
square meters in the Financial Center Area covered by land pledge No. 5 and approximately
Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888)
square meters of reclaimed areas at varying elevations above Mean Low Water Level
located outside the Financial Center Area and the First Neighborhood Unit."3

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting
and transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand
eight hundred ninety four (1,915,894) square meters." Subsequently, on April 9, 1988, the Register
of Deeds of the Municipality of Parañaque issued Transfer Certificates of Title Nos. 7309, 7311, and
7312, in the name of PEA, covering the three reclaimed islands known as the "Freedom Islands"
located at the southern portion of the Manila-Cavite Coastal Road, Parañaque City. The Freedom
Islands have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred
and Forty One (1,578,441) square meters or 157.841 hectares.

On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a
private corporation, to develop the Freedom Islands. The JVA also required the reclamation of an
additional 250 hectares of submerged areas surrounding these islands to complete the configuration
in the Master Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI
entered into the JVA through negotiation without public bidding.4 On April 28, 1995, the Board of
Directors of PEA, in its Resolution No. 1245, confirmed the JVA.5 On June 8, 1995, then President
Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the JVA.6

On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the
Senate and denounced the JVA as the "grandmother of all scams." As a result, the Senate
Committee on Government Corporations and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate
Committees reported the results of their investigation in Senate Committee Report No. 560 dated
September 16, 1997.7 Among the conclusions of their report are: (1) the reclaimed lands PEA seeks
to transfer to AMARI under the JVA are lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot alienate these lands; (2) the certificates of
title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No.
365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate
Committee Report No. 560. The members of the Legal Task Force were the Secretary of
Justice,8 the Chief Presidential Legal Counsel,9 and the Government Corporate Counsel.10 The Legal
Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate
Committees.11

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were on-
going renegotiations between PEA and AMARI under an order issued by then President Fidel V.
Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and
retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.

On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application
for the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed as G.R. No.
132994 seeking to nullify the JVA. The Court dismissed the petition "for unwarranted disregard of
judicial hierarchy, without prejudice to the refiling of the case before the proper court."12

On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos in
the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the
terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the
1987 Constitution on the right of the people to information on matters of public concern. Petitioner
assails the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII
of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private
corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of pesos in
properties of the State that are of public dominion.

After several motions for extension of time,13 PEA and AMARI filed their Comments on October 19,
1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an
Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract;
(b) for issuance of a temporary restraining order; and (c) to set the case for hearing on oral
argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the
Court denied in a Resolution dated June 22, 1999.

In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the
parties to file their respective memoranda.

On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended
JVA," for brevity). On May 28, 1999, the Office of the President under the administration of then
President Joseph E. Estrada approved the Amended JVA.

Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on
"constitutional and statutory grounds the renegotiated contract be declared null and void."14

The Issues

The issues raised by petitioner, PEA15 and AMARI16 are as follows:

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT
AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
 II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;

III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF

ADMINISTRATIVE REMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL

INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;

VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT

FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE
RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND

VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF
WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.

The Court's Ruling

First issue: whether the principal reliefs prayed for in the petition are moot and academic
because of subsequent events.

The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations
for a new agreement." The petition also prays that the Court enjoin PEA from "privately entering into,
perfecting and/or executing any new agreement with AMARI."

PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner
on June 21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed
upon in the renegotiations. Thus, PEA has satisfied petitioner's prayer for a public disclosure of the
renegotiations. Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now moot
because PEA and AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the
Office of the President has approved the Amended JVA on May 28, 1999.

Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking
the signing and approval of the Amended JVA before the Court could act on the issue. Presidential
approval does not resolve the constitutional issue or remove it from the ambit of judicial review.

We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President
cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still
to implement the Amended JVA. The prayer to enjoin the signing of the Amended JVA on
constitutional grounds necessarily includes preventing its implementation if in the meantime PEA
and AMARI have signed one in violation of the Constitution. Petitioner's principal basis in assailing
the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits
the government from alienating lands of the public domain to private corporations. If the Amended
JVA indeed violates the Constitution, it is the duty of the Court to enjoin its implementation, and if
already implemented, to annul the effects of such unconstitutional contract.

The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and
ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a
single private corporation. It now becomes more compelling for the Court to resolve the issue to
insure the government itself does not violate a provision of the Constitution intended to safeguard
the national patrimony. Supervening events, whether intended or accidental, cannot prevent the
Court from rendering a decision if there is a grave violation of the Constitution. In the instant case, if
the Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title and
ownership of alienable lands of the public domain in the name of AMARI. Even in cases where
supervening events had made the cases moot, the Court did not hesitate to resolve the legal or
constitutional issues raised to formulate controlling principles to guide the bench, bar, and the
public.17

Also, the instant petition is a case of first impression. All previous decisions of the Court involving
Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural lands sold to private corporations which acquired the lands from
private parties. The transferors of the private corporations claimed or could claim the right to judicial
confirmation of their imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. 141" for
brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed
lands and submerged areas for non-agricultural purposes by purchase under PD No. 1084
(charter of PEA) and Title III of CA No. 141. Certain undertakings by AMARI under the Amended
JVA constitute the consideration for the purchase. Neither AMARI nor PEA can claim judicial
confirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or
still to be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive and
notorious occupation of agricultural lands of the public domain for at least thirty years since June 12,
1945 or earlier. Besides, the deadline for filing applications for judicial confirmation of imperfect title
expired on December 31, 1987.20

Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because
of the possible transfer at any time by PEA to AMARI of title and ownership to portions of the
reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy
percent proportionate share in the reclaimed areas as the reclamation progresses. The Amended
JVA even allows AMARI to mortgage at any time the entire reclaimed area to raise financing for the
reclamation project.21

Second issue: whether the petition merits dismissal for failing to observe the principle
governing the hierarchy of courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the
Court. The principle of hierarchy of courts applies generally to cases involving factual questions. As
it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant case,
however, raises constitutional issues of transcendental importance to the public.22 The Court can
resolve this case without determining any factual issue related to the case. Also, the instant case is a
petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article
VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case.

Third issue: whether the petition merits dismissal for non-exhaustion of administrative
remedies.

PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain
information without first asking PEA the needed information. PEA claims petitioner's direct resort to
the Court violates the principle of exhaustion of administrative remedies. It also violates the rule that
mandamus may issue only if there is no other plain, speedy and adequate remedy in the ordinary
course of law.
PEA distinguishes the instant case from Tañada v. Tuvera23 where the Court granted the petition for
mandamus even if the petitioners there did not initially demand from the Office of the President the
publication of the presidential decrees. PEA points out that in Tañada, the Executive Department
had an affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of
Commonwealth Act No. 63825 to publish the presidential decrees. There was, therefore, no need for
the petitioners in Tañada to make an initial demand from the Office of the President. In the instant
case, PEA claims it has no affirmative statutory duty to disclose publicly information about its
renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of
administrative remedies to the instant case in view of the failure of petitioner here to demand initially
from PEA the needed information.

The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation.
Under Section 79 of the Government Auditing Code,26 the disposition of government lands to private
parties requires public bidding. PEA was under a positive legal duty to disclose to the public the
terms and conditions for the sale of its lands. The law obligated PEA to make this public
disclosure even without demand from petitioner or from anyone. PEA failed to make this public
disclosure because the original JVA, like the Amended JVA, was the result of a negotiated
contract, not of a public bidding. Considering that PEA had an affirmative statutory duty to make the
public disclosure, and was even in breach of this legal duty, petitioner had the right to seek direct
judicial intervention.

Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative
remedies does not apply when the issue involved is a purely legal or constitutional question.27 The
principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of
the constitutional ban prohibiting the alienation of lands of the public domain to private corporations.
We rule that the principle of exhaustion of administrative remedies does not apply in the instant
case.

Fourth issue: whether petitioner has locus standi to bring this suit

PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his
constitutional right to information without a showing that PEA refused to perform an affirmative duty
imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he will
suffer any concrete injury because of the signing or implementation of the Amended JVA. Thus,
there is no actual controversy requiring the exercise of the power of judicial review.

The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to
comply with its constitutional duties. There are two constitutional issues involved here. First is the
right of citizens to information on matters of public concern. Second is the application of a
constitutional provision intended to insure the equitable distribution of alienable lands of the public
domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly
information on the sale of government lands worth billions of pesos, information which the
Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent
PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the
Constitution, compelling PEA to comply with a constitutional duty to the nation.

Moreover, the petition raises matters of transcendental importance to the public. In Chavez v.
PCGG,28 the Court upheld the right of a citizen to bring a taxpayer's suit on matters of transcendental
importance to the public, thus -

"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the
Marcoses is an issue of 'transcendental importance to the public.' He asserts that ordinary
 taxpayers have a right to initiate and prosecute actions questioning the validity of acts or
orders of government agencies or instrumentalities, if the issues raised are of 'paramount
public interest,' and if they 'immediately affect the social, economic and moral well being of
the people.'

Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest,
when the proceeding involves the assertion of a public right, such as in this case. He invokes
several decisions of this Court which have set aside the procedural matter of locus standi,
when the subject of the case involved public interest.

xxx

In Tañada v. Tuvera, the Court asserted that when the issue concerns a public right and the
object of mandamus is to obtain the enforcement of a public duty, the people are regarded
as the real parties in interest; and because it is sufficient that petitioner is a citizen and as
such is interested in the execution of the laws, he need not show that he has any legal or
special interest in the result of the action. In the aforesaid case, the petitioners sought to
enforce their right to be informed on matters of public concern, a right then recognized in
Section 6, Article IV of the 1973 Constitution, in connection with the rule that laws in order to
be valid and enforceable must be published in the Official Gazette or otherwise effectively
promulgated. In ruling for the petitioners' legal standing, the Court declared that the right they
sought to be enforced 'is a public right recognized by no less than the fundamental law of the
land.'

Legaspi v. Civil Service Commission, while reiterating Tañada, further declared that 'when a
mandamus proceeding involves the assertion of a public right, the requirement of personal
interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the
general 'public' which possesses the right.'

Further, in Albano v. Reyes, we said that while expenditure of public funds may not have
been involved under the questioned contract for the development, management and
operation of the Manila International Container Terminal, 'public interest [was] definitely
involved considering the important role [of the subject contract] . . . in the economic
development of the country and the magnitude of the financial consideration involved.' We
concluded that, as a consequence, the disclosure provision in the Constitution would
constitute sufficient authority for upholding the petitioner's standing.

Similarly, the instant petition is anchored on the right of the people to information and access
to official records, documents and papers — a right guaranteed under Section 7, Article III of
the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of
the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's
legal standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we
rule that the petition at bar should be allowed."

We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional
rights - to information and to the equitable diffusion of natural resources - matters of transcendental
public importance, the petitioner has the requisite locus standi.

Fifth issue: whether the constitutional right to information includes official information on on-
going negotiations before a final agreement.
Section 7, Article III of the Constitution explains the people's right to information on matters of public
concern in this manner:

"Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used as
basis for policy development, shall be afforded the citizen, subject to such limitations as may
be provided by law." (Emphasis supplied)

The State policy of full transparency in all transactions involving public interest reinforces the
people's right to information on matters of public concern. This State policy is expressed in Section
28, Article II of the Constitution, thus:

"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving public
interest." (Emphasis supplied)

These twin provisions of the Constitution seek to promote transparency in policy-making and in the
operations of the government, as well as provide the people sufficient information to exercise
effectively other constitutional rights. These twin provisions are essential to the exercise of freedom
of expression. If the government does not disclose its official acts, transactions and decisions to
citizens, whatever citizens say, even if expressed without any restraint, will be speculative and
amount to nothing. These twin provisions are also essential to hold public officials "at all times x x x
accountable to the people,"29 for unless citizens have the proper information, they cannot hold public
officials accountable for anything. Armed with the right information, citizens can participate in public
discussions leading to the formulation of government policies and their effective implementation. An
informed citizenry is essential to the existence and proper functioning of any democracy. As
explained by the Court in Valmonte v. Belmonte, Jr.30 –

"An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that
the channels for free political discussion be maintained to the end that the government may
perceive and be responsive to the people's will. Yet, this open dialogue can be effective only
to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only
when the participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit."

PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information
is limited to "definite propositions of the government." PEA maintains the right does not include
access to "intra-agency or inter-agency recommendations or communications during the stage when
common assertions are still in the process of being formulated or are in the 'exploratory stage'."

Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before
the closing of the transaction. To support its contention, AMARI cites the following discussion in the
1986 Constitutional Commission:

"Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts,
agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to the contract itself?
 Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can cover
both steps leading to a contract and already a consummated contract, Mr. Presiding
Officer.

Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation

of the transaction.

Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.

Mr. Suarez: Thank you."32 (Emphasis supplied)

AMARI argues there must first be a consummated contract before petitioner can invoke the right.
Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade
the quality of decision-making in government agencies. Government officials will hesitate to express
their real sentiments during deliberations if there is immediate public dissemination of their
discussions, putting them under all kinds of pressure before they decide.

We must first distinguish between information the law on public bidding requires PEA to disclose
publicly, and information the constitutional right to information requires PEA to release to the public.
Before the consummation of the contract, PEA must, on its own and without demand from anyone,
disclose to the public matters relating to the disposition of its property. These include the size,
location, technical description and nature of the property being disposed of, the terms and conditions
of the disposition, the parties qualified to bid, the minimum price and similar information. PEA must
prepare all these data and disclose them to the public at the start of the disposition process, long
before the consummation of the contract, because the Government Auditing Code requires public
bidding. If PEA fails to make this disclosure, any citizen can demand from PEA this information at
any time during the bidding process.

