[G.R. No. 135385. December 6, 2000] COMMISSION ON HUMAN RIGHTS, intervenor.

IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE

CONSERVATION OF NATURAL RESOURCES, INC., intervenor.

ISAGANI CRUZ and CESAR EUROPA, petitioners, vs. SECRETARY OF ENVIRONMENT

AND NATURAL RESOURCES, SECRETARY OF BUDGET AND MANAGEMENT RESOLUTION
and CHAIRMAN and COMMISSIONERS OF THE NATIONAL COMMISSION ON PER CURIAM:
INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, mandamus as citizens and taxpayers, assailing the constitutionality of certain provisions
ALFREMO CARPIANO, LIBERATO A. GABIN, MATERNIDAD M. COLAS, of Republic Act No. 8371 (R.A. 8371), otherwise known as the Indigenous Peoples Rights
NARCISA M. DALUPINES, BAI KIRAM-CONNIE SATURNO, BAE MLOMO- Act of 1997 (IPRA), and its Implementing Rules and Regulations (Implementing Rules).
BEATRIZ T. ABASALA, DATU BALITUNGTUNG-ANTONIO D. LUMANDONG,
DATU MANTUMUKAW TEOFISTO SABASALES, DATU EDUAARDO BANDA, In its resolution of September 29, 1998, the Court required respondents to
DATU JOEL UNAD, DATU RAMON BAYAAN, TIMUAY JOSE ANOY, TIMUAY comment.[1] In compliance, respondents Chairperson and Commissioners of the National
MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING, DATU SAHAMPONG Commission on Indigenous Peoples (NCIP), the government agency created under the
MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY, IPRA to implement its provisions, filed on October 13, 1998 their Comment to the
BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. Petition, in which they defend the constitutionality of the IPRA and pray that the petition
PANGAN, DATU MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW- be dismissed for lack of merit.
CRISPEN SAWAY, VICKY MAKAY, LOURDES D. AMOS, GILBERT P. On October 19, 1998, respondents Secretary of the Department of Environment
HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON, and Natural Resources (DENR) and Secretary of the Department of Budget and
ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE Management (DBM) filed through the Solicitor General a consolidated Comment. The
CARANTES-VIVAL, LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING Solicitor General is of the view that the IPRA is partly unconstitutional on the ground that
DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO ABUGAN, VIRGILIO it grants ownership over natural resources to indigenous peoples and prays that the
CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ, petition be granted in part.
RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI,
PERFECTO B. GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one
DALUNHAY, RICO O. SULATAN, RAFFY MALINDA, ALFREDO ABILLANOS, of the authors of the IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional
JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE SATURNO, ROMEO Commission, and the leaders and members of 112 groups of indigenous peoples (Flavier,
A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S. LIESES, FILIPE G. et. al), filed their Motion for Leave to Intervene. They join the NCIP in defending the
SAWAY, HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, constitutionality of IPRA and praying for the dismissal of the petition.
JIMMY UGYUB, SALVADOR TIONGSON, VENANCIO APANG, MADION MALID,
SUKIM MALID, NENENG MALID, MANGKATADONG AUGUSTO DIANO, On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a
JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY Motion to Intervene and/or to Appear as Amicus Curiae. The CHR asserts that IPRA is an
DIAMILING, SALOME P. SARZA, FELIPE P. BAGON, SAMMY SALNUNGAN, expression of the principle of parens patriae and that the State has the responsibility to
ANTONIO D. EMBA, NORMA MAPANSAGONOS, ROMEO SALIGA, SR., JERSON protect and guarantee the rights of those who are at a serious disadvantage like
P. GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M. indigenous peoples. For this reason it prays that the petition be dismissed.
GERARDA, ELIZABETH L. MENDI, MORANTE S. TIWAN, DANILO M. On March 23, 1999, another group, composed of the Ikalahan Indigenous People
MALUDAO, MINORS MARICEL MALID, represented by her father and the Haribon Foundation for the Conservation of Natural Resources, Inc. (Haribon, et
CORNELIO MALID, MARCELINO M. LADRA, represented by her father al.), filed a motion to Intervene with attached Comment-in-Intervention. They agree with
MONICO D. LADRA, JENNYLYN MALID, represented by her father TONY the NCIP and Flavier, et al. that IPRA is consistent with the Constitution and pray that the
MALID, ARIEL M. EVANGELISTA, represented by her mother LINAY petition for prohibition and mandamus be dismissed.
BALBUENA, EDWARD M. EMUY, SR., SUSAN BOLANIO, OND, PULA BATO
BLAAN TRIBAL FARMERS ASSOCIATION, INTER-PEOPLES EXCHANGE, INC. The motions for intervention of the aforesaid groups and organizations were
and GREEN FORUM-WESTERN VISAYAS, intervenors. granted.
 Oral arguments were heard on April 13, 1999. Thereafter, the parties and (1) sections 51 to 53 and 59 which detail the process of delineation and
intervenors filed their respective memoranda in which they reiterate the arguments recognition of ancestral domains and which vest on the NCIP the sole
adduced in their earlier pleadings and during the hearing. authority to delineate ancestral domains and ancestral lands;
Petitioners assail the constitutionality of the following provisions of the IPRA and (2) Section 52[i] which provides that upon certification by the NCIP that a
its Implementing Rules on the ground that they amount to an unlawful deprivation of the particular area is an ancestral domain and upon notification to the
States ownership over lands of the public domain as well as minerals and other natural following officials, namely, the Secretary of Environment and Natural
resources therein, in violation of the regalian doctrine embodied in Section 2, Article XII Resources, Secretary of Interior and Local Governments, Secretary of
of the Constitution: Justice and Commissioner of the National Development Corporation, the
jurisdiction of said officials over said area terminates;
(1) Section 3(a) which defines the extent and coverage of ancestral domains,
and Section 3(b) which, in turn, defines ancestral lands; (3) Section 63 which provides the customary law, traditions and practices of
indigenous peoples shall be applied first with respect to property rights,
(2) Section 5, in relation to section 3(a), which provides that ancestral claims of ownership, hereditary succession and settlement of land
domains including inalienable public lands, bodies of water, mineral and disputes, and that any doubt or ambiguity in the interpretation thereof
other resources found within ancestral domains are private but shall be resolved in favor of the indigenous peoples;
community property of the indigenous peoples;
(4) Section 65 which states that customary laws and practices shall be used to
(3) Section 6 in relation to section 3(a) and 3(b) which defines the resolve disputes involving indigenous peoples; and
composition of ancestral domains and ancestral lands;
(5) Section 66 which vests on the NCIP the jurisdiction over all claims and
(4) Section 7 which recognizes and enumerates the rights of the indigenous disputes involving rights of the indigenous peoples.[5]
peoples over the ancestral domains;
Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP
(5) Section 8 which recognizes and enumerates the rights of the indigenous Administrative Order No. 1, series of 1998, which provides that the administrative
peoples over the ancestral lands; relationship of the NCIP to the Office of the President is characterized as a lateral but
(6) Section 57 which provides for priority rights of the indigenous peoples in autonomous relationship for purposes of policy and program coordination. They contend
the harvesting, extraction, development or exploration of minerals and that said Rule infringes upon the Presidents power of control over executive
other natural resources within the areas claimed to be their ancestral departments under Section 17, Article VII of the Constitution. [6]
domains, and the right to enter into agreements with nonindigenous Petitioners pray for the following:
peoples for the development and utilization of natural resources therein
for a period not exceeding 25 years, renewable for not more than 25 (1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and
years; and other related provisions of R.A. 8371 are unconstitutional and invalid;
(7) Section 58 which gives the indigenous peoples the responsibility to (2) The issuance of a writ of prohibition directing the Chairperson and
maintain, develop, protect and conserve the ancestral domains and Commissioners of the NCIP to cease and desist from implementing the
portions thereof which are found to be necessary for critical watersheds, assailed provisions of R.A. 8371 and its Implementing Rules;
mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover
or reforestation.[2] (3) The issuance of a writ of prohibition directing the Secretary of the
Department of Environment and Natural Resources to cease and desist
Petitioners also content that, by providing for an all-encompassing definition of from implementing Department of Environment and Natural Resources
ancestral domains and ancestral lands which might even include private lands found Circular No. 2, series of 1998;
within said areas, Sections 3(a) and 3(b) violate the rights of private landowners. [3]
(4) The issuance of a writ of prohibition directing the Secretary of Budget and
In addition, petitioners question the provisions of the IPRA defining the powers Management to cease and desist from disbursing public funds for the
and jurisdiction of the NCIP and making customary law applicable to the settlement of implementation of the assailed provisions of R.A. 8371; and
disputes involving ancestral domains and ancestral lands on the ground that these
provisions violate the due process clause of the Constitution. [4] (5) The issuance of a writ of mandamus commanding the Secretary of
Environment and Natural Resources to comply with his duty of carrying
These provisions are: out the States 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: seniority, gerontocracy, and interpretation conceived of as a method of recovering
history. It is suspicious of innovation, discontinuities, 'paradigm shifts,' and the energy
Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the and brashness of youth. These ingrained attitudes are obstacles to anyone who wants to
Chief Justice and Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity re-orient law in a more pragmatic direction. But, by the same
of the challenged provisions of R.A. 8371. Justice Puno also filed a separate opinion token, pragmatic jurisprudence must come to terms with history."
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 When Congress enacted the Indigenous Peoples Rights Act (IPRA), it
interpreted as dealing with the large-scale exploitation of natural resources and should introduced radical concepts into the Philippine legal system which appear to collide
be read in conjunction with Section 2, Article XII of the 1987 Constitution. On the other with settled constitutional and jural precepts on state ownership of land and other
hand, Justice Mendoza voted to dismiss the petition solely on the ground that it does not natural resources. The sense and subtleties of this law cannot be appreciated without
raise a justiciable controversy and petitioners do not have standing to question the considering its distinct sociology and the labyrinths of its history. This Opinion attempts
constitutionality of R.A. 8371. to interpret IPRA by discovering its soul shrouded by the mist of our history. After all, the
IPRA was enacted by Congress not only to fulfill the constitutional mandate of protecting
Seven (7) other members of the Court voted to grant the petition. Justice the indigenous cultural communities' right to their ancestral land but more
Panganiban filed a separate opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a) importantly, to correct a grave historical injustice to our indigenous people.
(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 This Opinion discusses the following:
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, I. The Development of the Regalian Doctrine in the Philippine Legal System.
and De Leon join in the separate opinions of Justices Panganiban and Vitug.
A. The Laws of the Indies
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 B. Valenton v. Murciano
Procedure, the petition is DISMISSED.
C. The Public Land Acts and the Torrens System
Attached hereto and made integral parts thereof are the separate opinions of
Justices Puno, Vitug, Kapunan, Mendoza, and Panganiban.
D. The Philippine Constitutions
SO ORDERED.
II. The Indigenous Peoples Rights Act (IPRA).
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 A. Indigenous Peoples

1. Indigenous Peoples: Their History

SEPARATE OPINION
2. Their Concept of Land
PUNO, J.:
III. The IPRA is a Novel Piece of Legislation.
PRECIS
A. Legislative History
A classic essay on the utility of history was written in 1874 by Friedrich Nietzsche
entitled "On the Uses and Disadvantages of History for Life." Expounding on Nietzsche's IV. The Provisions of the IPRA Do Not Contravene the Constitution.
essay, Judge Richard Posner1 wrote:2
A. Ancestral domains and ancestral lands are the private property of indigenous
"Law is the most historically oriented, or if you like the most backward-looking, the most peoples and do not constitute part of the land of the public domain.
'past-dependent,' of the professions. It venerates tradition, precedent, pedigree, ritual,
custom, ancient practices, ancient texts, archaic terminology, maturity, wisdom,
 1. The right to ancestral domains and ancestral lands: how acquired I. THE DEVELOPMENT OF THE REGALIAN DOCTRINE IN THE PHILIPPINE LEGAL
SYSTEM.
2. The concept of native title
A. The Laws of the Indies
(a) Cariñ o v. Insular Government
The capacity of the State to own or acquire property is the state's power
(b) Indian Title to land of dominium.3 This was the foundation for the early Spanish decrees embracing the
feudal theory of jura regalia. The "Regalian Doctrine" or jura regalia is a Western legal
concept that was first introduced by the Spaniards into the country through the
(c) Why the Cariñ o doctrine is unique Laws of the Indies and the Royal Cedulas. The Laws of the Indies, i.e., more
specifically, Law 14, Title 12, Book 4 of the Novisima Recopilacion de Leyes de las Indias,
3. The option of securing a torrens title to the ancestral land set the policy of the Spanish Crown with respect to the Philippine Islands in the following
manner:
B. The right of ownership and possession by the ICCs/IPs to their ancestral
domains is a limited form of ownership and does not include the right to "We, having acquired full sovereignty over the Indies, and all lands, territories, and
alienate the same. possessions not heretofore ceded away by our royal predecessors, or by us, or in our
name, still pertaining to the royal crown and patrimony, it is our will that all lands which
1. The indigenous concept of ownership and customary law are held without proper and true deeds of grant be restored to us as they belong to us, in
order that after reserving before all what to us or to our viceroys, audiencias, and
governors may seem necessary for public squares, ways, pastures, and commons in those
C. Sections 7 (a), 7 (b) and 57 of the IPRA do not violate the Regalian Doctrine places which are peopled, taking into consideration not only their present condition, but
enshrined in Section 2, Article XII of the 1987 Constitution. also their future and their probable increase, and after distributing to the natives what
may be necessary for tillage and pasturage, confirming them in what they now have and
1. The rights of ICCs/IPs over their ancestral domains and lands giving them more if necessary, all the rest of said lands may remain free and
unencumbered for us to dispose of as we may wish.
2. The right of ICCs/IPs to develop lands and natural resources within
the ancestral domains does not deprive the State of ownership over We therefore order and command that all viceroys and presidents of pretorial courts
the natural resources, control and supervision in their development designate at such time as shall to them seem most expedient, a suitable period within
and exploitation. which all possessors of tracts, farms, plantations, and estates shall exhibit to them and to
the court officers appointed by them for this purpose, their title deeds thereto. And those
(a) Section 1, Part II, Rule III of the Implementing Rules goes who are in possession by virtue of proper deeds and receipts, or by virtue of just
beyond the parameters of Section 7(a) of the law on prescriptive right shall be protected, and all the rest shall be restored to us to be
ownership of ancestral domains and is ultra vires. disposed of at our will." 4

(b) The small-scale utilization of natural resources in Section The Philippines passed to Spain by virtue of "discovery" and conquest. Consequently, all
7 (b) of the IPRA is allowed under Paragraph 3, Section 2, lands became the exclusive patrimony and dominion of the Spanish Crown. The Spanish
Article XII of the 1987 Consitution. Government took charge of distributing the lands by issuing royal grants and
concessions to Spaniards, both military and civilian.5 Private land titles could only be
acquired from the government either by purchase or by the various modes of land grant
(c) The large-scale utilization of natural resources in Section from the Crown.6
57 of the IPRA may be harmonized with Paragraphs 1 and 4,
Section 2, Article XII of the 1987 Constitution.
The Laws of the Indies were followed by the Ley Hipotecaria, or the Mortgage Law of
1893.7 The Spanish Mortgage Law provided for the systematic registration of titles and
V. The IPRA is a Recognition of Our Active Participation in the International Indigenous deeds as well as possessory claims. The law sought to register and tax lands pursuant to
Movement. the Royal Decree of 1880. The Royal Decree of 1894, or the "Maura Law," was partly an
amendment of the Mortgage Law as well as the Laws of the Indies, as already amended
DISCUSSION by previous orders and decrees.8 This was the last Spanish land law promulgated in the
Philippines. It required the "adjustment" or registration of all agricultural lands,
otherwise the lands shall revert to the state.
Four years later, by the Treaty of Paris of December 10, 1898, Spain ceded to the possessors the owners of the land possessed by them without any action on the part of
government of the United States all rights, interests and claims over the national the authorities."12
territory of the Philippine Islands. In 1903, the United States colonial government,
through the Philippine Commission, passed Act No. 926, the first Public Land Act. The preamble stated that all those lands which had not been granted by Philip, or in his
name, or by the kings who preceded him, belonged to the Crown.13 For those lands
B. Valenton v. Murciano granted by the king, the decree provided for a system of assignment of such lands. It also
ordered that all possessors of agricultural land should exhibit their title deed, otherwise,
In 1904, under the American regime, this Court decided the case of Valenton v. the land would be restored to the Crown.14
Murciano.9
The Royal Cedula of October 15, 1754 reinforced the Recopilacion when it ordered the
Valenton resolved the question of which is the better basis for ownership of land: long- Crown's principal subdelegate to issue a general order directing the publication of the
time occupation or paper title. Plaintiffs had entered into peaceful occupation of the Crown's instructions:
subject land in 1860. Defendant's predecessor-in-interest, on the other hand, purchased
the land from the provincial treasurer of Tarlac in 1892. The lower court ruled against "x x x to the end that any and all persons who, since the year 1700, and up to the date of
the plaintiffs on the ground that they had lost all rights to the land by not objecting to the the promulgation and publication of said order, shall have occupied royal lands, whether
administrative sale. Plaintiffs appealed the judgment, asserting that their 30-year or not x x x cultivated or tenanted, may x x x appear and exhibit to said subdelegates the
adverse possession, as an extraordinary period of prescription in the Partidas and the titles and patents by virtue of which said lands are occupied. x x x. Said subdelegates will
Civil Code, had given them title to the land as against everyone, including the State; and at the same time warn the parties interested that in case of their failure to present their
that the State, not owning the land, could not validly transmit it. title deeds within the term designated, without a just and valid reason therefor, they will
be deprived of and evicted from their lands, and they will be granted to others." 15
The Court, speaking through Justice Willard, decided the case on the basis of "those
special laws which from earliest time have regulated the disposition of the public lands On June 25, 1880, the Crown adopted regulations for the adjustment of lands "wrongfully
in the colonies."10 The question posed by the Court was: "Did these special laws recognize occupied" by private individuals in the Philippine Islands. Valenton construed these
any right of prescription as against the State as to these lands; and if so, to what extent regulations together with contemporaneous legislative and executive interpretations of
was it recognized?" the law, and concluded that plaintiffs' case fared no better under the 1880 decree and
other laws which followed it, than it did under the earlier ones. Thus as a general
Prior to 1880, the Court said, there were no laws specifically providing for the doctrine, the Court stated:
disposition of land in the Philippines. However, it was understood that in the absence of
any special law to govern a specific colony, the Laws of the Indies would be followed. "While the State has always recognized the right of the occupant to a deed if he proves a
Indeed, in the Royal Order of July 5, 1862, it was decreed that until regulations on the possession for a sufficient length of time, yet it has always insisted that he must make
subject could be prepared, the authorities of the Philippine Islands should follow strictly that proof before the proper administrative officers, and obtain from them his
the Laws of the Indies, the Ordenanza of the Intendentes of 1786, and the Royal Cedula deed, and until he did that the State remained the absolute owner."16
of 1754.11
In conclusion, the Court ruled: "We hold that from 1860 to 1892 there was no law in
Quoting the preamble of Law 14, Title 12, Book 4 of the Recopilacion de Leyes de las force in these Islands by which the plaintiffs could obtain the ownership of these lands by
Indias, the court interpreted it as follows: prescription, without any action by the State."17 Valenton had no rights other than those
which accrued to mere possession. Murciano, on the other hand, was deemed to be the
"In the preamble of this law there is, as is seen, a distinct statement that all those lands owner of the land by virtue of the grant by the provincial secretary. In effect, Valenton
belong to the Crown which have not been granted by Philip, or in his name, or by the upheld the Spanish concept of state ownership of public land.
kings who preceded him. This statement excludes the idea that there might be lands
not so granted, that did not belong to the king. It excludes the idea that the king As a fitting observation, the Court added that "[t]he policy pursued by the Spanish
was not still the owner of all ungranted lands, because some private person had been Government from earliest times, requiring settlers on the public lands to obtain
in the adverse occupation of them. By the mandatory part of the law all the occupants of title deeds therefor from the State, has been continued by the American
the public lands are required to produce before the authorities named, and within a time Government in Act No. 926."18
to be fixed by them, their title papers. And those who had good title or showed
prescription were to be protected in their holdings. It is apparent that it was not the C. The Public Land Acts and the Torrens System
intention of the law that mere possession for a length of time should make the
Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the ownership of land and natural resources was introduced by the Spaniards, however, they
the Philippine Bill of 1902. The law governed the disposition of lands of the public were not certain whether it was continued and applied by the Americans. To remove all
domain. It prescribed rules and regulations for the homesteading, selling, and leasing of doubts, the Convention approved the provision in the Constitution affirming the Regalian
portions of the public domain of the Philippine Islands, and prescribed the terms and doctrine.31
conditions to enable persons to perfect their titles to public lands in the Islands. It also
provided for the "issuance of patents to certain native settlers upon public lands," for the Thus, the 1935 Constitution, in Section 1 of Article XIII on "Conservation and Utilization
establishment of town sites and sale of lots therein, for the completion of imperfect titles, of Natural Resources," reads as follows:
and for the cancellation or confirmation of Spanish concessions and grants in the
Islands." In short, the Public Land Act operated on the assumption that title to public
lands in the Philippine Islands remained in the government;19 and that the government's "Sec. 1. All agricultural, timber, and mineral lands of the public domain, waters,
title to public land sprung from the Treaty of Paris and other subsequent treaties minerals, coal, petroleum, and other mineral oils, all forces of potential energy,
between Spain and the United States.20 The term "public land" referred to all lands of the and other natural resources of the Philippines belong to the State, and their
public domain whose title still remained in the government and are thrown open to disposition, exploitation, development, or utilization shall be limited to citizens of
private appropriation and settlement,21 and excluded the patrimonial property of the the Philippines, or to corporations or associations at least sixty per centum of the
government and the friar lands.22 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
Act No. 926 was superseded in 1919 by Act 2874, the second Public Land Act. This agricultural land, shall not be alienated, and no license, concession, or lease for the
new law was passed under the Jones Law. It was more comprehensive in scope but exploitation, development, or utilization of any of the natural resources shall be granted
limited the exploitation of agricultural lands to Filipinos and Americans and citizens of for a period exceeding twenty-five years, except as to water rights for irrigation, water
other countries which gave Filipinos the same privileges. 23 After the passage of the 1935 supply, fisheries, or industrial uses other than the development of water power, in which
Constitution, Act 2874 was amended in 1936 by Commonwealth Act No. 141. cases beneficial use may be the measure and the limit of the grant."
Commonwealth Act No. 141 remains the present Public Land Law and it is essentially the
same as Act 2874. The main difference between the two relates to the transitory
provisions on the rights of American citizens and corporations during the The 1973 Constitution reiterated the Regalian doctrine in Section 8, Article XIV on the
Commonwealth period at par with Filipino citizens and corporations.24 "National Economy and the Patrimony of the Nation," to wit:

Grants of public land were brought under the operation of the Torrens system "Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other
under Act 496, or the Land Registration Law of 1903. Enacted by the Philippine mineral oils, all forces of potential energy, fisheries, wildlife, and other natural
Commission, Act 496 placed all public and private lands in the Philippines under the resources of the Philippines belong to the State. With the exception of agricultural,
Torrens system. The law is said to be almost a verbatim copy of the Massachussetts Land industrial or commercial, residential, and resettlement lands of the public domain,
Registration Act of 1898,25 which, in turn, followed the principles and procedure of the natural resources shall not be alienated, and no license, concession, or lease for
Torrens system of registration formulated by Sir Robert Torrens who patterned it after the exploration, development, exploitation, or utilization of any of the natural
the Merchant Shipping Acts in South Australia. The Torrens system requires that the resources shall be granted for a period exceeding twenty-five years, renewable for
government issue an official certificate of title attesting to the fact that the person named not more than twenty-five years, except as to water rights for irrigation, water supply,
is the owner of the property described therein, subject to such liens and encumbrances fisheries, or industrial uses other than the development of water power, in which cases
as thereon noted or the law warrants or reserves. 26 The certificate of title is indefeasible beneficial use may be the measure and the limit of the grant."
and imprescriptible and all claims to the parcel of land are quieted upon issuance of said
certificate. This system highly facilitates land conveyance and negotiation. 27 The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article XII on
"National Economy and Patrimony," to wit:
D. The Philippine Constitutions
"Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
The Regalian doctrine was enshrined in the 1935 Constitution. One of the fixed and mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife,
dominating objectives of the 1935 Constitutional Convention was the nationalization and flora and fauna, and other natural resources are owned by the State. With the
conservation of the natural resources of the country. 28There was an overwhelming exception of agricultural lands, all other natural resources shall not be alienated.
sentiment in the Convention in favor of the principle of state ownership of natural The exploration, development and utilization of natural resources shall be under
resources and the adoption of the Regalian doctrine.29 State ownership of natural the full control and supervision of the State. The State may directly undertake such
resources was seen as a necessary starting point to secure recognition of the state's activities or it may enter into co-production, joint venture, or production-sharing
power to control their disposition, exploitation, development, or utilization.30 The agreements with Filipino citizens, or corporations or associations at least sixty per
delegates to the Constitutional Convention very well knew that the concept of State centum of whose capital is owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not more than twenty-five years,
and under such terms and conditions as may be provided by law. In cases of water rights b. the right to redemption for a period not exceeding 15 years from
for irrigation, water supply, fisheries, or industrial uses other than the development of date of transfer, if the transfer is to a non-member of the ICC/IP and is
water power, beneficial use may be the measure and limit of the grant. tainted by vitiated consent of the ICC/IP, or if the transfer is for an
unconscionable consideration.33
x x x."
Within their ancestral domains and ancestral lands, the ICCs/IPs are given the right to
Simply stated, all lands of the public domain as well as all natural self-governance and empowerment,34 social justice and human rights,35 the right to
resources enumerated therein, whether on public or private land, belong to the State. It preserve and protect their culture, traditions, institutions and community intellectual
is this concept of State ownership that petitioners claim is being violated by the rights, and the right to develop their own sciences and technologies. 36
IPRA.
To carry out the policies of the Act, the law created the National Commission on
II. THE INDIGENOUS PEOPLES RIGHTS ACT. Indigenous Peoples (NCIP). The NCIP is an independent agency under the Office of the
President and is composed of seven (7) Commissioners belonging to ICCs/IPs from each
of the ethnographic areas- Region I and the Cordilleras; Region II; the rest of Luzon;
Republic Act No. 8371 is entitled "An Act to Recognize, Protect and Promote the Rights Island groups including Mindoro, Palawan, Romblon, Panay and the rest of the Visayas;
of Indigenous Cultural Communities/ Indigenous Peoples, Creating a National Northern and Western Mindanao; Southern and Eastern Mindanao; and Central
Commission on Indigenous Peoples, Establishing Implementing Mechanisms, Mindanao.37 The NCIP took over the functions of the Office for Northern Cultural
Appropriating Funds Therefor, and for Other Purposes." It is simply known as "The Communities and the Office for Southern Cultural Communities created by former
Indigenous Peoples Rights Act of 1997" or the IPRA. President Corazon Aquino which were merged under a revitalized structure. 38

The IPRA recognizes the existence of the indigenous cultural communities or indigenous Disputes involving ICCs/IPs are to be resolved under customary laws and
peoples (ICCs/IPs) as a distinct sector in Philippine society. It grants these people the practices. When still unresolved, the matter may be brought to the NCIP, which is
ownership and possession of their ancestral domains and ancestral lands, and granted quasi-judicial powers.39 The NCIP's decisions may be appealed to the Court of
defines the extent of these lands and domains. The ownership given is the Appeals by a petition for review.
indigenous concept of ownership under customary law which traces its origin to
native title.
Any person who violates any of the provisions of the Act such as, but not limited to,
unauthorized and/or unlawful intrusion upon ancestral lands and domains shall be
Other rights are also granted the ICCs/IPs, and these are: punished in accordance with customary laws or imprisoned from 9 months to 12 years
and/or fined from ₱100,000.00 to ₱500,000.00 and obliged to pay damages. 40
- the right to develop lands and natural resources;
A. Indigenous Peoples
- the right to stay in the territories;
The IPRA is a law dealing with a specific group of people, i.e., the Indigenous Cultural
- the right in case of displacement; Communities (ICCs) or the Indigenous Peoples (IPs). The term "ICCs" is used in the 1987
Constitution while that of "IPs" is the contemporary international language in the
- the right to safe and clean air and water; International Labor Organization (ILO) Convention 169 41 and the United Nations (UN)
Draft Declaration on the Rights of Indigenous Peoples.42
- the right to claim parts of reservations;
ICCs/IPs are defined by the IPRA as:
32
- the right to resolve conflict;
"Sec. 3 [h]. Indigenous Cultural Communities/ Indigenous Peoples- refer to a group of
people or homogeneous societies identified by self-ascription and ascription by others,
- the right to ancestral lands which include who have continuously lived as organized community on communally bounded and
defined territory, and who have, under claims of ownership since time immemorial,
a. the right to transfer land/property to/among members of the same occupied, possessed and utilized such territories, sharing common bonds of language,
ICCs/IPs, subject to customary laws and traditions of the community customs, traditions and other distinctive cultural traits, or who have, through resistance
concerned; to political, social and cultural inroads of colonization, non-indigenous religions and
cultures, became historically differentiated from the majority of Filipinos. ICCs/IPs shall
likewise include peoples who are regarded as indigenous on account of their descent 7. In Region IX- the Badjao numbering about 192,000 in Tawi-Tawi, Zamboanga
from the populations which inhabited the country, at the time of conquest or del Sur; the Kalibugan of Basilan, the Samal, Subanon and Yakat.
colonization, or at the time of inroads of non-indigenous religions and cultures, or the
establishment of present state boundaries, who retain some or all of their own social, 8. Region X- Numbering 1.6 million in Region X alone, the IPs are: the Banwaon,
economic, cultural and political institutions, but who may have been displaced from their Bukidnon, Matigsalog, Talaanding of Bukidnon; the Camiguin of Camiguin
traditional domains or who may have resettled outside their ancestral domains." Island; the Higa-unon of Agusan del Norte, Agusan del Sur, Bukidnon and
Misamis Occidental; the Tigwahanon of Agusan del Sur, Misamis Oriental and
Indigenous Cultural Communities or Indigenous Peoples refer to a group of people and Misamis Occidental, the Manobo of the Agusan provinces, and the
or homogeneous societies who have continuously lived as an organized Umayamnon of Agusan and Bukidnon.
community on communally bounded and defined territory. These groups of people
have actually occupied, possessed and utilized their territories under claim of ownership 9. In Region XI- There are about 1,774,065 IPs in Region XI. They are tribes of
since time immemorial. They share common bonds of language, customs, traditions and the Dibabaon, Mansaka of Davao del Norte; B'laan, Kalagan, Langilad, T'boli and
other distinctive cultural traits, or, they, by their resistance to political, social and Talaingod of Davao del Sur; Mamamanua of Surigao del Sur; Mandaya of the
cultural inroads of colonization, non-indigenous religions and cultures, became Surigao provinces and Davao Oriental; Manobo Blit of South Cotabato; the
historically differentiated from the Filipino majority. ICCs/IPs also include descendants Mangguangon of Davao and South Cotabato; Matigsalog of Davao del Norte and
of ICCs/IPs who inhabited the country at the time of conquest or colonization, who retain Del Sur; Tagakaolo, Tasaday and Ubo of South Cotabato; and Bagobo of Davao
some or all of their own social, economic, cultural and political institutions but who may del sur and South Cotabato.
have been displaced from their traditional territories or who may have resettled outside
their ancestral domains.
10. In Region XII- Ilianen, Tiruray, Maguindanao, Maranao, Tausug,
Yakan/Samal, and Iranon.43
1. Indigenous Peoples: Their History
How these indigenous peoples came to live in the Philippines goes back to as early
Presently, Philippine indigenous peoples inhabit the interiors and mountains of Luzon, as 25,000 to 30,000 B.C.
Mindanao, Mindoro, Negros, Samar, Leyte, and the Palawan and Sulu group of islands.
They are composed of 110 tribes and are as follows:
Before the time of Western contact, the Philippine archipelago was peopled largely by
the Negritos, Indonesians and Malays.44 The strains from these groups eventually gave
1. In the Cordillera Autonomous Region- Kankaney, Ibaloi, Bontoc, Tinggian or rise to common cultural features which became the dominant influence in ethnic
Itneg, Ifugao, Kalinga, Yapayao, Aeta or Agta or Pugot, and Bago of Ilocos Norte reformulation in the archipelago. Influences from the Chinese and Indian civilizations in
and Pangasinan; Ibanag of Isabela, Cagayan; Ilongot of Quirino and Nueva the third or fourth millenium B.C. augmented these ethnic strains. Chinese economic and
Vizcaya; Gaddang of Quirino, Nueva Vizcaya, Itawis of Cagayan; Ivatan of socio-cultural influences came by way of Chinese porcelain, silk and traders. Indian
Batanes, Aeta of Cagayan, Quirino and Isabela. influence found their way into the religious-cultural aspect of pre-colonial society. 45