Information, however, on on-going evaluation or review of bids or proposals being undertaken by

the bidding or review committee is not immediately accessible under the right to information. While
the evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on the
bids or proposals. However, once the committee makes its official recommendation, there arises
a "definite proposition" on the part of the government. From this moment, the public's right to
information attaches, and any citizen can access all the non-proprietary information leading to such
definite proposition. In Chavez v. PCGG,33 the Court ruled as follows:

"Considering the intent of the framers of the Constitution, we believe that it is incumbent
upon the PCGG and its officers, as well as other government representatives, to disclose
sufficient public information on any proposed settlement they have decided to take up with
the ostensible owners and holders of ill-gotten wealth. Such information, though, must
pertain to definite propositions of the government, not necessarily to intra-agency or
inter-agency recommendations or communications during the stage when common
assertions are still in the process of being formulated or are in the "exploratory" stage. There
is need, of course, to observe the same restrictions on disclosure of information in general,
as discussed earlier – such as on matters involving national security, diplomatic or foreign
relations, intelligence and other classified information." (Emphasis supplied)

Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission

understood that the right to information "contemplates inclusion of negotiations leading to the
consummation of the transaction." Certainly, a consummated contract is not a requirement for the
exercise of the right to information. Otherwise, the people can never exercise the right if no contract
is consummated, and if one is consummated, it may be too late for the public to expose its defects. 1âw phi 1.nêt
Requiring a consummated contract will keep the public in the dark until the contract, which may be
grossly disadvantageous to the government or even illegal, becomes a fait accompli. This negates
the State policy of full transparency on matters of public concern, a situation which the framers of the
Constitution could not have intended. Such a requirement will prevent the citizenry from participating
in the public discussion of any proposed contract, effectively truncating a basic right enshrined in
the Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the
State of its avowed "policy of full disclosure of all its transactions involving public interest."

The right covers three categories of information which are "matters of public concern," namely: (1)
official records; (2) documents and papers pertaining to official acts, transactions and decisions; and
(3) government research data used in formulating policies. The first category refers to any document
that is part of the public records in the custody of government agencies or officials. The second
category refers to documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies or officials.
The third category refers to research data, whether raw, collated or processed, owned by the
government and used in formulating government policies.

The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and
other documents attached to such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the
renegotiation of the JVA.34 The right only affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the right is also subject to
reasonable regulations to protect the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct the inspection and copying.35

The right to information, however, does not extend to matters recognized as privileged information
under the separation of powers.36 The right does not also apply to information on military and
diplomatic secrets, information affecting national security, and information on investigations of
crimes by law enforcement agencies before the prosecution of the accused, which courts have long
recognized as confidential.37 The right may also be subject to other limitations that Congress may
impose by law.

There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house
of Congress,38 are recognized as confidential. This kind of information cannot be pried open by a co-
equal branch of government. A frank exchange of exploratory ideas and assessments, free from the
glare of publicity and pressure by interested parties, is essential to protect the independence of
decision-making of those tasked to exercise Presidential, Legislative and Judicial power.39 This is not
the situation in the instant case.

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

The Regalian Doctrine

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian
doctrine which holds that the State owns all lands and waters of the public domain. Upon the
Spanish conquest of the Philippines, ownership of all "lands, territories and possessions" in the
Philippines passed to the Spanish Crown.42 The King, as the sovereign ruler and representative of
the people, acquired and owned all lands and territories in the Philippines except those he disposed
of by grant or sale to private individuals.

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the
State, in lieu of the King, as the owner of all lands and waters of the public domain. The Regalian
doctrine is the foundation of the time-honored principle of land ownership that "all lands that were not
acquired from the Government, either by purchase or by grant, belong to the public domain."43 Article
339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the
Regalian doctrine.

Ownership and Disposition of Reclaimed Lands

The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and
disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission
enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of the
government to corporations and individuals. Later, on November 29, 1919, the Philippine
Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the
sale, of reclaimed lands of the government to corporations and individuals. On November 7,
1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land
Act, which authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. CA No. 141 continues to this day as the general law governing the
classification and disposition of lands of the public domain.

The Spanish Law of Waters of 1866 and the Civil Code of 1889

Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the
maritime zone of the Spanish territory belonged to the public domain for public use.44 The Spanish
Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which provided as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State,
or by the provinces, pueblos or private persons, with proper permission, shall become the
property of the party constructing such works, unless otherwise provided by the terms of the
grant of authority."

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking
the reclamation, provided the government issued the necessary permit and did not reserve
ownership of the reclaimed land to the State.

Article 339 of the Civil Code of 1889 defined property of public dominion as follows:

"Art. 339. Property of public dominion is –

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

2. That belonging exclusively to the State which, without being of general public use, is
employed in some public service, or in the development of the national wealth, such as walls,
fortresses, and other works for the defense of the territory, and mines, until granted to private
individuals."

Property devoted to public use referred to property open for use by the public. In contrast, property
devoted to public service referred to property used for some specific public service and open only to
those authorized to use the property.

Property of public dominion referred not only to property devoted to public use, but also to property
not so used but employed to develop the national wealth. This class of property constituted
property of public dominion although employed for some economic or commercial activity to increase
the national wealth.

Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into
private property, to wit:

"Art. 341. Property of public dominion, when no longer devoted to public use or to the
defense of the territory, shall become a part of the private property of the State."

This provision, however, was not self-executing. The legislature, or the executive department
pursuant to law, must declare the property no longer needed for public use or territorial defense
before the government could lease or alienate the property to private parties.45

Act No. 1654 of the Philippine Commission

On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of
reclaimed and foreshore lands. The salient provisions of this law were as follows:

"Section 1. The control and disposition of the foreshore as defined in existing law, and
the title to all Government or public lands made or reclaimed by the Government by
dredging or filling or otherwise throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to rights conceded to
the City of Manila in the Luneta Extension.

Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made
or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or
blocks, with the necessary streets and alleyways located thereon, and shall cause plats and
plans of such surveys to be prepared and filed with the Bureau of Lands.

(b) Upon completion of such plats and plans the Governor-General shall give notice to the
public that such parts of the lands so made or reclaimed as are not needed for public
purposes will be leased for commercial and business purposes, x x x.

xxx
 (e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-General may
by executive order prescribe." (Emphasis supplied)

Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government. The Act also vested in the government control and disposition of foreshore lands.
Private parties could lease lands reclaimed by the government only if these lands were no longer
needed for public purpose. Act No. 1654 mandated public bidding in the lease of government
reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other
public lands which the government could sell to private parties, these reclaimed lands were available
only for lease to private parties.

Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654
did not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law
of Waters. Lands reclaimed from the sea by private parties with government permission remained
private lands.

Act No. 2874 of the Philippine Legislature

On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.46 The
salient provisions of Act No. 2874, on reclaimed lands, were as follows:

"Sec. 6. The Governor-General, upon the recommendation of the Secretary of

Agriculture and Natural Resources, shall from time to time classify the lands of the
public domain into –

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands, x x x.

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

Sec. 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited or classified x x x.

xxx

Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land,
shall be classified as suitable for residential purposes or for commercial, industrial, or
other productive purposes other than agricultural purposes, and shall be open to
disposition or concession, shall be disposed of under the provisions of this chapter, and not
otherwise.

Sec. 56. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

 (b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;

(d) Lands not included in any of the foregoing classes.

x x x.

Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be
disposed of to private parties by lease only and not otherwise, as soon as the
Governor-General, upon recommendation by the Secretary of Agriculture and Natural
Resources, shall declare that the same are not necessary for the public service and
are open to disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act." (Emphasis supplied)

Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain
into x x x alienable or disposable"47 lands. Section 7 of the Act empowered the Governor-General to
"declare what lands are open to disposition or concession." Section 8 of the Act limited alienable or
disposable lands only to those lands which have been "officially delimited and classified."

Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands,
however, must be suitable for residential, commercial, industrial or other productive non-
agricultural purposes. These provisions vested upon the Governor-General the power to classify
inalienable lands of the public domain into disposable lands of the public domain. These provisions
also empowered the Governor-General to classify further such disposable lands of the public domain
into government reclaimed, foreshore or marshy lands of the public domain, as well as other non-
agricultural lands.

Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain
classified as government reclaimed, foreshore and marshy lands "shall be disposed of to private
parties by lease only and not otherwise." The Governor-General, before allowing the lease of
these lands to private parties, must formally declare that the lands were "not necessary for the public
service." Act No. 2874 reiterated the State policy to lease and not to sell government reclaimed,
foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No. 1654.
Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable or
disposable lands of the public domain that the government could not sell to private parties.

The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy
public lands for non-agricultural purposes retain their inherent potential as areas for public service.
This is the reason the government prohibited the sale, and only allowed the lease, of these lands to
private parties. The State always reserved these lands for some future public service.

Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy
lands into other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were
the only lands for non-agricultural purposes the government could sell to private parties. Thus, under
Act No. 2874, the government could not sell government reclaimed, foreshore and marshy lands to
private parties, unless the legislature passed a law allowing their sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of
the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with
government permission remained private lands.

Dispositions under the 1935 Constitution

On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The
1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that –

"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals,
coal, petroleum, and other mineral oils, all forces of potential energy and other natural
resources of the Philippines belong to the State, and their disposition, exploitation,
development, or utilization shall be limited to citizens of the Philippines or to corporations or
associations at least sixty per centum of the capital of which is owned by such citizens,
subject to any existing right, grant, lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources, with the exception of
public agricultural land, shall not be alienated, and no license, concession, or lease for
the exploitation, development, or utilization of any of the natural resources shall be granted
for a period exceeding twenty-five years, renewable for another twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the measure and limit of
the grant." (Emphasis supplied)

The 1935 Constitution barred the alienation of all natural resources except public agricultural lands,
which were the only natural resources the State could alienate. Thus, foreshore lands, considered
part of the State's natural resources, became inalienable by constitutional fiat, available only for
lease for 25 years, renewable for another 25 years. The government could alienate foreshore lands
only after these lands were reclaimed and classified as alienable agricultural lands of the public
domain. Government reclaimed and marshy lands of the public domain, being neither timber nor
mineral lands, fell under the classification of public agricultural lands.50 However, government
reclaimed and marshy lands, although subject to classification as disposable public agricultural
lands, could only be leased and not sold to private parties because of Act No. 2874.

The prohibition on private parties from acquiring ownership of government reclaimed and marshy
lands of the public domain was only a statutory prohibition and the legislature could therefore
remove such prohibition. The 1935 Constitution did not prohibit individuals and corporations from
acquiring government reclaimed and marshy lands of the public domain that were classified as
agricultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution
provided as follows:

"Section 2. No private corporation or association may acquire, lease, or hold public

agricultural lands in excess of one thousand and twenty four hectares, nor may any
individual acquire such lands by purchase in excess of one hundred and forty
hectares, or by lease in excess of one thousand and twenty-four hectares, or by
homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two
thousand hectares, may be leased to an individual, private corporation, or association."
(Emphasis supplied)

Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No.
2874 to open for sale to private parties government reclaimed and marshy lands of the public
domain. On the contrary, the legislature continued the long established State policy of retaining for
the government title and ownership of government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly

On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as
the Public Land Act, which compiled the then existing laws on lands of the public domain. CA No.
141, as amended, remains to this day the existing general law governing the classification and
disposition of lands of the public domain other than timber and mineral lands.51

Section 6 of CA No. 141 empowers the President to classify lands of the public domain into
"alienable or disposable"52 lands of the public domain, which prior to such classification are
inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the President to
"declare what lands are open to disposition or concession." Section 8 of CA No. 141 states that the
government can declare open for disposition or concession only lands that are "officially delimited
and classified." Sections 6, 7 and 8 of CA No. 141 read as follows:

"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into –

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands,

and may at any time and in like manner transfer such lands from one class to another,53 for
the purpose of their administration and disposition.

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

Sec. 8. Only those lands shall be declared open to disposition or concession which
have been officially delimited and classified and, when practicable, surveyed, and which
have not been reserved for public or quasi-public uses, nor appropriated by the
Government, nor in any manner become private property, nor those on which a private right
authorized and recognized by this Act or any other valid law may be claimed, or which,
having been reserved or appropriated, have ceased to be so. x x x."

Thus, before the government could alienate or dispose of lands of the public domain, the President
must first officially classify these lands as alienable or disposable, and then declare them open to
disposition or concession. There must be no law reserving these lands for public or quasi-public
uses.

The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the
public domain, are as follows:

"Sec. 58. Any tract of land of the public domain which, being neither timber nor
mineral land, is intended to be used for residential purposes or for commercial,
industrial, or other productive purposes other than agricultural, and is open to
disposition or concession, shall be disposed of under the provisions of this chapter
and not otherwise.
 Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;

(d) Lands not included in any of the foregoing classes.

Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may
be, to any person, corporation, or association authorized to purchase or lease public lands
for agricultural purposes. x x x.

Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be
disposed of to private parties by lease only and not otherwise, as soon as the
President, upon recommendation by the Secretary of Agriculture, shall declare that the
same are not necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or lease under the
provisions of this Act." (Emphasis supplied)

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act
No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of
the public domain. All these lands are intended for residential, commercial, industrial or other non-
agricultural purposes. As before, Section 61 allowed only the lease of such lands to private parties.
The government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or
those lands for non-agricultural purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands, however, became inalienable under
the 1935 Constitution which only allowed the lease of these lands to qualified private parties.

Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for
residential, commercial, industrial or other productive purposes other than agricultural "shall be
disposed of under the provisions of this chapter and not otherwise." Under Section 10 of CA
No. 141, the term "disposition" includes lease of the land. Any disposition of government reclaimed,
foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter IX,
Title III of CA No. 141,54 unless a subsequent law amended or repealed these provisions.

In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of
Appeals,55 Justice Reynato S. Puno summarized succinctly the law on this matter, as follows:

"Foreshore lands are lands of public dominion intended for public use. So too are lands
reclaimed by the government by dredging, filling, or other means. Act 1654 mandated that
the control and disposition of the foreshore and lands under water remained in the national
government. Said law allowed only the 'leasing' of reclaimed land. The Public Land Acts of
1919 and 1936 also declared that the foreshore and lands reclaimed by the government
were to be "disposed of to private parties by lease only and not otherwise." Before leasing,
however, the Governor-General, upon recommendation of the Secretary of Agriculture and
Natural Resources, had first to determine that the land reclaimed was not necessary for the
public service. This requisite must have been met before the land could be disposed of. But
even then, the foreshore and lands under water were not to be alienated and sold to
 private parties. The disposition of the reclaimed land was only by lease. The land
remained property of the State." (Emphasis supplied)

As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained
in effect at present."

The State policy prohibiting the sale to private parties of government reclaimed, foreshore and
marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA
No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore lands,
however, became a constitutional edict under the 1935 Constitution. Foreshore lands became
inalienable as natural resources of the State, unless reclaimed by the government and classified as
agricultural lands of the public domain, in which case they would fall under the classification of
government reclaimed lands.

After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of
the public domain continued to be only leased and not sold to private parties.56 These lands
remained sui generis, as the only alienable or disposable lands of the public domain the
government could not sell to private parties.

Since then and until now, the only way the government can sell to private parties government
reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law
authorizing such sale. CA No. 141 does not authorize the President to reclassify government
reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands classified
under Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the
government could sell to private parties.

Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under
Section 59 that the government previously transferred to government units or entities could be sold
to private parties. Section 60 of CA No. 141 declares that –

"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the
Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes
for which such sale or lease is requested, and shall not exceed one hundred and forty-four
hectares: Provided, however, That this limitation shall not apply to grants, donations, or
transfers made to a province, municipality or branch or subdivision of the Government for the
purposes deemed by said entities conducive to the public interest; but the land so granted,
donated, or transferred to a province, municipality or branch or subdivision of the
Government shall not be alienated, encumbered, or otherwise disposed of in a manner
affecting its title, except when authorized by Congress: x x x." (Emphasis supplied)

The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority
required in Section 56 of Act No. 2874.

One reason for the congressional authority is that Section 60 of CA No. 141 exempted government
units and entities from the maximum area of public lands that could be acquired from the State.
These government units and entities should not just turn around and sell these lands to private
parties in violation of constitutional or statutory limitations. Otherwise, the transfer of lands for non-
agricultural purposes to government units and entities could be used to circumvent constitutional
limitations on ownership of alienable or disposable lands of the public domain. In the same manner,
such transfers could also be used to evade the statutory prohibition in CA No. 141 on the sale of
government reclaimed and marshy lands of the public domain to private parties. Section 60 of CA
No. 141 constitutes by operation of law a lien on these lands.57
In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No.
141, Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as
follows:

"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now
the Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of
such authority, the Director of Lands shall give notice by public advertisement in the same
manner as in the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be
made to the highest bidder. x x x." (Emphasis supplied)

Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable
or disposable lands of the public domain.58

Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish
Law of Waters of 1866. Private parties could still reclaim portions of the sea with government
permission. However, the reclaimed land could become private land only if classified as
alienable agricultural land of the public domain open to disposition under CA No. 141. The 1935
Constitution prohibited the alienation of all natural resources except public agricultural lands.

The Civil Code of 1950

The Civil Code of 1950 readopted substantially the definition of property of public dominion found in
the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that –

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

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

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

x x x.

Art. 422. Property of public dominion, when no longer intended for public use or for public
service, shall form part of the patrimonial property of the State."

Again, the government must formally declare that the property of public dominion is no longer
needed for public use or public service, before the same could be classified as patrimonial property
of the State.59 In the case of government reclaimed and marshy lands of the public domain, the
declaration of their being disposable, as well as the manner of their disposition, is governed by the
applicable provisions of CA No. 141.

Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those
properties of the State which, without being for public use, are intended for public service or the
"development of the national wealth." Thus, government reclaimed and marshy lands of the State,
even if not employed for public use or public service, if developed to enhance the national wealth,
are classified as property of public dominion.
Dispositions under the 1973 Constitution

The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian
doctrine. Section 8, Article XIV of the 1973 Constitution stated that –

"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral
oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the
Philippines belong to the State. With the exception of agricultural, industrial or
commercial, residential, and resettlement lands of the public domain, natural
resources shall not be alienated, and no license, concession, or lease for the exploration,
development, exploitation, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for not more than twenty-five years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases, beneficial use may be the measure and the
limit of the grant." (Emphasis supplied)

The 1973 Constitution prohibited the alienation of all natural resources with the exception of
"agricultural, industrial or commercial, residential, and resettlement lands of the public domain." In
contrast, the 1935 Constitution barred the alienation of all natural resources except "public
agricultural lands." However, the term "public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the public domain.60 If the
land of public domain were neither timber nor mineral land, it would fall under the classification of
agricultural land of the public domain. Both the 1935 and 1973 Constitutions, therefore,
prohibited the alienation of all natural resources except agricultural lands of the public
domain.

The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals
who were citizens of the Philippines. Private corporations, even if wholly owned by Philippine
citizens, were no longer allowed to acquire alienable lands of the public domain unlike in the 1935
Constitution. Section 11, Article XIV of the 1973 Constitution declared that –

"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and
development requirements of the natural resources, shall determine by law the size of land
of the public domain which may be developed, held or acquired by, or leased to, any
qualified individual, corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public domain except by
lease not to exceed one thousand hectares in area nor may any citizen hold such lands by
lease in excess of five hundred hectares or acquire by purchase, homestead or grant, in
excess of twenty-four hectares. No private corporation or association may hold by lease,
concession, license or permit, timber or forest lands and other timber or forest resources in
excess of one hundred thousand hectares. However, such area may be increased by the
Batasang Pambansa upon recommendation of the National Economic and Development
Authority." (Emphasis supplied)

Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public
domain only through lease. Only individuals could now acquire alienable lands of the public domain,
and private corporations became absolutely barred from acquiring any kind of alienable land
of the public domain. The constitutional ban extended to all kinds of alienable lands of the public
domain, while the statutory ban under CA No. 141 applied only to government reclaimed, foreshore
and marshy alienable lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084
creating PEA, a wholly government owned and controlled corporation with a special charter.
Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers:

"Sec. 4. Purpose. The Authority is hereby created for the following purposes:

(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or
other means, or to acquire reclaimed land;

(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any
and all kinds of lands, buildings, estates and other forms of real property, owned,
managed, controlled and/or operated by the government;

(c) To provide for, operate or administer such service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.

Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the
purposes for which it is created, have the following powers and functions:

(a)To prescribe its by-laws.

xxx

(i) To hold lands of the public domain in excess of the area permitted to private
corporations by statute.

(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse,
canal, ditch, flume x x x.

xxx

(o) To perform such acts and exercise such functions as may be necessary for the
attainment of the purposes and objectives herein specified." (Emphasis supplied)

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.
Foreshore areas are those covered and uncovered by the ebb and flow of the tide.61 Submerged
areas are those permanently under water regardless of the ebb and flow of the tide.62 Foreshore and
submerged areas indisputably belong to the public domain63 and are inalienable unless reclaimed,
classified as alienable lands open to disposition, and further declared no longer needed for public
service.

The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public
domain did not apply to PEA since it was then, and until today, a fully owned government
corporation. The constitutional ban applied then, as it still applies now, only to "private corporations
and associations." PD No. 1084 expressly empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private corporations by statute." Thus, PEA can hold title
to private lands, as well as title to lands of the public domain.

In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain,
there must be legislative authority empowering PEA to sell these lands. This legislative authority is
necessary in view of Section 60 of CA No.141, which states –
 "Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or
branch or subdivision of the Government shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by Congress; x x x."
(Emphasis supplied)

Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and
submerged alienable lands of the public domain. Nevertheless, any legislative authority granted to
PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional
ban on private corporations from acquiring alienable lands of the public domain. Hence, such
legislative authority could only benefit private individuals.

Dispositions under the 1987 Constitution

The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian
doctrine. The 1987 Constitution declares that all natural resources are "owned by the State," and
except for alienable agricultural lands of the public domain, natural resources cannot be alienated.
Sections 2 and 3, Article XII of the 1987 Constitution state that –

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. The exploration,
development, and utilization of natural resources shall be under the full control and
supervision of the State. x x x.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
lands, and national parks. Agricultural lands of the public domain may be further classified by
law according to the uses which they may be devoted. Alienable lands of the public
domain shall be limited to agricultural lands. Private corporations or associations may
not hold such alienable lands of the public domain except by lease, for a period not
exceeding twenty-five years, renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area. Citizens of the Philippines may lease not more
than five hundred hectares, or acquire not more than twelve hectares thereof by purchase,
homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and
subject to the requirements of agrarian reform, the Congress shall determine, by law, the
size of lands of the public domain which may be acquired, developed, held, or leased and
the conditions therefor." (Emphasis supplied)

The 1987 Constitution continues the State policy in the 1973 Constitution banning private
corporations from acquiring any kind of alienable land of the public domain. Like the 1973
Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the public
domain only through lease. As in the 1935 and 1973 Constitutions, the general law governing the
lease to private corporations of reclaimed, foreshore and marshy alienable lands of the public
domain is still CA No. 141.

The Rationale behind the Constitutional Ban

The rationale behind the constitutional ban on corporations from acquiring, except through lease,
alienable lands of the public domain is not well understood. During the deliberations of the 1986
Constitutional Commission, the commissioners probed the rationale behind this ban, thus:
 "FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which
says:

`No private corporation or association may hold alienable lands of the public domain except
by lease, not to exceed one thousand hectares in area.'

If we recall, this provision did not exist under the 1935 Constitution, but this was introduced
in the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable
public lands. But it has not been very clear in jurisprudence what the reason for this is.
In some of the cases decided in 1982 and 1983, it was indicated that the purpose of this
is to prevent large landholdings. Is that the intent of this provision?

MR. VILLEGAS: I think that is the spirit of the provision.

FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances
where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a
chapel stood because the Supreme Court said it would be in violation of this." (Emphasis
supplied)

In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:

"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural
lands by private corporations is to equitably diffuse land ownership or to encourage 'owner-
cultivatorship and the economic family-size farm' and to prevent a recurrence of cases like
the instant case. Huge landholdings by corporations or private persons had spawned social
unrest."

However, if the constitutional intent is to prevent huge landholdings, the Constitution could have
simply limited the size of alienable lands of the public domain that corporations could acquire. The
Constitution could have followed the limitations on individuals, who could acquire not more than 24
hectares of alienable lands of the public domain under the 1973 Constitution, and not more than 12
hectares under the 1987 Constitution.

If the constitutional intent is to encourage economic family-size farms, placing the land in the name
of a corporation would be more effective in preventing the break-up of farmlands. If the farmland is
registered in the name of a corporation, upon the death of the owner, his heirs would inherit shares
in the corporation instead of subdivided parcels of the farmland. This would prevent the continuing
break-up of farmlands into smaller and smaller plots from one generation to the next.

In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from
acquiring more than the allowed area of alienable lands of the public domain. Without the
constitutional ban, individuals who already acquired the maximum area of alienable lands of the
public domain could easily set up corporations to acquire more alienable public lands. An individual
could own as many corporations as his means would allow him. An individual could even hide his
ownership of a corporation by putting his nominees as stockholders of the corporation. The
corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by
individuals of alienable lands of the public domain.

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a
limited area of alienable land of the public domain to a qualified individual. This constitutional intent
is safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public
domain, since the vehicle to circumvent the constitutional intent is removed. The available alienable
public lands are gradually decreasing in the face of an ever-growing population. The most effective
way to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the
public domain only to individuals. This, it would seem, is the practical benefit arising from the
constitutional ban.

The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three
properties, namely:

1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo
Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of
1,578,441 square meters;"

2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and

3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to
regularize the configuration of the reclaimed area."65

PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further
reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim
another 350 hectares x x x."66

In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the
750-hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are
still submerged areas forming part of Manila Bay.

Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's
"actual cost" in partially reclaiming the Freedom Islands. AMARI will also complete, at its own
expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation
costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will
share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is
defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common
areas. Title to AMARI's share in the net usable area, totaling 367.5 hectares, will be issued in the
name of AMARI. Section 5.2 (c) of the Amended JVA provides that –

"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's Land share based on the Land Allocation
Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and
delivery of the proper certificates of title covering AMARI's Land Share in the name of
AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at any
given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the
titles pertaining to AMARI, until such time when a corresponding proportionate area of
additional land pertaining to PEA has been titled." (Emphasis supplied)

Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5
hectares of reclaimed land which will be titled in its name.

To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture
PEA's statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila
Bay. Section 3.2.a of the Amended JVA states that –
 "PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby
granting the Joint Venture the full and exclusive right, authority and privilege to undertake the
Project in accordance with the Master Development Plan."

The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its
supplemental agreement dated August 9, 1995.