2. In Region III- Aetas. The ancient Filipinos settled beside bodies of water. Hunting and food gathering
became supplementary activities as reliance on them was reduced by fishing and the
3. In Region IV- Dumagats of Aurora, Rizal; Remontado of Aurora, Rizal, cultivation of the soil.46 From the hinterland, coastal, and riverine communities, our
Quezon; Alangan or Mangyan, Batangan, Buid or Buhid, Hanunuo and Iraya of ancestors evolved an essentially homogeneous culture, a basically common way of life
Oriental and Occidental Mindoro; Tadyawan of Occidental Mindoro; Cuyonon, where nature was a primary factor. Community life throughout the archipelago was
Palawanon, Tagbanua and Tao't bato of Palawan. influenced by, and responded to, common ecology. The generally benign tropical climate
and the largely uniform flora and fauna favored similarities, not differences. 47 Life was
4. In Region V- Aeta of Camarines Norte and Camarines Sur; Aeta-Abiyan, essentially subsistence but not harsh.48
Isarog, and Kabihug of Camarines Norte; Agta, and Mayon of Camarines Sur;
Itom of Albay, Cimaron of Sorsogon; and the Pullon of Masbate and Camarines The early Filipinos had a culture that was basically Malayan in structure and form. They
Sur. had languages that traced their origin to the Austronesian parent-stock and used them
not only as media of daily communication but also as vehicles for the expression of their
5. In Region VI- Ati of Negros Occidental, Iloilo and Antique, Capiz; the Magahat literary moods.49 They fashioned concepts and beliefs about the world that they could
of Negros Occidental; the Corolano and Sulod. not see, but which they sensed to be part of their lives. 50 They had their own religion and
religious beliefs. They believed in the immortality of the soul and life after death. Their
rituals were based on beliefs in a ranking deity whom they called Bathalang Maykapal,
6. In Region VII- Magahat of Negros Oriental and Eskaya of Bohol.
and a host of other deities, in the environmental spirits and in soul spirits. The early Subanon.62The Sultanate of Maguindanao spread out from Cotabato toward Maranao
Filipinos adored the sun, the moon, the animals and birds, for they seemed to consider territory, now Lanao del Norte and Lanao del Sur.63
the objects of Nature as something to be respected. They venerated almost any object
that was close to their daily life, indicating the importance of the relationship between The Muslim societies evolved an Asiatic form of feudalism where land was still
man and the object of nature.51 held in common but was private in use. This is clearly indicated in the Muslim Code of
Luwaran. The Code contains a provision on the lease of cultivated lands. It, however, has
The unit of government was the "barangay," a term that derived its meaning from the no provision for the acquisition, transfer, cession or sale of land. 64
Malay word "balangay," meaning, a boat, which transported them to these shores. 52 The
barangay was basically a family-based community and consisted of thirty to one hundred The societies encountered by Magellan and Legaspi therefore were primitive
families. Each barangay was different and ruled by a chieftain called a "dato." It was the economies where most production was geared to the use of the producers and to the
chieftain's duty to rule and govern his subjects and promote their welfare and interests. fulfillment of kinship obligations. They were not economies geared to exchange and
A chieftain had wide powers for he exercised all the functions of government. He was the profit.65 Moreover, the family basis of barangay membership as well as of leadership and
executive, legislator and judge and was the supreme commander in time of war. 53 governance worked to splinter the population of the islands into numerous small and
separate communities.66
Laws were either customary or written. Customary laws were handed down orally
from generation to generation and constituted the bulk of the laws of the When the Spaniards settled permanently in the Philippines in 1565, they found the
barangay. They were preserved in songs and chants and in the memory of the elder Filipinos living in barangay settlements scattered along water routes and river
persons in the community.54 The written laws were those that the chieftain and his elders banks. One of the first tasks imposed on the missionaries and the encomenderos was to
promulgated from time to time as the necessity arose. 55 The oldest known written body collect all scattered Filipinos together in a reduccion.67 As early as 1551, the Spanish
of laws was the Maragtas Code by Datu Sumakwel at about 1250 A.D. Other old codes are government assumed an unvarying solicitous attitude towards the natives. 68 The
the Muslim Code of Luwaran and the Principal Code of Sulu. 56 Whether customary or Spaniards regarded it a sacred "duty to conscience and humanity to civilize these less
written, the laws dealt with various subjects, such as inheritance, divorce, usury, loans, fortunate people living in the obscurity of ignorance" and to accord them the "moral and
partnership, crime and punishment, property rights, family relations and adoption. material advantages" of community life and the "protection and vigilance afforded them
Whenever disputes arose, these were decided peacefully through a court composed by by the same laws."69
the chieftain as "judge" and the barangay elders as "jury." Conflicts arising between
subjects of different barangays were resolved by arbitration in which a board composed
of elders from neutral barangays acted as arbiters. 57 The Spanish missionaries were ordered to establish pueblos where the church and
convent would be constructed. All the new Christian converts were required to construct
their houses around the church and the unbaptized were invited to do the same. 70 With
Baranganic society had a distinguishing feature: the absence of private property in the reduccion, the Spaniards attempted to "tame" the reluctant Filipinos through
land. The chiefs merely administered the lands in the name of the barangay. The social Christian indoctrination using the convento/casa real/plaza complex as focal point.
order was an extension of the family with chiefs embodying the higher unity of the The reduccion, to the Spaniards, was a "civilizing" device to make the Filipinos law-
community. Each individual, therefore, participated in the community ownership of the abiding citizens of the Spanish Crown, and in the long run, to make them ultimately adopt
soil and the instruments of production as a member of the barangay.58 This ancient Hispanic culture and civilization.71
communalism was practiced in accordance with the concept of mutual sharing of
resources so that no individual, regardless of status, was without
sustenance. Ownership of land was non-existent or unimportant and the right of All lands lost by the old barangays in the process of pueblo organization as well as
usufruct was what regulated the development of lands.59 Marine resources and all lands not assigned to them and the pueblos, were now declared to be crown
fishing grounds were likewise free to all. Coastal communities depended for their lands or realengas, belonging to the Spanish king. It was from the realengas that
economic welfare on the kind of fishing sharing concept similar to those in land land grants were made to non-Filipinos.72
communities.60 Recognized leaders, such as the chieftains and elders, by virtue of their
positions of importance, enjoyed some economic privileges and benefits. But their rights, The abrogation of the Filipinos' ancestral rights in land and the introduction of the
related to either land and sea, were subject to their responsibility to protect the concept of public domain were the most immediate fundamental results of Spanish
communities from danger and to provide them with the leadership and means of colonial theory and law.73 The concept that the Spanish king was the owner of
survival.61 everything of value in the Indies or colonies was imposed on the natives, and the
natives were stripped of their ancestral rights to land. 74
Sometime in the 13th century, Islam was introduced to the archipelago in
Maguindanao. The Sultanate of Sulu was established and claimed jurisdiction over Increasing their foothold in the Philippines, the Spanish colonialists, civil and religious,
territorial areas represented today by Tawi-tawi, Sulu, Palawan, Basilan and Zamboanga. classified the Filipinos according to their religious practices and beliefs, and divided
Four ethnic groups were within this jurisdiction: Sama, Tausug, Yakan and them into three types . First were the Indios, the Christianized Filipinos, who generally
came from the lowland populations. Second, were the Moros or the Muslim "special view to determining the most practicable means for bringing about their
communities, and third, were the infieles or the indigenous communities.75 advancement in civilization and prosperity." The BNCT was modeled after the bureau
dealing with American Indians. The agency took a keen anthropological interest in
The Indio was a product of the advent of Spanish culture. This class was favored by the Philippine cultural minorities and produced a wealth of valuable materials about them. 83
Spaniards and was allowed certain status although below the Spaniards.
The Moros and infieles were regarded as the lowest classes.76 The 1935 Constitution did not carry any policy on the non-Christian Filipinos. The
raging issue then was the conservation of the national patrimony for the Filipinos.
The Moros and infieles resisted Spanish rule and Christianity. The Moros were
driven from Manila and the Visayas to Mindanao; while the infieles, to the hinterlands. In 1957, the Philippine Congress passed R.A. No. 1888, an "Act to effectuate in a more
The Spaniards did not pursue them into the deep interior. The upland societies were rapid and complete manner the economic, social, moral and political advancement of the
naturally outside the immediate concern of Spanish interest, and the cliffs and forests of non-Christian Filipinos or national cultural minorities and to render real, complete, and
the hinterlands were difficult and inaccessible, allowing the infieles, in effect, relative permanent the integration of all said national cultural minorities into the body politic,
security.77 Thus, the infieles, which were peripheral to colonial administration, were not creating the Commission on National Integration charged with said functions." The
only able to preserve their own culture but also thwarted the Christianization process, law called for a policy of integration of indigenous peoples into the Philippine
separating themselves from the newly evolved Christian community. 78 Their own mainstream and for this purpose created the Commission on National
political, economic and social systems were kept constantly alive and vibrant. Integration (CNI).84 The CNI was given, more or less, the same task as the BNCT during
the American regime. The post-independence policy of integration was like the
The pro-Christian or pro-Indio attitude of colonialism brought about a generally mutual colonial policy of assimilation understood in the context of a guardian-ward
feeling of suspicion, fear, and hostility between the Christians on the one hand and the relationship.85
non-Christians on the other. Colonialism tended to divide and rule an otherwise
culturally and historically related populace through a colonial system that exploited both The policy of assimilation and integration did not yield the desired result. Like the
the virtues and vices of the Filipinos. 79 Spaniards and Americans, government attempts at integration met with fierce
resistance. Since World War II, a tidal wave of Christian settlers from the lowlands of
President McKinley, in his instructions to the Philippine Commission of April 7, Luzon and the Visayas swamped the highlands and wide open spaces in
1900, addressed the existence of the infieles: Mindanao.86Knowledge by the settlers of the Public Land Acts and the Torrens
system resulted in the titling of several ancestral lands in the settlers' names. With
government initiative and participation, this titling displaced several indigenous
"In dealing with the uncivilized tribes of the Islands, the Commission should adopt peoples from their lands. Worse, these peoples were also displaced by projects
the same course followed by Congress in permitting the tribes of our North undertaken by the national government in the name of national development. 87
American Indians to maintain their tribal organization and government, and under
which many of those tribes are now living in peace and contentment, surrounded by
civilization to which they are unable or unwilling to conform. Such tribal government It was in the 1973 Constitution that the State adopted the following provision:
should, however, be subjected to wise and firm regulation; and, without undue or petty
interference, constant and active effort should be exercised to prevent barbarous "The State shall consider the customs, traditions, beliefs, and interests of national
practices and introduce civilized customs." 80 cultural communities in the formulation and implementation of State policies." 88

Placed in an alternative of either letting the natives alone or guiding them in the path of For the first time in Philippine history, the "non-Christian tribes" or the "cultural
civilization, the American government chose "to adopt the latter measure as one more in minorities" were addressed by the highest law of the Republic, and they were
accord with humanity and with the national conscience." 81 referred to as "cultural communities." More importantly this time, their "uncivilized"
culture was given some recognition and their "customs, traditions, beliefs and interests"
The Americans classified the Filipinos into two: the Christian Filipinos and the non- were to be considered by the State in the formulation and implementation of State
Christian Filipinos. The term "non-Christian" referred not to religious belief, but to a policies. President Marcos abolished the CNI and transferred its functions to
geographical area, and more directly, "to natives of the Philippine Islands of a low grade the Presidential Adviser on National Minorities (PANAMIN). The PANAMIN was
of civilization, usually living in tribal relationship apart from settled communities." 82 tasked to integrate the ethnic groups that sought full integration into the larger
community, and at the same time "protect the rights of those who wish to preserve their
original lifeways beside the larger community." 89 In short, while still adopting the
Like the Spaniards, the Americans pursued a policy of assimilation. In 1903, they integration policy, the decree recognized the right of tribal Filipinos to preserve
passed Act No. 253 creating the Bureau of Non-Christian Tribes (BNCT). Under the their way of life.90
Department of the Interior, the BNCT's primary task was to conduct ethnographic
research among unhispanized Filipinos, including those in Muslim Mindanao, with a
In 1974, President Marcos promulgated P.D. No. 410, otherwise known as Land is the central element of the indigenous peoples' existence. There is no
the Ancestral Lands Decree. The decree provided for the issuance of land occupancy traditional concept of permanent, individual, land ownership. Among the Igorots,
certificates to members of the national cultural communities who were given up to 1984 ownership of land more accurately applies to the tribal right to use the land or to
to register their claims.91 In 1979, the Commission on the Settlement of Land territorial control. The people are the secondary owners or stewards of the land and that
Problems was created under E.O. No. 561 which provided a mechanism for the if a member of the tribe ceases to work, he loses his claim of ownership, and the land
expeditious resolution of land problems involving small settlers, landowners, and tribal reverts to the beings of the spirit world who are its true and primary owners. Under the
Filipinos.92 concept of "trusteeship," the right to possess the land does not only belong to the present
generation but the future ones as well.99
Despite the promulgation of these laws, from 1974 to the early 1980's, some 100,000
Kalingas and Bontoks of the Cordillera region were displaced by the Chico River dam Customary law on land rests on the traditional belief that no one owns the land except
project of the National Power Corporation (NPC). The Manobos of Bukidnon saw their the gods and spirits, and that those who work the land are its mere
land bulldozed by the Bukidnon Sugar Industries Company (BUSCO). In Agusan del Sur, stewards.100 Customary law has a strong preference for communal
the National Development Company was authorized by law in 1979 to take ownership, which could either be ownership by a group of individuals or families who
approximately 40,550 hectares of land that later became the NDC-Guthrie plantation in are related by blood or by marriage,101 or ownership by residents of the same locality
Agusan del Sur. Most of the land was possessed by the Agusan natives. 93 Timber who may not be related by blood or marriage. The system of communal ownership under
concessions, water projects, plantations, mining, and cattle ranching and other projects customary laws draws its meaning from the subsistence and highly collectivized mode of
of the national government led not only to the eviction of the indigenous peoples from economic production. The Kalingas, for instance, who are engaged in team occupation
their land but also to the reduction and destruction of their natural environment. 94 like hunting, foraging for forest products, and swidden farming found it natural that
forest areas, swidden farms, orchards, pasture and burial grounds should be
The Aquino government signified a total shift from the policy of integration to one communally-owned.102 For the Kalingas, everybody has a common right to a common
of preservation. Invoking her powers under the Freedom Constitution, President economic base. Thus, as a rule, rights and obligations to the land are shared in common.
Aquino created the Office of Muslim Affairs, Office for Northern Cultural
Communities and the Office for Southern Cultural Communities all under the Office Although highly bent on communal ownership, customary law on land also
of the President.95 sanctions individual ownership.The residential lots and terrace rice farms are
governed by a limited system of individual ownership. It is limited because while the
The 1987 Constitution carries at least six (6) provisions which insure the right of individual owner has the right to use and dispose of the property, he does not possess all
tribal Filipinos to preserve their way of life.96 This Constitution goes further than the rights of an exclusive and full owner as defined under our Civil Code. 103 Under
the 1973 Constitution by expressly guaranteeing the rights of tribal Filipinos to Kalinga customary law, the alienation of individually-owned land is strongly discouraged
their ancestral domains and ancestral lands. By recognizing their right to their except in marriage and succession and except to meet sudden financial needs due to
ancestral lands and domains, the State has effectively upheld their right to live in a sickness, death in the family, or loss of crops.104 Moreover, and to be alienated should
culture distinctly their own. first be offered to a clan-member before any village-member can purchase it, and in no
case may land be sold to a non-member of the ili.105
2. Their Concept of Land
Land titles do not exist in the indigenous peoples' economic and social system. The
concept of individual land ownership under the civil law is alien to them.
Indigenous peoples share distinctive traits that set them apart from the Filipino Inherently colonial in origin, our national land laws and governmental policies
mainstream. They are non-Christians. They live in less accessible, marginal, mostly frown upon indigenous claims to ancestral lands. Communal ownership is looked
upland areas. They have a system of self-government not dependent upon the laws of the upon as inferior, if not inexistent.106
central administration of the Republic of the Philippines. They follow ways of life and
customs that are perceived as different from those of the rest of the population. 97 The
kind of response the indigenous peoples chose to deal with colonial threat worked well III. THE IPRA IS A NOVEL PIECE OF LEGISLATION.
to their advantage by making it difficult for Western concepts and religion to erode their
customs and traditions. The "infieles societies" which had become peripheral to colonial A. The Legislative History of the IPRA
administration, represented, from a cultural perspective, a much older base of
archipelagic culture. The political systems were still structured on the patriarchal and It was to address the centuries-old neglect of the Philippine indigenous
kinship oriented arrangement of power and authority. The economic activities were peoples that the Tenth Congress of the Philippines, by their joint efforts, passed and
governed by the concepts of an ancient communalism and mutual help. The social approved R.A. No. 8371, the Indigenous Peoples Rights Act (IPRA) of 1997. The law
structure which emphasized division of labor and distinction of functions, not status, was was a consolidation of two Bills- Senate Bill No. 1728 and House Bill No. 9125.
maintained. The cultural styles and forms of life portraying the varieties of social
courtesies and ecological adjustments were kept constantly vibrant. 98
Principally sponsored by Senator Juan M. Flavier,107 Senate Bill No. 1728 was a "native title." This ruling has not been overturned. In fact, it was affirmed in subsequent
consolidation of four proposed measures referred to the Committees on Cultural cases."111
Communities, Environment and Natural Resources, Ways and Means, as well as Finance.
It adopted almost en toto the comprehensive version of Senate Bill Nos. 1476 and 1486 Following Cariño, the State passed Act No. 926, Act No. 2874, C.A. No. 141, P.D. 705, P.D.
which was a result of six regional consultations and one national consultation with 410, P.D. 1529, R.A. 6734 (the Organic Act for the Autonomous Region of Muslim
indigenous peoples nationwide.108 At the Second Regular Session of the Tenth Mindanao). These laws, explicitly or implicitly, and liberally or restrictively, recognized
Congress, Senator Flavier, in his sponsorship speech, gave a background on the situation "native title" or "private right" and the existence of ancestral lands and domains. Despite
of indigenous peoples in the Philippines, to wit: the passage of these laws, however, Senator Flavier continued:

"The Indigenous Cultural Communities, including the Bangsa Moro, have long suffered "x x x the executive department of government since the American occupation has not
from the dominance and neglect of government controlled by the majority. Massive implemented the policy. In fact, it was more honored in its breach than in its observance,
migration of their Christian brothers to their homeland shrunk their territory and many its wanton disregard shown during the period unto the Commonwealth and the early
of the tribal Filipinos were pushed to the hinterlands. Resisting the intrusion, years of the Philippine Republic when government organized and supported massive
dispossessed of their ancestral land and with the massive exploitation of their natural resettlement of the people to the land of the ICCs."
resources by the elite among the migrant population, they became marginalized. And the
government has been an indispensable party to this insidious conspiracy against the
Indigenous Cultural Communities (ICCs). It organized and supported the resettlement of Senate Bill No. 1728 seeks to genuinely recognize the IPs right to own and possess their
people to their ancestral land, which was massive during the Commonwealth and early ancestral land. The bill was prepared also under the principle of parens patriae inherent
years of the Philippine Republic. Pursuant to the Regalian Doctrine first introduced to in the supreme power of the State and deeply embedded in Philippine legal tradition.
our system by Spain through the Royal Decree of 13 February 1894 or the Maura Law, This principle mandates that persons suffering from serious disadvantage or handicap,
the government passed laws to legitimize the wholesale landgrabbing and provide for which places them in a position of actual inequality in their relation or transaction with
easy titling or grant of lands to migrant homesteaders within the traditional areas of the others, are entitled to the protection of the State.
ICCs."109
Senate Bill No. 1728 was passed on Third Reading by twenty-one (21) Senators
Senator Flavier further declared: voting in favor and none against, with no abstention. 112

"The IPs are the offsprings and heirs of the peoples who have first inhabited and cared House Bill No. 9125 was sponsored by Rep. Zapata, Chairman of the Committee on
for the land long before any central government was established. Their ancestors had Cultural Communities. It was originally authored and subsequently presented and
territories over which they ruled themselves and related with other tribes. These defended on the floor by Rep. Gregorio Andolana of North Cotabato.113
territories- the land- include people, their dwelling, the mountains, the water, the air,
plants, forest and the animals. This is their environment in its totality. Their existence as Rep. Andolana's sponsorhip speech reads as follows:
indigenous peoples is manifested in their own lives through political, economic, socio-
cultural and spiritual practices. The IPs culture is the living and irrefutable proof to this. "This Representation, as early as in the 8th Congress, filed a bill of similar implications
that would promote, recognize the rights of indigenous cultural communities within the
Their survival depends on securing or acquiring land rights; asserting their rights to it; framework of national unity and development.
and depending on it. Otherwise, IPs shall cease to exist as distinct peoples." 110
Apart from this, Mr. Speaker, is our obligation, the government's obligation to assure and
To recognize the rights of the indigenous peoples effectively, Senator Flavier proposed a ascertain that these rights shall be well-preserved and the cultural traditions as well as
bill based on two postulates: (1) the concept of native title; and (2) the principle the indigenous laws that remained long before this Republic was established shall be
of parens patriae. preserved and promoted. There is a need, Mr. Speaker, to look into these matters
seriously and early approval of the substitute bill shall bring into reality the aspirations,
According to Senator Flavier, "[w]hile our legal tradition subscribes to the Regalian the hope and the dreams of more than 12 million Filipinos that they be considered in the
Doctrine reinstated in Section 2, Article XII of the 1987 Constitution," our "decisional mainstream of the Philippine society as we fashion for the year 2000." 114
laws" and jurisprudence passed by the State have "made exception to the doctrine." This
exception was first laid down in the case of Cariño v. Insular Government where: Rep. Andolana stressed that H.B. No. 9125 is based on the policy of preservation as
mandated in the Constitution. He also emphasized that the rights of IPs to their land was
"x x x the court has recognized long occupancy of land by an indigenous member of the enunciated in Cariño v. Insular Government which recognized the fact that they had
cultural communities as one of private ownership, which, in legal concept, is termed vested rights prior to the establishment of the Spanish and American regimes. 115
After exhaustive interpellation, House Bill No. 9125, and its corresponding particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
amendments, was approved on Second Reading with no objections. cultivators.116

IV. THE PROVISIONS OF THE IPRA DO NOT CONTRAVENE THE CONSTITUTION . Ancestral lands are lands held by the ICCs/IPs under the same conditions as ancestral
domains except that these are limited to lands and that these lands are not merely
A. Ancestral Domains and Ancestral Lands are the Private Property of Indigenous occupied and possessed but are also utilized by the ICCs/IPs under claims of individual
Peoples and Do Not Constitute Part of the Land of the Public Domain. or traditional group ownership. These lands include but are not limited to residential
lots, rice terraces or paddies, private forests, swidden farms and tree lots. 117
The IPRA grants to ICCs/IPs a distinct kind of ownership over ancestral domains
and ancestral lands.Ancestral lands are not the same as ancestral domains. These are The procedures for claiming ancestral domains and lands are similar to the procedures
defined in Section 3 [a] and [b] of the Indigenous Peoples Right Act, viz: embodied in Department Administrative Order (DAO) No. 2, series of 1993, signed by
then Secretary of the Department of Environment and Natural Resources (DENR) Angel
Alcala.118 DAO No. 2 allowed the delineation of ancestral domains by special task forces
"Sec. 3 a) Ancestral Domains. - Subject to Section 56 hereof, refer to all areas generally and ensured the issuance of Certificates of Ancestral Land Claims (CALC's) and
belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural Certificates of Ancestral Domain Claims (CADC's) to IPs.
resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs
by themselves or through their ancestors, communally or individually since time
immemorial, continuously to the present except when interrupted by war, force majeure The identification and delineation of these ancestral domains and lands is a power
or displacement by force, deceit, stealth or as a consequence of government projects or conferred by the IPRA on the National Commission on Indigenous Peoples (NCIP).119 The
any other voluntary dealings entered into by government and private guiding principle in identification and delineation is self-delineation.120 This means that
individuals/corporations, and which are necessary to ensure their economic, social and the ICCs/IPs have a decisive role in determining the boundaries of their domains and in
cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, all the activities pertinent thereto.121
and other lands individually owned whether alienable and disposable or otherwise,
hunting grounds, burial grounds, worship areas, bodies of water, mineral and other The procedure for the delineation and recognition of ancestral domains is set forth in
natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs Sections 51 and 52 of the IPRA. The identification, delineation and certification
but from which they traditionally had access to for their subsistence and traditional of ancestral lands is in Section 53 of said law.
activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
cultivators; Upon due application and compliance with the procedure provided under the law and
upon finding by the NCIP that the application is meritorious, the NCIP shall issue a
b) Ancestral Lands.- Subject to Section 56 hereof, refers to land occupied, possessed and Certificate of Ancestral Domain Title (CADT) in the name of the community
utilized by individuals, families and clans who are members of the ICCs/IPs since time concerned.122 The allocation of lands within the ancestral domain to any individual or
immemorial, by themselves or through their predecessors-in-interest, under claims of indigenous corporate (family or clan) claimants is left to the ICCs/IPs concerned to
individual or traditional group ownership, continuously, to the present except when decide in accordance with customs and traditions. 123 With respect to ancestral lands
interrupted by war, force majeure or displacement by force, deceit, stealth, or as a outside the ancestral domain, the NCIP issues a Certificate of Ancestral Land Title
consequence of government projects and other voluntary dealings entered into by (CALT).124
government and private individuals/corporations, including, but not limited to,
residential lots, rice terraces or paddies, private forests, swidden farms and tree lots." CADT's and CALT's issued under the IPRA shall be registered by the NCIP before the
Register of Deeds in the place where the property is situated. 125
Ancestral domains are all areas belonging to ICCs/IPs held under a claim of ownership,
occupied or possessed by ICCs/IPs by themselves or through their ancestors, (1) Right to Ancestral Domains and Ancestral Lands: How Acquired
communally or individually since time immemorial, continuously until the present,
except when interrupted by war, force majeure or displacement by force, deceit, stealth
or as a consequence of government projects or any other voluntary dealings with The rights of the ICCs/IPs to their ancestral domains and ancestral lands may be
government and/or private individuals or corporations. Ancestral domains comprise acquired in two modes: (1) by native title over both ancestral lands and
lands, inland waters, coastal areas, and natural resources therein and includes domains; or (2) by torrens title under the Public Land Act and the Land
ancestral lands, forests, pasture, residential, agricultural, and other lands Registration Act with respect to ancestral lands only.
individually owned whether alienable or not, hunting grounds, burial grounds,
worship areas, bodies of water, mineral and other natural resources. They also (2) The Concept of Native Title
include lands which may no longer be exclusively occupied by ICCs/IPs but from which
they traditionally had access to for their subsistence and traditional activities,
Native title is defined as: applying the Valenton ruling. Cariñ o took the case to the U.S. Supreme Court.136 On one
hand, the Philippine government invoked the Regalian doctrine and contended that
"Sec. 3 [l]. Native Title- refers to pre-conquest rights to lands and domains which, as far Cariñ o failed to comply with the provisions of the Royal Decree of June 25, 1880, which
back as memory reaches, have been held under a claim of private ownership by required registration of land claims within a limited period of time. Cariñ o, on the other,
ICCs/IPs, have never been public lands and are thus indisputably presumed to have asserted that he was the absolute owner of the land jure gentium, and that the land never
been held that way since before the Spanish Conquest."126 formed part of the public domain.

Native title refers to ICCs/IPs' preconquest rights to lands and domains held under a In a unanimous decision written by Justice Oliver Wendell Holmes, the U.S. Supreme
claim of private ownership as far back as memory reaches. These lands are deemed Court held:
never to have been public lands and are indisputably presumed to have been held that
way since before the Spanish Conquest. The rights of ICCs/IPs to their "It is true that Spain, in its earlier decrees, embodied the universal feudal theory that all
ancestral domains (which also include ancestral lands) by virtue of native title shall be lands were held from the Crown, and perhaps the general attitude of conquering nations
recognized and respected.127 Formal recognition, when solicited by ICCs/IPs concerned, toward people not recognized as entitled to the treatment accorded to those in the same
shall be embodied in a Certificate of Ancestral Domain Title (CADT), which shall zone of civilization with themselves. It is true, also, that in legal theory, sovereignty is
recognize the title of the concerned ICCs/IPs over the territories identified and absolute, and that, as against foreign nations, the United States may assert, as Spain
delineated.128 asserted, absolute power. But it does not follow that, as against the inhabitants of the
Philippines, the United States asserts that Spain had such power. When theory is left on
Like a torrens title, a CADT is evidence of private ownership of land by native one side, sovereignty is a question of strength, and may vary in degree. How far a new
title. Native title, however, is a right of private ownership peculiarly granted to ICCs/IPs sovereign shall insist upon the theoretical relation of the subjects to the head in the past,
over their ancestral lands and domains. The IPRA categorically declares ancestral lands and how far it shall recognize actual facts, are matters for it to decide." 137
and domains held by native title as never to have been public land. Domains and lands
held under native title are, therefore, indisputably presumed to have never been public The U.S. Supreme Court noted that it need not accept Spanish doctrines. The choice was
lands and are private. with the new colonizer. Ultimately, the matter had to be decided under U.S. law.

(a) Cariño v. Insular Government129 The Cariño decision largely rested on the North American constitutionalist's concept of
"due process" as well as the pronounced policy "to do justice to the natives." 138 It was
The concept of native title in the IPRA was taken from the 1909 case of Cariño v. Insular based on the strong mandate extended to the Islands via the Philippine Bill of 1902 that
Government.130 Cariñofirmly established a concept of private land title that existed "No law shall be enacted in said islands which shall deprive any person of life, liberty, or
irrespective of any royal grant from the State. property without due process of law, or deny to any person therein the equal protection
of the laws." The court declared:
In 1903, Don Mateo Cariñ o, an Ibaloi, sought to register with the land registration court
146 hectares of land in Baguio Municipality, Benguet Province. He claimed that this land "The acquisition of the Philippines was not like the settlement of the white race in the
had been possessed and occupied by his ancestors since time immemorial; that his United States. Whatever consideration may have been shown to the North American
grandfather built fences around the property for the holding of cattle and that his father Indians, the dominant purpose of the whites in America was to occupy land. It is obvious
cultivated some parts of the land. Cariñ o inherited the land in accordance with Igorot that, however stated, the reason for our taking over the Philippines was different. No
custom. He tried to have the land adjusted under the Spanish land laws, but no document one, we suppose, would deny that, so far as consistent with paramount necessities, our
issued from the Spanish Crown.131 In 1901, Cariñ o obtained a possessory title to the land first object in the internal administration of the islands is to do justice to the natives, not
under the Spanish Mortgage Law.132 The North American colonial government, however, to exploit their country for private gain. By the Organic Act of July 1, 1902, chapter 1369,
ignored his possessory title and built a public road on the land prompting him to seek a section 12 (32 Statutes at Large, 691), all the property and rights acquired there by the
Torrens title to his property in the land registration court. While his petition was United States are to be administered 'for the benefit of the inhabitants thereof.' It is
pending, a U.S. military reservation133 was proclaimed over his land and, shortly reasonable to suppose that the attitude thus assumed by the United States with regard to
thereafter, a military detachment was detailed on the property with orders to keep cattle what was unquestionably its own is also its attitude in deciding what it will claim for its
and trespassers, including Cariñ o, off the land.134 own. The same statute made a bill of rights, embodying the safeguards of the
Constitution, and, like the Constitution, extends those safeguards to all. It provides that
'no law shall be enacted in said islands which shall deprive any person of life, liberty, or
In 1904, the land registration court granted Cariñ o's application for absolute ownership property without due process of law, or deny to any person therein the equal protection
to the land. Both the Government of the Philippine Islands and the U.S. Government of the laws.' In the light of the declaration that we have quoted from section 12, it is hard
appealed to the C.F.I. of Benguet which reversed the land registration court and to believe that the United States was ready to declare in the next breath that "any
dismissed Cariñ o's application. The Philippine Supreme Court135 affirmed the C.F.I. by person" did not embrace the inhabitants of Benguet, or that it meant by "property" only
that which had become such by ceremonies of which presumably a large part of the By recognizing this kind of title, the court clearly repudiated the doctrine of Valenton. It
inhabitants never had heard, and that it proposed to treat as public land what they, by was frank enough, however, to admit the possibility that the applicant might have been
native custom and by long association,- of the profoundest factors in human thought,- deprived of his land under Spanish law because of the inherent ambiguity of the decrees
regarded as their own."139 and concomitantly, the various interpretations which may be given them. But precisely
because of the ambiguity and of the strong "due process mandate" of the
The Court went further: Constitution, the court validated this kind of title.142 This title was sufficient, even
without government administrative action, and entitled the holder to a Torrens
certificate. Justice Holmes explained:
"Every presumption is and ought to be against the government in a case like the
present. It might, perhaps, be proper and sufficient to say that when, as far back as
testimony or memory goes, the land has been held by individuals under a claim of "It will be perceived that the rights of the applicant under the Spanish law present a
private ownership, it will be presumed to have been held in the same way from problem not without difficulties for courts of a legal tradition. We have deemed it proper
before the Spanish conquest, and never to have been public land. Certainly in a case on that account to notice the possible effect of the change of sovereignty and the act of
like this, if there is doubt or ambiguity in the Spanish law, we ought to give the applicant Congress establishing the fundamental principles now to be observed. Upon a
the benefit of the doubt."140 consideration of the whole case we are of the opinion that law and justice require that
the applicant should be granted what he seeks, and should not be deprived of what, by
the practice and belief of those among whom he lived, was his property, through a
The court thus laid down the presumption of a certain title held (1) as far back as refined interpretation of an almost forgotten law of Spain." 143
testimony or memory went, and (2) under a claim of private ownership. Land held by
this title is presumed to "never have been public land."
Thus, the court ruled in favor of Cariño and ordered the registration of the 148
hectares in Baguio Municipality in his name.144
Against this presumption, the U.S. Supreme Court analyzed the Spanish decrees upheld in
the 1904 decision ofValenton v. Murciano. The U.S. Supreme Court found no proof that
the Spanish decrees did not honor native title. On the contrary, the decrees discussed Examining Cariño closer, the U.S. Supreme Court did not categorically refer to the title it
in Valenton appeared to recognize that the natives owned some land, irrespective of any upheld as "native title." It simply said:
royal grant. The Regalian doctrine declared in the preamble of the Recopilacion was all
"theory and discourse" and it was observed that titles were admitted to exist beyond the "The Province of Benguet was inhabited by a tribe that the Solicitor-General, in his
powers of the Crown, viz: argument, characterized as a savage tribe that never was brought under the civil
or military government of the Spanish Crown. It seems probable, if not certain, that
"If the applicant's case is to be tried by the law of Spain, we do not discover such the Spanish officials would not have granted to anyone in that province the
clear proof that it was bad by that law as to satisfy us that he does not own the registration to which formerly the plaintiff was entitled by the Spanish Laws, and
land. To begin with, the older decrees and laws cited by the counsel for the plaintiff which would have made his title beyond question good. Whatever may have been the
in error seem to indicate pretty clearly that the natives were recognized as owning technical position of Spain it does not follow that, in the view of the United States, he had
some lands, irrespective of any royal grant. In other words, Spain did not assume to lost all rights and was a mere trespasser when the present government seized his land.
convert all the native inhabitants of the Philippines into trespassers or even into tenants The argument to that effect seems to amount to a denial of native titles through an
at will. For instance, Book 4, title 12, Law 14 of the the Recopilacion de Leyes de las Indias, important part of the Island of Luzon, at least, for the want of ceremonies which the
cited for a contrary conclusion in Valenton v. Murciano, 3 Philippine 537, while it Spaniards would not have permitted and had not the power to enforce." 145
commands viceroys and others, when it seems proper, to call for the exhibition of grants,
directs them to confirm those who hold by good grants or justa prescripcion. It is true This is the only instance when Justice Holmes used the term "native title" in the entire
that it begins by the characteristic assertion of feudal overlordship and the origin length of the Cariño decision. It is observed that the widespread use of the term "native
of all titles in the King or his predecessors. That was theory and discourse. The fact title" may be traced to Professor Owen James Lynch, Jr., a Visiting Professor at the
was that titles were admitted to exist that owed nothing to the powers of Spain University of the Philippines College of Law from the Yale University Law School. In
beyond this recognition in their books." (Emphasis supplied).141 1982, Prof. Lynch published an article in the Philippine Law Journal entitled Native
Title, Private Right and Tribal Land Law.146 This article was made after Professor
The court further stated that the Spanish "adjustment" proceedings never held sway over Lynch visited over thirty tribal communities throughout the country and studied the
unconquered territories. The wording of the Spanish laws were not framed in a manner origin and development of Philippine land laws.147 He discussed Cariño extensively and
as to convey to the natives that failure to register what to them has always been their used the term "native title" to refer to Cariñ o's title as discussed and upheld by the U.S.
own would mean loss of such land. The registration requirement was "not to confer title, Supreme Court in said case.
but simply to establish it;" it was "not calculated to convey to the mind of an Igorot chief
the notion that ancient family possessions were in danger, if he had read every word of (b) Indian Title
it."
In a footnote in the same article, Professor Lynch stated that the concept of "native title" by treaty, or by executive order, but it cannot be established by custom and
as defined by Justice Holmes in Cariño "is conceptually similar to "aboriginal title" of the prescription.155
American Indians.148 This is not surprising, according to Prof. Lynch, considering that
during the American regime, government policy towards ICCs/IPs was consistently made Indian title to land, however, is not limited to land grants or reservations. It also
in reference to native Americans.149 This was clearly demonstrated in the case of Rubi v. covers the "aboriginal right of possession or occupancy."156 The aboriginal right of
Provincial Board of Mindoro.150 possession depends on the actual occupancy of the lands in question by the tribe or
nation as their ancestral home, in the sense that such lands constitute definable territory
In Rubi, the Provincial Board of Mindoro adopted a Resolution authorizing the provincial occupied exclusively by the particular tribe or nation. 157 It is a right which exists apart
governor to remove the Mangyans from their domains and place them in a permanent from any treaty, statute, or other governmental action, although in numerous instances
reservation in Sitio Tigbao, Lake Naujan. Any Mangyan who refused to comply was to be treaties have been negotiated with Indian tribes, recognizing their aboriginal possession
imprisoned. Rubi and some Mangyans, including one who was imprisoned for trying to and delimiting their occupancy rights or settling and adjusting their boundaries. 158
escape from the reservation, filed for habeas corpus claiming deprivation of liberty
under the Board Resolution. This Court denied the petition on the ground of police American jurisprudence recognizes the Indians' or native Americans' rights to
power. It upheld government policy promoting the idea that a permanent settlement was land they have held and occupied before the "discovery" of the Americas by the
the only successful method for educating the Mangyans, introducing civilized customs, Europeans. The earliest definitive statement by the U.S. Supreme Court on the
improving their health and morals, and protecting the public forests in which they nature of aboriginal title was made in 1823 in Johnson & Graham's Lessee v.
roamed.151 Speaking through Justice Malcolm, the court said: M'Intosh.159

"Reference was made in the President's instructions to the Commission to the policy In Johnson, the plaintiffs claimed the land in question under two (2) grants made by the
adopted by the United States for the Indian Tribes. The methods followed by the chiefs of two (2) Indian tribes. The U.S. Supreme Court refused to recognize this
Government of the Philippine Islands in its dealings with the so-called non-Christian conveyance, the plaintiffs being private persons. The only conveyance that was
people is said, on argument, to be practically identical with that followed by the United recognized was that made by the Indians to the government of the European discoverer.
States Government in its dealings with the Indian tribes. Valuable lessons, it is insisted, Speaking for the court, Chief Justice Marshall pointed out that the potentates of the old
can be derived by an investigation of the American-Indian policy. world believed that they had made ample compensation to the inhabitants of the new
world by bestowing civilization and Christianity upon them; but in addition, said the
From the beginning of the United States, and even before, the Indians have been treated court, they found it necessary, in order to avoid conflicting settlements and consequent
as "in a state of pupilage." The recognized relation between the Government of the war, to establish the principle that discovery gives title to the government by whose
United States and the Indians may be described as that of guardian and ward. It is for the subjects, or by whose authority, the discovery was made, against all other
Congress to determine when and how the guardianship shall be terminated. The Indians European governments, which title might be consummated by possession. 160 The
are always subject to the plenary authority of the United States. 152 exclusion of all other Europeans gave to the nation making the discovery the sole right of
acquiring the soil from the natives and establishing settlements upon it. As regards the
x x x. natives, the court further stated that:

As to the second point, the facts in the Standing Bear case and the Rubi case are not "Those relations which were to exist between the discoverer and the natives were to be
exactly identical. But even admitting similarity of facts, yet it is known to all that Indian regulated by themselves. The rights thus acquired being exclusive, no other power could
reservations do exist in the United States, that Indians have been taken from different interpose between them.
parts of the country and placed on these reservations, without any previous consultation
as to their own wishes, and that, when once so located, they have been made to remain In the establishment of these relations, the rights of the original inhabitants were, in no
on the reservation for their own good and for the general good of the country. If any instance, entirely disregarded; but were necessarily, to a considerable extent,
lesson can be drawn from the Indian policy of the United States, it is that the impaired. They were admitted to be the rightful occupants of the soil, with a legal as
determination of this policy is for the legislative and executive branches of the well as just claim to retain possession of it, and to use it according to their own
government and that when once so decided upon, the courts should not interfere to discretion; but their rights to complete sovereignty, as independent nations, were
upset a carefully planned governmental system. Perhaps, just as many forceful reasons necessarily diminished, and their power to dispose of the soil at their own will, to
exist for the segregation of the Manguianes in Mindoro as existed for the segregation of whomsoever they pleased, was denied by the fundamental principle that discovery gave
the different Indian tribes in the United States." 153 exclusive title to those who made it.

Rubi applied the concept of Indian land grants or reservations in the Philippines. An While the different nations of Europe respected the right of the natives as
Indian reservation is a part of the public domain set apart by proper authority for the use occupants, they asserted the ultimate dominion to be in themselves; and claimed
and occupation of a tribe or tribes of Indians.154 It may be set apart by an act of Congress, and exercised, as a consequence of this ultimate dominion, a power to grant the
soil, while yet in possession of the natives. These grants have been understood by Cherokees, that they were under the protection of the United States, and of no other
all to convey a title to the grantees, subject only to the Indian right of power. They assumed the relation with the United States which had before subsisted
occupancy."161 with Great Britain.

Thus, the discoverer of new territory was deemed to have obtained the exclusive This relation was that of a nation claiming and receiving the protection of one more
right to acquire Indian land and extinguish Indian titles. Only to the discoverer- whether powerful, not that of individuals abandoning their national character, and submitting as
to England, France, Spain or Holland- did this right belong and not to any other nation or subjects to the laws of a master." 166
private person. The mere acquisition of the right nonetheless did not extinguish Indian
claims to land. Rather, until the discoverer, by purchase or conquest, exercised its right, It was the policy of the U.S. government to treat the Indians as nations with distinct
the concerned Indians were recognized as the "rightful occupants of the soil, with a legal territorial boundaries and recognize their right of occupancy over all the lands within
as well as just claim to retain possession of it." Grants made by the discoverer to her their domains. Thus:
subjects of lands occupied by the Indians were held to convey a title to the grantees,
subject only to the Indian right of occupancy. Once the discoverer purchased the land
from the Indians or conquered them, it was only then that the discoverer gained an "From the commencement of our government Congress has passed acts to regulate trade
absolute title unrestricted by Indian rights. and intercourse with the Indians; which treat them as nations, respect their rights, and
manifest a firm purpose to afford that protection which treaties stipulate. All these acts,
and especially that of 1802, which is still in force, manifestly consider the several Indian
The court concluded, in essence, that a grant of Indian lands by Indians could not convey nations as distinct political communities, having territorial boundaries, within
a title paramount to the title of the United States itself to other parties, saying: which their authority is exclusive, and having a right to all the lands within those
boundaries, which is not only acknowledged, but guaranteed by the United States.
"It has never been contended that the Indian title amounted to nothing. Their right of
possession has never been questioned. The claim of government extends to the x x x.
complete ultimate title, charged with this right of possession, and to the exclusive
power of acquiring that right."162
"The Indian nations had always been considered as distinct, independent political
communities, retaining their original natural rights, as the undisputed possessors
It has been said that the history of America, from its discovery to the present day, proves of the soil from time immemorial, with the single exception of that imposed by
the universal recognition of this principle. 163 irresistible power, which excluded them from intercourse with any other European
potentate than the first discoverer of the coast of the particular region claimed: and this
The Johnson doctrine was a compromise. It protected Indian rights and their native was a restriction which those European potentates imposed on themselves, as well as on
lands without having to invalidate conveyances made by the government to many U.S. the Indians. The very term "nation," so generally applied to them, means "a people
citizens.164 distinct from others." x x x.167

Johnson was reiterated in the case of Worcester v. Georgia.165 In this case, the State of The Cherokee nation, then, is a distinct community, occupying its own territory, with
Georgia enacted a law requiring all white persons residing within the Cherokee nation to boundaries accurately described, in which the laws of Georgia can have no force, and
obtain a license or permit from the Governor of Georgia; and any violation of the law was which the citizens of Georgia have no right to enter but with the assent of the Cherokees
deemed a high misdemeanor. The plaintiffs, who were white missionaries, did not obtain themselves or in conformity with treaties and with the acts of Congress. The whole
said license and were thus charged with a violation of the Act. intercourse between the United States and this nation is, by our Constitution and laws,
vested in the government of the United States." 168
The U.S. Supreme Court declared the Act as unconstitutional for interfering with the
treaties established between the United States and the Cherokee nation as well as the The discovery of the American continent gave title to the government of the discoverer
Acts of Congress regulating intercourse with them. It characterized the relationship as against all other European governments. Designated as the naked fee, 169 this title was
between the United States government and the Indians as: to be consummated by possession and was subject to the Indian title of occupancy. The
discoverer acknowledged the Indians' legal and just claim to retain possession of the
"The Indian nations were, from their situation, necessarily dependent on some foreign land, the Indians being the original inhabitants of the land. The discoverer nonetheless
potentate for the supply of their essential wants, and for their protection from lawless asserted the exclusive right to acquire the Indians' land- either by purchase, "defensive"
and injurious intrusions into their country. That power was naturally termed their conquest, or cession- and in so doing, extinguish the Indian title. Only the discoverer
protector. They had been arranged under the protection of Great Britain; but the could extinguish Indian title because it alone asserted ultimate dominion in itself. Thus,
extinguishment of the British power in their neighborhood, and the establishment of that while the different nations of Europe respected the rights of the natives as occupants,
of the United States in its place, led naturally to the declaration, on the part of the they all asserted the ultimate dominion and title to be in themselves. 170
As early as the 19th century, it became accepted doctrine that although fee title to (c) Why the Cariñ o doctrine is unique
the lands occupied by the Indians when the colonists arrived became vested in the
sovereign- first the discovering European nation and later the original 13 States In the Philippines, the concept of native title first upheld in Cariño and enshrined in the
and the United States- a right of occupancy in the Indian tribes was nevertheless IPRA grants ownership, albeit in limited form, of the land to the ICCs/IPs. Native title
recognized. The Federal Government continued the policy of respecting the Indian right presumes that the land is private and was never public. Cariño is the only case that
of occupancy, sometimes called Indian title, which it accorded the protection of complete specifically and categorically recognizes native title. The long line of cases
ownership.171 But this aboriginal Indian interest simply constitutes "permission" from citing Cariño did not touch on native title and the private character of ancestral
the whites to occupy the land, and means mere possession not specifically recognized as domains and lands. Cariñowas cited by the succeeding cases to support the concept
ownership by Congress.172 It is clear that this right of occupancy based upon aboriginal of acquisitive prescription under the Public Land Act which is a different matter
possession is not a property right.173 It is vulnerable to affirmative action by the federal altogether. Under the Public Land Act, land sought to be registered must be public
government who, as sovereign, possessed exclusive power to extinguish the right of agricultural land. When the conditions specified in Section 48 [b] of the Public Land Act
occupancy at will.174 Thus, aboriginal title is not the same as legal title. Aboriginal are complied with, the possessor of the land is deemed to have acquired, by operation of
title rests on actual, exclusive and continuous use and occupancy for a long time. 175 It law, a right to a grant of the land.189 The land ceases to be part of the public
entails that land owned by Indian title must be used within the tribe, subject to its laws domain,190 ipso jure,191 and is converted to private property by the mere lapse or
and customs, and cannot be sold to another sovereign government nor to any completion of the prescribed statutory period.
citizen.176 Such title as Indians have to possess and occupy land is in the tribe, and not in
the individual Indian; the right of individual Indians to share in the tribal property
usually depends upon tribal membership, the property of the tribe generally being held It was only in the case of Oh Cho v. Director of Lands192 that the court declared that the
in communal ownership.177 rule that all lands that were not acquired from the government, either by purchase or
grant, belong to the public domain has an exception. This exception would be any land
that should have been in the possession of an occupant and of his predecessors-in-
As a rule, Indian lands are not included in the term "public lands," which is ordinarily interest since time immemorial. It is this kind of possession that would justify the
used to designate such lands as are subject to sale or other disposal under general presumption that the land had never been part of the public domain or that it had been
laws.178 Indian land which has been abandoned is deemed to fall into the public private property even before the Spanish conquest. 193 Oh Cho, however, was decided
domain.179 On the other hand, an Indian reservation is a part of the public domain set under the provisions of the Public Land Act and Cariño was cited to support the
apart for the use and occupation of a tribe of Indians. 180 Once set apart by proper applicant's claim of acquisitive prescription under the said Act.
authority, the reservation ceases to be public land, and until the Indian title is
extinguished, no one but Congress can initiate any preferential right on, or restrict the
nation's power to dispose of, them.181 All these years, Cariño had been quoted out of context simply to justify long, continuous,
open and adverse possession in the concept of owner of public agricultural land. It is this
long, continuous, open and adverse possession in the concept of owner of thirty years
The American judiciary struggled for more than 200 years with the ancestral land both for ordinary citizens 194 and members of the national cultural minorities 195 that
claims of indigenous Americans.182 And two things are clear. First, aboriginal title is converts the land from public into private and entitles the registrant to a torrens
recognized. Second, indigenous property systems are also recognized. From a legal point certificate of title.
of view, certain benefits can be drawn from a comparison of Philippine IPs to native
Americans.183 Despite the similarities between native title and aboriginal title, however,
there are at present some misgivings on whether jurisprudence on American Indians (3) The Option of Securing a Torrens Title to the Ancestral Land Indicates that the
may be cited authoritatively in the Philippines. The U.S. recognizes the possessory rights Land is Private.
of the Indians over their land; title to the land, however, is deemed to have passed to the
U.S. as successor of the discoverer. The aboriginal title of ownership is not specifically The private character of ancestral lands and domains as laid down in the IPRA is
recognized as ownership by action authorized by Congress. 184 The protection of further strengthened by the option given to individual ICCs/IPs over their individually-
aboriginal title merely guards against encroachment by persons other than the Federal owned ancestral lands. For purposes of registration under the Public Land Act and
Government.185 Although there are criticisms against the refusal to recognize the native the Land Registration Act, the IPRA expressly converts ancestral land into public
Americans' ownership of these lands,186 the power of the State to extinguish these titles agricultural land which may be disposed of by the State. The necessary implication
has remained firmly entrenched.187 is that ancestral land is private. It, however, has to be first converted to public
agricultural land simply for registration purposes. To wit:
Under the IPRA, the Philippine State is not barred form asserting sovereignty over the
ancestral domains and ancestral lands. 188 The IPRA, however, is still in its infancy and "Sec. 12. Option to Secure Certificate of Title Under Commonwealth Act 141, as amended, or
any similarities between its application in the Philippines vis-à -vis American the Land Registration Act 496- Individual members of cultural communities, with respect
Jurisprudence on aboriginal title will depend on the peculiar facts of each case. to their individually-owned ancestral lands who, by themselves or through their
predecessors-in-interest, have been in continuous possession and occupation of the
same in the concept of owner since time immemorial or for a period of not less than
thirty (30) years immediately preceding the approval of this Act and uncontested by the Thus, ancestral lands and ancestral domains are not part of the lands of the public
members of the same ICCs/IPs shall have the option to secure title to their ancestral domain. They are private and belong to the ICCs/IPs. Section 3 of Article XII on
lands under the provisions of Commonwealth Act 141, as amended, or the Land National Economy and Patrimony of the 1987 Constitution classifies lands of the public
Registration Act 496. domain into four categories: (a) agricultural, (b) forest or timber, (c) mineral lands, and
(d) national parks. Section 5 of the same Article XII mentions ancestral lands and
For this purpose, said individually-owned ancestral lands, which are agricultural in ancestral domains but it does not classify them under any of the said four categories. To
character and actually used for agricultural, residential, pasture, and tree farming classify them as public lands under any one of the four classes will render the
purposes, including those with a slope of eighteen percent (18%) or more, are hereby entire IPRA law a nullity. The spirit of the IPRA lies in the distinct concept of ancestral
classified as alienable and disposable agricultural lands. domains and ancestral lands. The IPRA addresses the major problem of the ICCs/IPs
which is loss of land. Land and space are of vital concern in terms of sheer survival of the
ICCs/IPs.201
The option granted under this section shall be exercised within twenty (20) years from
the approval of this Act."196
The 1987 Constitution mandates the State to "protect the rights of indigenous
cultural communities to their ancestral lands" and that "Congress provide for the
ICCs/IPs are given the option to secure a torrens certificate of title over their applicability of customary laws x x x in determining the ownership and extent of
individually-owned ancestral lands. This option is limited to ancestral lands only, not ancestral domain."202 It is the recognition of the ICCs/IPs distinct rights of
domains, and such lands must be individually, not communally, owned. ownership over their ancestral domains and lands that breathes life into this
constitutional mandate.
Ancestral lands that are owned by individual members of ICCs/IPs who, by themselves
or through their predecessors-in-interest, have been in continuous possession and B. The right of ownership and possession by the ICCs/IPs of their ancestral
occupation of the same in the concept of owner since time immemorial 197 or for a period domains is a limited form of ownership and does not include the right to alienate
of not less than 30 years, which claims are uncontested by the members of the same the same.
ICCs/IPs, may be registered under C.A. 141, otherwise known as the Public Land Act, or
Act 496, the Land Registration Act. For purposes of registration, the individually-owned
ancestral lands are classified as alienable and disposable agricultural lands of the public Registration under the Public Land Act and Land Registration Act recognizes the concept
domain, provided, they are agricultural in character and are actually used for of ownership under the civil law. This ownership is based on adverse possession for a
agricultural, residential, pasture and tree farming purposes. These lands shall be specified period, and harkens to Section 44 of the Public Land Act on administrative
classified as public agricultural lands regardless of whether they have a slope of 18% or legalization (free patent) of imperfect or incomplete titles and Section 48 (b) and (c) of
more. the same Act on the judicial confirmation of imperfect or incomplete titles. Thus:

The classification of ancestral land as public agricultural land is in compliance with the "Sec. 44. Any natural-born citizen of the Philippines who is not the owner of more than
requirements of the Public Land Act and the Land Registration Act. C.A. 141, the Public twenty-four hectares and who since July fourth, 1926 or prior thereto, has continuously
Land Act, deals specifically with lands of the public domain. 198 Its provisions apply to occupied and cultivated, either by himself or through his predecessors-in-interest, a tract
those lands "declared open to disposition or concession" x x x "which have not been or tracts of agricultural public lands subject to disposition, or who shall have paid the
reserved for public or quasi-public purposes, nor appropriated by the Government, nor real estate tax thereon while the same has not been occupied by any person shall be
in any manner become private property, nor those on which a private right authorized entitled, under the provisions of this chapter, to have a free patent issued to him for such
and recognized by this Act or any other valid law x x x or which having been reserved or tract or tracts of such land not to exceed twenty-four hectares.
appropriated, have ceased to be so." 199 Act 496, the Land Registration Act, allows
registration only of private lands and public agricultural lands. Since ancestral domains A member of the national cultural minorities who has continuously occupied and
and lands are private, if the ICC/IP wants to avail of the benefits of C.A. 141 and Act cultivated, either by himself or through his predecessors-in-interest, a tract or
496, the IPRA itself converts his ancestral land, regardless of whether the land has tracts of land, whether disposable or not since July 4, 1955, shall be entitled to the
a slope of eighteen per cent (18%) or over,200 from private to public agricultural right granted in the preceding paragraph of this section: Provided, That at the time
land for proper disposition. he files his free patent application he is not the owner of any real property secured
or disposable under the provision of the Public Land Law. 203
The option to register land under the Public Land Act and the Land Registration Act has
nonetheless a limited period. This option must be exercised within twenty (20) years x x x.
from October 29, 1997, the date of approval of the IPRA.
"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 bases of their cultural integrity. The indigenous concept of ownership generally holds
where the land is located for confirmation of their claims and the issuance of a certificate that ancestral domains are the ICCs/IPs private but community property which belongs
of title therefor, under the Land Registration Act, to wit: to all generations and therefore cannot be sold, disposed or destroyed. It likewise covers
sustainable traditional resource rights."
(a) [perfection of Spanish titles] xxx.
The right of ownership and possession of the ICCs/IPs to their ancestral domains is
(b) Those who by themselves or through their predecessors-in-interest have held under the indigenous concept of ownership. This concept maintains the view
been in open, continuous, exclusive, and notorious possession and occupation that ancestral domains are the ICCs/IPs private but community property. It is
of agricultural lands of the public domain, under a bona fide claim of acquisition private simply because it is not part of the public domain. But its private character
or ownership, for at least thirty years immediately preceding the filing of the ends there. The ancestral domain is owned in common by the ICCs/IPs and not by
application for confirmation of title except when prevented by war or force one particular person. The IPRA itself provides that areas within the ancestral
majeure. These shall be conclusively presumed to have performed all the domains, whether delineated or not, are presumed to be communally held. 209 These
conditions essential to a Government grant and shall be entitled to a certificate communal rights, however, are not exactly the same as co-ownership rights under
of title under the provisions of this Chapter. the Civil Code.210 Co-ownership gives any co-owner the right to demand partition of the
property held in common. The Civil Code expressly provides that "no co-owner shall be
obliged to remain in the co-ownership." Each co-owner may demand at any time the
(c) Members of the national cultural minorities who by themselves or partition of the thing in common, insofar as his share is concerned. 211 To allow such a
through their predecessors-in-interest have been in open, continuous, right over ancestral domains may be destructive not only of customary law of the
exclusive and notorious possession and occupation of lands of the public community but of the very community itself. 212
domain suitable to agriculture, whether disposable or not, under a bona
fide claim of ownership for at least 30 years shall be entitled to the rights
granted in sub-section (b) hereof."204 Communal rights over land are not the same as corporate rights over real
property, much less corporate condominium rights. A corporation can exist only for a
maximum of fifty (50) years subject to an extension of another fifty years in any single
Registration under the foregoing provisions presumes that the land was originally public instance.213 Every stockholder has the right to disassociate himself from the
agricultural land but because of adverse possession since July 4, 1955 (free patent) or at corporation.214 Moreover, the corporation itself may be dissolved voluntarily or
least thirty years (judicial confirmation), the land has become private. Open, adverse, involuntarily.215
public and continuous possession is sufficient, provided, the possessor makes proper
application therefor. The possession has to be confirmed judicially or administratively
after which a torrens title is issued. Communal rights to the land are held not only by the present possessors of the
land but extends to all generations of the ICCs/IPs, past, present and future, to the
domain. This is the reason why the ancestral domain must be kept within the ICCs/IPs
A torrens title recognizes the owner whose name appears in the certificate as entitled to themselves. The domain cannot be transferred, sold or conveyed to other persons. It
all the rights of ownership under the civil law. The Civil Code of the Philippines defines belongs to the ICCs/IPs as a community.
ownership in Articles 427, 428 and 429. This concept is based on Roman Law which the
Spaniards introduced to the Philippines through the Civil Code of 1889. Ownership,
under Roman Law, may be exercised over things or rights. It primarily includes the right Ancestral lands are also held under the indigenous concept of ownership. The lands
of the owner to enjoy and dispose of the thing owned. And the right to enjoy and dispose are communal. These lands, however, may be transferred subject to the following
of the thing includes the right to receive from the thing what it produces, 205 the right to limitations: (a) only to the members of the same ICCs/IPs; (b) in accord with customary
consume the thing by its use,206 the right to alienate, encumber, transform or even laws and traditions; and (c) subject to the right of redemption of the ICCs/IPs for a
destroy the thing owned,207 and the right to exclude from the possession of the thing period of 15 years if the land was transferred to a non-member of the ICCs/IPs.
owned by any other person to whom the owner has not transmitted such thing. 208
Following the constitutional mandate that "customary law govern property rights or
1. The Indigenous Concept of Ownership and Customary Law. relations in determining the ownership and extent of ancestral domains," 216 the IPRA, by
legislative fiat, introduces a new concept of ownership. This is a concept that has
long existed under customary law.217
Ownership of ancestral domains by native title does not entitle the ICC/IP to a torrens
title but to a Certificate of Ancestral Domain Title (CADT). The CADT formally recognizes
the indigenous concept of ownership of the ICCs/IPs over their ancestral domain. Thus: Custom, from which customary law is derived, is also recognized under the Civil
Code as a source of law.218 Some articles of the Civil Code expressly provide that custom
should be applied in cases where no codal provision is applicable. 219 In other words, in
"Sec. 5. Indigenous concept of ownership.- Indigenous concept of ownership sustains the the absence of any applicable provision in the Civil Code, custom, when duly proven, can
view that ancestral domains and all resources found therein shall serve as the material define rights and liabilities.220
Customary law is a primary, not secondary, source of rights under the IPRA and laws; the right to an informed and intelligent participation in the formulation
uniquely applies to ICCs/IPs. Its recognition does not depend on the absence of a and implementation of any project, government or private, that will affect or
specific provision in the civil law. The indigenous concept of ownership under impact upon the ancestral domains and to receive just and fair compensation
customary law is specifically acknowledged and recognized, and coexists with the civil for any damages which they may sustain as a result of the project; and the right
law concept and the laws on land titling and land registration. 221 to effective measures by the government to prevent any interference with,
alienation and encroachment upon these rights;"
To be sure, the indigenous concept of ownership exists even without a paper
title. The CADT is merely a "formal recognition" of native title. This is clear from Section c) Right to Stay in the Territories.- The right to stay in the territory and not to be
11 of the IPRA, to wit: removed therefrom. No ICCs/IPs will be relocated without their free and prior
informed consent, nor through any means other than eminent domain. x x x;
"Sec. 11. Recognition of Ancestral Domain Rights.- The rights of ICCs/IPs to their ancestral
domains by virtue of Native Title shall be recognized and respected. Formal recognition, d) Right in Case of Displacement.- In case displacement occurs as a result of
when solicited by ICCs/IPs concerned shall be embodied in a Certificate of Ancestral natural catastrophes, the State shall endeavor to resettle the displaced ICCs/IPs
Domain Title, which shall recognize the title of the concerned ICCs/IPs over the in suitable areas where they can have temporary life support systems: x x x;
territories identified and delineated."
e) Right to Regulate the Entry of Migrants.- Right to regulate the entry of
The moral import of ancestral domain, native land or being native is "belongingness" to migrant settlers and organizations into their domains;
the land, being people of the land- by sheer force of having sprung from the land since
time beyond recall, and the faithful nurture of the land by the sweat of one's brow. This is f) Right to Safe and Clean Air and Water.-For this purpose, the ICCs/IPs shall
fidelity of usufructuary relation to the land- the possession of stewardship through have access to integrated systems for the management of their inland waters
perduring, intimate tillage, and the mutuality of blessings between man and land; from and air space;
man, care for land; from the land, sustenance for man. 222
g) Right to Claim Parts of Reservations.- The right to claim parts of the ancestral
C. Sections 7 (a), 7 (b) and 57 of the IPRA Do Not Violate the Regalian Doctrine domains which have been reserved for various purposes, except those reserved
Enshrined in Section 2, Article XII of the 1987 Constitution. and intended for common and public welfare and service;

1. The Rights of ICCs/IPs Over Their Ancestral Domains and Lands h) Right to Resolve Conflict.- Right to resolve land conflicts in accordance with
customary laws of the area where the land is located, and only in default
The IPRA grants the ICCs/IPs several rights over their ancestral domains and ancestral thereof shall the complaints be submitted to amicable settlement and to the
lands. Section 7 provides for the rights over ancestral domains: Courts of Justice whenever necessary."

"Sec. 7. Rights to Ancestral Domains.- The rights of ownership and possession of ICCs/IPs Section 8 provides for the rights over ancestral lands:
to their ancestral domains shall be recognized and protected. Such rights include:
"Sec. 8. Rights to Ancestral Lands.- The right of ownership and possession of the ICCs/IPs
a) Right of Ownership.- The right to claim ownership over lands, bodies of to their ancestral lands shall be recognized and protected.
water traditionally and actually occupied by ICCs/IPs, sacred places,
traditional hunting and fishing grounds, and all improvements made by a) Right to transfer land/property.- Such right shall include the right to transfer
them at any time within the domains; land or property rights to/among members of the same ICCs/IPs, subject to
customary laws and traditions of the community concerned.
b) Right to Develop Lands and Natural Resources.- Subject to Section 56
hereof, the right to develop, control and use lands and territories b) Right to Redemption.- In cases where it is shown that the transfer of
traditionally occupied, owned, or used; to manage and conserve natural land/property rights by virtue of any agreement or devise, to a non-member of
resources within the territories and uphold the responsibilities for future the concerned ICCs/IPs is tainted by the vitiated consent of the ICCs/IPs, or is
generations; to benefit and share the profits from allocation and transferred for an unconscionable consideration or price, the transferor ICC/IP
utilization of the natural resources found therein; the right to negotiate shall have the right to redeem the same within a period not exceeding fifteen
the terms and conditions for the exploration of natural resources in the (15) years from the date of transfer."
areas for the purpose of ensuring ecological, environmental protection
and the conservation measures, pursuant to national and customary
Section 7 (a) defines the ICCs/IPs the right of ownership over their utilization of minerals, petroleum, and other mineral oils according to the general
ancestral domains which covers (a) lands, (b) bodies of water traditionally and actually terms and conditions provided by law, based on real contributions to the economic
occupied by the ICCs/IPs, (c) sacred places, (d) traditional hunting and fishing grounds, growth and general welfare of the country. In such agreements, the state shall promote
and (e) all improvements made by them at any time within the domains. The right of the development and use of local scientific and technical resources.
ownership includes the following rights: (1) the right to develop lands and natural
resources; (b) the right to stay in the territories; (c) the right to resettlement in case of The President shall notify the Congress of every contract entered into in accordance with
displacement; (d) the right to regulate the entry of migrants; (e) the right to safe and this provision, within thirty days from its execution." 223
clean air and water; (f) the right to claim parts of the ancestral domains as reservations;
and (g) the right to resolve conflict in accordance with customary laws.
All lands of the public domain and all natural resources- waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or
Section 8 governs their rights to ancestral lands. Unlike ownership over the ancestral timber, wildlife, flora and fauna, and other natural resources- are owned by the State.
domains, Section 8 gives the ICCs/IPs also the right to transfer the land or property The Constitution provides that in the exploration, development and utilization of these
rights to members of the same ICCs/IPs or non-members thereof. This is in keeping with natural resources, the State exercises full control and supervision, and may undertake
the option given to ICCs/IPs to secure a torrens title over the ancestral lands, but not to the same in four (4) modes:
domains.
1. The State may directly undertake such activities; or
2. The Right of ICCs/IPs to Develop Lands and Natural Resources Within the Ancestral
Domains Does Not Deprive the State of Ownership Over the Natural Resources and
Control and Supervision in their Development and Exploitation. 2. The State may enter into co-production, joint venture or production-sharing
agreements with Filipino citizens or qualified corporations;
The Regalian doctrine on the ownership, management and utilization of natural
resources is declared in Section 2, Article XII of the 1987 Constitution, viz: 3. Congress may, by law, allow small-scale utilization of natural resources by
Filipino citizens;
"Sec. 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, 4. For the large-scale exploration, development and utilization of minerals,
flora and fauna, and other natural resources are owned by the State. With the petroleum and other mineral oils, the President may enter into agreements
exception of agricultural lands, all other natural resources shall not be alienated. The with foreign-owned corporations involving technical or financial assistance.
exploration, development, and utilization of natural resources shall be under the
full control and supervision of the State. The State may directly undertake such As owner of the natural resources, the State is accorded primary power and
activities, or, it may enter into co-production, joint venture, or production-sharing responsibility in the exploration, development and utilization of these natural
agreements with Filipino citizens, or corporations or associations at least sixty per resources. The State may directly undertake the exploitation and development by itself,
centum of whose capital is owned by such citizens. Such agreements may be for a or, it may allow participation by the private sector through co-production, 224joint
period not exceeding twenty-five years, renewable for not more than twenty-five years, venture,225 or production-sharing agreements.226 These agreements may be for a period
and under such terms and conditions as may be provided by law. In cases of water rights of 25 years, renewable for another 25 years. The State, through Congress, may allow the
for irrigation, water supply, fisheries, water supply, fisheries, or industrial uses other small-scale utilization of natural resources by Filipino citizens. For the large-scale
than the development of water power, beneficial use may be the measure and limit of the exploration of these resources, specifically minerals, petroleum and other mineral oils,
grant. the State, through the President, may enter into technical and financial assistance
agreements with foreign-owned corporations.
The State shall protect the nation's marine wealth in its archipelagic waters, territorial
sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Under the Philippine Mining Act of 1995, (R.A. 7942) and the People's Small-Scale Mining
Filipino citizens. Act of 1991 (R.A. 7076) the three types of agreements, i.e., co-production, joint venture
or production-sharing, may apply to both large-scale 227 and small-scale mining.228 "Small-
The Congress may, by law, allow small-scale utilization of natural resources by scale mining" refers to "mining activities which rely heavily on manual labor using
Filipino citizens, as well as cooperative fish farming, with priority to subsistence simple implements and methods and do not use explosives or heavy mining
fishermen and fishworkers in rivers, lakes, bays, and lagoons. equipment."229