The Threshold Issue

The threshold issue is whether AMARI, a private corporation, can acquire and own under the
Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of
Sections 2 and 3, Article XII of the 1987 Constitution which state that:

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
fauna, and other natural resources are owned by the State. With the exception of
agricultural lands, all other natural resources shall not be alienated. x x x.

xxx

Section 3. x x x Alienable lands of the public domain shall be limited to agricultural

lands. Private corporations or associations may not hold such alienable lands of the
public domain except by lease, x x x."(Emphasis supplied)

Classification of Reclaimed Foreshore and Submerged Areas

PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its Memorandum,67 PEA admits that –

"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as
alienable and disposable lands of the public domain:

'Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the government by dredging, filling, or other means;

x x x.'" (Emphasis supplied)

Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365
admitted in its Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands
are classified as alienable and disposable lands of the public domain."69 The Legal Task Force
concluded that –

"D. Conclusion

Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of
ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of
which PEA, as owner, may validly convey the same to any qualified person without violating
the Constitution or any statute.
 The constitutional provision prohibiting private corporations from holding public land, except
by lease (Sec. 3, Art. XVII,70 1987 Constitution), does not apply to reclaimed lands whose
ownership has passed on to PEA by statutory grant."

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila
Bay are part of the "lands of the public domain, waters x x x and other natural resources" and
consequently "owned by the State." As such, foreshore and submerged areas "shall not be
alienated," unless they are classified as "agricultural lands" of the public domain. The mere
reclamation of these areas by PEA does not convert these inalienable natural resources of the State
into alienable or disposable lands of the public domain. There must be a law or presidential
proclamation officially classifying these reclaimed lands as alienable or disposable and open to
disposition or concession. Moreover, these reclaimed lands cannot be classified as alienable or
disposable if the law has reserved them for some public or quasi-public use.71

Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."72 The President has the authority
to classify inalienable lands of the public domain into alienable or disposable lands of the public
domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department
attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine
Government for use as the Chancery of the Philippine Embassy. Although the Chancery had
transferred to another location thirteen years earlier, the Court still ruled that, under Article 42274 of
the Civil Code, a property of public dominion retains such character until formally declared
otherwise. The Court ruled that –

"The fact that the Roppongi site has not been used for a long time for actual Embassy
service does not automatically convert it to patrimonial property. Any such conversion
happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co.
v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of the public domain,
not available for private appropriation or ownership 'until there is a formal declaration
on the part of the government to withdraw it from being such' (Ignacio v. Director of
Lands, 108 Phil. 335 [1960]." (Emphasis supplied)

PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands
reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then
President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the 157.84
hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the
Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the
name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates of title
corresponding to land patents. To this day, these certificates of title are still in the name of PEA.

PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the
Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as
alienable or disposable lands of the public domain. PD No. 1085 and President Aquino's issuance of
a land patent also constitute a declaration that the Freedom Islands are no longer needed for public
service. The Freedom Islands are thus alienable or disposable lands of the public domain,
open to disposition or concession to qualified parties.

At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the
Freedom Islands although subsequently there were partial erosions on some areas. The government
had also completed the necessary surveys on these islands. Thus, the Freedom Islands were no
longer part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution
classifies lands of the public domain into "agricultural, forest or timber, mineral lands, and national
parks." Being neither timber, mineral, nor national park lands, the reclaimed Freedom Islands
necessarily fall under the classification of agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the only natural resources that the State may
alienate to qualified private parties. All other natural resources, such as the seas or bays, are
"waters x x x owned by the State" forming part of the public domain, and are inalienable pursuant to
Section 2, Article XII of the 1987 Constitution.

AMARI claims that the Freedom Islands are private lands because CDCP, then a private
corporation, reclaimed the islands under a contract dated November 20, 1973 with the
Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866,
argues that "if the ownership of reclaimed lands may be given to the party constructing the works,
then it cannot be said that reclaimed lands are lands of the public domain which the State may not
alienate."75 Article 5 of the Spanish Law of Waters reads as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State,
or by the provinces, pueblos or private persons, with proper permission, shall become the
property of the party constructing such works, unless otherwise provided by the terms of
the grant of authority." (Emphasis supplied)

Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only
with "proper permission" from the State. Private parties could own the reclaimed land only if not
"otherwise provided by the terms of the grant of authority." This clearly meant that no one could
reclaim from the sea without permission from the State because the sea is property of public
dominion. It also meant that the State could grant or withhold ownership of the reclaimed land
because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a
private person reclaiming from the sea without permission from the State could not acquire
ownership of the reclaimed land which would remain property of public dominion like the sea it
replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of
land ownership that "all lands that were not acquired from the government, either by purchase or by
grant, belong to the public domain."77

Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the
disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must
first be classified as alienable or disposable before the government can alienate them. These lands
must not be reserved for public or quasi-public purposes.78 Moreover, the contract between CDCP
and the government was executed after the effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the public domain. This contract could not
have converted the Freedom Islands into private lands of a private corporation.

Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the
reclamation of areas under water and revested solely in the National Government the power to
reclaim lands. Section 1 of PD No. 3-A declared that –

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

x x x."

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas
under water could now be undertaken only by the National Government or by a person contracted by
the National Government. Private parties may reclaim from the sea only under a contract with the
National Government, and no longer by grant or permission as provided in Section 5 of the Spanish
Law of Waters of 1866.

Executive Order No. 525, issued on February 14, 1979, designated PEA as the National
Government's implementing arm to undertake "all reclamation projects of the government," which
"shall be undertaken by the PEA or through a proper contract executed by it with any person
or entity." Under such contract, a private party receives compensation for reclamation services
rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of the
reclaimed land, subject to the constitutional ban on private corporations from acquiring alienable
lands of the public domain. The reclaimed land can be used as payment in kind only if the reclaimed
land is first classified as alienable or disposable land open to disposition, and then declared no
longer needed for public service.

The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares
which are still submerged and forming part of Manila Bay. There is no legislative or Presidential
act classifying these submerged areas as alienable or disposable lands of the public domain
open to disposition. These submerged areas are not covered by any patent or certificate of title.
There can be no dispute that these submerged areas form part of the public domain, and in their
present state are inalienable and outside the commerce of man. Until reclaimed from the sea,
these submerged areas are, under the Constitution, "waters x x x owned by the State," forming part
of the public domain and consequently inalienable. Only when actually reclaimed from the sea can
these submerged areas be classified as public agricultural lands, which under the Constitution are
the only natural resources that the State may alienate. Once reclaimed and transformed into public
agricultural lands, the government may then officially classify these lands as alienable or disposable
lands open to disposition. Thereafter, the government may declare these lands no longer needed for
public service. Only then can these reclaimed lands be considered alienable or disposable lands of
the public domain and within the commerce of man.

The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable
lands open to disposition is necessary because PEA is tasked under its charter to undertake public
services that require the use of lands of the public domain. Under Section 5 of PD No. 1084, the
functions of PEA include the following: "[T]o own or operate railroads, tramways and other kinds of
land transportation, x x x; [T]o construct, maintain and operate such systems of sanitary sewers as
may be necessary; [T]o construct, maintain and operate such storm drains as may be necessary."
PEA is empowered to issue "rules and regulations as may be necessary for the proper use by
private parties of any or all of the highways, roads, utilities, buildings and/or any of its
properties and to impose or collect fees or tolls for their use." Thus, part of the reclaimed foreshore
and submerged lands held by the PEA would actually be needed for public use or service since
many of the functions imposed on PEA by its charter constitute essential public services.

Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of the National
Government." The same section also states that "[A]ll reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken by the PEA or through a
proper contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation
to PD No. 3-A and PD No.1084, PEA became the primary implementing agency of the National
Government to reclaim foreshore and submerged lands of the public domain. EO No. 525
recognized PEA as the government entity "to undertake the reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests."79 Since large portions of these
reclaimed lands would obviously be needed for public service, there must be a formal declaration
segregating reclaimed lands no longer needed for public service from those still needed for public
service.1âwphi 1.nêt
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned
by the PEA," could not automatically operate to classify inalienable lands into alienable or disposable
lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of the public
domain would automatically become alienable once reclaimed by PEA, whether or not classified as
alienable or disposable.

The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests
in the Department of Environment and Natural Resources ("DENR" for brevity) the following powers
and functions:

"Sec. 4. Powers and Functions. The Department shall:

(1) x x x

xxx

(4) Exercise supervision and control over forest lands, alienable and disposable public
lands, mineral resources and, in the process of exercising such control, impose appropriate
taxes, fees, charges, rentals and any such form of levy and collect such revenues for the
exploration, development, utilization or gathering of such resources;

xxx

(14) Promulgate rules, regulations and guidelines on the issuance of licenses,

permits, concessions, lease agreements and such other privileges concerning the
development, exploration and utilization of the country's marine, freshwater, and
brackish water and over all aquatic resources of the country and shall continue to
oversee, supervise and police our natural resources; cancel or cause to cancel such
privileges upon failure, non-compliance or violations of any regulation, order, and for all other
causes which are in furtherance of the conservation of natural resources and supportive of
the national interest;

(15) Exercise exclusive jurisdiction on the management and disposition of all lands of
the public domain and serve as the sole agency responsible for classification, sub-
classification, surveying and titling of lands in consultation with appropriate
agencies."80 (Emphasis supplied)

As manager, conservator and overseer of the natural resources of the State, DENR exercises
"supervision and control over alienable and disposable public lands." DENR also exercises
"exclusive jurisdiction on the management and disposition of all lands of the public domain." Thus,
DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should
be reclaimed or not. This means that PEA needs authorization from DENR before PEA can
undertake reclamation projects in Manila Bay, or in any part of the country.

DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain.
Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under
Sections 681 and 782 of CA No. 141. Once DENR decides that the reclaimed lands should be so
classified, it then recommends to the President the issuance of a proclamation classifying the lands
as alienable or disposable lands of the public domain open to disposition. We note that then DENR
Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the
Revised Administrative Code and Sections 6 and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water, while
PEA is vested with the power to undertake the physical reclamation of areas under water, whether
directly or through private contractors. DENR is also empowered to classify lands of the public
domain into alienable or disposable lands subject to the approval of the President. On the other
hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.

Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not
make the reclaimed lands alienable or disposable lands of the public domain, much less patrimonial
lands of PEA. Likewise, the mere transfer by the National Government of lands of the public domain
to PEA does not make the lands alienable or disposable lands of the public domain, much less
patrimonial lands of PEA.

Absent two official acts – a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed by
PEA remain inalienable lands of the public domain. Only such an official classification and formal
declaration can convert reclaimed lands into alienable or disposable lands of the public domain,
open to disposition under the Constitution, Title I and Title III83 of CA No. 141 and other applicable
laws.84

PEA's Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain,
the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA,
citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or subdivision of
the government "shall not be alienated, encumbered, or otherwise disposed of in a manner affecting
its title, except when authorized by Congress: x x x."85 (Emphasis by PEA)

In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, which
states that –

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be
executed in behalf of the government by the following: x x x."

Thus, the Court concluded that a law is needed to convey any real property belonging to the
Government. The Court declared that -

"It is not for the President to convey real property of the government on his or her own sole
will. Any such conveyance must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence." (Emphasis supplied)

PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to
sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that –

"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of the Manila-Cavite Coastal Road Project
between the Republic of the Philippines and the Construction and Development Corporation
of the Philippines dated November 20, 1973 and/or any other contract or reclamation
covering the same area is hereby transferred, conveyed and assigned to the ownership
and administration of the Public Estates Authority established pursuant to PD No. 1084;
Provided, however, That the rights and interests of the Construction and Development
 Corporation of the Philippines pursuant to the aforesaid contract shall be recognized and
respected.

Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations
of the Republic of the Philippines (Department of Public Highways) arising from, or incident
to, the aforesaid contract between the Republic of the Philippines and the Construction and
Development Corporation of the Philippines.

In consideration of the foregoing transfer and assignment, the Public Estates Authority shall
issue in favor of the Republic of the Philippines the corresponding shares of stock in said
entity with an issued value of said shares of stock (which) shall be deemed fully paid and
non-assessable.

The Secretary of Public Highways and the General Manager of the Public Estates Authority
shall execute such contracts or agreements, including appropriate agreements with the
Construction and Development Corporation of the Philippines, as may be necessary to
implement the above.

Special land patent/patents shall be issued by the Secretary of Natural Resources in

favor of the Public Estates Authority without prejudice to the subsequent transfer to
the contractor or his assignees of such portion or portions of the land reclaimed or to
be reclaimed as provided for in the above-mentioned contract. On the basis of such
patents, the Land Registration Commission shall issue the corresponding certificate
of title." (Emphasis supplied)

On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -

"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall
be responsible for its administration, development, utilization or disposition in accordance
with the provisions of Presidential Decree No. 1084. Any and all income that the PEA may
derive from the sale, lease or use of reclaimed lands shall be used in accordance with the
provisions of Presidential Decree No. 1084."

There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed
lands. PD No. 1085 merely transferred "ownership and administration" of lands reclaimed from
Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA "shall belong to or be
owned by PEA." EO No. 525 expressly states that PEA should dispose of its reclaimed lands "in
accordance with the provisions of Presidential Decree No. 1084," the charter of PEA.

PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in,
subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled
and/or operated by the government."87 (Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public
domain. PEA may sell to private parties its patrimonial properties in accordance with the PEA
charter free from constitutional limitations. The constitutional ban on private corporations from
acquiring alienable lands of the public domain does not apply to the sale of PEA's patrimonial lands.

PEA may also sell its alienable or disposable lands of the public domain to private individuals
since, with the legislative authority, there is no longer any statutory prohibition against such sales
and the constitutional ban does not apply to individuals. PEA, however, cannot sell any of its
alienable or disposable lands of the public domain to private corporations since Section 3, Article XII
of the 1987 Constitution expressly prohibits such sales. The legislative authority benefits only
individuals. Private corporations remain barred from acquiring any kind of alienable land of the public
domain, including government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by
PEA to the "contractor or his assignees" (Emphasis supplied) would not apply to private corporations
but only to individuals because of the constitutional ban. Otherwise, the provisions of PD No. 1085
would violate both the 1973 and 1987 Constitutions.

The requirement of public auction in the sale of reclaimed lands

Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to
disposition, and further declared no longer needed for public service, PEA would have to conduct a
public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and
67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a
public auction.88 Special Patent No. 3517 expressly states that the patent is issued by authority of
the Constitution and PD No. 1084, "supplemented by Commonwealth Act No. 141, as amended."
This is an acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed
alienable lands of the public domain unless otherwise provided by law. Executive Order No.
654,89 which authorizes PEA "to determine the kind and manner of payment for the transfer" of its
assets and properties, does not exempt PEA from the requirement of public auction. EO No. 654
merely authorizes PEA to decide the mode of payment, whether in kind and in installment, but does
not authorize PEA to dispense with public auction.

Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code,
the government is required to sell valuable government property through public bidding. Section 79
of PD No. 1445 mandates that –

"Section 79. When government property has become unserviceable for any cause, or is no
longer needed, it shall, upon application of the officer accountable therefor, be inspected by
the head of the agency or his duly authorized representative in the presence of the auditor
concerned and, if found to be valueless or unsaleable, it may be destroyed in their
presence. If found to be valuable, it may be sold at public auction to the highest
bidder under the supervision of the proper committee on award or similar body in the
presence of the auditor concerned or other authorized representative of the
Commission, after advertising by printed notice in the Official Gazette, or for not less
than three consecutive days in any newspaper of general circulation, or where the
value of the property does not warrant the expense of publication, by notices posted for a like
period in at least three public places in the locality where the property is to be sold. In the
event that the public auction fails, the property may be sold at a private sale at such
price as may be fixed by the same committee or body concerned and approved by the
Commission."

It is only when the public auction fails that a negotiated sale is allowed, in which case the
Commission on Audit must approve the selling price.90 The Commission on Audit implements
Section 79 of the Government Auditing Code through Circular No. 89-29691 dated January 27, 1989.
This circular emphasizes that government assets must be disposed of only through public auction,
and a negotiated sale can be resorted to only in case of "failure of public auction."

At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore
and submerged alienable lands of the public domain. Private corporations are barred from bidding at
the auction sale of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA
imposed a condition that the winning bidder should reclaim another 250 hectares of submerged
areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional
reclaimed areas in favor of the winning bidder.92 No one, however, submitted a bid. On December
23, 1994, the Government Corporate Counsel advised PEA it could sell the Freedom Islands
through negotiation, without need of another public bidding, because of the failure of the public
bidding on December 10, 1991.93

However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the
additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim another
350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area to 750
hectares.94 The failure of public bidding on December 10, 1991, involving only 407.84 hectares,95 is
not a valid justification for a negotiated sale of 750 hectares, almost double the area publicly
auctioned. Besides, the failure of public bidding happened on December 10, 1991, more than three
years before the signing of the original JVA on April 25, 1995. The economic situation in the country
had greatly improved during the intervening period.

Reclamation under the BOT Law and the Local Government Code

The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear:
"Private corporations or associations may not hold such alienable lands of the public domain except
by lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and AMARI as
legislative authority to sell reclaimed lands to private parties, recognizes the constitutional ban.
Section 6 of RA No. 6957 states –

"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance
of any infrastructure projects undertaken through the build-operate-and-transfer arrangement
or any of its variations pursuant to the provisions of this Act, the project proponent x x x may
likewise be repaid in the form of a share in the revenue of the project or other non-monetary
payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed
land, subject to the constitutional requirements with respect to the ownership of the
land: x x x." (Emphasis supplied)

A private corporation, even one that undertakes the physical reclamation of a government BOT
project, cannot acquire reclaimed alienable lands of the public domain in view of the constitutional
ban.

Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local
governments in land reclamation projects to pay the contractor or developer in kind consisting of a
percentage of the reclaimed land, to wit:

"Section 302. Financing, Construction, Maintenance, Operation, and Management of

Infrastructure Projects by the Private Sector. x x x

xxx

In case of land reclamation or construction of industrial estates, the repayment plan may
consist of the grant of a portion or percentage of the reclaimed land or the industrial estate
constructed."
Although Section 302 of the Local Government Code does not contain a proviso similar to that of the
BOT Law, the constitutional restrictions on land ownership automatically apply even though not
expressly mentioned in the Local Government Code.

Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a
corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the contractor
or developer is an individual, portions of the reclaimed land, not exceeding 12 hectares96 of non-
agricultural lands, may be conveyed to him in ownership in view of the legislative authority allowing
such conveyance. This is the only way these provisions of the BOT Law and the Local Government
Code can avoid a direct collision with Section 3, Article XII of the 1987 Constitution.

Registration of lands of the public domain

Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands." This theory is
echoed by AMARI which maintains that the "issuance of the special patent leading to the eventual
issuance of title takes the subject land away from the land of public domain and converts the
property into patrimonial or private property." In short, PEA and AMARI contend that with the
issuance of Special Patent No. 3517 and the corresponding certificates of titles, the 157.84 hectares
comprising the Freedom Islands have become private lands of PEA. In support of their theory, PEA
and AMARI cite the following rulings of the Court:

1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –

"Once the patent was granted and the corresponding certificate of title was issued, the land
ceased to be part of the public domain and became private property over which the Director
of Lands has neither control nor jurisdiction."

2. Lee Hong Hok v. David,98 where the Court declared -

"After the registration and issuance of the certificate and duplicate certificate of title based on
a public land patent, the land covered thereby automatically comes under the operation of
Republic Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio Tengco
v. Heirs of Jose Aliwalas,99 where the Court ruled -

"While the Director of Lands has the power to review homestead patents, he may do so only
so long as the land remains part of the public domain and continues to be under his
exclusive control; but once the patent is registered and a certificate of title is issued, the land
ceases to be part of the public domain and becomes private property over which the Director
of Lands has neither control nor jurisdiction."

4. Manalo v. Intermediate Appellate Court,100 where the Court held –

"When the lots in dispute were certified as disposable on May 19, 1971, and free patents
were issued covering the same in favor of the private respondents, the said lots ceased to be
part of the public domain and, therefore, the Director of Lands lost jurisdiction over the
same."

5.Republic v. Court of Appeals,101 where the Court stated –

 "Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a
land grant to the Mindanao Medical Center, Bureau of Medical Services, Department of
Health, of the whole lot, validly sufficient for initial registration under the Land Registration
Act. Such land grant is constitutive of a 'fee simple' title or absolute title in favor of petitioner
Mindanao Medical Center. Thus, Section 122 of the Act, which governs the registration of
grants or patents involving public lands, provides that 'Whenever public lands in the
Philippine Islands belonging to the Government of the United States or to the Government of
the Philippines are alienated, granted or conveyed to persons or to public or private
corporations, the same shall be brought forthwith under the operation of this Act (Land
Registration Act, Act 496) and shall become registered lands.'"

The first four cases cited involve petitions to cancel the land patents and the corresponding
certificates of titles issued to private parties. These four cases uniformly hold that the Director of
Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land
automatically comes under the Torrens System. The fifth case cited involves the registration under
the Torrens System of a 12.8-hectare public land granted by the National Government to Mindanao
Medical Center, a government unit under the Department of Health. The National Government
transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a public service. The Court affirmed the
registration of the 12.8-hectare public land in the name of Mindanao Medical Center under Section
122 of Act No. 496. This fifth case is an example of a public land being registered under Act No. 496
without the land losing its character as a property of public dominion.

In the instant case, the only patent and certificates of title issued are those in the name of PEA, a
wholly government owned corporation performing public as well as proprietary functions. No patent
or certificate of title has been issued to any private party. No one is asking the Director of Lands to
cancel PEA's patent or certificates of title. In fact, the thrust of the instant petition is that PEA's
certificates of title should remain with PEA, and the land covered by these certificates, being
alienable lands of the public domain, should not be sold to a private corporation.

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or
public ownership of the land. Registration is not a mode of acquiring ownership but is merely
evidence of ownership previously conferred by any of the recognized modes of acquiring ownership.
Registration does not give the registrant a better right than what the registrant had prior to the
registration.102 The registration of lands of the public domain under the Torrens system, by itself,
cannot convert public lands into private lands.103

Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the
alienable land of the public domain automatically becomes private land cannot apply to government
units and entities like PEA. The transfer of the Freedom Islands to PEA was made subject to the
provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by then President
Aquino, to wit:

"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and
in conformity with the provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto
the Public Estates Authority the aforesaid tracts of land containing a total area of one million
nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the
technical description of which are hereto attached and made an integral part hereof."
(Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No.
1084. Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of
alienable lands of the public domain that are transferred to government units or entities. Section 60
of CA No. 141 constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of the
registered land even if not annotated on the certificate of title.104 Alienable lands of the public domain
held by government entities under Section 60 of CA No. 141 remain public lands because they
cannot be alienated or encumbered unless Congress passes a law authorizing their disposition.
Congress, however, cannot authorize the sale to private corporations of reclaimed alienable lands of
the public domain because of the constitutional ban. Only individuals can benefit from such law.

The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141
does not automatically convert alienable lands of the public domain into private or patrimonial lands.
The alienable lands of the public domain must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands, before these lands can become private or
patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress can declare
lands of the public domain as private or patrimonial lands in the hands of a government agency
tasked to dispose of public lands. This will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior to such law, are concededly public lands.

Under EO No. 525, PEA became the central implementing agency of the National Government to
reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that –

"EXECUTIVE ORDER NO. 525

Designating the Public Estates Authority as the Agency Primarily Responsible for all
Reclamation Projects

Whereas, there are several reclamation projects which are ongoing or being proposed to be
undertaken in various parts of the country which need to be evaluated for consistency with
national programs;

Whereas, there is a need to give further institutional support to the Government's declared
policy to provide for a coordinated, economical and efficient reclamation of lands;

Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited
to the National Government or any person authorized by it under proper contract;

Whereas, a central authority is needed to act on behalf of the National Government

which shall ensure a coordinated and integrated approach in the reclamation of lands;

Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a
government corporation to undertake reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests; and

Whereas, Presidential Decree No. 1416 provides the President with continuing authority to
reorganize the national government including the transfer, abolition, or merger of functions
and offices.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of

the powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416,
do hereby order and direct the following:
 Section 1. The Public Estates Authority (PEA) shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of
the National Government. All reclamation projects shall be approved by the President upon
recommendation of the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; Provided, that, reclamation projects of any
national government agency or entity authorized under its charter shall be undertaken in
consultation with the PEA upon approval of the President.

x x x ."

As the central implementing agency tasked to undertake reclamation projects nationwide, with
authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged
with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or
sold by PEA are not private lands, in the same manner that DENR, when it disposes of other
alienable lands, does not dispose of private lands but alienable lands of the public domain. Only
when qualified private parties acquire these lands will the lands become private lands. In the hands
of the government agency tasked and authorized to dispose of alienable of disposable lands
of the public domain, these lands are still public, not private lands.

Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as
well as "any and all kinds of lands." PEA can hold both lands of the public domain and private lands.
Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are
transferred to PEA and issued land patents or certificates of title in PEA's name does not
automatically make such lands private.

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

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain
since PEA can "acquire x x x any and all kinds of lands." This will open the floodgates to
corporations and even individuals acquiring hundreds of hectares of alienable lands of the public
domain under the guise that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country - creating the very evil
that the constitutional ban was designed to prevent. This will completely reverse the clear direction
of constitutional development in this country. The 1935 Constitution allowed private corporations to
acquire not more than 1,024 hectares of public lands.105 The 1973 Constitution prohibited private
corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally
reiterated this prohibition.

The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No.
1529, automatically become private lands is contrary to existing laws. Several laws authorize lands
of the public domain to be registered under the Torrens System or Act No. 496, now PD No. 1529,
without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of PD No.
1529, respectively, provide as follows:

Act No. 496

 "Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x
Government of the Philippine Islands are alienated, granted, or conveyed to persons or
the public or private corporations, the same shall be brought forthwith under the operation
of this Act and shall become registered lands."

PD No. 1529

"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government
alienated, granted or conveyed to any person, the same shall be brought forthwith under the
operation of this Decree." (Emphasis supplied)

Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529
includes conveyances of public lands to public corporations.

Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or
branch or subdivision of the Government," as provided in Section 60 of CA No. 141, may be
registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such registration,
however, is expressly subject to the condition in Section 60 of CA No. 141 that the land "shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its title, except when
authorized by Congress." This provision refers to government reclaimed, foreshore and marshy
lands of the public domain that have been titled but still cannot be alienated or encumbered unless
expressly authorized by Congress. The need for legislative authority prevents the registered land of
the public domain from becoming private land that can be disposed of to qualified private parties.

The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be
registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states –

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be executed
in behalf of the government by the following:

(1) x x x

(2) For property belonging to the Republic of the Philippines, but titled in the name of
any political subdivision or of any corporate agency or instrumentality, by the
executive head of the agency or instrumentality." (Emphasis supplied)

Thus, private property purchased by the National Government for expansion of a public wharf may
be titled in the name of a government corporation regulating port operations in the country. Private
property purchased by the National Government for expansion of an airport may also be titled in the
name of the government agency tasked to administer the airport. Private property donated to a
municipality for use as a town plaza or public school site may likewise be titled in the name of the
municipality.106 All these properties become properties of the public domain, and if already registered
under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or provision in
any existing law for the de-registration of land from the Torrens System.