The President may enter into agreements with foreign-owned corporations involving Examining the IPRA, there is nothing in the law that grants to the ICCs/IPs
either technical or financial assistance for large-scale exploration, development, and ownership over the natural resources within their ancestral domains. The right of
ICCs/IPs in their ancestral domains includes ownership, but this "ownership" is The constitutionality of Section 1, Part II, Rule III of the Implementing Rules was not
expressly defined and limited in Section 7 (a) as: specifically and categorically challenged by petitioners. Petitioners actually assail the
constitutionality of the Implementing Rules in general. 232Nevertheless, to avoid any
"Sec. 7. a) Right of ownership- The right to claim ownership over lands, bodies of water confusion in the implementation of the law, it is necessary to declare that the inclusion of
traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and "natural resources" in Section 1, Part II, Rule III of the Implementing Rules goes beyond
fishing grounds, and all improvements made by them at any time within the domains;" the parameters of Section 7 (b) of the law and is contrary to Section 2, Article XII of
the 1987 Constitution.
The ICCs/IPs are given the right to claim ownership over "lands, bodies of water
traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and (b) The Small-Scale Utilization of Natural Resources In Sec. 7 (b) of the IPRA Is
fishing grounds, and all improvements made by them at any time within the domains." It Allowed Under Paragraph 3, Section 2 of Article XII of the Constitution.
will be noted that this enumeration does not mention bodies of water not occupied by
the ICCs/IPs, minerals, coal, wildlife, flora and fauna in the traditional hunting Ownership over natural resources remain with the State and the IPRA in Section 7 (b)
grounds, fish in the traditional fishing grounds, forests or timber in the sacred places, etc. merely grants the ICCs/IPs the right to manage them, viz:
and all other natural resources found within the ancestral domains. Indeed, the right of
ownership under Section 7 (a) does not cover "Sec. 7 (b) Right to Develop Lands and Natural Resources.- Subject to Section 56
"waters, minerals, coal, petroleum and other mineral oils, all forces of potential hereof, right to develop, control and use lands and territories traditionally occupied,
energy, fisheries, forests or timber, wildlife, floraand fauna and all other natural owned, or used; to manage and conserve natural resourceswithin the territories and
resources" enumerated in Section 2, Article XII of the 1987 Constitution as uphold the responsibilities for future generations; to benefit and share the profits from
belonging to the State. allocation and utilization of the natural resources found therein; the right to
negotiate the terms and conditions for the exploration of natural resources in the areas
The non-inclusion of ownership by the ICCs/IPs over the natural resources in Section for the purpose of ensuring ecological, environmental protection and the conservation
7(a) complies with the Regalian doctrine. measures, pursuant to national and customary laws; the right to an informed and
intelligent participation in the formulation and implementation of any project,
(a) Section 1, Part II, Rule III of the Implementing Rules Goes Beyond the government or private, that will affect or impact upon the ancestral domains and to
Parameters of Sec. 7 (a) of the IPRA And is Unconstitutional. receive just and fair compensation for any damages which they may sustain as a result of
the project; and the right to effective measures by the government to prevent any
interference with, alienation and encroachment upon these rights;"
The Rules Implementing the IPRA230 in Section 1, Part II, Rule III reads:
The right to develop lands and natural resources under Section 7 (b) of the IPRA
"Section 1. Rights of Ownership. ICCs/IPs have rights of ownership over lands, waters, enumerates the following rights:
and natural resources and all improvements made by them at any time within the
ancestral domains/ lands. These rights shall include, but not limited to, the right over the
fruits, the right to possess, the right to use, right to consume, right to exclude and right to a) the right to develop, control and use lands and territories traditionally
recover ownership, and the rights or interests over land and natural resources. The right occupied;
to recover shall be particularly applied to lands lost through fraud or any form or vitiated
consent or transferred for an unconscionable price." b) the right to manage and conserve natural resources within the territories
and uphold the responsibilities for future generations;
Section 1 of the Implementing Rules gives the ICCs/IPs rights of ownership over "lands,
waters and natural resources." The term "natural resources" is not one of those expressly c) the right to benefit and share the profits from the allocation and utilization of
mentioned in Section 7 (a) of the law. Our Constitution and jurisprudence clearly declare the natural resources found therein;
that the right to claim ownership over land does not necessarily include the right to
claim ownership over the natural resources found on or under the land. 231 The IPRA d) the right to negotiate the terms and conditions for the exploration of natural
itself makes a distinction between land and natural resources. Section 7 (a) speaks resources for the purpose of ensuring ecological, environmental protection and
of the right of ownership only over the land within the ancestral domain. It is the conservation measures, pursuant to national and customary laws;
Sections 7 (b) and 57 of the law that speak of natural resources, and these
provisions, as shall be discussed later, do not give the ICCs/IPs the right of
ownership over these resources. e) the right to an informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect or impact
upon the ancestral domains and to receive just and fair compensation for any
damages which they may sustain as a result of the project;
 f) the right to effective measures by the government to prevent any Section 57 speaks of the "harvesting, extraction, development or exploitation of
interference with, alienation and encroachment upon these rights. 233 natural resources within ancestral domains" and "gives the ICCs/IPs 'priority rights'
therein." The terms "harvesting, extraction, development or exploitation" of any
Ownership over the natural resources in the ancestral domains remains with the natural resources within the ancestral domains obviously refer to large-scale
State and the ICCs/IPs are merely granted the right to "manage and conserve" utilization. It is utilization not merely for subsistence but for commercial or other
them for future generations, "benefit and share" the profits from their allocation extensive use that require technology other than manual labor. 236 The law recognizes the
and utilization, and "negotiate the terms and conditions for their exploration" for probability of requiring a non-member of the ICCs/IPs to participate in the development
the purpose of "ensuring ecological and environmental protection and and utilization of the natural resources and thereby allows such participation for a
conservation measures." It must be noted that the right to negotiate the terms and period of not more than 25 years, renewable for another 25 years. This may be done on
conditions over the natural resources covers only their exploration which must be for condition that a formal written agreement be entered into by the non-member and
the purpose of ensuring ecological and environmental protection of, and conservation members of the ICCs/IPs.
measures in the ancestral domain. It does not extend to the exploitation and
development of natural resources. Section 57 of the IPRA does not give the ICCs/IPs the right to "manage and conserve" the
natural resources. Instead, the law only grants the ICCs/IPs "priority rights" in the
Simply stated, the ICCs/IPs' rights over the natural resources take the form of development or exploitation thereof. Priority means giving preference. Having priority
management or stewardship. For the ICCs/IPs may use these resources and share in rights over the natural resources does not necessarily mean ownership rights. The grant
the profits of their utilization or negotiate the terms for their exploration. At the same of priority rights implies that there is a superior entity that owns these resources and
time, however, the ICCs/IPs must ensure that the natural resources within their this entity has the power to grant preferential rights over the resources to whosoever
ancestral domains are conserved for future generations and that the "utilization" of these itself chooses.
resources must not harm the ecology and environment pursuant to national and
customary laws.234 Section 57 is not a repudiation of the Regalian doctrine. Rather, it is an affirmation of the
said doctrine that all natural resources found within the ancestral domains belong to the
The limited rights of "management and use" in Section 7 (b) must be taken to State. It incorporates by implication the Regalian doctrine, hence, requires that the
contemplate small-scale utilization of natural resources as distinguished from provision be read in the light of Section 2, Article XII of the 1987
large-scale. Small-scale utilization of natural resources is expressly allowed in the Constitution. Interpreting Section 2, Article XII of the 1987 Constitution 237 in
third paragraph of Section 2, Article XII of the Constitution "in recognition of the relation to Section 57 of IPRA, the State, as owner of these natural resources, may
plight of forest dwellers, gold panners, marginal fishermen and others similarly situated directly undertake the development and exploitation of the natural resources by
who exploit our natural resources for their daily sustenance and survival." 235 Section 7 itself, or in the alternative, it may recognize the priority rights of the ICCs/IPs as
(b) also expressly mandates the ICCs/IPs to manage and conserve these resources and owners of the land on which the natural resources are found by entering into a co-
ensure environmental and ecological protection within the domains, which duties, by production, joint venture, or production-sharing agreement with them. The State
their very nature, necessarily reject utilization in a large-scale. may likewise enter into any of said agreements with a non-member of the ICCs/IPs,
whether natural or juridical, or enter into agreements with foreign-owned
corporations involving either technical or financial assistance for the large-scale
(c) The Large-Scale Utilization of Natural Resources In Section 57 of the IPRA Is exploration, development and utilization of minerals, petroleum, and other
Allowed Under Paragraphs 1 and 4, Section 2, Article XII of the 1987 Constitution . mineral oils, or allow such non-member to participate in its agreement with the
ICCs/IPs. If the State decides to enter into an agreement with a non-ICC/IP member, the
Section 57 of the IPRA provides: National Commission on Indigenous Peoples (NCIP) shall ensure that the rights of the
ICCs/IPs under the agreement shall be protected. The agreement shall be for a period of
"Sec. 57. Natural Resources within Ancestral Domains.- The ICCs/IPs shall have priority 25 years, renewable for another 25 years.
rights in the harvesting, extraction, development or exploitation of any natural
resources within the ancestral domains. A non-member of the ICCs/IPs concerned may To reiterate, in the large-scale utilization of natural resources within the ancestral
be allowed to take part in the development and utilization of the natural resources for a domains, the State, as owner of these resources, has four (4) options: (1) it may, of and
period of not exceeding twenty-five (25) years renewable for not more than twenty-five by itself, directly undertake the development and exploitation of the natural resources;
(25) years: Provided, That a formal and written agreement is entered into with the or (2) it may recognize the priority rights of the ICCs/IPs by entering into an agreement
ICCs/IPs concerned or that the community, pursuant to its own decision-making process, with them for such development and exploitation; or (3) it may enter into an agreement
has agreed to allow such operation: Provided finally, That the NCIP may exercise with a non-member of the ICCs/IPs, whether natural or juridical, local or foreign; or (4) it
visitorial powers and take appropriate action to safeguard the rights of the ICCs/IPs may allow such non-member to participate in the agreement with the ICCs/IPs.
under the same contract."
The rights granted by the IPRA to the ICCs/IPs over the natural resources in their ancestral domains. For those that are found within the said domains, Sections 7(b) and
ancestral domains merely gives the ICCs/IPs, as owners and occupants of the land 57 of the IPRA apply.
on which the resources are found, the right to the small-scale utilization of these
resources, and at the same time, a priority in their large-scale development and V. THE IPRA IS A RECOGNITION OF OUR ACTIVE PARTICIPATION IN THE
exploitation. Section 57 does not mandate the State to automatically give priority INDIGENOUS INTERNATIONAL MOVEMENT.
to the ICCs/IPs. The State has several options and it is within its discretion to
choose which option to pursue. Moreover, there is nothing in the law that gives the
ICCs/IPs the right to solely undertake the large-scale development of the natural The indigenous movement can be seen as the heir to a history of anti-imperialism
resources within their domains. The ICCs/IPs must undertake such endeavour stretching back to prehistoric times. The movement received a massive impetus during
always under State supervision or control. This indicates that the State does not lose the 1960's from two sources. First, the decolonization of Asia and Africa brought into the
control and ownership over the resources even in their exploitation. Sections 7 (b) and limelight the possibility of peoples controlling their own destinies. Second, the right of
57 of the law simply give due respect to the ICCs/IPs who, as actual occupants of the land self-determination was enshrined in the UN Declaration on Human Rights. 238 The rise of
where the natural resources lie, have traditionally utilized these resources for their the civil rights movement and anti-racism brought to the attention of North American
subsistence and survival. Indians, Aborigines in Australia, and Maori in New Zealand the possibility of fighting for
fundamental rights and freedoms.
Neither is the State stripped of ownership and control of the natural resources by the
following provision: In 1974 and 1975, international indigenous organizations were founded, 239 and during
the 1980's, indigenous affairs were on the international agenda. The people of the
Philippine Cordillera were the first Asians to take part in the international indigenous
"Section 59. Certification Precondition.- All departments and other governmental agencies movement. It was the Cordillera People's Alliance that carried out successful campaigns
shall henceforth be strictly enjoined from issuing, renewing or granting any concession, against the building of the Chico River Dam in 1981-82 and they have since become one
license or lease, or entering into any production-sharing agreement. without prior of the best-organized indigenous bodies in the world. 240
certification from the NCIP that the area affected does not overlap with any ancestral
domain. Such certification shall only be issued after a field-based investigation is
conducted by the Ancestral Domains Office of the area concerned: Provided, That no Presently, there is a growing concern for indigenous rights in the international scene.
certification shall be issued by the NCIP without the free and prior informed and written This came as a result of the increased publicity focused on the continuing disrespect for
consent of the ICCs/IPs concerned: Provided, further, That no department, government indigenous human rights and the destruction of the indigenous peoples' environment,
agency or government-owned or -controlled corporation may issue new concession, together with the national governments' inability to deal with the situation. 241Indigenous
license, lease, or production sharing agreement while there is a pending application for a rights came as a result of both human rights and environmental protection, and have
CADT: Provided, finally, That the ICCs/IPs shall have the right to stop or suspend, in become a part of today's priorities for the international agenda. 242
accordance with this Act, any project that has not satisfied the requirement of this
consultation process." International institutions and bodies have realized the necessity of applying policies,
programs and specific rules concerning IPs in some nations. The World Bank, for
Concessions, licenses, lease or production-sharing agreements for the exploitation of example, first adopted a policy on IPs as a result of the dismal experience of projects in
natural resources shall not be issued, renewed or granted by all departments and Latin America.243 The World Bank now seeks to apply its current policy on IPs to some of
government agencies without prior certification from the NCIP that the area subject of its projects in Asia. This policy has provided an influential model for the projects of the
the agreement does not overlap with any ancestral domain. The NCIP certification shall Asian Development Bank.244
be issued only after a field-based investigation shall have been conducted and the free
and prior informed written consent of the ICCs/IPs obtained. Non-compliance with the The 1987 Philippine Constitution formally recognizes the existence of ICCs/IPs and
consultation requirement gives the ICCs/IPs the right to stop or suspend any project declares as a State policy the promotion of their rights within the framework of national
granted by any department or government agency. unity and development.245 The IPRA amalgamates the Philippine category of ICCs with
the international category of IPs,246 and is heavily influenced by both the International
As its subtitle suggests, this provision requires as a precondition for the issuance of any Labor Organization (ILO) Convention 169 and the United Nations (UN) Draft Declaration
concession, license or agreement over natural resources, that a certification be issued by on the Rights of Indigenous Peoples.247
the NCIP that the area subject of the agreement does not lie within any ancestral domain.
The provision does not vest the NCIP with power over the other agencies of the State as ILO Convention No. 169 is entitled the "Convention Concerning Indigenous and Tribal
to determine whether to grant or deny any concession or license or agreement. It merely Peoples in Independent Countries"248 and was adopted on June 27, 1989. It is based on
gives the NCIP the authority to ensure that the ICCs/IPs have been informed of the the Universal Declaration of Human Rights, the International Covenant on Economic,
agreement and that their consent thereto has been obtained. Note that the certification Social and Cultural Rights, the International Covenant on Civil and Political Rights, and
applies to agreements over natural resources that do not necessarily lie within the many other international instruments on the prevention of discrimination. 249 ILO
Convention No. 169 revised the "Convention Concerning the Protection and Integration
of Indigenous and Other Tribal and Semi-Tribal Populations in Independent Countries"
(ILO No. 107) passed on June 26, 1957. Developments in international law made it
appropriate to adopt new international standards on indigenous peoples "with a view to
removing the assimilationist orientation of the earlier standards," and recognizing the
aspirations of these peoples to exercise control over their own institutions, ways of life
and economic development." 250

CONCLUSION

The struggle of the Filipinos throughout colonial history had been plagued by ethnic and
religious differences. These differences were carried over and magnified by the
Philippine government through the imposition of a national legal order that is mostly
foreign in origin or derivation. 251 Largely unpopulist, the present legal system has
resulted in the alienation of a large sector of society, specifically, the indigenous peoples.
The histories and cultures of the indigenes are relevant to the evolution of Philippine
culture and are vital to the understanding of contemporary problems. 252 It is through the
IPRA that an attempt was made by our legislators to understand Filipino society not in
terms of myths and biases but through common experiences in the course of history. The
Philippines became a democracy a centennial ago and the decolonization process still
continues. If the evolution of the Filipino people into a democratic society is to truly
proceed democratically, i.e., if the Filipinos as a whole are to participate fully in the task
of continuing democratization,253 it is this Court's duty to acknowledge the presence of
indigenous and customary laws in the country and affirm their co-existence with the land
laws in our national legal system.

With the foregoing disquisitions, I vote to uphold the constitutionality of the Indigenous
Peoples Rights Act of 1997.
 THE SECRETARY OF THE
DEPARTMENT OF ENVIRONMENT
Republic of the Philippines
AND NATURAL RESOURCES, THE
Supreme Court REGIONAL TECHNICAL
Manila DIRECTOR FOR LANDS, LANDS
MANAGEMENT BUREAU,
EN BANC REGION VI, PROVINCIAL
ENVIRONMENT AND NATURAL
RESOURCES OFFICER, KALIBO,
THE SECRETARY OF THE G.R. No. 167707 AKLAN,
DEPARTMENT OF ENVIRONMENT Respondents.
AND NATURAL RESOURCES, THE
REGIONAL EXECUTIVE Present: x--------------------------------------------------x
DIRECTOR, DENR-REGION VI,
REGIONAL TECHNICAL PUNO, C.J., DECISION
DIRECTOR FOR LANDS, QUISUMBING,
LANDS MANAGEMENT BUREAU, YNARES-SANTIAGO,
REGION VI PROVINCIAL CARPIO, REYES, R.T., J.:
ENVIRONMENT AND NATURAL AUSTRIA-MARTINEZ,
RESOURCES OFFICER OF KALIBO, CORONA,*
AKLAN, REGISTER OF DEEDS, CARPIO MORALES,
DIRECTOR OF LAND AZCUNA, AT stake in these consolidated cases is the right of the present occupants
REGISTRATION AUTHORITY, TINGA,
of Boracay Island to secure titles over their occupied lands.
DEPARTMENT OF TOURISM CHICO-NAZARIO,
SECRETARY, DIRECTOR OF VELASCO, JR.,
PHILIPPINE TOURISM NACHURA,**
AUTHORITY, REYES, There are two consolidated petitions. The first is G.R. No. 167707, a petition for
Petitioners, LEONARDO-DE CASTRO, and
review on certiorari of the Decision[1] of the Court of Appeals (CA) affirming that [2] of the
BRION, JJ.
- versus - Regional Trial Court (RTC) in Kalibo, Aklan, which granted the petition for declaratory

relief filed by respondents-claimants Mayor Jose Yap, et al. and ordered the survey of
MAYOR JOSE S. YAP, LIBERTAD
TALAPIAN, MILA Y. SUMNDAD, and Boracay for titling purposes. The second is G.R. No. 173775, a petition for prohibition,
ANICETO YAP, in their behalf and Promulgated: mandamus, and nullification of Proclamation No. 1064 [3] issued by President Gloria
in behalf of all those similarly situated,
Respondents. October 8, 2008 Macapagal-Arroyo classifying Boracay into reserved forest and agricultural land.

x--------------------------------------------------x
The Antecedents
DR. ORLANDO SACAY and G.R. No. 173775
WILFREDO GELITO, joined by
THE LANDOWNERS OF
BORACAY SIMILARLY G.R. No. 167707
SITUATED NAMED IN A LIST,
ANNEX A OF THIS PETITION,
Petitioners, Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand

beaches and warm crystalline waters, is reputedly a premier Philippine tourist

- versus -
destination. The island is also home to 12,003 inhabitants [4] who live in the bone-shaped Act, they had the right to have the lots registered in their names through judicial

islands three barangays. [5]

confirmation of imperfect titles.

On April 14, 1976, the Department of Environment and Natural The Republic, through the Office of the Solicitor General (OSG), opposed the

Resources (DENR) approved the National Reservation Survey of Boracay petition for declaratory relief.The OSG countered that Boracay Island was

Island, which identified several lots as being occupied or claimed by named persons.
[6] [7]
an unclassified land of the public domain. It formed part of the mass of lands classified

as public forest, which was not available for disposition pursuant to Section 3(a) of

On November 10, 1978, then President Ferdinand Marcos issued Proclamation Presidential Decree (PD) No. 705 or the Revised Forestry Code, [11] as amended.

No. 1801[8] declaring Boracay Island, among other islands, caves and peninsulas in

the Philippines, as tourist zones and marine reserves under the administration of the The OSG maintained that respondents-claimants reliance on PD No. 1801

Philippine Tourism Authority (PTA). President Marcos later approved the issuance and PTA Circular No. 3-82 was misplaced. Their right to judicial confirmation of title was

of PTA Circular 3-82 dated September 3, 1982, to implement Proclamation No. 1801.
[9]
governed by CA No. 141 and PD No. 705. SinceBoracay Island had not been classified as

alienable and disposable, whatever possession they had cannot ripen into ownership.

Claiming that Proclamation No. 1801 and PTA Circular No 3-82 precluded them

from filing an application for judicial confirmation of imperfect title or survey of land for During pre-trial, respondents-claimants and the OSG stipulated on the

titling purposes, respondents-claimants following facts: (1) respondents-claimants were presently in possession of parcels of

Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a land in Boracay Island; (2) these parcels of land were planted with coconut trees and

petition for declaratory relief with the RTC in Kalibo, Aklan. other natural growing trees; (3) the coconut trees had heights of more or less twenty

(20) meters and were planted more or less fifty (50) years ago; and (4) respondents-

In their petition, respondents-claimants alleged that Proclamation No. 1801 claimants declared the land they were occupying for tax purposes. [12]

and PTA Circular No. 3-82 raised doubts on their right to secure titles over their occupied

lands. They declared that they themselves, or through their predecessors-in-interest, had The parties also agreed that the principal issue for resolution was purely legal:

been in open, continuous, exclusive, and notorious possession and occupation in Boracay whether Proclamation No. 1801 posed any legal hindrance or impediment to the titling

since June 12, 1945, or earlier since time immemorial. They declared their lands for tax of the lands in Boracay. They decided to forego with the trial and to submit the case for

purposes and paid realty taxes on them.[10] resolution upon submission of their respective memoranda. [13]

Respondents-claimants posited that Proclamation No. 1801 and its The RTC took judicial notice[14] that certain parcels of land in Boracay Island,

implementing Circular did not place Boracay beyond the commerce of man. Since more particularly Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of

the Island was classified as a tourist zone, it was susceptible of private ownership. Under Title No. 19502 (RO 2222) in the name of the Heirs of Ciriaco S. Tirol. These lots were

Section 48(b) of Commonwealth Act (CA) No. 141, otherwise known as the Public Land
 WHEREFORE, in view of the foregoing premises, judgment is
involved in Civil Case Nos. 5222 and 5262 filed before the RTC of Kalibo, Aklan. hereby rendered by us DENYING the appeal filed in this case and
[15]
The titles were issued on AFFIRMING the decision of the lower court. [24]

August 7, 1933.[16]

RTC and CA Dispositions The CA held that respondents-claimants could not be prejudiced by a

declaration that the lands they occupied since time immemorial were part of a forest

On July 14, 1999, the RTC rendered a decision in favor of respondents- reserve.

claimants, with a fallo reading:

Again, the OSG sought reconsideration but it was similarly denied. [25] Hence, the
WHEREFORE, in view of the foregoing, the Court declares present petition under Rule 45.
that Proclamation No. 1801 and PTA Circular No. 3-82 pose no legal
obstacle to the petitioners and those similarly situated to acquire title
to their lands in Boracay, in accordance with the applicable laws and
in the manner prescribed therein; and to have their lands surveyed G.R. No. 173775
and approved by respondent Regional Technical Director of Lands as
the approved survey does not in itself constitute a title to the land.
On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-
SO ORDERED.[17]
Arroyo issued Proclamation No. 1064[26] classifying Boracay Island into four hundred

(400) hectares of reserved forest land (protection purposes) and six hundred twenty-
The RTC upheld respondents-claimants right to have their occupied lands titled
eight and 96/100 (628.96) hectares of agricultural land (alienable and disposable). The
in their name. It ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82
Proclamation likewise provided for a fifteen-meter buffer zone on each side of the
mentioned that lands in Boracay were inalienable or could not be the subject of
centerline of roads and trails, reserved for right-of-way and which shall form part of the
disposition.[18] The Circular itself recognized private ownership of lands. [19] The trial court
area reserved for forest land protection purposes.
cited Sections 87[20] and 53[21] of the Public Land Act as basis for acknowledging private

ownership of lands in Boracay and that only those forested areas in public lands were
On August 10, 2006, petitioners-claimants Dr. Orlando Sacay, [27] Wilfredo Gelito,
declared as part of the forest reserve. [22]
[28]
and other landowners[29] in Boracay filed with this Court an original petition for

prohibition, mandamus, and nullification of Proclamation No. 1064. [30] They allege that
The OSG moved for reconsideration but its motion was denied. [23] The Republic
the Proclamation infringed on their prior vested rights over portions of Boracay. They
then appealed to the CA.
have been in continued possession of their respective lots in Boracay since time

immemorial. They have also invested billions of pesos in developing their lands and
On December 9, 2004, the appellate court affirmed in toto the RTC decision,
building internationally renowned first class resorts on their lots. [31]
disposing as follows:
 Petitioners-claimants contended that there is no need for a proclamation Petitioners-claimants hoist five (5) issues, namely:

reclassifying Boracay into agricultural land. Being classified as neither mineral nor
I.
timber land, the island is deemed agricultural pursuant to the Philippine Bill of 1902 and AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS
Act No. 926, known as the first Public Land Act. [32] Thus, their possession in the concept IN CONCEPT OF OWNER OVER THEIR RESPECTIVE AREAS IN
BORACAY, SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30
of owner for the required period entitled them to judicial confirmation of imperfect title. YRS. PRIOR TO THE FILING OF THE PETITION FOR DECLARATORY
RELIEF ON NOV. 19, 1997, WERE THE AREAS OCCUPIED BY THEM
PUBLIC AGRICULTURAL LANDS AS DEFINED BY LAWS THEN ON
JUDICIAL CONFIRMATION OF IMPERFECT TITLES OR PUBLIC
Opposing the petition, the OSG argued that petitioners-claimants do not have a
FOREST AS DEFINED BY SEC. 3a, PD 705?
vested right over their occupied portions in the island. Boracay is an unclassified public
II.
forest land pursuant to Section 3(a) of PD No. 705. Being public forest, the claimed HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT
OF PRIVATE OWNERSHIP OVER THEIR OCCUPIED PORTIONS
portions of the island are inalienable and cannot be the subject of judicial confirmation of OF BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT
imperfect title. It is only the executive department, not the courts, which has authority to APPLIED YET FOR JUDICIAL CONFIRMATION OF IMPERFECT TITLE?

reclassify lands of the public domain into alienable and disposable lands. There is a need III.
IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS
for a positive government act in order to release the lots for disposition. ALIENABLE AND DISPOSABLE UNDER SEC 6, CA 141 [AN]
INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN
TITLE UNDER THE TORRENS SYSTEM?
On November 21, 2006, this Court ordered the consolidation of the two
IV.
petitions as they principally involve the same issues on the land classification IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006,
VIOLATIVE OF THE PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP
of Boracay Island.[33] OF PETITIONERS OVER THEIR LANDS IN BORACAY, PROTECTED BY
THE DUE PROCESS CLAUSE OF THE CONSTITUTION OR IS
PROCLAMATION 1064 CONTRARY TO SEC. 8, CA 141, OR SEC. 4(a) OF
Issues RA 6657.

V.
G.R. No. 167707 CAN RESPONDENTS BE COMPELLED BY MANDAMUS TO ALLOW THE
SURVEY AND TO APPROVE THE SURVEY PLANS FOR PURPOSES OF
THE APPLICATION FOR TITLING OF THE LANDS OF PETITIONERS IN
BORACAY?[35] (Underscoring supplied)
The OSG raises the lone issue of whether Proclamation No. 1801

and PTA Circular No. 3-82 pose any legal obstacle for respondents, and all those similarly
In capsule, the main issue is whether private claimants (respondents-claimants
situated, to acquire title to their occupied lands in Boracay Island.[34]
in G.R. No. 167707 and petitioners-claimants in G.R. No. 173775) have a right to secure

titles over their occupied portions in Boracay. The twin petitions pertain to their right, if
any, to judicial confirmation of imperfect title under CA No. 141, as amended. They do

not involve their right to secure title under other pertinent laws.
G.R. No. 173775
 Our Ruling

All lands not otherwise appearing to be clearly within private ownership are
Regalian Doctrine and power of the executive
to reclassify lands of the public domain presumed to belong to the State.[47] Thus, all lands that have not been acquired from the

government, either by purchase or by grant, belong to the State as part of the inalienable

Private claimants rely on three (3) laws and executive acts in their bid for public domain.[48] Necessarily, it is up to the State to determine if lands of the public

judicial confirmation of imperfect title, namely: (a) Philippine Bill of 1902[36] in relation domain will be disposed of for private ownership. The government, as the agent of the

to Act No. 926, later amended and/or superseded by Act No. 2874 and CA No. 141; [37] (b) state, is possessed of the plenary power as the persona in law to determine who shall be

Proclamation No. 1801[38] issued by then President Marcos; and (c) Proclamation No. the favored recipients of public lands, as well as under what terms they may be granted

1064[39] issued by President Gloria Macapagal-Arroyo. We shall proceed to determine such privilege, not excluding the placing of obstacles in the way of their exercise of what

their rights to apply for judicial confirmation of imperfect title under these laws and otherwise would be ordinary acts of ownership.[49]

executive acts.
Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish

But first, a peek at the Regalian principle and the power of the executive to conquest of the Philippines, ownership of all lands, territories and possessions in

reclassify lands of the public domain. the Philippines passed to the Spanish Crown.[50] The Regalian doctrine was first

introduced in the Philippines through the Laws of the Indies and the Royal Cedulas, which

The 1935 Constitution classified lands of the public domain into agricultural, laid the foundation that all lands that were not acquired from the Government, either by

forest or timber.[40]Meanwhile, the 1973 Constitution provided the following divisions: purchase or by grant, belong to the public domain. [51]

agricultural, industrial or commercial, residential, resettlement, mineral, timber or forest

and grazing lands, and such other classes as may be provided by law, [41] giving the The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage

government great leeway for classification. [42] Then the 1987 Constitution reverted to the Law of 1893. The Spanish Mortgage Law provided for the systematic registration of titles

1935 Constitution classification with one addition: national parks.[43] Of and deeds as well as possessory claims.[52]

these, only agricultural lands may be alienated.[44] Prior to Proclamation No. 1064 of May

22, 2006, Boracay Island had never been expressly and administratively classified under The Royal Decree of 1894 or the Maura Law[53] partly amended the Spanish

any of these grand divisions. Boracay was an unclassified land of the public domain. Mortgage Law and the Laws of the Indies. It established possessory information as the

method of legalizing possession of vacant Crown land, under certain conditions which

The Regalian Doctrine dictates that all lands of the public domain belong to the were set forth in said decree.[54] Under Section 393 of the Maura Law, an informacion

State, that the State is the source of any asserted right to ownership of land and charged posesoria or possessory information title, [55] when duly inscribed in the Registry of

with the conservation of such patrimony. [45] The doctrine has been consistently adopted Property, is converted into a title of ownership only after the lapse of twenty (20) years

under the 1935, 1973, and 1987 Constitutions.[46] of uninterrupted possession which must be actual, public, and adverse, [56] from the date

of its inscription.[57] However, possessory information title had to be perfected one year
after the promulgation of the Maura Law, or until April 17, 1895. Otherwise, the lands and made provisions for judicial and administrative confirmation of imperfect titles and

would revert to the State. [58]

for the sale or lease of public lands. It permitted corporations regardless of the

nationality of persons owning the controlling stock to lease or purchase lands of the

In sum, private ownership of land under the Spanish regime could only be public domain.[67] Under the Act, open, continuous, exclusive, and notorious possession

founded on royal concessions which took various forms, namely: (1) titulo real or royal and occupation of agricultural lands for the next ten (10) years preceding July 26,

grant; (2) concesion especial or special grant; (3)composicion con el estado or adjustment 1904 was sufficient for judicial confirmation of imperfect title. [68]

title; (4) titulo de compra or title by purchase; and (5) informacion posesoria or

possessory information title.[59] On November 29, 1919, Act No. 926 was superseded by Act No. 2874,

otherwise known as the second Public Land Act. This new, more comprehensive law

The first law governing the disposition of public lands in the Philippines under limited the exploitation of agricultural lands to Filipinos and Americans and citizens of

American rule was embodied in the Philippine Bill of 1902.[60] By this law, lands of the other countries which gave Filipinos the same privileges. For judicial confirmation of

public domain in the Philippine Islands were classified into three (3) grand divisions, to title, possession and occupation en concepto dueo since time immemorial, or since July

wit: agricultural, mineral, and timber or forest lands. [61] The act provided for, among 26, 1894, was required.[69]

others, the disposal of mineral lands by means of absolute grant (freehold system) and

by lease (leasehold system). [62] It also provided the definition by exclusion of agricultural After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874

public lands. [63]

Interpreting the meaning of agricultural lands under the Philippine Bill of on December 1, 1936. To this day, CA No. 141, as amended, remains as the existing

1902, the Court declared in Mapa v. Insular Government:[64] general law governing the classification and disposition of lands of the public domain

other than timber and mineral lands, [70] and privately owned lands which reverted to the

State.[71]
x x x In other words, that the phrase agricultural land as
used in Act No. 926 means those public lands acquired
from Spain which are not timber or mineral lands. x x Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of
x[65] (Emphasis Ours)
possession and occupation of lands of the public domain since time immemorial or

since July 26, 1894. However, this provision was superseded by Republic Act (RA) No.
On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise
1942,[72] which provided for a simple thirty-year prescriptive period for judicial
known as the Land Registration Act. The act established a system of registration by
confirmation of imperfect title. The provision was last amended by PD No. 1073,
which recorded title becomes absolute, indefeasible, and imprescriptible. This is known
[73]
which now provides for possession and occupation of the land applied for since June
as the Torrens system.[66]
12, 1945, or earlier.[74]

Concurrently, on October 7, 1903, the Philippine Commission passed Act

The issuance of PD No. 892[75] on February 16, 1976 discontinued the use of
No. 926, which was the first Public Land Act. The Act introduced the homestead system
Spanish titles as evidence in land registration proceedings. [76] Under the decree, all
holders of Spanish titles or grants should apply for registration of their lands under Act

No. 496 within six (6) months from the effectivity of the decree on February 16, In the case at bar, no such proclamation, executive order, administrative action,

1976. Thereafter, the recording of all unregistered lands[77] shall be governed by Section report, statute, or certification was presented to the Court. The records are bereft of

194 of the Revised Administrative Code, as amended by Act No. 3344. evidence showing that, prior to 2006, the portions of Boracay occupied by private

claimants were subject of a government proclamation that the land is alienable and

On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, disposable.Absent such well-nigh incontrovertible evidence, the Court cannot accept the

known as the Property Registration Decree. It was enacted to codify the various laws submission that lands occupied by private claimants were already open to disposition

relative to registration of property. [78]

It governs registration of lands under before 2006. Matters of land classification or reclassification cannot be assumed. They

the Torrens system as well as unregistered lands, including chattel mortgages. [79] call for proof.[87]

A positive act declaring land as alienable and disposable is required. In Ankron and De Aldecoa did not make the whole of Boracay Island, or

keeping with the presumption of State ownership, the Court has time and again portions of it, agricultural lands. Private claimants posit that Boracay was already an

emphasized that there must be a positive act of the government,such as an official agricultural land pursuant to the old cases Ankron v. Government of the

proclamation, [80]
declassifying inalienable public land into disposable land for Philippine Islands (1919) [88]
and De Aldecoa v. The Insular Government (1909). [89]
These

agricultural or other purposes.[81] In fact, Section 8 of CA No. 141 limits alienable or cases were decided under the provisions of the Philippine Bill of 1902 and Act No.

disposable lands only to those lands which have been officially delimited and classified. 926. There is a statement in these old cases that in the absence of evidence to the
[82]
contrary, that in each case the lands are agricultural lands until the contrary is shown.[90]

The burden of proof in overcoming the presumption of State ownership of the Private claimants reliance on Ankron and De Aldecoa is misplaced. These cases

lands of the public domain is on the person applying for registration (or claiming did not have the effect of converting the whole of Boracay Island or portions of it into

ownership), who must prove that the land subject of the application is alienable or agricultural lands. It should be stressed that the Philippine Bill of 1902 and Act No. 926

disposable. [83]
To overcome this presumption, incontrovertible evidence must be merely provided the manner through which land registration courts would classify lands

established that the land subject of the application (or claim) is alienable or disposable. of the public domain. Whether the land would be classified as timber, mineral, or
[84]
There must still be a positive act declaring land of the public domain as alienable and agricultural depended on proof presented in each case.

disposable. To prove that the land subject of an application for registration is alienable,

the applicant must establish the existence of a positive act of the government such as a Ankron and De Aldecoa were decided at a time when the President of the

presidential proclamation or an executive order; an administrative action; investigation Philippines had no power to classify lands of the public domain into mineral, timber, and

reports of Bureau of Lands investigators; and a legislative act or a statute. [85]

The agricultural. At that time, the courts were free to make corresponding classifications in

applicant may also secure a certification from the government that the land claimed to justiciable cases, or were vested with implicit power to do so, depending upon the

have been possessed for the required number of years is alienable and disposable. [86]
preponderance of the evidence.[91] This was the Courts ruling in Heirs of the Late Spouses
Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic,[92] in which it stated, take these lands out of State ownership and worse, would be utterly inconsistent with

through Justice Adolfo Azcuna, viz.: and totally repugnant to the long-entrenched Regalian doctrine.

x x x Petitioners furthermore insist that a particular land

need not be formally released by an act of the Executive before it can The presumption in Ankron and De Aldecoa attaches only to land registration
be deemed open to private ownership, citing the cases of Ramos v. cases brought under the provisions of Act No. 926, or more specifically those cases
Director of Lands and Ankron v. Government of the Philippine Islands.
dealing with judicial and administrative confirmation of imperfect titles. The
xxxx
presumption applies to an applicant for judicial or administrative conformation of
Petitioners reliance upon Ramos v. Director of
imperfect title under Act No. 926. It certainly cannot apply to landowners, such as private
Lands and Ankron v. Government is misplaced. These cases were
decided under the Philippine Bill of 1902 and the first Public Land Act claimants or their predecessors-in-interest, who failed to avail themselves of the benefits
No. 926 enacted by the Philippine Commission on October 7, 1926,
under which there was no legal provision vesting in the Chief of Act No. 926. As to them, their land remained unclassified and, by virtue of the Regalian
Executive or President of the Philippines the power to classify lands of
the public domain into mineral, timber and agricultural so that the doctrine, continued to be owned by the State.
courts then were free to make corresponding classifications in
justiciable cases, or were vested with implicit power to do so,
depending upon the preponderance of the evidence.[93] In any case, the assumption in Ankron and De Aldecoa was not absolute. Land

classification was, in the end, dependent on proof. If there was proof that the land was
To aid the courts in resolving land registration cases under Act No. 926, it was better suited for non-agricultural uses, the courts could adjudge it as a mineral or timber
then necessary to devise a presumption on land classification. Thus evolved the dictum land despite the presumption. In Ankron, this Court stated:
in Ankron that the courts have a right to presume, in the absence of evidence to the
In the case of Jocson vs. Director of Forestry (supra), the
contrary, that in each case the lands are agricultural lands until the contrary is shown. [94] Attorney-General admitted in effect that whether the particular land
in question belongs to one class or another is a question of fact. The
mere fact that a tract of land has trees upon it or has mineral within it
is not of itself sufficient to declare that one is forestry land and the
other, mineral land. There must be some proof of the extent and
present or future value of the forestry and of the minerals. While, as
we have just said, many definitions have been given for agriculture,
But We cannot unduly expand the presumption in Ankron and De Aldecoa to an
forestry, and mineral lands, and that in each case it is a question of
argument that all lands of the public domain had been automatically reclassified as fact, we think it is safe to say that in order to be forestry or mineral
land the proof must show that it is more valuable for the forestry or
disposable and alienable agricultural lands. By no stretch of imagination did the the mineral which it contains than it is for agricultural purposes. (Sec.
7, Act No. 1148.) It is not sufficient to show that there exists some
presumption convert all lands of the public domain into agricultural lands. trees upon the land or that it bears some mineral. Land may be
classified as forestry or mineral today, and, by reason of the
exhaustion of the timber or mineral, be classified as agricultural land
If We accept the position of private claimants, the Philippine Bill of 1902 and tomorrow. And vice-versa, by reason of the rapid growth of timber or
the discovery of valuable minerals, lands classified as agricultural
Act No. 926 would have automatically made all lands in the Philippines, except those today may be differently classified tomorrow. Each case must be
already classified as timber or mineral land, alienable and disposable lands . That would decided upon the proof in that particular case, having regard for
its present or future value for one or the other purposes. We
believe, however, considering the fact that it is a matter of public
 knowledge that a majority of the lands in the Philippine Islands are
agricultural lands that the courts have a right to presume, in the
absence of evidence to the contrary, that in each case the lands are We note that the RTC decision[99] in G.R. No. 167707 mentioned Krivenko v.
agricultural lands until the contrary is shown. Whatever the land
involved in a particular land registration case is forestry or Register of Deeds of Manila,[100] which was decided in 1947 when CA No. 141, vesting the
mineral land must, therefore, be a matter of proof. Its superior
value for one purpose or the other is a question of fact to be Executive with the sole power to classify lands of the public domain was already in
settled by the proof in each particular case. The fact that the land is
effect. Krivenko cited the old cases Mapa v. Insular Government,[101] De Aldecoa v. The
a manglar [mangrove swamp] is not sufficient for the courts to decide
whether it is agricultural, forestry, or mineral land. It may perchance Insular Government,[102] and Ankron v. Government of the Philippine Islands.[103]
belong to one or the other of said classes of land. The Government, in
the first instance, under the provisions of Act No. 1148, may, by
reservation, decide for itself what portions of public land shall be
considered forestry land, unless private interests have intervened Krivenko, however, is not controlling here because it involved a totally different
before such reservation is made. In the latter case, whether the land is issue. The pertinent issue in Krivenko was whether residential lots were included in the
agricultural, forestry, or mineral, is a question of proof. Until private
interests have intervened, the Government, by virtue of the terms of general classification of agricultural lands; and if so, whether an alien could acquire a
said Act (No. 1148), may decide for itself what portions of the public
domain shall be set aside and reserved as forestry or mineral land. residential lot. This Court ruled that as an alien, Krivenko was prohibited by the 1935
(Ramos vs. Director of Lands, 39 Phil. 175; Jocson vs. Director of
Constitution[104] from acquiring agricultural land, which included residential lots. Here,
Forestry, supra)[95] (Emphasis ours)
the issue is whether unclassified lands of the public domain are automatically deemed
Since 1919, courts were no longer free to determine the classification of lands agricultural.
from the facts of each case, except those that have already became private lands. [96]
Act