Private lands taken by the Government for public use under its power of eminent domain become
unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the
Register of Deeds to issue in the name of the National Government new certificates of title covering
such expropriated lands. Section 85 of PD No. 1529 states –
 "Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein,
is expropriated or taken by eminent domain, the National Government, province, city or
municipality, or any other agency or instrumentality exercising such right shall file for
registration in the proper Registry a certified copy of the judgment which shall state definitely
by an adequate description, the particular property or interest expropriated, the number of
the certificate of title, and the nature of the public use. A memorandum of the right or interest
taken shall be made on each certificate of title by the Register of Deeds, and where the fee
simple is taken, a new certificate shall be issued in favor of the National Government,
province, city, municipality, or any other agency or instrumentality exercising such right for
the land so taken. The legal expenses incident to the memorandum of registration or
issuance of a new certificate of title shall be for the account of the authority taking the land or
interest therein." (Emphasis supplied)

Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.

AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands
or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the
Amended JVA "is not a sale but a joint venture with a stipulation for reimbursement of the original
cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP
under its 1973 contract with the Republic." Whether the Amended JVA is a sale or a joint venture,
the fact remains that the Amended JVA requires PEA to "cause the issuance and delivery of the
certificates of title conveying AMARI's Land Share in the name of AMARI."107

This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that
private corporations "shall not hold such alienable lands of the public domain except by lease." The
transfer of title and ownership to AMARI clearly means that AMARI will "hold" the reclaimed lands
other than by lease. The transfer of title and ownership is a "disposition" of the reclaimed lands, a
transaction considered a sale or alienation under CA No. 141,108 the Government Auditing
Code,109 and Section 3, Article XII of the 1987 Constitution.

The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas
form part of the public domain and are inalienable. Lands reclaimed from foreshore and submerged
areas also form part of the public domain and are also inalienable, unless converted pursuant to law
into alienable or disposable lands of the public domain. Historically, lands reclaimed by the
government are sui generis, not available for sale to private parties unlike other alienable public
lands. Reclaimed lands retain their inherent potential as areas for public use or public service.
Alienable lands of the public domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure such equitable distribution, the
1973 and 1987 Constitutions have barred private corporations from acquiring any kind of alienable
land of the public domain. Those who attempt to dispose of inalienable natural resources of the
State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to
private corporations, do so at their own risk.

We can now summarize our conclusions as follows:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may
lease these lands to private corporations but may not sell or transfer ownership of these
lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to
the ownership limitations in the 1987 Constitution and existing laws.
 2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural
resources of the public domain until classified as alienable or disposable lands open to
disposition and declared no longer needed for public service. The government can make
such classification and declaration only after PEA has reclaimed these submerged areas.
Only then can these lands qualify as agricultural lands of the public domain, which are the
only natural resources the government can alienate. In their present state, the 592.15
hectares of submerged areas are inalienable and outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of
77.34 hectares110 of the Freedom Islands, such transfer is void for being contrary to Section
3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any
kind of alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156
hectares111 of still submerged areas of Manila Bay, such transfer is void for being contrary to
Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural
resources other than agricultural lands of the public domain. PEA may reclaim these
submerged areas. Thereafter, the government can classify the reclaimed lands as alienable
or disposable, and further declare them no longer needed for public service. Still, the transfer
of such reclaimed alienable lands of the public domain to AMARI will be void in view of
Section 3, Article XII of the 1987 Constitution which prohibits private corporations from
acquiring any kind of alienable land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution.
Under Article 1409112 of the Civil Code, contracts whose "object or purpose is contrary to law," or
whose "object is outside the commerce of men," are "inexistent and void from the beginning." The
Court must perform its duty to defend and uphold the Constitution, and therefore declares the
Amended JVA null and void ab initio.

Seventh issue: whether the Court is the proper forum to raise the issue of whether the
Amended JVA is grossly disadvantageous to the government.

Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last
issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of factual
matters.

WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint
Venture Agreement which is hereby declared NULL and VOID ab initio.

SO ORDERED.

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

11. Ayog vs. Cusi, Nov. 19, 1982

[G.R. No. L-46729. November 19, 1982.]

 LAUSAN AYOG, BENITO AYOG, DAMASO AYOG, JULIO AYOG, SEGUNDA AYOG, VICENTE
ABAQUETA, BERNANDINO ADORMEO, VIDAL ALBANO, FELICIANO ARIAS, ANTONIO BALDOS,
MAXIMO BALDOS ROMERO BINGZON, EMILIO CADAYDAY, FRUCTUOSO CHUA, SR., HERACLEO
CHUA, GUILLERMO DAGOY, ABDON DEIMOS, NICASIO DE LEON, JULIANA VDA. DE DIANNA,
DEMOCRITO DEVERO, ALFREDO DIVINAGRACIA, ESTEBAN DIVINAGRACIA, LEODEGARDIO
DIVINAGRACIA, NELLO DIVINAGRACIA, MERQUIADES EMBERADOR, JESUS EMPERADO,
PORFERIO ENOC, SOFRONIO ENOC, RAFAEL GAETOS, NICOLAS GARLET, TRINIDAD GARLET,
FORTUNATA GEONZON, NICOLADA NAQUILA, TORIBIO NAQUILA, EFREN OKAY, ELPIDIO OKAY,
SR., DIEGO ONGRIA, ERNESTO PEÑARES, VICENTE PATULOT, IGNACIA RIBAO, JUANO RICO,
JESUS ROSALITA, ARMANDO TANTE and ANSELMO VALMORES, Petitioners, v. JUDGE VICENTE N.
CUSI, JR., Court of First Instance of Davao, Branch I, PROVINCIAL SHERIFF OF DAVAO, and
BIÑAN DEVELOPMENT CO., INC., Respondents. MINISTER OF NATURAL RESOURCES and
DIRECTOR OF LANDS, intervenors.

Marcelino C. Maximo, Enrique S. Empleo and Carlito H. Vailoces for petitioners

Levi Damaso for respondent Biñan Dev’t. Co.

SYNOPSIS

During the effectivity of the 1935 Constitution which expressly allowed private juridical entities to acquire
alienable lands of the public domain not exceeding 1,024 hectares, respondent private corporation
purchased from the Bureau of Lands a parcel of public agricultural land with an area of 250 hectares and
obtained favorable judgment from a civil court to evict the occupants thereof. However, it was only when
the 1973 Constitution took effect that the sales patent and the Torrens title of the subject land were issued
and the judgment of the lower court became final and executory after its affirmance on appeal. This action
for prohibition was brought when respondent corporation moved for execution of the judgment evicting the
defendants. Herein petitioners, some of whom were not defendants in the ejectment case, contend that the
adoption of the new Constitution was a supervening fact which rendered it legally impossible to execute the
lower court’s judgment. They invoked the constitutional prohibition under Section 11, Article XIV that "no
private corporation or association may hold alienable lands of the public domain except by lease not to
exceed one thousand hectares in area." cralaw virtua 1aw lib rary

On review, the Supreme Court was unanimous in dismissing the petition holding that the prohibition under
Section 11, Article XIV of the 1973 Constitution has no retroactive application to the sales application of
respondent corporation because the latter had already acquired a vested right to the land applied for at the
time the new Constitution took effect; further holding that petitioners who were not defendants in the
ejectment case should be excluded from the effect of the lower court’s judgment. Seven of the thirteen
justices, however, made the clarification that only those petitioners who do not derive their right of
possession from any of the defendants in the ejectment suit should be excluded from the effect of the lower
court’s judgment.

Petition dismissed.

SYLLABUS

1. CONSTITUTIONAL LAW; SECTION 11, ARTICLE XIV OF THE 1973 CONSTITUTION; PROVISION BARRING
PRIVATE CORPORATIONS FROM HOLDING ALIENABLE LANDS OF PUBLIC DOMAIN EXCEPT BY LEASE
CANNOT BE GIVEN RETROACTIVE EFFECT SO AS TO ADVERSELY AFFECT RIGHTS ALREADY VESTED PRIOR
TO ITS EFFECTIVITY. — We hold that Section 11, Article XIV of the 1973 Constitution which provides that
"no private corporation or association may hold alienable lands of the public domain except by lease not to
exceed one thousand hectares in area" has no retroactive application to the sales application of Biñan
Development Co., Inc. because it had already acquired a vested right to the land applied for at the time the
1973 Constitution took effect. That vested right has to be respected. It could not be abrogated by the new
Constitution. Section 2, Article XIII of the 1935 Constitution allows private corporations to purchase public
agricultural lands not exceeding one thousand and twenty-four hectares. Petitioners’ prohibition action is
barred by the doctrine of vested rights in constitutional law.

2. WORDS AND PHRASES; "VESTED RIGHT" DEFINED. — "A right is vested when the right to enjoyment has
become the property of some particular person or persons as a present interest" (16 C.J.S. 1173). It is "the
privilege to enjoy property legally vested, to enforce contracts, and enjoy the rights of property conferred by
the existing law" (12 C.J.S. 955, Note 46, No. 6) or "some right or interest in property which has become
fixed and established and is no longer open to doubt or controversy" (Downs v. Blount, 170 Fed. 15,20,
cited in Balboa v. Farrales, 51 Phil. 498, 502).

3. CONSTITUTIONAL LAW; SECTION 11, ARTICLE XIV OF THE 1973 CONSTITUTION; CONTEMPORANEOUS
CONSTRUCTION OF THE CONSTITUTIONAL PROHIBITION BY A HIGH EXECUTIVE OFFICIAL CARRIES GREAT
WEIGHT AND ACCORDED MUCH RESPECT BY THE COURTS. — Secretary of Justice Vicente Abad Santos in
his 1973 opinion ruled that where the applicant, before the Constitution took effect, had fully complied with
all his obligations under the Public Land Act in order to entitle him to a sales patent, there would seem to be
no legal equitable justification for refusing to issue or release the sales patent. In opinion No. 140, series of
1974, he held that as soon as the applicant had fulfilled the construction or cultivation requirements and has
fully paid the purchase price, he should be deemed to have acquired by purchase the particular tract of land
and to him the area limitation in the new Constitution would not apply. In opinion No. 185, series of 1976,
Secretary Abad Santos held that where the cultivation requirements were fulfilled before the new
Constitution took effect but the full payment of the price was completed after January 17, 1973, the
applicant was, nevertheless, entitled to a sales patent. Such a contemporaneous construction of the
constitutional prohibition by a high executive official carries great weight and should be accorded much
respect. It is a correct interpretation of Section II of Article XIV.

4. ID.; DOCTRINE OF VESTED RIGHTS; APPLIED IN CASE AT BAR. — In the instant case, it is incontestable
that prior to the effectivity of the 1973 Constitution the right of the corporation to purchase the land in
question had become fixed and established and was no longer open to doubt or controversy. Its compliance
with the requirements of the Public Land Law for the issuance of a patent had the effect of segregating the
said land from the public domain. The corporation’s right to obtain a patent for that land is protected by law.
It cannot be deprived of that right without due process (Director of Lands v. CA, 123 Phil. 919).

5. ID.; SOCIAL JUSTICE; ADMINISTRATIVE AUTHORITIES SHOULD FIND WAYS AND MEANS TO
ACCOMMODATE SOME OF THE PETITIONERS IF THEY ARE LANDLESS AND ARE TILLERS OF THE SOIL. — In
the interest of social justice, to avoid agrarian unrest and to dispel the notion that the law grinds the faces
of the poor, the administrative authorities should find ways and means of accommodating some of the
petitioners if they are landless and are really tillers of the son who in the words of President Magsaysay
deserve a little more food in their stomachs, a little more shelter over their heads and a tittle more clothing
on their backs. The State should endeavor to help the poor who find it difficult to make both ends meet and
who suffer privations in the universal struggle for existence.

6. ID.; SECTION 11, ARTICLE XIV OF THE 1973 CONSTITUTION; PURPOSE OF THE PROHIBITION AGAINST
PURCHASES OF PUBLIC AGRICULTURAL LANDS BY PRIVATE CORPORATIONS. — One purpose of the
constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably
diffuse land ownership or to encourage "owner-cultivatorship and the economic family-size farm" and to
prevent a recurrence of cases like the instant case. Huge landholdings by corporations or private persons
had spawned social unrest.

7. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; CANNOT BE ENFORCED AGAINST PERSONS WHO WERE
NOT PARTIES TO THE SUIT. — We hold that the judgment cannot be enforced against the said petitioners
who were not defendants in that litigation or who were not summoned and heard in that case. Generally, "it
is an axiom of the law that no man shall be affected by proceedings to which he is a stranger’’ (Ed. A. Keller
& Co. v. Ellerman & Bucknall Steamship Co 38 Phil. 514, 520).

8. ID.; ID.; ID.; REASON. — To enforce the judgment against those who were not parties to the case and
who occupy portions of the disputed land distinct and separate front the portions occupied by the defendants
in the ejectment suit, would be violative of due process of law, the law which, according to Daniel Webster in
his argument in the Dartmouth College case, is the law of the land, a law which hears before it condemns,
which proceeds upon inquiry and renders judgment only after trial. "The meaning is, that every citizen shall
hold his life, liberty, property, and immunities, under the protection of the general rules which govern
society." (Cited in Lopez v. Director of Lands. 47 Phil. 23, 32. See Gatchalian v. Arlegui, L-35615 and Tang
Tee v. Arlegui, L-41360, Feb. 17, 1977, 75 SCRA 234 and Berses v. Villanueva, 25 Phil. 473).

9. ID.; ID.; SPECIAL CIVIL ACTIONS; CONTEMPT; NO CONTEMPT OF COURT IS COMMITTED BY A PARTY
WHO PLOWED THE LAND AND DESTROYED THE STANDING CROPS OF ONE OF PETITIONERS WHO IS NOT A
PARTY-DEFENDANT IN THE EJECTMENT CASE BELOW; PETITIONER’S REMEDY IS NOT CONTEMPT BUT A
CIVIL OR CRIMINAL ACTION. — We hold that no contempt was committed. The temporary restraining order
 was not directed to Biñan Development Co Inc., its officers, agents or privies. Emberador was not named
specifically in the trial court’s judgment as one of the occupants to be ejected. For the redress of whatever
wrong or delict was committed against Emberador by reason of the destruction of his improvements, his
remedy is not in a contempt proceeding but in some appropriate civil and criminal actions against the
destroyer of the improvements.

VASQUEZ, J., concurring: chanrob1es vi rt ual 1aw li brary

REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; COURT’S JUDGMENT SHOULD BE CLARIFIED TO EXCLUDE
FROM THE EFFECT OF THE EJECTMENT DECISION ONLY PETITIONERS WHO DO NOT DERIVE THEIR RIGHT
OF POSSESSION FROM ANY OF THE DEFENDANTS IN THE LOWER COURT. — The judgment in any ease is
binding and enforcible not only against the parties thereto but also against "their successors in interest by
title subsequent to the commencement of the action" (Sec. 49[b], Rule 39, Rules of Court). We have
previously held that the judgment in an ejectment ease may be enforced not only against the defendants
therein but also against the members of their family, their relatives or privies who derive their right of
possession from the defendants (Ariem v. Delos Angeles, 49 SCRA 343). A further clarification of the
dispositive portion is apparently needed to exclude from the effect of the judgment in the ejectment case
only the petitioners who do not derive their right of possession from any of the defendants in the ejectment
suit.

DECISION

AQUINO, J.:

This case is about the application of section 11, Article XIV of the 1973 Constitution (disqualifying a private
corporation from purchasing public lands) to a 1953 sales award made by the Bureau of Lands, for which a
sales patent and Torrens title were issued in 1975, and to the 1964 decision of the trial court, ejecting some
of the petitioners from the land purchased, which decision was affirmed in 1975 by the Court of Appeals.
That legal question arises under the following facts: chan rob 1es vi rtual 1aw lib rary

On January 21, 1953, the Director of Lands, after a bidding, awarded to Biñan Development Co., Inc. on the
basis of its 1951 Sales Application No. V-6834 Cadastral Lot No. 281 located at Barrio Tamugan, Guianga
(Baguio District), Davao City with an area of about two hundred fifty hectares. Some occupants of the lot
protested against the sale. The Director of Lands in his decision of August 30, 1957 dismissed the protests
and ordered the occupants to vacate the lot and remove their improvements. No appeal was made from that
decision.

The Director found that the protestants (defendants in the 1961 ejectment suit, some of whom are now
petitioners herein) entered the land only after it was awarded to the corporation and, therefore, they could
not be regarded as bona fide occupants thereof. The Director characterized them as squatters. He found that
some claimants were fictitious persons (p. 30, Rollo of L-43505, Okay v. CA). He issued a writ of execution
but the protestants defied the writ and refused to vacate the land (p. 28, Rollo of L-43505, Okay v. CA). **

Because the alleged occupants refused to vacate the land, the corporation filed against them on February
27, 1961 in the Court of First Instance of Davao, Civil Case No. 3711, an ejectment suit (accion publiciana).
The forty defendants were identified as follows:chan rob1e s virtual 1aw l ibra ry

1. Vicente Abaqueta 21. Eniego Garlic

2. Candido Abella 22. Nicolas Garlic

3. Julio Ayog 23. Rufo Garlic

4. Arcadio Ayong 24. Alfonso Ibales

5. Generoso Bangonan 25. Julian Locacia

6. Lomayong Cabao 26. Filomeno Labantaban

7. Jose Catibring 27. Arcadio Lumantas

8. Teodolfo Chua 28. Santos Militante

9. Guillermo Dagoy 29. Toribio Naquila

10. Anastacia Vda. de Didal 30. Elpidio Okay

11. Alfredo Divinagracia 31. Guillermo Omac

12. Silverio Divinagracia 32. Emilio Padayday

13. Galina Edsa 33. Marcosa Vda. de Rejoy

14. Jesus Emperado 34. Lorenzo Rutsa

15. Porfirio Enoc 35. Ramon Samsa

16. Benito Ente 36. Rebecca Samsa

17. German Flores 37. Alfeao Sante

18. Ciriaco Fuentes 38. Meliton Sante

19. Pulong Gabao 39. Amil Sidaani

20. Constancio Garlic 40. Cosme Villegas.

That ejectment suit delayed the issuance of the patent. The trial court found that the protests of twenty of
the above-named defendants were among those that were dismissed by the Director of Lands in his 1957
decision already mentioned.

On July 18, 1961 the purchase price of ten thousand pesos was fully paid by Biñan Development Co., Inc.
On November 10, 1961, an official of the Bureau of Lands submitted a final investigation report wherein it
was stated that the corporation had complied with the cultivation and other requirements under the Public
Land Law and had paid the purchase price of the land (p. 248, Rollo).

It was only more than thirteen years later or on August 14, 1975 when Sales Patent No. 5681 was issued to
the corporation for that lot with a reduced area of 175.3 hectares. The patent was registered. Original
Certificate of Title No. P-5176 was issued to the patentee.

The Director of Lands in his memorandum dated June 29, 1974 for the Secretary of Natural Resources,
recommending approval of the sales patent, pointed out that the purchaser-corporation had complied with
the said requirements long before the effectivity of the Constitution, that the land in question was free from
claims and conflicts and that the issuance of the patent was in conformity with the guidelines prescribed in
Opinion No. 64, series of 1973, of Secretary of Justice Vicente Abad Santos and was an exception to the
prohibition in section 11, Article XIV of the Constitution (p. 258, Rollo).

Secretary of Natural Resources Jose J. Eeido, Jr., in approving the patent on August 14, 1975, noted that
the applicant had acquired a vested right to its issuance (p. 259, Rollo). cha nro bles lawl ibra ry : red nad

Before that patent was issued, there was a trial in the ejectment suit. Fifteen defendants (out of forty),
namely, Julio Ayog, Guillermo Bagoy, Generoso Bangonan, Jose Catibring, Porfirio Enoc, Jose Emperado,
Arcadio Lomanto, Toribio Naquila, Elpidio Okay, Alfeo Sante, Meliton Sante, Ramon Samsa, Rebecca Samsa,
Arcadio Sarumines and Felix Tahantahan, testified that they entered the disputed land long before 1951 and
that they planted it to coconuts, coffee, jackfruit and other fruit trees (p. 28, Record on Appeal).

The trial court did not give credence to their testimonies. It believed the report of an official of the Bureau of
Lands that in 1953 the land was free from private claims and conflicts and it gave much weight to the
decision of the Director of Lands dismissing the protests of the defendants against the sales award (p. 30,
Record on Appeal).
Furthermore, the trial court during its ocular inspection of the land on November 8, 1964 found that the
plantings on the land could not be more than ten years old, meaning that they were not existing in 1953
when the sales award was made. Hence, the trial court ordered the defendants to vacate the land and to
restore the possession thereof to the company. The Court of Appeals affirmed that judgment on December
5, 1975 in its decision in Biñan Development Co., Inc. v. Sante, CA-G.R. No. 37142-R. The review of the
decision was denied by this Court on May 17, 1976 in Elpidio Okay v. Court of Appeals, L-43505.

After the record was remanded to the trial court, the corporation filed a motion for execution. The
defendants, some of whom are now petitioners herein, opposed the motion. They contended that the
adoption of the Constitution, which took effect on January 17, 1973, was a supervening fact which rendered
it legally impossible to execute the lower court’s judgment. They invoked the constitutional prohibition,
already mentioned, that "no private corporation or association may hold alienable lands of the public domain
except by lease not to exceed one thousand hectares in area." cralaw virtua1aw l ibra ry

The lower court suspended action on the motion for execution because of the manifestation of the
defendants that they would file a petition for prohibition in this Court. On August 24, 1977, the instant
prohibition action was filed. Some of the petitioners were not defendants in the ejectment case.

We hold that the said constitutional prohibition has no retroactive application to the sales application of
Biñan Development Co., Inc. because it had already acquired a vested right to the land applied for at the
time the 1973 Constitution took effect. chanrob les law li bra ry

That vested right has to be respected. It could not be abrogated by the new Constitution. Section 2, Article
XIII of the 1935 Constitution allows private corporations to purchase public agricultural lands not exceeding
one thousand and twenty-four hectares. Petitioners’ prohibition action is barred by the doctrine of vested
rights in constitutional law.

"A right is vested when the right to enjoyment has become the property of some particular person or
persons as a present interest" (16 C.J.S. 1173). It is "the privilege to enjoy property legally vested, to
enforce contracts, and enjoy the rights of property conferred by the existing law" (12 C.J. 955, Note 46, No.
6) or "some right or interest in property which has become fixed and established and is no longer open to
doubt or controversy" (Downs v. Blount, 170 Fed. 15, 20, cited in Balboa v. Farrales, 51 Phil. 498, 502).

The due process clause prohibits the annihilation of vested rights. "A state may not impair vested rights by
legislative enactment, by the enactment or by the subsequent repeal of a municipal ordinance, or by a
change in the constitution of the State, except in a legitimate exercise of the police power" (16 C.J.S. 1177-
78).

It has been observed that, generally, the term "vested right" expresses the concept of present fixed
interest, which in right reason and natural justice should be protected against arbitrary State action, or an
innately just and imperative right which an enlightened free society, sensitive to inherent and irrefragable
individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines, Inc. v.
Rosenthal, 192 Atl. 2nd 587).

Secretary of Justice Abad Santos in his 1973 opinion ruled that where the applicant, before the Constitution
took effect, had fully complied with all his obligations under the Public Land Act in order to entitle him to a
sales patent, there would seem to be no legal or equitable justification for refusing to issue or release the
sales patent (p. 254, Rollo).

In Opinion No. 140, series of 1974, he held that as soon as the applicant had fulfilled the construction or
cultivation requirements and has fully paid the purchase price, he should be deemed to have acquired by
purchase the particular tract of land and to him the area limitation in the new Constitution would not apply.

In Opinion No. 185, series of 1976, Secretary Abad Santos held that where the cultivation requirements
were fulfilled before the new Constitution took effect but the full payment of the price was completed after
January 17, 1973, the applicant was, nevertheless, entitled to a sales patent (p. 256, Rollo).

Such a contemporaneous construction of the constitutional prohibition by a high executive official carries
great weight and should be accorded much respect. It is a correct interpretation of section 11 of Article XIV.

In the instant case, it is incontestable that prior to the effectivity of the 1973 Constitution the right of the
corporation to purchase the land in question had become fixed and established and was no longer open to
doubt or controversy.

Its compliance with the requirements of the Public Land Law for the issuance of a patent had the effect of
segregating the said land from the public domain. The corporation’s right to obtain a patent for that land is
protected by law. It cannot be deprived of that right without due process (Director of Lands v. CA, 123 Phil.
919).chanrobles law lib rary

As we cannot review the factual findings of the trial court and the Court of Appeals, we cannot entertain
petitioners’ contention that many of them by themselves and through their predecessors-in-interest have
possessed portions of land even before the war. They should have filed homestead or free patent
applications.

Our jurisdiction is limited to the resolution of the legal issue as to whether the 1973 Constitution is an
obstacle to the implementation of the trial court’s 1964 final and executory judgment ejecting the
petitioners. On that issue, we have no choice but to sustain its enforceability.

Nevertheless, in the interest of social justice, to avoid agrarian unrest and to dispel the notion that the law
grinds the faces of the poor, the administrative authorities should find ways and means of accommodating
some of the petitioners if they are landless and are really tillers of the soil who in the words of President
Magsaysay deserve a little more food in their stomachs, a little more shelter over their heads and a little
more clothing on their backs. The State should endeavor to help the poor who find it difficult to make both
ends meet and who suffer privations in the universal struggle for existence.

A tiller of the soil is entitled to enjoy basic human rights, particularly freedom from want. The common man
should be assisted an possessing and cultivating a piece of land for his sustenance, to give him social
security and to enable him to achieve a dignified existence and become an independent, self-reliant and
responsible citizen in our democratic society.

To guarantee him that right is to discourage him from becoming a subversive or from rebelling against a
social order where, as the architect of the French Revolution observed, the rich are choking with the
superfluities of life but the famished multitude lack the barest necessities.

Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private
corporations is to equitably diffuse land ownership or to encourage "owner-cultivatorship and the economic
family-size farm" and to prevent a recurrence of cases like the instant case. Huge landholdings by
corporations or private persons had spawned social unrest.

Petitioners’ counsel claims that Biñan Development Co., Inc. seeks to execute the judgment in Civil Case No.
3711, the ejectment suit from which this prohibition case arose, against some of the petitioners who were
not defendants in that suit (p. 126, Rollo).

Those petitioners are not successors-in-interest of the defendants in the ejectment suit. Nor do they derive
their right of possession from the said defendants. Those petitioners occupy portions of the disputed land
distinct and separate from the portions occupied by the said defendants. chanroble s.com : vi rtual law lib rary

We hold that judgment cannot be enforced against the said petitioners who were not defendants in that
litigation or who were not summoned and heard in that case. Generally, "it is an axiom of the law that no
man shall be affected by proceedings to which he is a stranger" (Ed. A. Keller & Co. v. Ellerman & Bucknall
Steamship Co., 38 Phil. 514, 520).