No. 2874, promulgated in 1919 and reproduced in Section 6 of CA No. 141, gave the

Executive Department, through the President, the exclusive prerogative to classify or Notably, the definition of agricultural public lands mentioned in Krivenko relied
reclassify public lands into alienable or disposable, mineral or forest. 96-a
Since then, on the old cases decided prior to the enactment of Act No. 2874, including Ankron and De
courts no longer had the authority, whether express or implied, to determine the Aldecoa.[105] As We have already stated, those cases cannot apply here, since they were
classification of lands of the public domain.[97] decided when the Executive did not have the authority to classify lands as agricultural,

timber, or mineral.
Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their
Private claimants continued possession under Act No. 926 does not create a
title in 1933,[98] did not present a justiciable case for determination by the land
presumption that the land is alienable. Private claimants also contend that their
registration court of the propertys land classification. Simply put, there was no
continued possession of portions of Boracay Island for the requisite period of ten (10)
opportunity for the courts then to resolve if the land the Boracay occupants are now
years under Act No. 926[106] ipso facto converted the island into private
claiming were agricultural lands. When Act No. 926 was supplanted by Act No. 2874 in
ownership. Hence, they may apply for a title in their name.
1919, without an application for judicial confirmation having been filed by private

claimants or their predecessors-in-interest, the courts were no longer authorized to

determine the propertys land classification. Hence, private claimants cannot bank on Act

No. 926.
 A similar argument was squarely rejected by the Court in Collado v. Court of

Appeals. [107]
Collado, citing the separate opinion of now Chief Justice Reynato S. Puno PD No. 705 issued by President Marcos categorized all unclassified lands of the

in Cruz v. Secretary of Environment and Natural Resources,107-a ruled: public domain as public forest. Section 3(a) of PD No. 705 defines a public forest as

a mass of lands of the public domain which has not been the subject of the present system
Act No. 926, the first Public Land Act, was
passed in pursuance of the provisions of the of classification for the determination of which lands are needed for forest purpose and
Philippine Bill of 1902. The law governed the which are not. Applying PD No. 705, all unclassified lands, including those
disposition of lands of the public domain. It
prescribed rules and regulations for the in Boracay Island, are ipso facto considered public forests. PD No. 705, however, respects
homesteading, selling and leasing of portions of the
public domain of the Philippine Islands, and titles already existing prior to its effectivity.
prescribed the terms and conditions to enable
persons to perfect their titles to public lands in
the Islands. It also provided for the issuance of The Court notes that the classification of Boracay as a forest land under PD No.
patents to certain native settlers upon public lands,
for the establishment of town sites and sale of lots 705 may seem to be out of touch with the present realities in the islan d. Boracay, no
therein, for the completion of imperfect titles, and
for the cancellation or confirmation of Spanish doubt, has been partly stripped of its forest cover to pave the way for commercial
concessions and grants in the Islands. In short, the developments. As a premier tourist destination for local and foreign tourists, Boracay
Public Land Act operated on the assumption that
title to public lands in the Philippine Islands appears more of a commercial island resort, rather than a forest land.
remained in the government; and that the
governments title to public land sprung from the
Treaty of Paris and other subsequent treaties
Nevertheless, that the occupants of Boracay have built multi-million peso beach
between Spain and the United States. The term
public land referred to all lands of the public resorts on the island;[111]that the island has already been stripped of its forest cover; or
domain whose title still remained in the
government and are thrown open to private that the implementation of Proclamation No. 1064 will destroy the islands tourism
appropriation and settlement, and excluded the
patrimonial property of the government and the industry, do not negate its character as public forest.
friar lands.

Thus, it is plain error for petitioners to argue that under the Forests, in the context of both the Public Land Act and the
Philippine Bill of 1902 and Public Land Act No. 926, mere
possession by private individuals of lands creates the legal Constitution [112]
classifying lands of the public domain into agricultural, forest or timber,
presumption that the lands are alienable and disposable. mineral lands, and national parks, do not necessarily refer to large tracts of wooded land
[108]
(Emphasis Ours)
or expanses covered by dense growths of trees and underbrushes.[113] The discussion

in Heirs of Amunategui v. Director of Forestry[114] is particularly instructive:

Except for lands already covered by existing titles, Boracay was an

unclassified land of the public domain prior to Proclamation No. 1064. Such A forested area classified as forest land of the public domain
unclassified lands are considered public forest under PD No. 705. The DENR[109] and does not lose such classification simply because loggers or settlers
may have stripped it of its forest cover. Parcels of land classified as
the National Mapping and Resource Information Authority [110] certify forest land may actually be covered with grass or planted to crops
by kaingin cultivators or other farmers. Forest lands do not have to be
that Boracay Island is an unclassified land of the public domain. on mountains or in out of the way places. Swampy areas covered by
 mangrove trees, nipa palms, and other trees growing in brackish or No trees in forested private lands may be cut without prior
sea water may also be classified as forest land. The classification is authority from the PTA. All forested areas in public lands are
descriptive of its legal nature or status and does not have to be declared forest reserves. (Emphasis supplied)
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 Clearly, the reference in the Circular to both private and public lands merely
of the public domain, the rules on confirmation of imperfect title do
not apply.[115] (Emphasis supplied) recognizes that the island can be classified by the Executive department pursuant to its

powers under CA No. 141. In fact, Section 5 of the Circular recognizes the then Bureau of
There is a big difference between forest as defined in a dictionary and forest or timber Forest Developments authority to declare areas in the island as alienable and disposable
land as a classification of lands of the public domain as appearing in our statutes. One is when it provides:
descriptive of what appears on the land while the other is a legal status, a classification
Subsistence farming, in areas declared as alienable and
for legal purposes.[116] At any rate, the Court is tasked to determine the legalstatus disposable by the Bureau of Forest Development.
of Boracay Island, and not look into its physical layout. Hence, even if its forest cover has

been replaced by beach resorts, restaurants and other commercial establishments, it has Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to
not been automatically converted from public forest to alienable agricultural land. classify Boracay Island as alienable and disposable land. If President Marcos intended to

classify the island as alienable and disposable or forest, or both, he would have identified
Private claimants cannot rely on Proclamation No. 1801 as basis for the specific limits of each, as President Arroyo did in Proclamation No. 1064. This was
judicial confirmation of imperfect title. The proclamation did not convert Boracay not done in Proclamation No. 1801.
into an agricultural land. However, private claimants argue that Proclamation No. 1801

issued by then President Marcos in 1978 entitles them to judicial confirmation of The Whereas clauses of Proclamation No. 1801 also explain the rationale
imperfect title. The Proclamation classified Boracay, among other islands, as a tourist behind the declaration of Boracay Island, together with other islands, caves and
zone. Private claimants assert that, as a tourist spot, the island is susceptible of private peninsulas in the Philippines, as a tourist zone and marine reserve to be administered by
ownership. the PTA to ensure the concentrated efforts of the public and private sectors in the

development of the areas tourism potential with due regard for ecological balance in the
Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of marine environment. Simply put, the proclamation is aimed at administering the islands
Boracay into an agricultural land. There is nothing in the law or the Circular which for tourism and ecological purposes. It does not address the areas alienability. [119]
made Boracay Island an agricultural land. The reference in Circular No. 3-82 to private

lands[117] and areas declared as alienable and disposable [118] does not by itself classify the More importantly, Proclamation No. 1801 covers not only Boracay Island, but
entire island as agricultural. Notably, Circular No. 3-82 makes reference not only to sixty-four (64) other islands, coves, and peninsulas in the Philippines, such as Fortune
private lands and areas but also to public forested lands. Rule VIII, Section 3 provides: and Verde Islands in Batangas, Port Galera in Oriental Mindoro, Panglao and Balicasag

Islands in Bohol, Coron Island, Puerto Princesa and surrounding areas in Palawan,

Camiguin Island in Cagayan de Oro, and Misamis Oriental, to name a few. If the
designation of Boracay Island as tourist zone makes it alienable and disposable by virtue provision of the Comprehensive Agrarian Reform Law (CARL) or RA No. 6657 barring

of Proclamation No. 1801, all the other areas mentioned would likewise be declared wide conversion of public forests into agricultural lands. They claim that since Boracay is a

open for private disposition. That could not have been, and is clearly beyond, the intent public forest under PD No. 705, President Arroyo can no longer convert it into an

of the proclamation. agricultural land without running afoul of Section 4(a) of RA No. 6657, thus:

SEC. 4. Scope. The Comprehensive Agrarian Reform Law of

It was Proclamation No. 1064 of 2006 which positively declared part of 1988 shall cover, regardless of tenurial arrangement and commodity
Boracay as alienable and opened the same to private ownership. Sections 6 and 7 of produced, all public and private agricultural lands as provided in
Proclamation No. 131 and Executive Order No. 229, including other
CA No. 141[120] provide that it is only the President, upon the recommendation of the lands of the public domain suitable for agriculture.

proper department head, who has the authority to classify the lands of the public domain More specifically, the following lands are covered by the
Comprehensive Agrarian Reform Program:
into alienable or disposable, timber and mineral lands. [121]

(a) All alienable and disposable lands of the public

In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely domain devoted to or suitable for
agriculture. No reclassification of forest or
exercised the authority granted to her to classify lands of the public domain, presumably mineral lands to agricultural lands shall be
undertaken after the approval of this Act until
subject to existing vested rights. Classification of public lands is the exclusive prerogative Congress, taking into account ecological,
of the Executive Department, through the Office of the President. Courts have no developmental and equity considerations,
shall have determined by law, the specific
authority to do so.[122] Absent such classification, the land remains unclassified until limits of the public domain.

released and rendered open to disposition. [123]

That Boracay Island was classified as a public forest under PD No. 705 did not

Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest bar the Executive from later converting it into agricultural land. Boracay Island still

land and 628.96 hectares of agricultural land. The Proclamation likewise provides for a remained an unclassified land of the public domain despite PD No. 705.

15-meter buffer zone on each side of the center line of roads and trails, which are

reserved for right of way and which shall form part of the area reserved for forest land In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,

protection purposes. [124]

the Court stated that unclassified lands are public forests.

Contrary to private claimants argument, there was nothing invalid or irregular,

much less unconstitutional, about the classification of Boracay Island made by the
While it is true that the land classification map does not
President through Proclamation No. 1064. It was within her authority to make such categorically state that the islands are public forests, the fact that
they were unclassified lands leads to the same result. In the
classification, subject to existing vested rights.
absence of the classification as mineral or timber land, the land
remains unclassified land until released and rendered open to
disposition.[125](Emphasis supplied)
Proclamation No. 1064 does not violate the Comprehensive Agrarian

Reform Law. Private claimants further assert that Proclamation No. 1064 violates the
 Moreover, the prohibition under the CARL applies only to a reclassification of

land. If the land had never been previously classified, as in the case of Boracay, there can Private claimants bid for judicial confirmation of imperfect title, relying on the

be no prohibited reclassification under the agrarian law. We agree with the opinion of Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must fail because of the

the Department of Justice [126]

on this point: absence of the second element of alienable and disposable land. Their entitlement to a

government grant under our present Public Land Act presupposes that the land
Indeed, the key word to the correct application of the
prohibition in Section 4(a) is the word reclassification. Where there possessed and applied for is already alienable and disposable. This is clear from the
has been no previous classification of public forest [referring, we repeat, wording of the law itself. [129] Where the land is not alienable and disposable, possession
to the mass of the public domain which has not been the subject of the
present system of classification for purposes of determining which are of the land, no matter how long, cannot confer ownership or possessory rights. [130]
needed for forest purposes and which are not] into permanent forest or
forest reserves or some other forest uses under the Revised Forestry
Code, there can be no reclassification of forest lands to speak of within
Neither may private claimants apply for judicial confirmation of imperfect title
the meaning of Section 4(a).
under Proclamation No. 1064, with respect to those lands which were classified as
Thus, obviously, the prohibition in Section 4(a) of the CARL
against the reclassification of forest lands to agricultural lands agricultural lands. Private claimants failed to prove the first element of open, continuous,
without a prior law delimiting the limits of the public domain, does
not, and cannot, apply to those lands of the public domain, exclusive, and notorious possession of their lands in Boracay since June 12, 1945.
denominated as public forest under the Revised Forestry Code, which
have not been previously determined, or classified, as needed for
forest purposes in accordance with the provisions of the Revised We cannot sustain the CA and RTC conclusion in the petition for declaratory
Forestry Code.[127]
relief that private claimants complied with the requisite period of possession.

Private claimants are not entitled to apply for judicial confirmation of

The tax declarations in the name of private claimants are insufficient to prove
imperfect title under CA No. 141. Neither do they have vested rights over the
the first element of possession. We note that the earliest of the tax declarations in the
occupied lands under the said law. There are two requisites for judicial confirmation of
name of private claimants were issued in 1993. Being of recent dates, the tax
imperfect or incomplete title under CA No. 141, namely: (1) open, continuous, exclusive,
declarations are not sufficient to convince this Court that the period of possession and
and notorious possession and occupation of the subject land by himself or through his
occupation commenced on June 12, 1945.
predecessors-in-interest under a bona fide claim of ownership since time immemorial or

from June 12, 1945; and (2) the classification of the land as alienable and disposable land
Private claimants insist that they have a vested right in Boracay, having been in
of the public domain.[128]
possession of the island for a long time. They have invested millions of pesos in

developing the island into a tourist spot. They say their continued possession and
As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No.
investments give them a vested right which cannot be unilaterally rescinded by
1801 did not convert portions of Boracay Island into an agricultural land. The island
Proclamation No. 1064.
remained an unclassified land of the public domain and, applying the Regalian doctrine,

is considered State property.

 The continued possession and considerable investment of private claimants do More realistically, Congress may enact a law to entitle private claimants to

not automatically give them a vested right in Boracay. Nor do these give them a right to acquire title to their occupied lots or to exempt them from certain requirements under

apply for a title to the land they are presently occupying. This Court is constitutionally the present land laws. There is one such bill[133] now pending in the House of

bound to decide cases based on the evidence presented and the laws applicable. As the Representatives. Whether that bill or a similar bill will become a law is for Congress to

law and jurisprudence stand, private claimants are ineligible to apply for a judicial decide.

confirmation of title over their occupied portions in Boracay even with their continued

possession and considerable investment in the island. In issuing Proclamation No. 1064, the government has taken the step necessary

to open up the island to private ownership. This gesture may not be sufficient to appease

One Last Note some sectors which view the classification of the island partially into a forest reserve as

absurd. That the island is no longer overrun by trees, however, does not becloud the

The Court is aware that millions of pesos have been invested for the vision to protect its remaining forest cover and to strike a healthy balance between

development of Boracay Island, making it a by-word in the local and international progress and ecology. Ecological conservation is as important as economic progress.

tourism industry. The Court also notes that for a number of years, thousands of people

have called the island their home. While the Court commiserates with private claimants To be sure, forest lands are fundamental to our nations survival. Their

plight, We are bound to apply the law strictly and judiciously . This is the law and it promotion and protection are not just fancy rhetoric for politicians and activists. These

should prevail. Ito ang batas at ito ang dapat umiral. are needs that become more urgent as destruction of our environment gets prevalent

and difficult to control. As aptly observed by Justice Conrado Sanchez in 1968 in Director

All is not lost, however, for private claimants. While they may not be eligible of Forestry v. Munoz:[134]

to apply for judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as
The view this Court takes of the cases at bar is but in
amended, this does not denote their automatic ouster from the residential, commercial, adherence to public policy that should be followed with respect to
and other areas they possess now classified as agricultural. Neither will this mean the forest lands. Many have written much, and many more have spoken,
and quite often, about the pressing need for forest preservation,
loss of their substantial investments on their occupied alienable lands. Lack of title does conservation, protection, development and reforestation. Not without
justification. For, forests constitute a vital segment of any country's
not necessarily mean lack of right to possess. natural resources. It is of common knowledge by now that absence of
the necessary green cover on our lands produces a number of adverse
or ill effects of serious proportions. Without the trees, watersheds dry
For one thing, those with lawful possession may claim good faith as builders of up; rivers and lakes which they supply are emptied of their contents.
The fish disappear. Denuded areas become dust bowls. As waterfalls
improvements. They can take steps to preserve or protect their possession. For another, cease to function, so will hydroelectric plants. With the rains, the
fertile topsoil is washed away; geological erosion results. With erosion
they may look into other modes of applying for original registration of title, such as by come the dreaded floods that wreak havoc and destruction to
homestead[131] or sales patent,[132] subject to the conditions imposed by law. property crops, livestock, houses, and highways not to mention
precious human lives. Indeed, the foregoing observations should be
written down in a lumbermans decalogue.[135]
 WHEREFORE, judgment is rendered as follows:

1. The petition for certiorari in G.R. No. 167707 is GRANTED and the Court of

Appeals Decision in CA-G.R. CV No. 71118 REVERSED AND SET ASIDE.

2. The petition for certiorari in G.R. No. 173775 is DISMISSED for lack of merit.

SO ORDERED.
 [G.R. No. 150413. July 1, 2003] covered by any land patent. Likewise, this Court could well-discern from the survey plan
covering the same property, as well as technical description and other documents
presented, that the land sought to be registered is agricultural and not within any forest
zone or public domain; and that tacking her predecessors-in-interests possession to hers,
REPUBLIC OF THE PHILIPPINES, petitioner, vs. ALEXANDRA LAO, respondent. applicant appears to be in continuous and public possession thereof for more than thirty
(30) years.[4]

DECISION
The dispositive portion of the decision reads:
YNARES-SANTIAGO, J.:
WHEREFORE, this Court hereby approves this application for registration and thus
This petition for review assails the decision [1] of the Court of Appeals in CA-G.R. CV places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as
No. 56230, which affirmed the judgment[2] of the Regional Trial Court of Tagaytay City, Property Registration Law, the land described in Plan Ap-04-007770 and containing an
Branch 18, in Land Registration Case No. TG-719. area of nine thousand three hundred forty-nine (9,349) square meters as supported by
its technical description now forming part of the record of this case, in addition to other
On September 4, 1995, respondent Alexandra Lao filed with the Regional Trial proofs adduced in the name of ALEXANDRA A. LAO, of legal age, married to NELSON O.
Court of Tagaytay City, Branch 18, an application for the registration of title over a parcel LAO, Filipino citizen, with residence at 1648 Yakal Street, Sta. Cruz, Manila.
of land designated as Lot No. 3951, Cad. 452-D, Silang Cadastre, Plan Ap-04-007770,
consisting of nine thousand three hundred forty nine (9,349) square meters under
Once this Decision becomes final and executory, the corresponding decree of registration
Presidential Decree No. 1529, otherwise known as the Property Registration
shall forthwith issue.
Decree. Respondent alleged that she acquired the land by purchase from the siblings
Raymundo Noguera and Ma. Victoria A. Valenzuela, who inherited it from Generosa
Medina. The latter, in turn, inherited the land from her father, Jose Medina, who acquired SO ORDERED.[5]
the same from Edilberto Perido by transfer.
Petitioner Republic of the Philippines, represented by the Office of the Solicitor
In the alternative, respondent prayed that the land be awarded to her under the
General, appealed to the Court of Appeals which was docketed as CA-G.R. CV No.
provisions of Commonwealth Act No. 141, as amended, also known as the Public Land
56230. On October 15, 2001, the appellate court affirmed the judgment of the trial court.
Act, based on her and her predecessors open, public, actual, continuous, exclusive, [6]
Hence, this petition for review raising the following errors:
notorious and adverse possession and occupancy under bona fide claim of ownership for
more than thirty (30) years.
THERE IS NO SUFFICIENT EVIDENCE TO WARRANT THE ORIGINAL REGISTRATION OF
At the hearing in the lower court, respondent presented the following witnesses: TITLE OF SUBJECT PROPERTY IN THE NAME OF RESPONDENT.[7]
Candido Amoroso, who testified on the ownership of the land by Edilberto Perido in
1932; Vicente Laudato, who testified on respondents purchase of the property from A. RESPONDENT FAILED TO COMPLY WITH THE LEGALLY REQUIRED
Raymundo and Ma. Victoria; and Fina Victoria So-Liwanag, who assisted respondent in PERIOD AND ACTS OF POSSESSION.[8]
her application for registration. Respondent likewise presented in evidence the Deed of
Absolute Sale[3] dated April 19, 1994 executed by Raymundo and Victoria in her favor, the B. THE TAX DECLARATIONS PRESENTED BY RESPONDENT DO NOT
survey plan and technical description of the property, and the tax declarations in the CORROBORATE HER CLAIM OF THE LEGALLY REQUIRED PERIOD OF
name of respondent as well as her predecessors-in-interest. POSSESSION.[9]
On June 28, 1996, the trial court made the following findings, to wit: C. RESPONDENT FAILED TO PRESENT A CERTIFICATION FROM THE
APPROPRIATE GOVERNMENT AGENCY THAT THE LAND SUBJECT OF
x x x the applicant acquired the subject parcel of land by purchase from Raymundo HER APPLICATION FOR REGISTRATION IS ALIENABLE AND DISPOSABLE
Noguera and Ma. Victoria A. Valenzuela in 1994, and that applicant and her LAND OF THE PUBLIC DOMAIN.[10]
predecessors-in-interest have been in continuous, uninterrupted, open, public, adverse
In sum, the issues presented before us are (a) whether or not respondent was able
and in the concept of an owner possession of the subject parcel of land for more than
to prove, by the quantum of evidence mandated by law, that she met the required period
thirty (30) years now; and that the same parcel was declared for taxation purposes; that
of open, exclusive, continuous and notorious possession, in the concept of an owner, of
the realty taxes due thereon have been duly paid; that the land involved in this case is not
the subject parcel of land; and (b) whether or not respondent was able to show that the Land Act are hereby amended in the sense that these provisions shall apply only to
land subject of her application was disposable and alienable land of the public domain. alienable and disposable land of the public domain which have been in open, continuous,
exclusive and notorious possession and occupation by the applicant himself or thru his
Section 14 (1) of Presidential Decree No. 1529 states: predecessors-in-interest under a bona fide claim of acquisition of ownership, since June
12, 1945.
Who may apply. The following persons may file in the proper Court of First Instance an
application for registration of title to land, whether personally or through their duly The aforequoted ruling was reiterated in Republic v. Court of Appeals,[12] thus:
authorized representatives:
This Court has held in Republic vs. Doldol [295 SCRA 359, (1998)] that, originally, Section
(1) Those who by themselves or through their predecessor-in-interest have been in 48(b) of C.A. No. 141 provided for possession and occupation of lands of the public
open, continuous, exclusive and notorious possession and occupation of alienable and domain since July 26, 1894. This was superseded by R.A. No. 1942 which provided for a
disposable lands of the public domain under a bona fide claim of ownership since June simple thirty-year prescriptive period of occupation by an applicant for judicial
12, 1945, or earlier. confirmation of imperfect title. The same, however, has already been amended by
Presidential Decree No. 1073, approved on January 25, 1977. As amended Section 48 (b)
On the other hand, Section 48 (b) of Commonwealth Act No. 141, as amended by now reads:
Section 4 of Presidential Decree No. 1073, provides:
(b) Those who by themselves or through their predecessors-in-interest have been in
The provisions of Section 48(b) and Section 48(c), Chapter VIII, of the Public Land Act open, continuous, exclusive and notorious possession and occupation of agricultural
are hereby amended in the sense that these provisions shall apply only to alienable and lands of the public domain, under a bona fide claim of acquisition or ownership, since
disposable lands of the public domain which have been in open, continuous, exclusive June 12, 1945, or earlier, immediately preceding the filing of the application for
and notorious possession and occupation by the applicant himself or thru his confirmation of title, except when prevented by wars or force majeure. Those shall be
predecessor-in-interest, under a bona fide claim of acquisition of ownership, since June conclusively presumed to have performed all the conditions essential to a Government
12, 1945. grant and shall be entitled to a certificate of title under the provisions of this chapter.

Thus, before one can register his title over a parcel of land, the applicant must show Petitioner argues that respondent failed to prove by incontrovertible evidence that
that (a) he, by himself or through his predecessors-in-interest, has been in open, she had been in open, continuous, exclusive and notorious possession and occupation of
continuous, exclusive and notorious possession and occupation of the subject land under the subject land, in the concept of an owner, since June 12, 1945 or earlier. According to
a bona fide claim of ownership since June 12, 1945 or earlier; and (b) the land subject of petitioner, respondents witnesses did not state the exact period when respondents
the application is alienable and disposable land of the public domain. predecessors-in-interest started occupying the subject land. They only made sweeping
statements to the effect that respondent had been in possession of the property for more
Respondent submits that Section 48 (b) of CA 141 was amended by Republic Act than thirty years. Hence, it can not be conclusively determined whether respondent and
No. 6940, which reduced the required period of possession to thirty years immediately her predecessors-in-interest have truly been in possession of the property since June 12,
prior to the filing of the application. Said law became effective on April 15, 1945 or earlier. Furthermore, respondent failed to show how the property was
1990. However, petitioner maintains that the required period of possession remained transferred from Generosa Medina to Raymundo Noguera and Ma. Victoria A.
the same. RA 6940 explicitly states that its provisions amended sections 44, 45 and 47 of Valenzuela. No extrajudicial settlement of property was established. Consequently,
CA 141. Nothing in RA 6940 amends Section 48 (b). In other words, the requisites for respondent can not tack her possession with those of Generosa Medina and her
judicial confirmation of imperfect or incomplete title set forth therein remains the same, predecessors-in-interest.
namely, (1) possession of the subject land from June 12, 1945, and (2) the classification
of the land as alienable and disposable land of the public domain. In Public Estates There is merit in the petition.
Authority v. Court of Appeals,[11] we held that:
Candido Amoroso, respondents first witness, testified that he first knew of the
property in 1932 and that it was owned by a certain Edilberto Perido. However, no
Under the public land act, judicial confirmation of imperfect title required possession en evidence was presented to support his claim. Respondent submitted the tax declarations
concepto de dueo since time immemorial, or since July 26, 1894. Under C.A. No. 141, this in the name of her predecessors-in-interest, including that of Edilberto. However, the
requirement was retained. However, on June 22, 1957, Republic Act No. 1942 was earliest of these documents pertained to the year 1948 only, three years short of the
enacted amending C.A. No. 141. This later enactment required adverse possession for a required period. Respondents other witness, Vicente Laudato, claimed that he had
period of only thirty (30) years. On January 25, 1977, the President enacted P.D. No. known about the property since he was ten years old, which was in 1945, and that
1073, further amending C.A. No. 141, extending the period for filing applications for Edilberto Perido owned the property. On cross-examination, however, he testified that
judicial confirmation of imperfect or incomplete titles to December 31, 1987. Under this he based his information on Edilbertos ownership of the land on the fact that the latter
decree, the provisions of Section 48 (b) and Section 48 (c), Chapter VIII, of the Public used to greet him and his family whenever he passed by their house.Vicente later on
admitted that he did not know with certainty whether Edilberto was indeed the owner disposable. She cannot rely on the mere presumption that it was agricultural and,
and possessor of the property. [13] therefore, alienable part of the public domain.[20] Thus, in Director of Lands v. Funtilar,
[21]
we held:
Finally, respondent failed to present the extrajudicial settlement or other document
evidencing the transfer of the land from Generosa Medina to Raymundo Noguera and Ma.
Victoria A. Valenzuela. She likewise did not show the relationship between these It was rather sweeping for the appellate court to rule that after an applicant files his
parties. She only presented the deed of sale between her and the latter, where it was application for registration, the burden shifts totally to the government to prove that the
stated that Raymundo and Ma. Victoria inherited the property from Generosa. Hence, land forms part of the unclassified forest zone. The ruling in Heirs of Amunategui v.
respondent can not tack her possession with those of Generosa and her predecessors-in- Director of Forestry (126 SCRA 69) governs applications for confirmation of imperfect
interest. At most, respondents possession can only be reckoned from the time that title. The applicant shoulders the burden of overcoming the presumption that the land
Raymundo and Ma. Victoria claimed possession of the property. sought to be registered forms part of the public domain.

Respondent having thus failed to show by incontrovertible evidence that her Moreover, the absence of opposition from the government agencies is of no
possession of the land commenced on June 12, 1945 or earlier, she failed to meet the first moment because the State cannot be estopped by the omission, mistake or error of its
requisite under the pertinent provisions of PD 1529 and CA 141. officials or agents.[22]
Petitioner further submits that respondent failed to show that the land subject of It bears stressing at this point that declassification of forest land and its conversion
her application is classified as alienable and disposable land of the public domain. Under into alienable or disposable land for agricultural or other purposes requires an express
the Regalian doctrine which is embodied in our Constitution, [14]all lands of the public and positive act from the government. [23] It cannot be presumed; but must be established
domain belong to the State, which is the source of any asserted right to ownership of by convincing proof.[24]
land.[15] All lands not appearing to be clearly within private ownership are presumed to
belong to the State. [16] Unless public land is shown to have been reclassified or alienated WHEREFORE, in view of the foregoing, the petition is GRANTED. The decision of
to a private person by the State, it remains part of the inalienable public domain. [17] To the Court of Appeals in CA-G.R. CV No. 56230 is REVERSED and SET ASIDE. The
overcome this presumption, incontrovertible evidence must be established that the land application for original registration of title over Lot No. 3951, Cad. 452-D, Silang
subject of the application is alienable or disposable. [18] Cadastre, Plan Ap-04-007770, which was docketed as Land Registration Case No. TG-719
before the Regional Trial Court of Tagaytay City, Branch 18, is DENIED.
In De Ocampo v. Arlos,[19] it was held that:
SO ORDERED.
x x x a title may be judicially confirmed under Section 48 of the Public Land Act only if it
pertains to alienable lands of the public domain. Unless such assets are reclassified and
considered disposable and alienable, occupation thereof in the concept of owner, no
matter how long, cannot ripen into ownership and be registered as a title. Verily,
Presidential Decree No. 1073 clarified Section 48 (b) of the Public Land Act by
specifically declaring that the latter applied only to alienable and disposable lands of the
public domain.