To enforce the judgment against those who were not parties to the case and who occupy portions of the
disputed land distinct and separate from the portions occupied by the defendants in the ejectment suit,
would be violative of due process of law, the law which, according to Daniel Webster in his argument in the
Dartmouth College case, is the law of the land, a law which hears before it condemns, which proceeds upon
inquiry and renders judgment only after trial. "The meaning is, that every citizen shall hold his life, liberty,
property, and immunities, under the protection of the general rules which govern society." (Cited in Lopez v.
Director of Lands, 47 Phil. 23, 32. See Gatchalian v. Arlegui, L-35615 and Tang Tee v. Arlegui, L-41360,
February 17, 1977, 75 SCRA 234 and Berses v. Villanueva, 25 Phil. 473.)

Contempt incident. — During the pendency of this case, or at about four o’clock in the morning of December
12, 1978, Ciriaco Tebayan, Domingo Nevasca, Rogelio Duterte and Sofronio Etac, employees of the Crown
Fruits and Cannery Corporation, plowed or bulldozed with their tractors a portion of the disputed land which
was occupied by Melquiades Emberador, one of the petitioners herein. The disputed land was leased by
Biñan Development Co., Inc. to the canning corporation.

The four tractor drivers destroyed the improvements thereon worth about five thousand pesos consisting of
coffee, coconut and banana plants. Emberador was in the hospital at the time the alleged destruction of the
improvements occurred. However, it should be noted that Emberador was not expressly named as a
defendant in the ejectment suit. Apparently, he is not included in the trial court’s decision although he was
joined as a co-petitioner in this prohibition case.

The petitioners in their motion of January 11, 1979 asked that the four tractor drivers and Honesto Garcia,
the manager of Biñan Development Co., Inc., be declared in contempt of court for having disregarded the
restraining order issued by this Court on August 29, 1977, enjoining specifically Judge Vicente N. Cusi and
the provincial sheriff from enforcing the decision in the ejectment suit, Civil Case No. 3711 (pp. 46-47, 138-
141, Rollo).

Garcia and the four drivers answered the motion. The incident was assigned for hearing to Judge Antonio M.
Martinez of the Court of First Instance of Davao. Judge Martinez found that the plowing was made at the
instance of Garcia who told the barrio captain, petitioner Lausan Ayog, a Bagobo, that he (Garcia) could not
wait anymore for the termination of this case.

The record shows that on April 30, 1979 or four months after the said incident, Emberador, in consideration
of P3,500, as the value of the improvements on his land, executed a quitclaim in favor of the Crown Fruits
and Cannery Corporation (Exh. 1, 2 and 3).

We hold that no contempt was committed. The temporary restraining order was not directed to Biñan
Development Co., Inc. its officers, agents or privies. Emberador was not named specifically in the trial
court’s judgment as one of the occupants to be ejected.

For the redress of whatever wrong or delict was committed against Emberador by reason of the destruction
of his improvements, his remedy is not in a contempt proceeding but in some appropriate civil and criminal
actions against the destroyer of the improvements. chan robles law lib rary

In resume, we find that there is no merit in the instant prohibition action. The constitutional prohibition
relied upon by the petitioners as a ground to stop the execution of the judgment in the ejectment suit has
no retroactive application to that case and does not divest the trial court of jurisdiction to enforce that
judgment.

WHEREFORE, the petition is dismissed for lack of merit but with the clarification that the said judgment
cannot be enforced against those petitioners herein who were not defendants in the ejectment case, Civil
Case No. 3711, and over whom the lower court did not acquire jurisdiction. The contempt proceeding is also
dismissed. No costs.

SO ORDERED.

Concepcion, Jr., Guerrero, Abad Santos, Relova and Gutierrez, Jr., JJ., concur.

Escolin, J., took no part.

Separate Opinions

FERNANDO, C.J., concurring: chan rob1es v irt ual 1aw l ibra ry

States that the Court is unanimous as to the dismissal of the petition. But while joining the concurring
opinion of Justice Vasquez, he further states that there are only seven votes as to the qualification therein
mentioned, although Justice Vasquez made clear that he was relying in the holding of this Court in Ariem v.
De los Angeles, L-32164, Jan. 31, 1973, 49 SCRA 343.

VASQUEZ, J., concurring: chanrob1es vi rt ual 1aw li brary

I concur with the very ably written main opinion. However, I wish to erase any possible erroneous
impression that may be derived from the dispositive portion insofar as it declares that the judgment in the
ejectment case may not be enforced against the petitioners who were not defendants in Civil Case No. 3711
and over whom the lower court did not acquire jurisdiction.

The judgment in any case is binding and enforceable not only against the parties thereto but also against
"their successors in interest by title subsequent to the commencement of the action" (Sec. 49[b], Rule 39,
Rules of Court). We have previously held that the judgment in an ejectment case may be enforced not only
against the defendants therein but also against the members of their family, their relatives or privies who
derive their right of possession from the defendants (Ariem v. Delos Angeles, 49 SCRA 343).

A further clarification of the dispositive portion is apparently needed to exclude from the effect of the
judgment in the ejectment case only the petitioners who do not derive their right of possession from any of
the defendants in the ejectment suit.
chanrob les law li bra ry

Teehankee, Makasiar, De Castro, Melencio-Herrera and Plana, JJ., concur.

12. Cruz vs sec of denr, gr 135385, dec 6, 2000

.R. No. 135385 December 6, 2000

ISAGANI CRUZ and CESAR EUROPA, petitioners,

vs.
SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET
AND MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL
COMMISSION ON INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO
CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI
KIRAM-CONNIE SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG-
ANTONIO D. LUMANDONG, DATU MANTUMUKAW TEOFISTO SABASALES, DATU
EDUAARDO BANDA, DATU JOEL UNAD, DATU RAMON BAYAAN, TIMUAY JOSE ANOY,
TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING, DATU SAHAMPONG
MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY, BAY INAY
DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU
MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY,
LOURDES D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA
GRACE L. GIRON, ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES,
LYNETTE CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING
DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO CAYETANO, CONCHITA
G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ, RODOLFO C. AGUILAR, MAURO
VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B. GUINOSAO, WALTER N. TIMOL,
MANUEL T. SELEN, OSCAR DALUNHAY, RICO O. SULATAN, RAFFY MALINDA, ALFREDO
ABILLANOS, JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE SATURNO, ROMEO
A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S. LIESES, FILIPE G. SAWAY,
HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB, SALVADOR
TIONGSON, VENANCIO APANG, MADION MALID, SUKIM MALID, NENENG MALID,
MANGKATADONG AUGUSTO DIANO, JOSEPHINE M. ALBESO, MORENO MALID, MARIO
MANGCAL, FELAY DIAMILING, SALOME P. SARZA, FELIPE P. BAGON, SAMMY
SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA, SR.,
JERSON P. GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M.
GERARDA, ELIZABETH L. MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS
MARICEL MALID, represented by her father CORNELIO MALID, MARCELINO M. LADRA,
represented by her father MONICO D. LADRA, JENNYLYN MALID, represented by her father
TONY MALID, ARIEL M. EVANGELISTA, represented by her mother LINAY BALBUENA,
EDWARD M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO B'LAAN TRIBAL FARMER'S
ASSOCIATION, INTER-PEOPLE'S EXCHANGE, INC. and GREEN FORUM-WESTERN
VISAYAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE CONSERVATION
OF NATURAL RESOURCES, INC., intervenor.

RESOLUTION

PER CURIAM:

Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as
citizens and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371
(R.A. 8371), otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and its
Implementing Rules and Regulations (Implementing Rules).

In its resolution of September 29, 1998, the Court required respondents to comment.1 In compliance,
respondents Chairperson and Commissioners of the National Commission on Indigenous Peoples
(NCIP), the government agency created under the IPRA to implement its provisions, filed on October
13, 1998 their Comment to the Petition, in which they defend the constitutionality of the IPRA and
pray that the petition be dismissed for lack of merit.

On October 19, 1998, respondents Secretary of the Department of Environment and Natural
Resources (DENR) and Secretary of the Department of Budget and Management (DBM) filed
through the Solicitor General a consolidated Comment. The Solicitor General is of the view that the
IPRA is partly unconstitutional on the ground that it grants ownership over natural resources to
indigenous peoples and prays that the petition be granted in part.

On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the authors
of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission, and the
leaders and members of 112 groups of indigenous peoples (Flavier, et. al), filed their Motion for
Leave to Intervene. They join the NCIP in defending the constitutionality of IPRA and praying for the
dismissal of the petition.

On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to Intervene
and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of the principle of
parens patriae and that the State has the responsibility to protect and guarantee the rights of those
who are at a serious disadvantage like indigenous peoples. For this reason it prays that the petition
be dismissed.

On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the Haribon
Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a motion to
Intervene with attached Comment-in-Intervention. They agree with the NCIP and Flavier, et al. that
IPRA is consistent with the Constitution and pray that the petition for prohibition and mandamus be
dismissed.

The motions for intervention of the aforesaid groups and organizations were granted.
Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their
respective memoranda in which they reiterate the arguments adduced in their earlier pleadings and
during the hearing.

Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing
Rules on the ground that they amount to an unlawful deprivation of the State’s ownership over lands
of the public domain as well as minerals and other natural resources therein, in violation of the
regalian doctrine embodied in Section 2, Article XII of the Constitution:

"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b)
which, in turn, defines ancestral lands;

"(2) Section 5, in relation to section 3(a), which provides that ancestral domains including inalienable
public lands, bodies of water, mineral and other resources found within ancestral domains are
private but community property of the indigenous peoples;

"(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral domains
and ancestral lands;

"(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral domains;

(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the
ancestral lands;

"(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting,
extraction, development or exploration of minerals and other natural resources within the areas
claimed to be their ancestral domains, and the right to enter into agreements with nonindigenous
peoples for the development and utilization of natural resources therein for a period not exceeding
25 years, renewable for not more than 25 years; and

"(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, protect
and conserve the ancestral domains and portions thereof which are found to be necessary for critical
watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover or
reforestation."2

Petitioners also content that, by providing for an all-encompassing definition of "ancestral domains"
and "ancestral lands" which might even include private lands found within said areas, Sections 3(a)
and 3(b) violate the rights of private landowners.3

In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of the
NCIP and making customary law applicable to the settlement of disputes involving ancestral
domains and ancestral lands on the ground that these provisions violate the due process clause of
the Constitution.4

These provisions are:

"(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of
ancestral domains and which vest on the NCIP the sole authority to delineate ancestral
domains and ancestral lands;
 "(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is
an ancestral domain and upon notification to the following officials, namely, the Secretary of
Environment and Natural Resources, Secretary of Interior and Local Governments,
Secretary of Justice and Commissioner of the National Development Corporation, the
jurisdiction of said officials over said area terminates;

"(3) Section 63 which provides the customary law, traditions and practices of indigenous
peoples shall be applied first with respect to property rights, claims of ownership, hereditary
succession and settlement of land disputes, and that any doubt or ambiguity in the
interpretation thereof shall be resolved in favor of the indigenous peoples;

"(4) Section 65 which states that customary laws and practices shall be used to resolve
disputes involving indigenous peoples; and

"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes
involving rights of the indigenous peoples."5

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative Order
No. 1, series of 1998, which provides that "the administrative relationship of the NCIP to the Office of
the President is characterized as a lateral but autonomous relationship for purposes of policy and
program coordination." They contend that said Rule infringes upon the President’s power of control
over executive departments under Section 17, Article VII of the Constitution.6

Petitioners pray for the following:

"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related
provisions of R.A. 8371 are unconstitutional and invalid;

"(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the
NCIP to cease and desist from implementing the assailed provisions of R.A. 8371 and its
Implementing Rules;

"(3) The issuance of a writ of prohibition directing the Secretary of the Department of
Environment and Natural Resources to cease and desist from implementing Department of
Environment and Natural Resources Circular No. 2, series of 1998;

"(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management
to cease and desist from disbursing public funds for the implementation of the assailed
provisions of R.A. 8371; and

"(5) The issuance of a writ of mandamus commanding the Secretary of Environment and
Natural Resources to comply with his duty of carrying out the State’s constitutional mandate
to control and supervise the exploration, development, utilization and conservation of
Philippine natural resources."7

After due deliberation on the petition, the members of the Court voted as follows:

Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice
and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged
provisions of R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged
provisions of the law with the exception of Section 1, Part II, Rule III of NCIP Administrative Order
No. 1, series of 1998, the Rules and Regulations Implementing the IPRA, and Section 57 of the
IPRA which he contends should be interpreted as dealing with the large-scale exploitation of natural
resources and should be read in conjunction with Section 2, Article XII of the 1987 Constitution. On
the other hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not
raise a justiciable controversy and petitioners do not have standing to question the constitutionality
of R.A. 8371.

Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a
separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions
of R.A. 8371 are unconstitutional. He reserves judgment on the constitutionality of Sections 58, 59,
65, and 66 of the law, which he believes must await the filing of specific cases by those whose rights
may have been violated by the IPRA. Justice Vitug also filed a separate opinion expressing the view
that Sections 3(a), 7, and 57 of R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena,
Gonzaga-Reyes, and De Leon join in the separate opinions of Justices Panganiban and Vitug.

As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case
was redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly,
pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.

Attached hereto and made integral parts thereof are the separate opinions of Justices Puno, Vitug,
Kapunan, Mendoza, and Panganiban.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Melo, Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago,
and De Leon, Jr., JJ., concur.
Puno, Vitug, Kapunan, Mendoza and Panganiban JJ., see separate opinion