In the case at bar, no certification from the appropriate government agency or

official proclamation reclassifying the land as alienable and disposable was presented by
respondent. Respondent merely submitted the survey map and technical descriptions of
the land, which contained no information regarding the classification of the
property. These documents are not sufficient to overcome the presumption that the land
sought to be registered forms part of the public domain.
Respondent argues that she was not required to present any certification stating
that the land is open for disposition because no opposition to her application was ever
made by the appropriate government agencies. She claims that in the absence of any
proof to the contrary, lands of the public domain are agricultural in nature and thus
susceptible to private ownership.
As an applicant for registration of a parcel of land, respondent had the initial
obligation to show that the property involved is agricultural. Being the interested party,
it was incumbent upon her to prove that the land being registered is indeed alienable or
 [G.R. No. 127882. December 1, 2004] RESOLUTION
PANGANIBAN, J.:

LA BUGAL-BLAAN TRIBAL ASSOCIATION, INC., Represented by its Chairman FLONG All mineral resources are owned by the State. Their exploration, development and
MIGUEL M. LUMAYONG; WIGBERTO E. TAADA; PONCIANO BENNAGEN; utilization (EDU) must always be subject to the full control and supervision of the State.
JAIME TADEO; RENATO R. CONSTANTINO JR.; FLONG AGUSTIN M. DABIE; More specifically, given the inadequacy of Filipino capital and technology in large-
ROBERTO P. AMLOY; RAQIM L. DABIE; SIMEON H. DOLOJO; IMELDA M. scale EDU activities, the State may secure the help of foreign companies in all relevant
GANDON; LENY B. GUSANAN; MARCELO L. GUSANAN; QUINTOL A. matters -- especially financial and technical assistance -- provided that, at all times, the
LABUAYAN; LOMINGGES D. LAWAY; BENITA P. TACUAYAN; Minors JOLY L. State maintains its right of full control. The foreign assistor or contractor assumes all
BUGOY, Represented by His Father UNDERO D. BUGOY and ROGER M. financial, technical and entrepreneurial risks in the EDU activities; hence, it may be given
DADING; Represented by His Father ANTONIO L. DADING; ROMY M. reasonable management, operational, marketing, audit and other prerogatives to protect
LAGARO, Represented by His Father TOTING A. LAGARO; MIKENY JONG B. its investments and to enable the business to succeed.
LUMAYONG, Represented by His Father MIGUEL M. LUMAYONG; RENE T. Full control is not anathematic to day-to-day management by the contractor,
MIGUEL, Represented by His Mother EDITHA T. MIGUEL; ALDEMAR L. SAL, provided that the State retains the power to direct overall strategy; and to set aside,
Represented by His Father DANNY M. SAL; DAISY RECARSE, Represented reverse or modify plans and actions of the contractor. The idea of full control is similar to
by Her Mother LYDIA S. SANTOS; EDWARD M. EMUY; ALAN P. that which is exercised by the board of directors of a private corporation: the
MAMPARAIR; MARIO L. MANGCAL; ALDEN S. TUSAN; AMPARO S. YAP; performance of managerial, operational, financial, marketing and other functions may be
VIRGILIO CULAR; MARVIC M.V.F. LEONEN; JULIA REGINA CULAR, GIAN delegated to subordinate officers or given to contractual entities, but the board retains
CARLO CULAR, VIRGILIO CULAR JR., Represented by Their Father full residual control of the business.
VIRGILIO CULAR; PAUL ANTONIO P. VILLAMOR, Represented by His
Parents JOSE VILLAMOR and ELIZABETH PUA-VILLAMOR; ANA GININA R. Who or what organ of government actually exercises this power of control on
TALJA, Represented by Her Father MARIO JOSE B. TALJA; SHARMAINE R. behalf of the State? The Constitution is crystal clear: the President. Indeed, the Chief
CUNANAN, Represented by Her Father ALFREDO M. CUNANAN; ANTONIO Executive is the official constitutionally mandated to enter into agreements with foreign
JOSE A. VITUG III, Represented by His Mother ANNALIZA A. VITUG, LEAN D. owned corporations. On the other hand, Congress may review the action of the President
NARVADEZ, Represented by His Father MANUEL E. NARVADEZ JR.; once it is notified of every contract entered into in accordance with this [constitutional]
ROSERIO MARALAG LINGATING, Represented by Her Father RIO OLIMPIO provision within thirty days from its execution. In contrast to this express mandate of the
A. LINGATING; MARIO JOSE B. TALJA; DAVID E. DE VERA; MARIA President and Congress in the EDU of natural resources, Article XII of the Constitution is
MILAGROS L. SAN JOSE; Sr. SUSAN O. BOLANIO, OND; LOLITA G. silent on the role of the judiciary. However, should the President and/or Congress
DEMONTEVERDE; BENJIE L. NEQUINTO;[1]ROSE LILIA S. ROMANO; gravely abuse their discretion in this regard, the courts may -- in a proper case -- exercise
ROBERTO S. VERZOLA; EDUARDO AURELIO C. REYES; LEAN LOUEL A. their residual duty under Article VIII. Clearly then, the judiciary should not inordinately
PERIA, Represented by His Father ELPIDIO V. PERIA; [2] GREEN FORUM interfere in the exercise of this presidential power of control over the EDU of our natural
PHILIPPINES; GREEN FORUM WESTERN VISAYAS (GF-WV); resources.
ENVIRONMENTAL LEGAL ASSISTANCE CENTER (ELAC); KAISAHAN TUNGO
SA KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN The Constitution should be read in broad, life-giving strokes. It should not be used
(KAISAHAN);[3] PARTNERSHIP FOR AGRARIAN REFORM and RURAL to strangulate economic growth or to serve narrow, parochial interests. Rather, it should
DEVELOPMENT SERVICES, INC. (PARRDS); PHILIPPINE PARTNERSHIP FOR be construed to grant the President and Congress sufficient discretion and reasonable
THE DEVELOPMENT OF HUMAN RESOURCES IN THE RURAL AREAS, INC. leeway to enable them to attract foreign investments and expertise, as well as to secure
(PHILDHRRA); WOMENS LEGAL BUREAU (WLB); CENTER FOR for our people and our posterity the blessings of prosperity and peace.
ALTERNATIVE DEVELOPMENT INITIATIVES, INC. (CADI); UPLAND On the basis of this control standard, this Court upholds the constitutionality of the
DEVELOPMENT INSTITUTE (UDI); KINAIYAHAN FOUNDATION, INC.; Philippine Mining Law, its Implementing Rules and Regulations -- insofar as they relate to
SENTRO NG ALTERNATIBONG LINGAP PANLIGAL (SALIGAN); and LEGAL financial and technical agreements -- as well as the subject Financial and Technical
RIGHTS AND NATURAL RESOURCES CENTER, INC. (LRC), petitioners, Assistance Agreement (FTAA).[5]
vs. VICTOR O. RAMOS, Secretary, Department of Environment and Natural
Resources (DENR); HORACIO RAMOS, Director, Mines and Geosciences
Bureau (MGB-DENR); RUBEN TORRES, Executive Secretary; and WMC
(PHILIPPINES), INC.,[4] respondents. Background
 The Petition for Prohibition and Mandamus before the Court challenges the 1. Has the case been rendered moot by the sale of WMC shares in WMCP to
constitutionality of (1) Republic Act No. [RA] 7942 (The Philippine Mining Act of 1995); Sagittarius (60 percent of Sagittarius equity is owned by Filipinos and/or Filipino-owned
(2) its Implementing Rules and Regulations (DENR Administrative Order No. [DAO] 96- corporations while 40 percent is owned by Indophil Resources NL, an Australian
40); and (3) the FTAA dated March 30, 1995,[6] executed by the government with company) and by the subsequent transfer and registration of the FTAA from WMCP to
Western Mining Corporation (Philippines), Inc. (WMCP).[7] Sagittarius?
On January 27, 2004, the Court en banc promulgated its Decision[8] granting the Petition 2. Assuming that the case has been rendered moot, would it still be proper to
and declaring the unconstitutionality of certain provisions of RA 7942, DAO 96-40, as well as of resolve the constitutionality of the assailed provisions of the Mining Law, DAO 96-40 and
the entire FTAA executed between the government and WMCP, mainly on the finding that the WMCP FTAA?
FTAAs are service contracts prohibited by the 1987 Constitution.
3. What is the proper interpretation of the phrase Agreements Involving Either
The Decision struck down the subject FTAA for being similar to service contracts,[9] which, Technical or Financial Assistancecontained in paragraph 4 of Section 2 of Article XII of the
though permitted under the 1973 Constitution,[10] were subsequently denounced for being Constitution?
antithetical to the principle of sovereignty over our natural resources, because they allowed
foreign control over the exploitation of our natural resources, to the prejudice of the Filipino Should the Motion for Reconsideration
nation. Be Granted?

The Decision quoted several legal scholars and authors who had criticized service Respondents and intervenors Motions for Reconsideration should be granted, for
contracts for, inter alia, vesting in the foreign contractor exclusive management and the reasons discussed below. The foregoing three issues identified by the Court shall now
control of the enterprise, including operation of the field in the event petroleum was be taken up seriatim.
discovered; control of production, expansion and development; nearly unfettered control First Issue:
over the disposition and sale of the products discovered/extracted; effective ownership Mootness
of the natural resource at the point of extraction; and beneficial ownership of our
economic resources. According to the Decision, the 1987 Constitution (Section 2 of In declaring unconstitutional certain provisions of RA 7942, DAO 96-40, and the
Article XII) effectively banned such service contracts. WMCP FTAA, the majority Decision agreed with petitioners contention that the subject
FTAA had been executed in violation of Section 2 of Article XII of the 1987 Constitution.
Subsequently, respondents filed separate Motions for Reconsideration. In a According to petitioners, the FTAAs entered into by the government with foreign-owned
Resolution dated March 9, 2004, the Court required petitioners to comment thereon. In corporations are limited by the fourth paragraph of the said provision to agreements
the Resolution of June 8, 2004, it set the case for Oral Argument on June 29, 2004. involving only technical or financial assistance for large-scale exploration, development
After hearing the opposing sides, the Court required the parties to submit their and utilization of minerals, petroleum and other mineral oils. Furthermore, the foreign
respective Memoranda in amplification of their arguments. In a Resolution issued later contractor is allegedly permitted by the FTAA in question to fully manage and control the
the same day, June 29, 2004, the Court noted, inter alia, the Manifestation and Motion (in mining operations and, therefore, to acquire beneficial ownership of our mineral
lieu of comment) filed by the Office of the Solicitor General (OSG) on behalf of public resources.
respondents. The OSG said that it was not interposing any objection to the Motion for The Decision merely shrugged off the Manifestation by WMPC informing the Court
Intervention filed by the Chamber of Mines of the Philippines, Inc. (CMP) and was in fact (1) that on January 23, 2001, WMC had sold all its shares in WMCP to Sagittarius Mines,
joining and adopting the latters Motion for Reconsideration. Inc., 60 percent of whose equity was held by Filipinos; and (2) that the assailed FTAA had
Memoranda were accordingly filed by the intervenor as well as by petitioners, likewise been transferred from WMCP to Sagittarius.[11] The ponencia declared that the
public respondents, and private respondent, dwelling at length on the three issues instant case had not been rendered moot by the transfer and registration of the FTAA to
discussed below. Later, WMCP submitted its Reply Memorandum, while the OSG -- in a Filipino-owned corporation, and that the validity of the said transfer remained in
obedience to an Order of this Court -- filed a Compliance submitting copies of more dispute and awaited final judicial determination. [12] Patently therefore, the Decision is
FTAAs entered into by the government. anchored on the assumption that WMCP had remained a foreign corporation.
The crux of this issue of mootness is the fact that WMCP, at the time it entered into
the FTAA, happened to be wholly owned by WMC Resources International Pty., Ltd.
Three Issues Identified by the Court (WMC), which in turn was a wholly owned subsidiary of Western Mining Corporation
Holdings Ltd., a publicly listed major Australian mining and exploration company.
The nullity of the FTAA was obviously premised upon the contractor being
During the Oral Argument, the Court identified the three issues to be resolved in a foreign corporation. Had the FTAA been originally issued to a Filipino-owned
the present controversy, as follows: corporation, there would have been no constitutionality issue to speak of. Upon the other
hand, the conveyance of the WMCP FTAA to a Filipino corporation can be likened to the
sale of land to a foreigner who subsequently acquires Filipino citizenship, or who later
resells the same land to a Filipino citizen. The conveyance would be validated, as the or restriction insofar as arrangements other than the three aforementioned contractual
property in question would no longer be owned by a disqualified vendee. schemes are concerned.
And, inasmuch as the FTAA is to be implemented now by a Filipino corporation, it Neither can one reasonably discern any implied stricture to that effect. Besides,
is no longer possible for the Court to declare it unconstitutional. The case pending in the there is no basis to believe that the framers of the Constitution, a majority of whom were
Court of Appeals is a dispute between two Filipino companies (Sagittarius and Lepanto), obviously concerned with furthering the development and utilization of the countrys
both claiming the right to purchase the foreign shares in WMCP. So, regardless of which natural resources, could have wanted to restrict Filipino participation in that area. This
side eventually wins, the FTAA would still be in the hands of a qualified Filipino point is clear, especially in the light of the overarching constitutional principle of giving
company. Considering that there is no longer any justiciable controversy, the plea to preference and priority to Filipinos and Filipino corporations in the development of our
nullify the Mining Law has become a virtual petition for declaratory relief, over which natural resources.
this Court has no original jurisdiction.
Besides, even assuming (purely for arguments sake) that a constitutional limitation
In their Final Memorandum, however, petitioners argue that the case has not barring Filipino corporations from holding and implementing an FTAA actually exists,
become moot, considering the invalidity of the alleged sale of the shares in WMCP from nevertheless, such provision would apply only to the transfer of the FTAA to Sagittarius,
WMC to Sagittarius, and of the transfer of the FTAA from WMCP to Sagittarius, resulting but definitely not to the sale of WMCs equity stake in WMCP to Sagittarius. Otherwise, an
in the change of contractor in the FTAA in question. And even assuming that the said unreasonable curtailment of property rights without due process of law would ensue.
transfers were valid, there still exists an actual case predicated on the invalidity of RA Petitioners argument must therefore fail.
7942 and its Implementing Rules and Regulations (DAO 96-40). Presently, we shall
discuss petitioners objections to the transfer of both the shares and the FTAA. We shall
take up the alleged invalidity of RA 7942 and DAO 96-40 later on in the discussion of the
third issue. FTAA Not Intended
Solely for Foreign Corporation

No Transgression of the Constitution Equally barren of merit is the second ground cited by petitioners -- that the FTAA
by the Transfer of the WMCP Shares was intended to apply solely to a foreign corporation, as can allegedly be seen from the
provisions therein. They manage to cite only one WMCP FTAA provision that can be
regarded as clearly intended to apply only to a foreign contractor: Section 12, which
Petitioners claim, first, that the alleged invalidity of the transfer of the WMCP provides for international commercial arbitration under the auspices of the International
shares to Sagittarius violates the fourth paragraph of Section 2 of Article XII of the Chamber of Commerce, after local remedies are exhausted. This provision, however, does
Constitution; second, that it is contrary to the provisions of the WMCP FTAA itself; not necessarily imply that the WMCP FTAA cannot be transferred to and assumed by a
and third, that the sale of the shares is suspect and should therefore be the subject of a Filipino corporation like Sagittarius, in which event the said provision should simply be
case in which its validity may properly be litigated. disregarded as a superfluity.
On the first ground, petitioners assert that paragraph 4 of Section 2 of Article XII
permits the government to enter into FTAAs only with foreign-owned corporations.
Petitioners insist that the first paragraph of this constitutional provision limits the No Need for a Separate
participation of Filipino corporations in the exploration, development and utilization of Litigation of the Sale of Shares
natural resources to only three species of contracts -- production sharing, co-production
and joint venture -- to the exclusion of all other arrangements or variations thereof, and
the WMCP FTAA may therefore not be validly assumed and implemented by Petitioners claim as third ground the suspicious sale of shares from WMC to
Sagittarius. In short, petitioners claim that a Filipino corporation is not allowed by the Sagittarius; hence, the need to litigate it in a separate case. Section 40 of RA 7942 (the
Constitution to enter into an FTAA with the government. Mining Law) allegedly requires the Presidents prior approval of a transfer.
However, a textual analysis of the first paragraph of Section 2 of Article XII does not A re-reading of the said provision, however, leads to a different conclusion. Sec.
support petitioners argument. The pertinent part of the said provision states: Sec. 2. x x x 40. Assignment/Transfer -- A financial or technical assistance agreement may be assigned
The exploration, development and utilization of natural resources shall be under the full or transferred, in whole or in part, to a qualified person subject to the prior approval of the
control and supervision of the State. The State may directly undertake such activities, or it President: Provided, That the President shall notify Congress of every financial or technical
may enter into co-production, joint venture, or production-sharing agreements with assistance agreement assigned or converted in accordance with this provision within thirty
Filipino citizens, or corporations or associations at least sixty per centum of whose capital (30) days from the date of the approval thereof.
is owned by such citizens. x x x. Nowhere in the provision is there any express limitation
 Section 40 expressly applies to the assignment or transfer of the FTAA, not to the sale se void, no valid right could be transferred; neither could it be ratified, so petitioners
and transfer of shares of stock in WMCP. Moreover, when the transferee of an FTAA is conclude.
another foreign corporation, there is a logical application of the requirement of prior
approval by the President of the Republic and notification to Congress in the event of Petitioners have assumed as fact that which has yet to be established. First and
assignment or transfer of an FTAA. In this situation, such approval and notification are foremost, the Decision of this Court declaring the FTAA void has not yet become final.
appropriate safeguards, considering that the new contractor is the subject of a foreign That was precisely the reason the Court still heard Oral Argument in this case. Second,
government. the FTAA does not vest in the foreign corporation full control and supervision over the
exploration, development and utilization of mineral resources, to the exclusion of the
On the other hand, when the transferee of the FTAA happens to be government. This point will be dealt with in greater detail below; but for now, suffice it
a Filipino corporation, the need for such safeguard is not critical; hence, the lack of prior to say that a perusal of the FTAA provisions will prove that the government has effective
approval and notification may not be deemed fatal as to render the transfer invalid. overall direction and control of the mining operations, including marketing and product
Besides, it is not as if approval by the President is entirely absent in this instance. As pricing, and that the contractors work programs and budgets are subject to its review
pointed out by private respondent in its Memorandum,[13] the issue of approval is the and approval or disapproval.
subject of one of the cases brought by Lepanto against Sagittarius in GR No. 162331. That
case involved the review of the Decision of the Court of Appeals dated November 21, As will be detailed later on, the government does not have to micro-manage the
2003 in CA-GR SP No. 74161, which affirmed the DENR Order dated December 31, 2001 mining operations and dip its hands into the day-to-day management of the enterprise in
and the Decision of the Office of the President dated July 23, 2002, both approving the order to be considered as having overall control and direction. Besides, for practical and
assignment of the WMCP FTAA to Sagittarius. pragmatic reasons, there is a need for government agencies to delegate certain aspects of
the management work to the contractor. Thus the basis for declaring the FTAA void still
Petitioners also question the sale price and the financial capacity of the transferee. has to be revisited, reexamined and reconsidered.
According to the Deed of Absolute Sale dated January 23, 2001, executed between WMC
and Sagittarius, the price of the WMCP shares was fixed at US$9,875,000, equivalent Petitioners sniff at the citation of Chavez v. Public Estates Authority,[14] and Halili v.
to P553 million at an exchange rate of 56:1. Sagittarius had an authorized capital stock CA,[15] claiming that the doctrines in these cases are wholly inapplicable to the instant
of P250 million and a paid up capital of P60 million. Therefore, at the time of approval of case.
the sale by the DENR, the debt-to-equity ratio of the transferee was over 9:1 -- hardly Chavez clearly teaches: Thus, the Court has ruled consistently that where a Filipino
ideal for an FTAA contractor, according to petitioners. citizen sells land to an alien who later sells the land to a Filipino, the invalidity of the first
However, private respondents counter that the Deed of Sale specifically provides transfer is corrected by the subsequent sale to a citizen. Similarly, where the alien who buys
that the payment of the purchase price would take place only after Sagittarius the land subsequently acquires Philippine citizenship, the sale is validated since the purpose
commencement of commercial production from mining operations, if at all. Consequently, of the constitutional ban to limit land ownership to Filipinos has been achieved. In short,
under the circumstances, we believe it would not be reasonable to conclude, as the law disregards the constitutional disqualification of the buyer to hold land if the land is
petitioners did, that the transferees high debt-to-equity ratio per se necessarily carried subsequently transferred to a qualified party, or the buyer himself becomes a qualified
negative implications for the enterprise; and it would certainly be improper to invalidate party.[16]
the sale on that basis, as petitioners propose. In their Comment, petitioners contend that in Chavez and Halili, the object of the
transfer (the land) was not what was assailed for alleged unconstitutionality. Rather, it
was the transaction that was assailed; hence subsequent compliance with constitutional
FTAA Not Void, provisions would cure its infirmity. In contrast, in the instant case it is the FTAA itself,
Thus Transferrable the object of the transfer, that is being assailed as invalid and unconstitutional. So,
petitioners claim that the subsequent transfer of a void FTAA to a Filipino corporation
would not cure the defect.
To bolster further their claim that the case is not moot, petitioners insist that the Petitioners are confusing themselves. The present Petition has been filed, precisely
FTAA is void and, hence cannot be transferred; and that its transfer does not operate to because the grantee of the FTAA was a wholly owned subsidiary of a foreign corporation.
cure the constitutional infirmity that is inherent in it; neither will a change in the It cannot be gainsaid that anyone would have asserted that the same FTAA was void if it
circumstances of one of the parties serve to ratify the void contract. had at the outset been issued to a Filipino corporation. The FTAA, therefore, is not per se
While the discussion in their Final Memorandum was skimpy, petitioners in their defective or unconstitutional. It was questioned only because it had been issued to an
Comment (on the MR) did ratiocinate that this Court had declared the FTAA to be void allegedly non-qualified, foreign-owned corporation.
because, at the time it was executed with WMCP, the latter was a fully foreign-owned We believe that this case is clearly analogous to Halili, in which the land acquired
corporation, in which the former vested full control and management with respect to the by a non-Filipino was re-conveyed to a qualified vendee and the original transaction was
exploration, development and utilization of mineral resources, contrary to the provisions thereby cured. Paraphrasing Halili, the same rationale applies to the instant case:
of paragraph 4 of Section 2 of Article XII of the Constitution. And since the FTAA was per assuming arguendo the invalidity of its prior grant to a foreign corporation, the disputed
FTAA -- being now held by a Filipino corporation -- can no longer be assailed; the entered into under the provisions of the Mining Act invites potential litigation for as long
objective of the constitutional provision -- to keep the exploration, development and as the constitutional issues are not resolved with finality. Nevertheless, we must concede
utilization of our natural resources in Filipino hands -- has been served. that there exists the distinct possibility that one or more of the future FTAAs will be the
subject of yet another suit grounded on constitutional issues.
More accurately speaking, the present situation is one degree better than that
obtaining in Halili, in which the original sale to a non-Filipino was clearly and But of equal if not greater significance is the cloud of uncertainty hanging over the
indisputably violative of the constitutional prohibition and thus void ab initio. In the mining industry, which is even now scaring away foreign investments. Attesting to this
present case, the issuance/grant of the subject FTAA to the then foreign-owned WMCP climate of anxiety is the fact that the Chamber of Mines of the Philippines saw the urgent
was not illegal, void or unconstitutional at the time. The matter had to be brought to need to intervene in the case and to present its position during the Oral Argument; and
court, precisely for adjudication as to whether the FTAA and the Mining Law had indeed that Secretary General Romulo Neri of the National Economic Development Authority
violated the Constitution. Since, up to this point, the decision of this Court declaring the (NEDA) requested this Court to allow him to speak, during that Oral Argument, on the
FTAA void has yet to become final, to all intents and purposes, the FTAA must be deemed economic consequences of the Decision of January 27, 2004. [20]
valid and constitutional.[17]
We are convinced. We now agree that the Court must recognize the exceptional
At bottom, we find completely outlandish petitioners contention that an FTAA character of the situation and the paramount public interest involved, as well as the
could be entered into by the government only with a foreign corporation, never with a necessity for a ruling to put an end to the uncertainties plaguing the mining industry and
Filipino enterprise. Indeed, the nationalistic provisions of the Constitution are all the affected communities as a result of doubts cast upon the constitutionality and validity
anchored on the protection of Filipino interests. How petitioners can now argue that of the Mining Act, the subject FTAA and future FTAAs, and the need to avert a multiplicity
foreigners have the exclusive right to FTAAs totally overturns the entire basis of the of suits. Paraphrasing Gonzales v. Commission on Elections, [21] it is evident that strong
Petition -- preference for the Filipino in the exploration, development and utilization of reasons of public policy demand that the constitutionality issue be resolved now. [22]
our natural resources. It does not take deep knowledge of law and logic to understand that
what the Constitution grants to foreigners should be equally available to Filipinos. In further support of the immediate resolution of the constitutionality issue, public
respondents cite Acop v. Guingona,[23] to the effect that the courts will decide a question --
otherwise moot and academic -- if it is capable of repetition, yet evading review. [24] Public
respondents ask the Court to avoid a situation in which the constitutionality issue may
Second Issue: again arise with respect to another FTAA, the resolution of which may not be achieved
Whether the Court Can Still Decide the Case, until after it has become too late for our mining industry to grow out of its infancy. They
Even Assuming It Is Moot also recall Salonga v. Cruz Pao,[25] in which this Court declared that (t)he Court also has
the duty to formulate guiding and controlling constitutional principles, precepts, doctrines
or rules. It has the symbolic function of educating the bench and bar on the extent of
All the protagonists are in agreement that the Court has jurisdiction to decide this protection given by constitutional guarantees. x x x.
controversy, even assuming it to be moot.
The mootness of the case in relation to the WMCP FTAA led the
Petitioners stress the following points. First, while a case becomes moot and undersigned ponente to state in his dissent to the Decision that there was no more
academic when there is no more actual controversy between the parties or no useful justiciable controversy and the plea to nullify the Mining Law has become a virtual
purpose can be served in passing upon the merits, [18] what is at issue in the instant case is petition for declaratory relief.[26] The entry of the Chamber of Mines of the Philippines,
not only the validity of the WMCP FTAA, but also the constitutionality of RA 7942 and its Inc., however, has put into focus the seriousness of the allegations of unconstitutionality
Implementing Rules and Regulations. Second, the acts of private respondent cannot of RA 7942 and DAO 96-40 which converts the case to one for prohibition [27] in the
operate to cure the law of its alleged unconstitutionality or to divest this Court of its enforcement of the said law and regulations.
jurisdiction to decide. Third, the Constitution imposes upon the Supreme Court the duty
to declare invalid any law that offends the Constitution. Indeed, this CMP entry brings to fore that the real issue in this case is whether
paragraph 4 of Section 2 of Article XII of the Constitution is contravened by RA 7942 and
Petitioners also argue that no amendatory laws have been passed to make the DAO 96-40, not whether it was violated by specific acts implementing RA 7942 and DAO
Mining Act of 1995 conform to constitutional strictures (assuming that, at present, it 96-40. [W]hen an act of the legislative department is seriously alleged to have infringed
does not); that public respondents will continue to implement and enforce the statute the Constitution, settling the controversy becomes the duty of this Court. By the mere
until this Court rules otherwise; and that the said law continues to be the source of legal enactment of the questioned law or the approval of the challenged action, the dispute is
authority in accepting, processing and approving numerous applications for mining said to have ripened into a judicial controversy even without any other overt act. [28] This
rights. ruling can be traced from Taada v. Angara,[29] in which the Court said:

Indeed, it appears that as of June 30, 2002, some 43 FTAA applications had been
filed with the Mines and Geosciences Bureau (MGB), with an aggregate area of In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the
2,064,908.65 hectares -- spread over Luzon, the Visayas and Mindanao [19] -- applied for. It Constitution, the petition no doubt raises a justiciable controversy. Where an action of
may be a bit far-fetched to assert, as petitioners do, that each and every FTAA that was
the legislative branch is seriously alleged to have infringed the Constitution, it becomes not The President may enter into agreements with foreign-owned corporations involving
only the right but in fact the duty of the judiciary to settle the dispute. either technical or financial assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils according to the general
xxxxxxxxx terms and conditions provided by law, based on real contributions to the economic growth
and general welfare of the country. In such agreements, the State shall promote the
development and use of local scientific and technical resources.
As this Court has repeatedly and firmly emphasized in many cases, it will not shirk,
digress from or abandon its sacred duty and authority to uphold the Constitution in
matters that involve grave abuse of discretion brought before it in appropriate cases, The President shall notify the Congress of every contract entered into in accordance with
committed by any officer, agency, instrumentality or department of the government. [30] this provision, within thirty days from its execution. [31]

Additionally, the entry of CMP into this case has also effectively forestalled any
possible objections arising from the standing or legal interest of the original parties. No Restriction of Meaning by
a Verba Legis Interpretation
For all the foregoing reasons, we believe that the Court should proceed to a
resolution of the constitutional issues in this case.
To interpret the foregoing provision, petitioners adamantly assert that the
language of the Constitution should prevail; that the primary method of interpreting it is
Third Issue: to seek the ordinary meaning of the words used in its provisions. They rely on rulings of
The Proper Interpretation of the Constitutional Phrase this Court, such as the following:
Agreements Involving Either Technical or Financial Assistance
The fundamental principle in constitutional construction however is that the primary
source from which to ascertain constitutional intent or purpose is the language of the
The constitutional provision at the nucleus of the controversy is paragraph 4 of provision itself. The presumption is that the words in which the constitutional provisions
Section 2 of Article XII of the 1987 Constitution. In order to appreciate its context, are couched express the objective sought to be attained. In other words, verba
Section 2 is reproduced in full: legis prevails. Only when the meaning of the words used is unclear and equivocal should
resort be made to extraneous aids of construction and interpretation, such as the
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral proceedings of the Constitutional Commission or Convention to shed light on and ascertain
oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and the true intent or purpose of the provision being construed. [32]
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 Very recently, in Francisco v. The House of Representatives,[33] this Court indeed had
utilization of natural resources shall be under the full control and supervision of the State. the occasion to reiterate the well-settled principles of constitutional construction:
The State may directly undertake such activities, or it may enter into co-production, joint
venture or production-sharing agreements with Filipino citizens or corporations or First, verba legis, that is, wherever possible, the words used in the Constitution must be
associations at least sixty per centum of whose capital is owned by such citizens. Such given their ordinary meaning except where technical terms are employed. x x x.
agreements may be for a period not exceeding twenty-five years, renewable for not more
than twenty-five years, and under such terms and conditions as may be provided by law. In
cases of water rights for irrigation, water supply, fisheries, or industrial uses other than the xxxxxxxxx
development of water power, beneficial use may be the measure and limit of the grant.
Second, where there is ambiguity, ratio legis est anima. The words of the Constitution
The State shall protect the nations marine wealth in its archipelagic waters, territorial sea, should be interpreted in accordance with the intent of its framers. x x x.
and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino
citizens. xxxxxxxxx

The Congress may, by law, allow small-scale utilization of natural resources by Filipino Finally, ut magis valeat quam pereat. The Constitution is to be interpreted as a whole.[34]
citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fish-
workers in rivers, lakes, bays and lagoons. For ease of reference and in consonance with verba legis, we reconstruct and
stratify the aforequoted Section 2 as follows:
1. All natural resources are owned by the State. Except for agricultural lands, natural management or other forms of assistance or other activities associated with the service
resources cannot be alienated by the State. contracts of the martial law regime, since the management or operation of mining
activities by foreign contractors, which is the primary feature of service contracts, was
2. The exploration, development and utilization (EDU) of natural resources shall be precisely the evil that the drafters of the 1987 Constitution sought to eradicate.
under the full control and supervision of the State. On the other hand, the intervenor[37] and public respondents argue that the FTAA
allowed by paragraph 4 is not merely an agreement for supplying limited and specific
3. The State may undertake these EDU activities through either of the following: financial or technical services to the State. Rather, such FTAA is a comprehensive
agreement for the foreign-owned corporations integrated exploration, development and
(a) By itself directly and solely utilization of mineral, petroleum or other mineral oils on a large-scale basis. The
agreement, therefore, authorizes the foreign contractors rendition of a whole range of
integrated and comprehensive services, ranging from the discovery to the development,
(b) By (i) co-production; (ii) joint venture; or (iii) production sharing agreements with utilization and production of minerals or petroleum products.
Filipino citizens or corporations, at least 60 percent of the capital of which is owned by
such citizens We do not see how applying a strictly literal or verba legis interpretation of
paragraph 4 could inexorably lead to the conclusions arrived at in the ponencia. First, the
4. Small-scale utilization of natural resources may be allowed by law in favor of Filipino drafters choice of words -- their use of the phrase agreements x x x involving either
citizens. technical or financial assistance -- does not indicate the intent to exclude other modes of
assistance. The drafters opted to use involving when they could have simply
said agreements for financial or technical assistance, if that was their intention to begin
5. For large-scale EDU of minerals, petroleum and other mineral oils, the President may with. In this case, the limitation would be very clear and no further debate would ensue.
enter into agreements with foreign-owned corporations involving either technical or
financial assistance according to the general terms and conditions provided by law x x x. In contrast, the use of the word involving signifies the possibility of the inclusion
of other forms of assistance or activities having to do with, otherwise related to or
Note that in all the three foregoing mining activities -- exploration, development and compatible with financial or technical assistance. The word involving as used in this
utilization -- the State may undertake such EDU activities by itself or in tandem with context has three connotations that can be differentiated thus: one, the sense of
Filipinos or Filipino corporations, except in two instances: first, in small-scale utilization concerning, having to do with, or affecting; two, entailing, requiring, implying or
of natural resources, which Filipinos may be allowed by law to undertake; and second, in necessitating; and three, including, containing or comprising.[38]
large-scale EDU of minerals, petroleum and mineral oils, which may be undertaken by
Plainly, none of the three connotations convey a sense of exclusivity. Moreover, the
the State via agreements with foreign-owned corporations involving either technical or
word involving, when understood in the sense of including, as in including technical or
financial assistance as provided by law.
financial assistance, necessarily implies that there are activities other than those that are
Petitioners claim that the phrase agreements x x x involving either technical or being included. In other words, if an agreement includes technical or financial assistance,
financial assistance simply means technical assistance or financial assistance agreements, there is apart from such assistance -- something else already in, and covered or may be
nothing more and nothing else. They insist that there is no ambiguity in the phrase, and covered by, the said agreement.
that a plain reading of paragraph 4 quoted above leads to the inescapable conclusion that
In short, it allows for the possibility that matters, other than those explicitly
what a foreign-owned corporation may enter into with the government is merely an
mentioned, could be made part of the agreement. Thus, we are now led to the conclusion
agreement for either financial ortechnical assistance only, for the large-scale exploration,
that the use of the word involving implies that these agreements with foreign
development and utilization of minerals, petroleum and other mineral oils; such a
corporations are not limited to mere financial or technical assistance. The difference in
limitation, they argue, excludes foreign management and operation of a mining
sense becomes very apparent when we juxtapose agreements for technical or financial
enterprise.[35]
assistance against agreements including technical or financial assistance. This much is
This restrictive interpretation, petitioners believe, is in line with the general policy unalterably clear in a verba legis approach.
enunciated by the Constitution reserving to Filipino citizens and corporations the use
Second, if the real intention of the drafters was to confine foreign corporations to
and enjoyment of the countrys natural resources. They maintain that this Courts
financial or technical assistance and nothing more, their language would have certainly
Decision[36] of January 27, 2004 correctly declared the WMCP FTAA, along with pertinent
been so unmistakably restrictive and stringent as to leave no doubt in anyones mind
provisions of RA 7942, void for allowing a foreign contractor to have direct and exclusive
about their true intent. For example, they would have used the sentence foreign
management of a mining enterprise. Allowing such a privilege not only runs counter to
corporations are absolutely prohibited from involvement in the management or
the full control and supervision that the State is constitutionally mandated to exercise
operation of mining or similar ventures or words of similar import. A search for such
over the exploration, development and utilization of the countrys natural resources;
stringent wording yields negative results. Thus, we come to the inevitable conclusion
doing so also vests in the foreign company beneficial ownership of our mineral
that there was a conscious and deliberate decision to avoid the use of restrictive
resources. It will be recalled that the Decision of January 27, 2004 zeroed in on
wording that bespeaks an intent not to use the expression agreements x x x involving Philippines. The last point needs to be emphasized: if merely financial or technical
either technical or financial assistance in an exclusionary and limiting manner. assistance agreements are allowed, there would be no need to limit them to large-
scale mining operations, as there would be far greater need for them in the
smaller-scale mining activities (and even in non-mining areas). Obviously, the
provision in question was intended to refer to agreements other than those for
Deletion of Service Contracts to mere financial or technical assistance.
Avoid Pitfalls of Previous Constitutions,
Not to Ban Service Contracts Per Se In like manner, there would be no need to require the President of the Republic to
report to Congress, if only financial or technical assistance agreements are involved. Such
agreements are in the nature of foreign loans that -- pursuant to Section 20 of Article
Third, we do not see how a verba legis approach leads to the conclusion that the VII[39] of the 1987 Constitution -- the President may contract or guarantee, merely with
management or operation of mining activities by foreign contractors, which is the primary the prior concurrence of the Monetary Board. In turn, the Board is required to report to
feature of service contracts, was precisely the evil that the drafters of the 1987 Constitution Congress within thirty days from the end of every quarter of the calendar year, not thirty
sought to eradicate. Nowhere in the above-quoted Section can be discerned the objective days after the agreement is entered into.
to keep out of foreign hands the management or operation of mining activities or the
plan to eradicate service contracts as these were understood in the 1973 Constitution. And if paragraph 4 permits only agreements for loans and other forms of financial,
Still, petitioners maintain that the deletion or omission from the 1987 Constitution of the or technical assistance, what is the point of requiring that they be based on real
term service contracts found in the 1973 Constitution sufficiently proves the drafters contributions to the economic growth and general welfare of the country? For instance,
intent to exclude foreigners from the management of the affected enterprises. how is one to measure and assess the real contributions to the economic growth and
general welfare of the country that may ensue from a foreign-currency loan agreement
To our mind, however, such intent cannot be definitively and conclusively or a technical-assistance agreement for, say, the refurbishing of an existing power
established from the mere failure to carry the same expression or term over to the new generating plant for a mining operation somewhere in Mindanao? Such a criterion would
Constitution, absent a more specific, explicit and unequivocal statement to that effect. make more sense when applied to a major business investment in a principal sector of
What petitioners seek (a complete ban on foreign participation in the management of the industry.
mining operations, as previously allowed by the earlier Constitutions) is nothing short of
bringing about a momentous sea change in the economic and developmental policies; The conclusion is clear and inescapable -- a verba legis construction shows that
and the fundamentally capitalist, free-enterprise philosophy of our government. We paragraph 4 is not to be understood as one limited only to foreign loans (or other forms
cannot imagine such a radical shift being undertaken by our government, to the great of financial support) and to technical assistance. There is definitely more to it than
prejudice of the mining sector in particular and our economy in general, merely on the that. These are provisions permitting participation by foreign companies;
basis of the omission of the terms service contract from or the failure to carry them over requiring the Presidents report to Congress; and using, as yardstick, contributions
to the new Constitution. There has to be a much more definite and even unarguable basis based on economic growth and general welfare. These were neither accidentally
for such a drastic reversal of policies. inserted into the Constitution nor carelessly cobbled together by the drafters in lip
service to shallow nationalism. The provisions patently have significance and
Fourth, a literal and restrictive interpretation of paragraph 4, such as that proposed usefulness in a context that allows agreements with foreign companies to include more
by petitioners, suffers from certain internal logical inconsistencies that generate than mere financial or technical assistance.
ambiguities in the understanding of the provision. As the intervenor pointed out, there
has never been any constitutional or statutory provision that reserved to Filipino citizens Fifth, it is argued that Section 2 of Article XII authorizes nothing more than a
or corporations, at least 60 percent of which is Filipino-owned, the rendition of financial rendition of specific and limited financial service or technical assistance by a foreign
or technical assistance to companies engaged in mining or the development of any other company. This argument begs the question To whom or for whom would it be rendered?
natural resource. The taking out of foreign-currency or peso-denominated loans or any or Who is being assisted? If the answer is The State, then it necessarily implies that the
other kind of financial assistance, as well as the rendition of technical assistance -- State itself is the one directly and solely undertaking the large-scale exploration,
whether to the State or to any other entity in the Philippines -- has never been restricted development and utilization of a mineral resource, so it follows that the State must itself
in favor of Filipino citizens or corporations having a certain minimum percentage of bear the liability and cost of repaying the financing sourced from the foreign lender
Filipino equity. Such a restriction would certainly be preposterous and unnecessary. As a and/or of paying compensation to the foreign entity rendering technical assistance.
matter of fact, financial, and even technical assistance, regardless of the nationality of its However, it is of common knowledge, and of judicial notice as well, that the
source, would be welcomed in the mining industry anytime with open arms, on account government is and has for many many years been financially strapped, to the point that
of the dearth of local capital and the need to continually update technological know-how even the most essential services have suffered serious curtailments -- education and
and improve technical skills. health care, for instance, not to mention judicial services -- have had to make do with
There was therefore no need for a constitutional provision specifically allowing inadequate budgetary allocations. Thus, government has had to resort to build-operate-
foreign-owned corporations to render financial or technical assistance, whether in transfer and similar arrangements with the private sector, in order to get vital
respect of mining or some other resource development or commercial activity in the infrastructure projects built without any governmental outlay.
 The very recent brouhaha over the gargantuan fiscal crisis or budget deficit merely without requiring arrangements for the protection of their investments, gains and
confirms what the ordinary citizen has suspected all along. After the reality check, one benefits.
will have to admit the implausibility of a direct undertaking -- by the State itself --
of large-scale exploration, development and utilization of minerals, petroleum and other Thus, by specifying such agreements involving assistance, the drafters necessarily
mineral oils. Such an undertaking entails not only humongous capital requirements, but gave implied assent to everything that these agreements necessarily entailed; or that
also the attendant risk of never finding and developing economically viable quantities of could reasonably be deemed necessary to make them tenable and effective, including
minerals, petroleum and other mineral oils. [40] management authority with respect to the day-to-day operations of the enterprise and
measures for the protection of the interests of the foreign corporation, PROVIDED THAT
It is equally difficult to imagine that such a provision restricting foreign companies Philippine sovereignty over natural resources and full control over the enterprise
to the rendition of only financial or technical assistance to the government was undertaking the EDU activities remain firmly in the State.
deliberately crafted by the drafters of the Constitution, who were all well aware of the
capital-intensive and technology-oriented nature of large-scale mineral or petroleum
extraction and the countrys deficiency in precisely those areas. [41] To say so would be
tantamount to asserting that the provision was purposely designed to ladle the large- Petitioners Theory Deflated by the
scale development and utilization of mineral, petroleum and related resources with Absence of Closing-Out Rules or Guidelines
impossible conditions; and to remain forever and permanently reserved for future
generations of Filipinos.
Seventh and final point regarding the plain-language approach, one of the practical
difficulties that results from it is the fact that there is nothing by way of transitory
provisions that would serve to confirm the theory that the omission of the term service
A More Reasonable Look contract from the 1987 Constitution signaled the demise of service contracts.
at the Charters Plain Language
The framers knew at the time they were deliberating that there were various
service contracts extant and in force and effect, including those in the petroleum
Sixth, we shall now look closer at the plain language of the Charter and examining industry. Many of these service contracts were long-term (25 years) and had several
the logical inferences. The drafters chose to emphasize and highlight agreements x x x more years to run. If they had meant to ban service contracts altogether, they would have
involving either technical or financial assistance in relation to foreign corporations had to provide for the termination or pretermination of the existing contracts. Accordingly,
participation in large-scale EDU. The inclusion of this clause on technical or financial they would have supplied the specifics and the whenand how of effecting the
assistance recognizes the fact that foreign business entities and multinational extinguishment of these existing contracts (or at least the mechanics for determining
corporations are the ones with the resources and know-how to provide technical and/or them); and of putting in place the means to address the just claims of the contractors for
financial assistance of the magnitude and type required for large-scale exploration, compensation for their investments, lost opportunities, and so on, if not for the recovery
development and utilization of these resources. thereof.

The drafters -- whose ranks included many academicians, economists, If the framers had intended to put an end to service contracts, they would have at
businessmen, lawyers, politicians and government officials -- were not unfamiliar with least left specific instructions to Congress to deal with these closing-out issues, perhaps
the practices of foreign corporations and multinationals. by way of general guidelines and a timeline within which to carry them out. The
following are some extant examples of such transitory guidelines set forth in Article XVIII
Neither were they so nave as to believe that these entities would provide assistance of our Constitution:
without conditionalities or some quid pro quo. Definitely, as business persons well know
and as a matter of judicial notice, this matter is not just a question of signing a Section 23. Advertising entities affected by paragraph (2), Section 11 of Article XVI of this
promissory note or executing a technology transfer agreement. Foreign corporations Constitution shall have five years from its ratification to comply on a graduated and
usually require that they be given a say in the management, for instance, of day-to-day proportionate basis with the minimum Filipino ownership requirement therein.
operations of the joint venture. They would demand the appointment of their own men
as, for example, operations managers, technical experts, quality control heads, internal
auditors or comptrollers. Furthermore, they would probably require seats on the Board xxxxxxxxx
of Directors -- all these to ensure the success of the enterprise and the repayment of the
loans and other financial assistance and to make certain that the funding and the Section 25. After the expiration in 1991 of the Agreement between the Republic of the
technology they supply would not go to waste. Ultimately, they would also want to Philippines and the United States of America concerning military bases, foreign military
protect their business reputation and bottom lines. [42] bases, troops, or facilities shall not be allowed in the Philippines except under a treaty duly
concurred in by the Senate and, when the Congress so requires, ratified by a majority of the
In short, the drafters will have to be credited with enough pragmatism and savvy to votes cast by the people in a national referendum held for that purpose, and recognized as
know that these foreign entities will not enter into such agreements involving assistance a treaty by the other contracting State.
Section 26. The authority to issue sequestration or freeze orders under Proclamation No. 3 MR. JAMIR. Yes, Madam President. With respect to the second paragraph of
dated March 25, 1986 in relation to the recovery of ill-gotten wealth shall remain operative Section 3, my amendment by substitution reads: THE PRESIDENT MAY
for not more than eighteen months after the ratification of this Constitution. However, in ENTER INTO AGREEMENTS WITH FOREIGN-OWNED CORPORATIONS
the national interest, as certified by the President, the Congress may extend such period. INVOLVING EITHER TECHNICAL OR FINANCIAL ASSISTANCE FOR
LARGE-SCALE EXPLORATION, DEVELOPMENT AND UTILIZATION OF
A sequestration or freeze order shall be issued only upon showing of a prima facie case. The NATURAL RESOURCES ACCORDING TO THE TERMS AND CONDITIONS
order and the list of the sequestered or frozen properties shall forthwith be registered with PROVIDED BY LAW.
the proper court. For orders issued before the ratification of this Constitution, the MR. VILLEGAS. The Committee accepts the amendment. Commissioner Suarez
corresponding judicial action or proceeding shall be filed within six months from its will give the background.
ratification. For those issued after such ratification, the judicial action or proceeding shall
be commenced within six months from the issuance thereof. MR. JAMIR. Thank you.
THE PRESIDENT. Commissioner Suarez is recognized.
The sequestration or freeze order is deemed automatically lifted if no judicial action or
proceeding is commenced as herein provided. [43] MR. SUAREZ. Thank you, Madam President.
Will Commissioner Jamir answer a few clarificatory questions?
It is inconceivable that the drafters of the Constitution would leave such an
important matter -- an expression of sovereignty as it were -- indefinitely hanging in the MR. JAMIR. Yes, Madam President.
air in a formless and ineffective state. Indeed, the complete absence of even a general
framework only serves to further deflate petitioners theory, like a childs balloon losing MR. SUAREZ. This particular portion of the section has reference to what was
its air. popularly known before as service contracts, among other things, is
that correct?
Under the circumstances, the logical inconsistencies resulting from petitioners
literal and purely verba legis approach to paragraph 4 of Section 2 of Article XII compel a MR. JAMIR. Yes, Madam President.
resort to other aids to interpretation.
MR. SUAREZ. As it is formulated, the President may enter into service
contracts but subject to the guidelines that may be promulgated by
Congress?
Petitioners Posture Also Negated MR. JAMIR. That is correct.
by Ratio Legis Et Anima
MR. SUAREZ. Therefore, that aspect of negotiation and consummation will fall
on the President, not upon Congress?
Thus, in order to resolve the inconsistencies, incongruities and ambiguities
encountered and to supply the deficiencies of the plain-language approach, there is a need MR. JAMIR. That is also correct, Madam President.
for recourse to the proceedings of the 1986 Constitutional Commission.There is a need MR. SUAREZ. Except that all of these contracts, service or otherwise, must
for ratio legis et anima.
be made strictly in accordance with guidelines prescribed by Congress?
MR. JAMIR. That is also correct.
Service Contracts Not MR. SUAREZ. And the Gentleman is thinking in terms of a law that uniformly
Deconstitutionalized covers situations of the same nature?
MR. JAMIR. That is 100 percent correct.
Pertinent portions of the deliberations of the members of the Constitutional MR. SUAREZ. I thank the Commissioner.
Commission (ConCom) conclusively show that they discussed agreements involving
either technical or financial assistance in the same breadth as service contractsand used MR. JAMIR. Thank you very much.[44]
the terms interchangeably. The following exchange between Commissioner Jamir
(sponsor of the provision) and Commissioner Suarez irrefutably proves that the The following exchange leaves no doubt that the commissioners knew exactly what
agreements involving technical or financial assistance were none other than service they were dealing with: service contracts.
contracts. THE PRESIDENT. Commissioner Gascon is recognized.
THE PRESIDENT. Commissioner Jamir is recognized. We are still on Section 3.
MR. GASCON. Commissioner Jamir had proposed an amendment with regard make every single contract subject to the concurrence of Congress
to special service contracts which was accepted by the Committee. which, according to the Commissioners amendment is the concurrence
Since the Committee has accepted it, I would like to ask some questions. of two-thirds of Congress voting separately then (1) there is a very great
chance that each contract will be different from another; and (2) there is
THE PRESIDENT. Commissioner Gascon may proceed. a great temptation that it would breed corruption because of the great
MR. GASCON. As it is proposed now, such service contracts will be entered lobbying that is going to happen. And we do not want to subject our
into by the President with the guidelines of a general law on service legislature to that.
contract to be enacted by Congress. Is that correct?
Now, to answer the Commissioners apprehension, by general law, we do not mean
MR. VILLEGAS. The Commissioner is right, Madam President. statements of motherhood. Congress can build all the restrictions that it wishes into that
MR. GASCON. According to the original proposal, if the President were to general law so that every contract entered into by the President under that specific area
enter into a particular agreement, he would need the concurrence of will have to be uniform. The President has no choice but to follow all the guidelines that
Congress. Now that it has been changed by the proposal of will be provided by law.
Commissioner Jamir in that Congress will set the general law to which
the President shall comply, the President will, therefore, not need the MR. GASCON. But my basic problem is that we do not know as of yet the
concurrence of Congress every time he enters into service contracts. Is contents of such a general law as to how much constraints there will be
that correct? in it. And to my mind, although the Committees contention that the
regular concurrence from Congress would subject Congress to extensive
MR. VILLEGAS. That is right. lobbying, I think that is a risk we will have to take since Congress is a
body of representatives of the people whose membership will be
MR. GASCON. The proposed amendment of Commissioner Jamir is in indirect
changing regularly as there will be changing circumstances every time
contrast to my proposed amendment, so I would like to object and
certain agreements are made. It would be best then to keep in tab and
present my proposed amendment to the body.
attuned to the interest of the Filipino people, whenever the President
enters into any agreement with regard to such an important matter
xxxxxxxxx as technical or financial assistance for large-scale exploration,
development and utilization of natural resources or service
MR. GASCON. Yes, it will be up to the body. contracts, the peoples elected representatives should be on top of it.

I feel that the general law to be set by Congress as regard service contract
xxxxxxxxx
agreements which the President will enter into might be too general or
since we do not know the content yet of such a law, it might be that
certain agreements will be detrimental to the interest of the Filipinos. MR. OPLE. Madam President, we do not need to suspend the session. If
This is in direct contrast to my proposal which provides that there be Commissioner Gascon needs a few minutes, I can fill up the remaining
effective constraints in the implementation of service contracts. time while he completes his proposed amendment. I just wanted to ask
Commissioner Jamir whether he would entertain a minor amendment
So instead of a general law to be passed by Congress to serve as a guideline to to his amendment, and it reads as follows: THE PRESIDENT SHALL
the President when entering into service contract agreements, I SUBSEQUENTLY NOTIFY CONGRESS OF EVERY SERVICE
propose that every service contract entered into by the President CONTRACT ENTERED INTO IN ACCORDANCE WITH THE GENERAL
would need the concurrence of Congress, so as to assure the Filipinos of LAW. I think the reason is, if I may state it briefly, as Commissioner
their interests with regard to the issue in Section 3 on all lands of the Bengzon said, Congress can always change the general law later on to
public domain. My alternative amendment, which we will discuss later, conform to new perceptions of standards that should be built
reads: THAT THE PRESIDENT SHALL ENTER INTO SUCH AGREEMENTS into service contracts. But the only way Congress can do this is if there
ONLY WITH THE CONCURRENCE OF TWO-THIRDS VOTE OF ALL THE were a notification requirement from the Office of the President that
MEMBERS OF CONGRESS SITTING SEPARATELY. such service contracts had been entered into, subject then to the
scrutiny of the Members of Congress. This pertains to a situation where
xxxxxxxxx the service contracts are already entered into, and all that this
amendment seeks is the reporting requirement from the Office of the
President. Will Commissioner Jamir entertain that?
MR. BENGZON. The reason we made that shift is that we realized the original
proposal could breed corruption. By the way, this is not just confined MR. JAMIR. I will gladly do so, if it is still within my power.
to service contracts but also to financial assistance. If we are going to
 MR. VILLEGAS. Yes, the Committee accepts the amendment. circumvent Filipino control of our economy. And one way of circumventing the rule in
favor of Filipino control of the economy is to recognize service contracts.
xxxxxxxxx
As far as I am concerned, if I should have my own way, I am for the complete deletion of
SR. TAN. Madam President, may I ask a question? this provision. However, we are presenting a compromise in the sense that we are
requiring a two-thirds vote of all the Members of Congress as a safeguard. I think we
THE PRESIDENT. Commissioner Tan is recognized. should not mistrust the future Members of Congress by saying that the purpose of this
provision is to avoid corruption. We cannot claim that they are less patriotic than we are.
SR. TAN. Am I correct in thinking that the only difference between these I think the Members of this Commission should know that entering into service
future service contracts and the past service contracts under Mr. contracts is an exception to the rule on protection of natural resources for the interest of
Marcos is the general law to be enacted by the legislature and the the nation, and therefore, being an exception it should be subject, whenever possible, to
notification of Congress by the President? That is the only difference, is stringent rules. It seems to me that we are liberalizing the rules in favor of aliens.
it not?
MR. VILLEGAS. That is right. I say these things with a heavy heart, Madam President. I do not claim to be a nationalist,
but I love my country. Although we need investments, we must adopt safeguards that
SR. TAN. So those are the safeguards. are truly reflective of the sentiments of the people and not mere cosmetic safeguards as
MR. VILLEGAS. Yes. There was no law at all governing service they now appear in the Jamir amendment. (Applause)
contracts before.
Thank you, Madam President.[46]
SR. TAN. Thank you, Madam President.[45]
Another excerpt, featuring then Commissioner (now Chief Justice) Hilario G. Davide
Jr., indicates the limitations of the scope of such service contracts -- they are valid only in
More Than Mere Financial regard to minerals, petroleum and other mineral oils, not to all natural resources.
and Technical Assistance
THE PRESIDENT. Commissioner Davide is recognized.
Entailed by the Agreements
MR. DAVIDE. Thank you, Madam President. This is an amendment to the
Jamir amendment and also to the Ople amendment. I propose to delete
The clear words of Commissioner Jose N. Nolledo quoted below explicitly and NATURAL RESOURCES and substitute it with the following: MINERALS,
eloquently demonstrate that the drafters knew that the agreements with foreign PETROLEUM AND OTHER MINERAL OILS. On the Ople amendment, I
corporations were going to entail not mere technical or financial assistance but, propose to add: THE NOTIFICATION TO CONGRESS SHALL BE WITHIN
rather, foreign investment in and management of an enterprise involved in large-scale THIRTY DAYS FROM THE EXECUTION OF THE SERVICE CONTRACT.
exploration, development and utilization of minerals, petroleum, and other mineral oils.
THE PRESIDENT. What does the Committee say with respect to the first
THE PRESIDENT. Commissioner Nolledo is recognized. amendment in lieu of NATURAL RESOURCES?
MR. NOLLEDO. Madam President, I have the permission of the Acting Floor MR. VILLEGAS. Could Commissioner Davide explain that?
Leader to speak for only two minutes in favor of the amendment of
Commissioner Gascon. MR. DAVIDE. Madam President, with the use of NATURAL RESOURCES here, it
would necessarily include all lands of the public domain, our marine
THE PRESIDENT. Commissioner Nolledo may proceed. resources, forests, parks and so on. So we would like to limit the scope
of these service contracts to those areas really where these may be
MR. NOLLEDO. With due respect to the members of the Committee and
needed, the exploitation, development and exploration of minerals,
Commissioner Jamir, I am in favor of the objection of Commissioner
petroleum and other mineral oils. And so, we believe that we should
Gascon.
really, if we want to grant service contracts at all, limit the same
to only those particular areas where Filipino capital may not be
Madam President, I was one of those who refused to sign the 1973 Constitution, and one sufficient, and not to all natural resources.
of the reasons is that there were many provisions in the Transitory Provisions therein
that favored aliens. I was shocked when I read a provision authorizing service MR. SUAREZ. Just a point of clarification again, Madam President. When the
contractswhile we, in this Constitutional Commission, provided for Filipino control of Commissioner made those enumerations and specifications, I suppose
the economy. We are, therefore, providing for exceptional instances where aliens may he deliberately did not include agricultural land?
 MR. DAVIDE. That is precisely the reason we have to enumerate what these The deliberations of the ConCom and some commissioners explanation of their
resources are into which service contractsmay enter. So, beyond the votes leave no room for doubt that the service contract concept precisely underpinned
reach of any service contract will be lands of the public domain, the commissioners understanding of the agreements involving either technical or
timberlands, forests, marine resources, fauna and flora, wildlife and financial assistance.
national parks.[47]
After the Jamir amendment was voted upon and approved by a vote of 21 to 10
with 2 abstentions, Commissioner Davide made the following statement, which is very Summation of the
relevant to our quest: Concom Deliberations
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I am very glad that Commissioner Padilla emphasized minerals, At this point, we sum up the matters established, based on a careful reading of the
petroleum and mineral oils. The Commission has just approved the ConCom deliberations, as follows:
possible foreign entry into the development, exploration and utilization In their deliberations on what was to become paragraph 4, the
of these minerals, petroleum and other mineral oils by virtue of the framers used the term service contracts in referring to agreements x
Jamir amendment. I voted in favor of the Jamir amendment because it x x involving either technical or financial assistance.
will eventually give way to vesting in exclusively Filipino citizens and
corporations wholly owned by Filipino citizens the right to utilize the They spoke of service contracts as the concept was understood in the
other natural resources. This means that as a matter of policy, natural 1973 Constitution.
resources should be utilized and exploited only by Filipino citizens or
corporations wholly owned by such citizens. But by virtue of the Jamir It was obvious from their discussions that they were not about to
amendment, since we feel that Filipino capital may not be enough for ban or eradicate service contracts.
the development and utilization of minerals, petroleum and other
Instead, they were plainly crafting provisions to put in place
mineral oils, the President can enter into service contracts with foreign
safeguards that would eliminate or minimize the abuses prevalent
corporations precisely for the development and utilization of such
during the marital law regime. In brief, they were going to permit
resources. And so, there is nothing to fear that we will stagnate in the
service contracts with foreign corporations as contractors, but with
development of minerals, petroleum and mineral oils because we
safety measures to prevent abuses, as an exception to the general
now allow service contracts. x x x. [48]
norm established in the first paragraph of Section 2 of Article XII.
The foregoing are mere fragments of the framers lengthy discussions of the This provision reserves or limits to Filipino citizens -- and
provision dealing with agreements x x x involving either technical or financial corporations at least 60 percent of which is owned by such citizens
assistance, which ultimately became paragraph 4 of Section 2 of Article XII of the -- the exploration, development and utilization of natural resources.
Constitution. Beyond any doubt, the members of the ConCom were actually debating
This provision was prompted by the perceived insufficiency of
about the martial-law-era service contracts for which they were crafting appropriate
Filipino capital and the felt need for foreign investments in the EDU
safeguards.
of minerals and petroleum resources.
In the voting that led to the approval of Article XII by the ConCom, the explanations
The framers for the most part debated about the sort of safeguards
given by Commissioners Gascon, Garcia and Tadeo indicated that they had voted to reject
that would be considered adequate and reasonable. But some of
this provision on account of their objections to the constitutionalization of the service
them, having more radical leanings, wanted to ban service contracts
contract concept.
altogether; for them, the provision would permit aliens to exploit
Mr. Gascon said, I felt that if we would constitutionalize any provision on service and benefit from the nations natural resources, which they felt
contracts, this should always be with the concurrence of Congress and not guided only by a should be reserved only for Filipinos.
general law to be promulgated by Congress. [49] Mr. Garcia explained, Service
In the explanation of their votes, the individual commissioners were
contracts are given constitutional legitimization in Sec. 3, even when they have been
heard by the entire body. They sounded off their individual
proven to be inimical to the interests of the nation, providing, as they do, the legal loophole
opinions, openly enunciated their philosophies, and supported or
for the exploitation of our natural resources for the benefit of foreign interests. [50] Likewise,
attacked the provisions with fervor. Everyones viewpoint was
Mr. Tadeo cited inter alia the fact that service contracts continued to subsist, enabling
heard.
foreign interests to benefit from our natural resources. [51] It was hardly likely that
these gentlemen would have objected so strenuously, had the provision called for In the final voting, the Article on the National Economy and
mere technical or financial assistance and nothing more. Patrimony -- including paragraph 4 allowing service contracts with
 foreign corporations as an exception to the general norm in Constitution, resort thereto may be had only when other guides fail as said proceedings are
paragraph 1 of Section 2 of the same article -- was resoundingly powerless to vary the terms of the Constitution when the meaning is clear. Debates in the
approved by a vote of 32 to 7, with 2 abstentions. constitutional convention are of value as showing the views of the individual members,
and as indicating the reason for their votes, but they give us no light as to the views of the
large majority who did not talk, much less the mass of our fellow citizens whose votes at
the polls gave that instrument the force of fundamental law. We think it safer to construe
Agreements Involving Technical the constitution from what appears upon its face. The proper interpretation therefore
or Financial Assistance Are depends more on how it was understood by the people adopting it than in the framers
Service Contracts With Safeguards understanding thereof.[52]

From the foregoing, we are impelled to conclude that the phrase agreements The notion that the deliberations reflect only the views of those members who
involving either technical or financial assistance, referred to in paragraph 4, are in spoke out and not the views of the majority who remained silent should be clarified. We
fact service contracts. But unlike those of the 1973 variety, the new ones are between must never forget that those who spoke out were heard by those who remained
foreign corporations acting as contractors on the one hand; and on the other, the silent and did not react. If the latter were silent because they happened not to be present
government as principal or owner of the works. In the new service contracts, the foreign at the time, they are presumed to have read the minutes and kept abreast of the
contractors provide capital, technology and technical know-how, and managerial deliberations. By remaining silent, they are deemed to have signified their assent to
expertise in the creation and operation of large-scale mining/extractive enterprises; and and/or conformity with at least some of the views propounded or their lack of objections
the government, through its agencies (DENR, MGB), actively exercises control and thereto. It was incumbent upon them, as representatives of the entire Filipino people, to
supervision over the entire operation. follow the deliberations closely and to speak their minds on the matter if they did not see
eye to eye with the proponents of the draft provisions.
Such service contracts may be entered into only with respect to minerals, petroleum
and other mineral oils. The grant thereof is subject to several safeguards, among which In any event, each and every one of the commissioners had the opportunity to
are these requirements: speak out and to vote on the matter. Moreover, the individual explanations of votes are
on record, and they show where each delegate stood on the issues . In sum, we cannot
completely denigrate the value or usefulness of the record of the ConCom, simply
(1) The service contract shall be crafted in accordance with a general law that will set because certain members chose not to speak out.
standard or uniform terms, conditions and requirements, presumably to attain a certain
uniformity in provisions and avoid the possible insertion of terms disadvantageous to It is contended that the deliberations therein did not necessarily reflect the
the country. thinking of the voting population that participated in the referendum and ratified the
Constitution. Verily, whether we like it or not, it is a bit too much to assume that every
(2) The President shall be the signatory for the government because, supposedly before one of those who voted to ratify the proposed Charter did so only after carefully reading
an agreement is presented to the President for signature, it will have been vetted several and mulling over it, provision by provision.
times over at different levels to ensure that it conforms to law and can withstand public Likewise, it appears rather extravagant to assume that every one of those who did
scrutiny. in fact bother to read the draft Charter actually understood the import of its provisions,
much less analyzed it vis--vis the previous Constitutions. We believe that in reality, a
(3) Within thirty days of the executed agreement, the President shall report it to good percentage of those who voted in favor of it did so more out of faith and trust. For
Congress to give that branch of government an opportunity to look over the agreement them, it was the product of the hard work and careful deliberation of a group of
and interpose timely objections, if any. intelligent, dedicated and trustworthy men and women of integrity and conviction,
whose love of country and fidelity to duty could not be questioned.
In short, a large proportion of the voters voted yes because the drafters, or a
Use of the Record of the majority of them, endorsed the proposed Constitution. What this fact translates to is the
ConCom to Ascertain Intent inescapable conclusion that many of the voters in the referendum did not form their own
isolated judgment about the draft Charter, much less about particular provisions therein.
They only relied or fell back and acted upon the favorable endorsement or
At this juncture, we shall address, rather than gloss over, the use of the framers recommendation of the framers as a group. In other words, by voting yes, they may be
intent approach, and the criticism hurled by petitioners who quote a ruling of this Court: deemed to have signified their voluntary adoption of the understanding and
interpretation of the delegates with respect to the proposed Charter and its particular
provisions. If its good enough for them, its good enough for me; or, in many instances, If
While it is permissible in this jurisdiction to consult the debates and proceedings of the
its good enough for President Cory Aquino, its good enough for me.
constitutional convention in order to arrive at the reason and purpose of the resulting
 And even for those who voted based on their own individual assessment of the Ut Magis Valeat
proposed Charter, there is no evidence available to indicate that their assessment or Quam Pereat
understanding of its provisions was in fact different from that of the drafters. This
unwritten assumption seems to be petitioners as well. For all we know, this segment of
voters must have read and understood the provisions of the Constitution in the same Under the third principle of constitutional construction laid down in Francisco -- ut
way the framers had, an assumption that would account for the favorable votes. magis valeat quam pereat -- every part of the Constitution is to be given effect, and the
Constitution is to be read and understood as a harmonious whole. Thus, full control and
Fundamentally speaking, in the process of rewriting the Charter, the members of supervision by the State must be understood as one that does not preclude the legitimate
the ConCom as a group were supposed to represent the entire Filipino people. Thus, we exercise of management prerogatives by the foreign contractor. Before any further
cannot but regard their views as being very much indicative of the thinking of the people discussion, we must stress the primacy and supremacy of the principle of sovereignty
with respect to the matters deliberated upon and to the Charter as a whole. and State control and supervision over all aspects of exploration, development and
It is therefore reasonable and unavoidable to make the following conclusion, utilization of the countrys natural resources, as mandated in the first paragraph of
based on the above arguments. As written by the framers and ratified and adopted Section 2 of Article XII.
by the people, the Constitution allows the continued use of service contracts with But in the next breadth we have to point out that full control and supervision
foreign corporations -- as contractors who would invest in and operate and cannot be taken literally to mean that the State controls and supervises everything
manage extractive enterprises, subject to the full control and supervision of the involved, down to the minutest details, and makes all decisions required in the mining
State -- sans the abuses of the past regime. The purpose is clear: to develop and operations. This strained concept of control and supervision over the mining enterprise
utilize our mineral, petroleum and other resources on a large scale for the would render impossible the legitimate exercise by the contractors of a reasonable
immediate and tangible benefit of the Filipino people. degree of management prerogative and authority necessary and indispensable to their
In view of the foregoing discussion, we should reverse the Decision of January 27, proper functioning.
2004, and in fact now hold a view different from that of the Decision, which had these For one thing, such an interpretation would discourage foreign entry into large-
findings: (a) paragraph 4 of Section 2 of Article XII limits foreign involvement in the local scale exploration, development and utilization activities; and result in the unmitigated
mining industry to agreements strictly for either financial or technical assistance only; stagnation of this sector, to the detriment of our nations development. This scenario
(b) the same paragraph precludes agreements that grant to foreign corporations the renders paragraph 4 inoperative and useless. And as respondents have correctly pointed
management of local mining operations, as such agreements are purportedly in the out, the government does not have to micro-manage the mining operations and dip its
nature of service contracts as these were understood under the 1973 Constitution; (c) hands into the day-to-day affairs of the enterprise in order for it to be considered as
these service contracts were supposedly de-constitutionalized and proscribed by the having full control and supervision.
omission of the term service contracts from the 1987 Constitution; (d) since the WMCP
FTAA contains provisions permitting the foreign contractor to manage the concern, the The concept of control[53] adopted in Section 2 of Article XII must be taken to mean
said FTAA is invalid for being a prohibited service contract; and (e) provisions of RA less than dictatorial, all-encompassing control; but nevertheless sufficient to give the
7942 and DAO 96-40, which likewise grant managerial authority to the foreign State the power to direct, restrain, regulate and govern the affairs of the extractive
contractor, are also invalid and unconstitutional. enterprises. Control by the State may be on a macro level, through the establishment of
policies, guidelines, regulations, industry standards and similar measures that would
enable the government to control the conduct of affairs in various enterprises and
restrain activities deemed not desirable or beneficial.
Ultimate Test: States Control
Determinative of Constitutionality The end in view is ensuring that these enterprises contribute to the economic
development and general welfare of the country, conserve the environment, and uplift
the well-being of the affected local communities. Such a concept of control would be
But we are not yet at the end of our quest. Far from it. It seems that we are compatible with permitting the foreign contractor sufficient and reasonable
confronted with a possible collision of constitutional provisions. On the one hand, management authority over the enterprise it invested in, in order to ensure that it is
paragraph 1 of Section 2 of Article XII explicitly mandates the State to exercise full operating efficiently and profitably, to protect its investments and to enable it to succeed.
control and supervision over the exploration, development and utilization of natural
resources. On the other hand, paragraph 4 permits safeguarded service contracts with The question to be answered, then, is whether RA 7942 and its Implementing
foreign contractors. Normally, pursuant thereto, the contractors exercise management Rules enable the government to exercise that degree of control sufficient to direct
prerogatives over the mining operations and the enterprise as a whole. There is thus a and regulate the conduct of affairs of individual enterprises and restrain
legitimate ground to be concerned that either the States full control and supervision may undesirable activities.
rule out any exercise of management authority by the foreign contractor; or, the other On the resolution of these questions will depend the validity and constitutionality
way around, allowing the foreign contractor full management prerogatives may of certain provisions of the Philippine Mining Act of 1995 (RA 7942) and its
ultimately negate the States full control and supervision. Implementing Rules and Regulations (DAO 96-40), as well as the WMCP FTAA.
 Indeed, petitioners charge [54] that RA 7942, as well as its Implementing Rules and disposition of mineral resources, and empowers the MGB to monitor
Regulations, makes it possible for FTAA contracts to cede full control and management of the compliance by the contractor of the terms and conditions of the
mining enterprises over to fully foreign-owned corporations, with the result that the mineral agreements, confiscate surety and performance bonds, and
State is allegedly reduced to a passive regulator dependent on submitted plans and deputize whenever necessary any member or unit of the Phil. National
reports, with weak review and audit powers. The State does not supposedly act as the Police, barangay, duly registered non-governmental organization
owner of the natural resources for and on behalf of the Filipino people; it practically has (NGO) or any qualified person to police mining activities;
little effective say in the decisions made by the enterprise. Petitioners then conclude that
the law, the implementing regulations, and the WMCP FTAA cede beneficial ownership of 3. Sec. 66 which vests in the Regional Director exclusive jurisdiction over
the mineral resources to the foreign contractor. safety inspections of all installations, whether surface or
A careful scrutiny of the provisions of RA 7942 and its Implementing Rules belies underground, utilized in mining operations.
petitioners claims. Paraphrasing the Constitution, Section 4 of the statute clearly affirms
the States control thus: 4. Sec. 35, which incorporates into all FTAAs the following terms, conditions
and warranties:
Sec. 4. Ownership of Mineral Resources. Mineral resources are owned by the State and the
exploration, development, utilization and processing thereof shall be under its full control (g) Mining operations shall be conducted in accordance with
and supervision. The State may directly undertake such activities or it may enter into the provisions of the Act and its IRR.
mineral agreements with contractors.
(h) Work programs and minimum expenditures
The State shall recognize and protect the rights of the indigenous cultural communities to commitments.
their ancestral lands as provided for by the Constitution.
xxxxxxxxx
The aforequoted provision is substantively reiterated in Section 2 of DAO 96-40 as
follows: (k) Requiring proponent to effectively use appropriate anti-
pollution technology and facilities to protect the
Sec. 2. Declaration of Policy. All mineral resources in public and private lands within the environment and restore or rehabilitate mined-out
territory and exclusive economic zone of the Republic of the Philippines are owned by the areas.
State. It shall be the responsibility of the State to promote their rational exploration,
development, utilization and conservation through the combined efforts of the Government (l) The contractors shall furnish the Government records of
and private sector in order to enhance national growth in a way that effectively safeguards geologic, accounting and other relevant data for its
the environment and protects the rights of affected communities. mining operation, and that books of accounts and
records shall be open for inspection by the
government. x x x.
Sufficient Control Over Mining
Operations Vested in the State (m) Requiring the proponent to dispose of the minerals at the
by RA 7942 and DAO 96-40 highest price and more advantageous terms and
conditions.

RA 7942 provides for the States control and supervision over mining operations. (n) x x x x x x x x x
The following provisions thereof establish the mechanism of inspection and visitorial
rights over mining operations and institute reportorial requirements in this manner:
(o) Such other terms and conditions consistent with the
Constitution and with this Act as the Secretary may
1. Sec. 8 which provides for the DENRs power of over-all supervision and deem to be for the best interest of the State and the
periodic review for the conservation, management, development and welfare of the Filipino people.
proper use of the States mineral resources;
The foregoing provisions of Section 35 of RA 7942 are also reflected and
2. Sec. 9 which authorizes the Mines and Geosciences Bureau (MGB) under implemented in Section 56 (g), (h), (l), (m) and (n) of the Implementing Rules, DAO 96-
the DENR to exercise direct charge in the administration and 40.
 Moreover, RA 7942 and DAO 96-40 also provide various stipulations confirming The FTAA contractor is obliged to assist in the
the governments control over mining enterprises: development of its mining community, promotion of the general welfare
of its inhabitants, and development of science and mining technology
The contractor is to relinquish to the government those portions of the (Section 57, RA 7942).
contract area not needed for mining operations and not covered by any
declaration of mining feasibility (Section 35-e, RA 7942; Section 60, DAO The FTAA contractor is obliged to submit reports
96-40). (on quarterly, semi-annual or annual basis as the case may be; per Section
270, DAO 96-40), pertaining to the following:
The contractor must comply with the provisions pertaining to mine safety,
health and environmental protection (Chapter XI, RA 7942; Chapters XV 1. Exploration
and XVI, DAO 96-40). 2. Drilling
3. Mineral resources and reserves
For violation of any of its terms and conditions, government may cancel an 4. Energy consumption
FTAA. (Chapter XVII, RA 7942; Chapter XXIV, DAO 96-40). 5. Production
An FTAA contractor is obliged to open its books of accounts and records 6. Sales and marketing
for inspection by the government (Section 56-m, DAO 96-40). 7. Employment
8. Payment of taxes, royalties, fees and other
An FTAA contractor has to dispose of the minerals and by-products at the Government Shares
highest market price and register with the MGB a copy of the sales 9. Mine safety, health and environment
agreement (Section 56-n, DAO 96-40). 10. Land use
11. Social development
MGB is mandated to monitor the contractors compliance with the terms 12. Explosives consumption
and conditions of the FTAA; and to deputize, when necessary, any
member or unit of the Philippine National Police, the barangay or a DENR- An FTAA pertaining to areas within government
accredited nongovernmental organization to police mining activities reservations cannot be granted without a written clearance from the
(Section 7-d and -f, DAO 96-40). government agencies concerned (Section 19, RA 7942; Section 54, DAO
96-40).
An FTAA cannot be transferred or assigned without prior approval by the
President (Section 40, RA 7942; Section 66, DAO 96-40). An FTAA contractor is required to post a
financial guarantee bond in favor of the government in an amount
A mining project under an FTAA cannot proceed to the equivalent to its expenditures obligations for any particular year. This
construction/development/utilization stage, unless its Declaration of requirement is apart from the representations and warranties of the
Mining Project Feasibility has been approved by government (Section 24, contractor that it has access to all the financing, managerial and
RA 7942). technical expertise and technology necessary to carry out the objectives
The Declaration of Mining Project Feasibility filed by the contractor cannot of the FTAA (Section 35-b, -e, and -f, RA 7942).
be approved without submission of the following documents: Other reports to be submitted by the contractor,
1. Approved mining project feasibility study (Section as required under DAO 96-40, are as follows: an environmental report
53-d, DAO 96-40) on the rehabilitation of the mined-out area and/or mine waste/tailing
2. Approved three-year work program (Section 53-a- covered area, and anti-pollution measures undertaken (Section 35-a-2);
4, DAO 96-40) annual reports of the mining operations and records of geologic
3. Environmental compliance certificate (Section 70, accounting (Section 56-m); annual progress reports and final report of
RA 7942) exploration activities (Section 56-2).
4. Approved environmental protection and Other programs required to be submitted by the
enhancement program (Section 69, RA 7942) contractor, pursuant to DAO 96-40, are the following: a safety and health
5. Approval by the Sangguniang program (Section 144); an environmental work program (Section 168);
Panlalawigan/Bayan/Barangay (Section 70, RA an annual environmental protection and enhancement program (Section
7942; Section 27, RA 7160) 171).
6. Free and prior informed consent by the indigenous
peoples concerned, including payment of The foregoing gamut of requirements, regulations, restrictions and limitations
royalties through a Memorandum of Agreement imposed upon the FTAA contractor by the statute and regulations easily overturns
(Section 16, RA 7942; Section 59, RA 8371) petitioners contention. The setup under RA 7942 and DAO 96-40 hardly relegates the
State to the role of a passive regulator dependent on submitted plans and reports. On the The objection, however, is not well-founded. While the Constitution mandates the
contrary, the government agencies concerned are empowered to approve or disapprove State to exercise full control and supervision over the exploitation of mineral
-- hence, to influence, direct and change -- the various work programs and the resources, nowhere does it require the government to hold all exploration permits and
corresponding minimum expenditure commitments for each of the exploration, similar authorizations. In fact, there is no prohibition at all against foreign or local
development and utilization phases of the mining enterprise. corporations or contractors holding exploration permits. The reason is not hard to see.
Once these plans and reports are approved, the contractor is bound to comply with Pursuant to Section 20 of RA 7942, an exploration permit merely grants to a
its commitments therein. Figures for mineral production and sales are regularly qualified person the right to conduct exploration for all minerals in specified areas. Such
monitored and subjected to government review, in order to ensure that the products and a permit does not amount to an authorization to extract and carry off the mineral
by-products are disposed of at the best prices possible; even copies of sales agreements resources that may be discovered. This phase involves nothing but expenditures for
have to be submitted to and registered with MGB. And the contractor is mandated to exploring the contract area and locating the mineral bodies. As no extraction is involved,
open its books of accounts and records for scrutiny, so as to enable the State to there are no revenues or incomes to speak of. In short, the exploration permit is an
determine if the government share has been fully paid. authorization for the grantee to spend its own funds on exploration programs that are
pre-approved by the government, without any right to recover anything should no
The State may likewise compel the contractors compliance with mandatory minerals in commercial quantities be discovered. The State risks nothing and loses
requirements on mine safety, health and environmental protection, and the use of anti- nothing by granting these permits to local or foreign firms; in fact, it stands to gain in the
pollution technology and facilities. Moreover, the contractor is also obligated to assist in form of data generated by the exploration activities.
the development of the mining community and to pay royalties to the indigenous peoples
concerned. Pursuant to Section 24 of RA 7942, an exploration permit grantee who determines
the commercial viability of a mining area may, within the term of the permit, file with the
Cancellation of the FTAA may be the penalty for violation of any of its terms and MGB a declaration of mining project feasibility accompanied by a work program for
conditions and/or noncompliance with statutes or regulations. This general, all-around, development. The approval of the mining project feasibility and compliance with other
multipurpose sanction is no trifling matter, especially to a contractor who may have yet requirements of RA 7942 vests in the grantee the exclusive right to an MPSA or any other
to recover the tens or hundreds of millions of dollars sunk into a mining project. mineral agreement, or to an FTAA.
Overall, considering the provisions of the statute and the regulations just discussed, Thus, the permit grantee may apply for an MPSA, a joint venture agreement, a co-
we believe that the State definitely possesses the means by which it can have the production agreement, or an FTAA over the permit area, and the application shall be
ultimate word in the operation of the enterprise, set directions and objectives, and detect approved if the permit grantee meets the necessary qualifications and the terms and
deviations and noncompliance by the contractor; likewise, it has the capability to enforce conditions of any such agreement. Therefore, the contractor will be in a position to
compliance and to impose sanctions, should the occasion therefor arise. extract minerals and earn revenues only when the MPSA or another mineral agreement,
In other words, the FTAA contractor is not free to do whatever it pleases and or an FTAA, is granted. At that point, the contractors rights and obligations will be
get away with it; on the contrary, it will have to follow the government line if it covered by an FTAA or a mineral agreement.
wants to stay in the enterprise. Ineluctably then, RA 7942 and DAO 96-40 vest in But prior to the issuance of such FTAA or mineral agreement, the exploration
the government more than a sufficient degree of control and supervision over the permit grantee (or prospective contractor) cannot yet be deemed to have entered into
conduct of mining operations. any contract or agreement with the State, and the grantee would definitely need to have
some document or instrument as evidence of its right to conduct exploration works
within the specified area. This need is met by the exploration permit issued pursuant to
Section 3(aq) of RA 7942 Sections 3(aq), 20 and 23 of RA 7942.
Not Unconstitutional In brief, the exploration permit serves a practical and legitimate purpose in
that it protects the interests and preserves the rights of the exploration permit
grantee (the would-be contractor) -- foreign or local -- during the period of time
An objection has been expressed that Section 3(aq) [55] of RA 7942 -- which allows a that it is spending heavily on exploration works, without yet being able to earn
foreign contractor to apply for and hold an exploration permit -- is unconstitutional. The revenues to recoup any of its investments and expenditures. Minus this permit and
reasoning is that Section 2 of Article XII of the Constitution does not allow foreign-owned the protection it affords, the exploration works and expenditures may end up benefiting
corporations to undertake mining operations directly. They may act only as contractors only claim-jumpers. Such a possibility tends to discourage investors and contractors.
of the State under an FTAA; and the State, as the party directly undertaking exploitation Thus, Section 3(aq) of RA 7942 may not be deemed unconstitutional.
of its natural resources, must hold through the government all exploration permits and
similar authorizations. Hence, Section 3(aq), in permitting foreign-owned corporations
to hold exploration permits, is unconstitutional.
The Terms of the WMCP FTAA
A Deference to State Control
 A perusal of the WMCP FTAA also reveals a slew of stipulations providing for State 15. The contractor is obligated to submit for approval of the DENR secretary a
control and supervision: work program covering each period of three fiscal years (Clause 6.2).
1. The contractor is obligated to account for the value of production and sale 16. The contractor is to submit reports to the DENR secretary on the
of minerals (Clause 1.4). production, ore reserves, work accomplished and work in progress,
profile of its work force and management staff, and other technical
2. The contractors work program, activities and budgets must be approved information (Clause 6.3).
by/on behalf of the State (Clause 2.1).
17. Any expansions, modifications, improvements and replacements of
3. The DENR secretary has the power to extend the exploration period mining facilities shall be subject to the approval of the secretary (Clause
(Clause 3.2-a). 6.4).
4. Approval by the State is necessary for incorporating lands into the FTAA 18. The State has control with respect to the amount of funds that the
contract area (Clause 4.3-c). contractor may borrow within the Philippines (Clause 7.2).
5. The Bureau of Forest Development is vested with discretion in regard to 19. The State has supervisory power with respect to technical, financial and
approving the inclusion of forest reserves as part of the FTAA contract marketing issues (Clause 10.1-a).
area (Clause 4.5).
20. The contractor is required to ensure 60 percent Filipino equity in the
6. The contractor is obliged to relinquish periodically parts of the contract contractor, within ten years of recovering specified expenditures,
area not needed for exploration and development (Clause 4.6). unless not so required by subsequent legislation (Clause 10.1).
7. A Declaration of Mining Feasibility must be submitted for approval by the 21. The State has the right to terminate the FTAA for the contractors
State (Clause 4.6-b). unremedied substantial breach thereof (Clause 13.2);
8. The contractor is obligated to report to the State its exploration activities 22. The States approval is needed for any assignment of the FTAA by the
(Clause 4.9). contractor to an entity other than an affiliate (Clause 14.1).
9. The contractor is required to obtain State approval of its work programs We should elaborate a little on the work programs and budgets, and what they
for the succeeding two-year periods, containing the proposed work mean with respect to the States ability to exercise full control and effective supervision
activities and expenditures budget related to exploration (Clause 5.1). over the enterprise. For instance, throughout the initial five-year exploration and
10. The contractor is required to obtain State approval for its proposed feasibility phase of the project, the contractor is mandated by Clause 5.1 of the WMCP
expenditures for exploration activities (Clause 5.2). FTAA to submit a series of work programs (copy furnished the director of MGB) to the
DENR secretary for approval. The programs will detail the contractors
11. The contractor is required to submit an annual report on geological, proposed exploration activities and budget covering each subsequent period of two fiscal
geophysical, geochemical and other information relating to its years.
explorations within the FTAA area (Clause 5.3-a).
In other words, the concerned government officials will be informed beforehand of
12. The contractor is to submit within six months after expiration of the proposed exploration activities and expenditures of the contractor for each
exploration period a final report on all its findings in the contract area succeeding two-year period, with the right to approve/disapprove them or require
(Clause 5.3-b). changes or adjustments therein if deemed necessary.

13. The contractor, after conducting feasibility studies, shall submit a Likewise, under Clause 5.2(a), the amount that the contractor was supposed to
declaration of mining feasibility, along with a description of the area to spend for exploration activities during the first contract year of the exploration period
be developed and mined, a description of the proposed mining was fixed at not less than P24 million; and then for the succeeding years, the amount
operations and the technology to be employed, and a proposed work shall be as agreed between the DENR secretary and the contractor prior to the
program for the development phase, for approval by the DENR commencement of each subsequent fiscal year. If no such agreement is arrived upon, the
secretary (Clause 5.4). previous years expenditure commitment shall apply.

14. The contractor is obliged to complete the development of the mine, This provision alone grants the government through the DENR secretary a very big
including construction of the production facilities, within the period say in the exploration phase of the project. This fact is not something to be taken lightly,
stated in the approved work program (Clause 6.1). considering that the government has absolutely no contribution to the exploration
expenditures or work activities and yet is given veto power over such a critical aspect of the
project. We cannot but construe as very significant such a degree of control over the Under the WMCP FTAA
project and, resultantly, over the mining enterprise itself.
Following its exploration activities or feasibility studies, if the contractor believes Petitioners, however, take aim at Clause 8.2, 8.3, and 8.5 of the WMCP FTAA which,
that any part of the contract area is likely to contain an economic mineral resource, it they say, amount to a relinquishment of control by the State, since it cannot truly impose
shall submit to the DENR secretary a declaration of mining feasibility (per Clause 5.4 of its own discretion in respect of the submitted work programs.
the FTAA), together with a technical description of the area delineated for development
and production, a description of the proposed mining operations including the technology 8.2. The Secretary shall be deemed to have approved any Work Programme or
to be used, a work program for development, an environmental impact statement, and a Budget or variation thereof submitted by the Contractor unless within
description of the contributions to the economic and general welfare of the country to be sixty (60) days after submission by the Contractor the Secretary gives
generated by the mining operations (pursuant to Clause 5.5). notice declining such approval or proposing a revision of certain
features and specifying its reasons therefor (the Rejection Notice).
The work program for development is subject to the approval of the DENR
secretary. Upon its approval, the contractor must comply with it and complete the 8.3. If the Secretary gives a Rejection Notice, the Parties shall promptly meet
development of the mine, including the construction of production facilities and and endeavor to agree on amendments to the Work Programme or
installation of machinery and equipment, within the period provided in the approved Budget. If the Secretary and the Contractor fail to agree on the
work program for development (per Clause 6.1). proposed revision within 30 days from delivery of the Rejection Notice
then the Work Programme or Budget or variation thereof proposed by
Thus, notably, the development phase of the project is likewise subject to the the Contractor shall be deemed approved, so as not to unnecessarily
control and supervision of the government. It cannot be emphasized enough that the delay the performance of the Agreement.
proper and timely construction and deployment of the production facilities and the
development of the mine are of pivotal significance to the success of the mining venture. 8.4. x x x x x x x x x
Any missteps here will potentially be very costly to remedy. Hence, the submission of the
work program for development to the DENR secretary for approval is particularly 8.5. So far as is practicable, the Contractor shall comply with any approved
noteworthy, considering that so many millions of dollars worth of investments -- Work Programme and Budget. It is recognized by the Secretary and
courtesy of the contractor -- are made to depend on the States consideration and action. the Contractor that the details of any Work Programmes or Budgets
may require changes in the light of changing circumstances. The
Throughout the operating period, the contractor is required to submit to the DENR Contractor may make such changes without approval of the Secretary
secretary for approval, copy furnished the director of MGB, work programs covering provided they do not change the general objective of any Work
each period of three fiscal years (per Clause 6.2). During the same period (per Clause Programme, nor entail a downward variance of more than twenty per
6.3), the contractor is mandated to submit various quarterly and annual reports to the centum (20percent) of the relevant Budget. All other variations to an
DENR secretary, copy furnished the director of MGB, on the tonnages of production in approved Work Programme or Budget shall be submitted for approval
terms of ores and concentrates, with corresponding grades, values and destinations; of the Secretary.
reports of sales; total ore reserves, total tonnage of ores, work accomplished and work in
progress (installations and facilities related to mining operations), investments made or From the provisions quoted above, petitioners generalize by asserting that the
committed, and so on and so forth. government does not participate in making critical decisions regarding the operations of
the mining firm. Furthermore, while the State can require the submission of work
Under Section VIII, during the period of mining operations, the contractor is also programs and budgets, the decision of the contractor will still prevail, if the parties have
required to submit to the DENR secretary (copy furnished the director of MGB) the work a difference of opinion with regard to matters affecting operations and management.
program and corresponding budget for the contract area, describing the mining
operations that are proposed to be carried out during the period covered. The secretary We hold, however, that the foregoing provisions do not manifest a relinquishment
is, of course, entitled to grant or deny approval of any work program or budget and/or of control. For instance, Clause 8.2 merely provides a mechanism for preventing the
propose revisions thereto. Once the program/budget has been approved, the contractor business or mining operations from grinding to a complete halt as a result of possibly
shall comply therewith. over-long and unjustified delays in the governments handling, processing and approval
of submitted work programs and budgets. Anyway, the provision does give the DENR
In sum, the above provisions of the WMCP FTAA taken together, far from constituting secretary more than sufficient time (60 days) to react to submitted work programs and
a surrender of control and a grant of beneficial ownership of mineral resources to the budgets. It cannot be supposed that proper grounds for objecting thereto, if any exist,
contractor in question, bestow upon the State more than adequate control and cannot be discovered within a period of two months.
supervision over the activities of the contractor and the enterprise.
On the other hand, Clause 8.3 seeks to provide a temporary, stop-gap solution in
the event a disagreement over the submitted work program or budget arises between
the State and the contractor and results in a stalemate or impasse, in order that there will
No Surrender of Control be no unreasonably long delays in the performance of the works.
 These temporary or stop-gap solutions are not necessarily evil or wrong. Neither substitute its judgment for that of the contractor and dictate upon the latter which areas
does it follow that the government will inexorably be aggrieved if and when these to give up.
temporary remedies come into play. First, avoidance of long delays in these situations
will undoubtedly redound to the benefit of the State as well as the contractor. Second, Moreover, we can be certain that the contractors self-interest will propel proper and
who is to say that the work program or budget proposed by the contractor and deemed efficient relinquishment. According to private respondent,[57] a mining company tries to
approved under Clause 8.3 would not be the better or more reasonable or more effective relinquish as much non-mineral areas as soon as possible, because the annual occupation fees
alternative? The contractor, being the insider, as it were, may be said to be in a better paid to the government are based on the total hectarage of the contract area, net of the areas
position than the State -- an outsider looking in -- to determine what work program or relinquished. Thus, the larger the remaining area, the heftier the amount of occupation fees to
budget would be appropriate, more effective, or more suitable under the circumstances. be paid by the contractor. Accordingly, relinquishment is not an issue, given that the
contractor will not want to pay the annual occupation fees on the non-mineral parts of its
All things considered, we take exception to the characterization of the DENR contract area. Neither will it want to relinquish promising sites, which other contractors may
secretary as a subservient nonentity whom the contractor can overrule at will, on subsequently pick up.
account of Clause 8.3. And neither is it true that under the same clause, the DENR
secretary has no authority whatsoever to disapprove the work program. As Respondent
WMCP reasoned in its Reply-Memorandum, the State -- despite Clause 8.3 -- still has
control over the contract area and it may, as sovereign authority, prohibit work thereon Government Not
until the dispute is resolved. And ultimately, the State may terminate the agreement, a Subcontractor
pursuant to Clause 13.2 of the same FTAA, citing substantial breach thereof. Hence, it
clearly retains full and effective control of the exploitation of the mineral resources.
Petitioners further maintain that the contractor can compel the government to
On the other hand, Clause 8.5 is merely an acknowledgment of the parties need for exercise its power of eminent domain to acquire surface areas within the contract area
flexibility, given that no one can accurately forecast under all circumstances, or predict for the contractors use. Clause 10.2 (e) of the WMCP FTAA provides that the government
how situations may change. Hence, while approved work programs and budgets are to be agrees that the contractor shall (e) have the right to require the Government at the
followed and complied with as far as practicable, there may be instances in which Contractors own cost, to purchase or acquire surface areas for and on behalf of the
changes will have to be effected, and effected rapidly, since events may take shape and Contractor at such price and terms as may be acceptable to the contractor. At the
unfold with suddenness and urgency. Thus, Clause 8.5 allows the contractor to move termination of this Agreement such areas shall be sold by public auction or tender and the
ahead and make changes without the express or implicit approval of the DENR secretary. Contractor shall be entitled to reimbursement of the costs of acquisition and maintenance,
Such changes are, however, subject to certain conditions that will serve to limit or adjusted for inflation, from the proceeds of sale.
restrict the variance and prevent the contractor from straying very far from what has
been approved. According to petitioners, government becomes a subcontractor to the contractor and
may, on account of this provision, be compelled to make use of its power of eminent
Clause 8.5 provides the contractor a certain amount of flexibility to meet domain, not for public purposes but on behalf of a private party, i.e., the
unexpected situations, while still guaranteeing that the approved work programs and contractor. Moreover, the power of the courts to determine the amount corresponding to
budgets are not abandoned altogether. Clause 8.5 does not constitute proof that the State the constitutional requirement of just compensation has allegedly also been contracted
has relinquished control. And ultimately, should there be disagreement with the actions away by the government, on account of the latters commitment that the acquisition shall
taken by the contractor in this instance as well as under Clause 8.3 discussed above, the be at such terms as may be acceptable to the contractor.
DENR secretary may resort to cancellation/termination of the FTAA as the ultimate
sanction. However, private respondent has proffered a logical explanation for the provision.
[58]
Section 10.2(e) contemplates a situation applicable to foreign-owned corporations.
WMCP, at the time of the execution of the FTAA, was a foreign-owned corporation and
therefore not qualified to own land. As contractor, it has at some future date to construct
Discretion to Select Contract the infrastructure -- the mine processing plant, the camp site, the tailings dam, and other
Area Not an Abdication of Control infrastructure -- needed for the large-scale mining operations. It will then have to
identify and pinpoint, within the FTAA contract area, the particular surface areas with
favorable topography deemed ideal for such infrastructure and will need to acquire the
Next, petitioners complain that the contractor has full discretion to select -- and the surface rights. The State owns the mineral deposits in the earth, and is also qualified to
government has no say whatsoever as to -- the parts of the contract area to be own land.
relinquished pursuant to Clause 4.6 of the WMCP FTAA. [56] This clause, however, does not
constitute abdication of control. Rather, it is a mere acknowledgment of the fact that the Section 10.2(e) sets forth the mechanism whereby the foreign-owned contractor,
contractor will have determined, after appropriate exploration works, which portions of disqualified to own land, identifies to the government the specific surface areas within
the contract area do not contain minerals in commercial quantities sufficient to justify the FTAA contract area to be acquired for the mine infrastructure. The government then
developing the same and ought therefore to be relinquished. The State cannot just
acquires ownership of the surface land areas on behalf of the contractor, in order to Contractors Right to Mortgage
enable the latter to proceed to fully implement the FTAA. Not Objectionable Per Se
The contractor, of course, shoulders the purchase price of the land. Hence, the
provision allows it, after termination of the FTAA, to be reimbursed from proceeds of the Petitioners also question the absolute right of the contractor under Clause 10.2 (l)
sale of the surface areas, which the government will dispose of through public bidding. It to mortgage and encumber not only its rights and interests in the FTAA and the
should be noted that this provision will not be applicable to Sagittarius as the present infrastructure and improvements introduced, but also the mineral products extracted.
FTAA contractor, since it is a Filipino corporation qualified to own and hold land. As Private respondents do not touch on this matter, but we believe that this provision may
such, it may therefore freely negotiate with the surface rights owners and acquire the have to do with the conditions imposed by the creditor-banks of the then foreign
surface property in its own right. contractor WMCP to secure the lendings made or to be made to the latter. Ordinarily,
Clearly, petitioners have needlessly jumped to unwarranted conclusions, without banks lend not only on the security of mortgages on fixed assets, but also on
being aware of the rationale for the said provision. That provision does not call for the encumbrances of goods produced that can easily be sold and converted into cash that can
exercise of the power of eminent domain -- and determination of just compensation is be applied to the repayment of loans. Banks even lend on the security of accounts
not an issue -- as much as it calls for a qualified party to acquire the surface rights on receivable that are collectible within 90 days.[59]
behalf of a foreign-owned contractor. It is not uncommon to find that a debtor corporation has executed deeds of
Rather than having the foreign contractor act through a dummy corporation, assignment by way of security over the production for the next twelve months and/or
having the State do the purchasing is a better alternative. This will at least cause the the proceeds of the sale thereof -- or the corresponding accounts receivable, if sold on
government to be aware of such transaction/s and foster transparency in the contractors terms -- in favor of its creditor-banks. Such deeds may include authorizing the creditors
dealings with the local property owners. The government, then, will not act as a to sell the products themselves and to collect the sales proceeds and/or the accounts
subcontractor of the contractor; rather, it will facilitate the transaction and enable the receivable.
parties to avoid a technical violation of the Anti-Dummy Law. Seen in this context, Clause 10.2(l) is not something out of the ordinary or
objectionable. In any case, as will be explained below, even if it is allowed to mortgage or
encumber the mineral end-products themselves, the contractor is not freed of its
Absence of Provision obligation to pay the government its basic and additional shares in the net mining
Requiring Sale at Posted revenue, which is the essential thing to consider.
Prices Not Problematic In brief, the alarum raised over the contractors right to mortgage the minerals is
simply unwarranted. Just the same, the contractor must account for the value of mineral
production and the sales proceeds therefrom. Likewise, under the WMCP FTAA, the
The supposed absence of any provision in the WMCP FTAA directly and explicitly government remains entitled to its sixty percent share in the net mining revenues of the
requiring the contractor to sell the mineral products at posted or market prices is not a contractor. The latters right to mortgage the minerals does not negate the States right to
problem. Apart from Clause 1.4 of the FTAA obligating the contractor to account for the receive its share of net mining revenues.
total value of mineral production and the sale of minerals, we can also look to Section 35
of RA 7942, which incorporates into all FTAAs certain terms, conditions and warranties,
including the following:
Shareholders Free
(l) The contractors shall furnish the Government records of geologic, to Sell Their Stocks
accounting and other relevant data for its mining operation, and
that books of accounts and records shall be open for inspection by the
government. x x x Petitioners likewise criticize Clause 10.2(k), which gives the contractor authority to
(m) Requiring the proponent to dispose of the minerals at the highest price and change its equity structure at any time. This provision may seem somewhat unusual, but
more advantageous terms and conditions. considering that WMCP then was 100 percent foreign-owned, any change would mean
that such percentage would either stay unaltered or be decreased in favor of Filipino
For that matter, Section 56(n) of DAO 99-56 specifically obligates an FTAA ownership. Moreover, the foreign-held shares may change hands freely. Such eventuality
contractor to dispose of the minerals and by-products at the highest market price and to is as it should be.
register with the MGB a copy of the sales agreement. After all, the provisions of
prevailing statutes as well as rules and regulations are deemed written into contracts. We believe it is not necessary for government to attempt to limit or restrict the
freedom of the shareholders in the contractor to freely transfer, dispose of or encumber
their shareholdings, consonant with the unfettered exercise of their business judgment
and discretion. Rather, what is critical is that, regardless of the identity, nationality and
percentage ownership of the various shareholders of the contractor -- and regardless of Financial Benefits Not
whether these shareholders decide to take the company public, float bonds and other fixed- Surrendered to the Contractor
income instruments, or allow the creditor-banks to take an equity position in the company
-- the foreign-owned contractor is always in a position to render the services required
under the FTAA, under the direction and control of the government. One of the main reasons certain provisions of RA 7942 were struck down was the
finding mentioned in the Decision that beneficial ownership of the mineral resources had
been conveyed to the contractor. This finding was based on the underlying assumption,
common to the said provisions, that the foreign contractor manages the mineral
Contractors Right to Ask resources in the same way that foreign contractors in service contracts used to. By
For Amendment Not Absolute allowing foreign contractors to manage or operate all the aspects of the mining operation,
the above-cited provisions of R.A. No. 7942 have in effect conveyed beneficial
ownership over the nations mineral resources to these contractors, leaving the State with
With respect to Clauses 10.4(e) and (i), petitioners complain that these provisions nothing but bare title thereto. [60] As the WMCP FTAA contained similar provisions deemed
bind government to allow amendments to the FTAA if required by banks and other by the ponente to be abhorrent to the Constitution, the Decision struck down the
financial institutions as part of the conditions for new lendings. However, we do not find Contract as well.
anything wrong with Clause 10.4(e), which only states that if the Contractor seeks to
obtain financing contemplated herein from banks or other financial institutions, (the Beneficial ownership has been defined as ownership recognized by law and
Government shall) cooperate with the Contractor in such efforts provided that such capable of being enforced in the courts at the suit of the beneficial owner. [61] Blacks Law
financing arrangements will in no event reduce the Contractors obligations or the Dictionary indicates that the term is used in two senses: first, to indicate the interest of a
Governments rights hereunder. The colatilla obviously safeguards the States interests; if beneficiary in trust property (also called equitable ownership); and second, to refer to
breached, it will give the government cause to object to the proposed amendments. the power of a corporate shareholder to buy or sell the shares, though the shareholder is
not registered in the corporations books as the owner. [62]Usually, beneficial ownership is
On the other hand, Clause 10.4(i) provides that the Government shall favourably distinguished from naked ownership, which is the enjoyment of all the benefits and
consider any request from [the] Contractor for amendments of this Agreement which are privileges of ownership, as against possession of the bare title to property.
necessary in order for the Contractor to successfully obtain the financing. Petitioners see in
this provision a complete renunciation of control. We disagree. An assiduous examination of the WMCP FTAA uncovers no indication that it
confers upon WMCP ownership, beneficial or otherwise, of the mining property it is to
The proviso does not say that the government shall grant any request for develop, the minerals to be produced, or the proceeds of their sale, which can be legally
amendment. Clause 10.4(i) only obliges the State to favorably consider any such request, asserted and enforced as against the State.
which is not at all unreasonable, as it is not equivalent to saying that the government
must automatically consent to it. This provision should be read together with the rest of As public respondents correctly point out, any interest the contractor may have in
the FTAA provisions instituting government control and supervision over the mining the proceeds of the mining operation is merely the equivalent of the consideration the
enterprise. The clause should not be given an interpretation that enables the contractor government has undertaken to pay for its services. All lawful contracts require such
to wiggle out of the restrictions imposed upon it by merely suggesting that certain mutual prestations, and the WMCP FTAA is no different. The contractor commits to
amendments are requested by the lenders. perform certain services for the government in respect of the mining operation, and in
turn it is to be compensated out of the net mining revenues generated from the sale of
Rather, it is up to the contractor to prove to the government that the requested mineral products. What would be objectionable is a contractual provision that unduly
changes to the FTAA are indispensable, as they enable the contractor to obtain the benefits the contractor far in excess of the service rendered or value delivered, if any, in
needed financing; that without such contract changes, the funders would absolutely exchange therefor.
refuse to extend the loan; that there are no other sources of financing available to the
contractor (a very unlikely scenario); and that without the needed financing, the A careful perusal of the statute itself and its implementing rules reveals that neither
execution of the work programs will not proceed. But the bottom line is, in the exercise RA 7942 nor DAO 99-56 can be said to convey beneficial ownership of any mineral
of its power of control, the government has the final say on whether to approve or resource or product to any foreign FTAA contractor.
disapprove such requested amendments to the FTAA. In short, approval thereof is not
mandatory on the part of the government.
In fine, the foregoing evaluation and analysis of the aforementioned FTAA Equitable Sharing
provisions sufficiently overturns petitioners litany of objections to and criticisms of Financial Benefits
of the States alleged lack of control.

On the contrary, DAO 99-56, entitled Guidelines Establishing the Fiscal Regime of
Financial or Technical Assistance Agreements aims to ensure an equitable sharing of the
benefits derived from mineral resources. These benefits are to be equitably shared Capital gains tax on traded stocks - 5 to 10 percent of the value of
among the government (national and local), the FTAA contractor, and the affected the shares
communities. The purpose is to ensure sustainable mineral resources development; and
a fair, equitable, competitive and stable investment regime for the large-scale Withholding tax on interest payments on foreign loans -15 percent
exploration, development and commercial utilization of minerals. The general framework of the amount of interest
or concept followed in crafting the fiscal regime of the FTAA is based on the principle that Withholding tax on dividend payments to foreign stockholders 15
the government expects real contributions to the economic growth and general welfare of percent of the dividend
the country, while the contractor expects a reasonable return on its investments in the
project.[63] Wharfage and port fees
Specifically, under the fiscal regime, the governments expectation is, inter alia, the Licensing fees (for example, radio permit, firearms permit,
receipt of its share from the taxes and fees normally paid by a mining enterprise. On the professional fees)
other hand, the FTAA contractor is granted by the government certain fiscal and non-
fiscal incentives[64] to help support the formers cash flow during the most critical phase Other national taxes and fees.
(cost recovery) and to make the Philippines competitive with other mineral-producing Payments to Local Governments:
countries. After the contractor has recovered its initial investment, it will pay all the
normal taxes and fees comprising the basic share of the government, plus an additional Local business tax - a maximum of 2 percent of gross sales or
share for the government based on the options and formulae set forth in DAO 99-56. receipts (the rate varies among local government units)
The said DAO spells out the financial benefits the government will receive from an Real property tax - 2 percent of the fair market value of the
FTAA, referred to as the Government Share, composed of a basic government share and property, based on an assessment level set by the local government
an additional government share.
Special education levy - 1 percent of the basis used for the real
The basic government share is comprised of all direct taxes, fees and royalties, as property tax
well as other payments made by the contractor during the term of the FTAA. These are
amounts paid directly to (i) the national government (through the Bureau of Internal Occupation fees - PhP50 per hectare per year; PhP100 per hectare
Revenue, Bureau of Customs, Mines & Geosciences Bureau and other national per year if located in a mineral reservation
government agencies imposing taxes or fees), (ii) the local government units where the
Community tax - maximum of PhP10,500 per year
mining activity is conducted, and (iii) persons and communities directly affected by the
mining project. The major taxes and other payments constituting the basic government All other local government taxes, fees and imposts as of the effective
share are enumerated below:[65] date of the FTAA - the rate and the type depend on the local
government
Payments to the National Government:
Other Payments:
Excise tax on minerals - 2 percent of the gross output of mining
operations Royalty to indigenous cultural communities, if any 1 percent of
gross output from mining operations
Contractor income tax - maximum of 32 percent of taxable income
for corporations Special allowance - payment to claim owners and surface rights
holders
Customs duties and fees on imported capital equipment -the rate is
set by the Tariff and Customs Code (3-7 percent for chemicals; 3-10 Apart from the basic share, an additional government share is also collected from
percent for explosives; 3-15 percent for mechanical and electrical the FTAA contractor in accordance with the second paragraph of Section 81 of RA 7942,
equipment; and 3-10 percent for vehicles, aircraft and vessels which provides that the government share shall be comprised of, among other
things, certain taxes, duties and fees. The subject proviso reads:
VAT on imported equipment, goods and services 10 percent of value
Royalties due the government on minerals extracted from mineral The Government share in a financial or technical assistance agreement shall consist
reservations, if applicable 5 percent of the actual market value of the of, among other things, the contractors corporate income tax, excise tax, special
minerals produced allowance, withholding tax due from the contractors foreign stockholders arising from
dividend or interest payments to the said foreign stockholder in case of a foreign national,
Documentary stamp tax - the rate depends on the type of and all such other taxes, duties and fees as provided for under existing laws. (Bold types
transaction supplied.)
 The government, through the DENR and the MGB, has interpreted the insertion of enterprise.The additional government share was to be paid by the contractor on top of
the phrase among other things as signifying that the government is entitled to an the basic share, so as to achieve a fifty-fifty sharing -- between the government and the
additional government share to be paid by the contractor apart from the basic share, in contractor -- of net benefits from mining. In the Ramos-DeVera paper, the explanation of
order to attain a fifty-fifty sharing of net benefits from mining. the three options or formulas[68] -- presented in DAO 99-56 for the computation of the
additional government share -- serves to debunk the claim that the governments take from
The additional government share is computed by using one of three options or an FTAA consists solely of taxes, fees and duties.
schemes presented in DAO 99-56: (1) a fifty-fifty sharing in the cumulative present value
of cash flows; (2) the share based on excess profits; and (3) the sharing based on the Unfortunately, the Office of the Solicitor General -- although in possession of the
cumulative net mining revenue. The particular formula to be applied will be selected by relevant data -- failed to fully replicate or echo the pertinent elucidation in the Ramos-
the contractor, with a written notice to the government prior to the commencement of DeVera paper regarding the three schemes or options for computing the additional
the development and construction phase of the mining project. [66] government share presented in DAO 99-56. Had due care been taken by the OSG, the Court
would have been duly apprised of the real nature and particulars of the additional share.
Proceeds from the government shares arising from an FTAA contract are
distributed to and received by the different levels of government in the following But, perhaps, on account of the esoteric discussion in the Ramos-DeVera paper, and
proportions: the even more abstruse mathematical jargon employed in DAO 99-56, the OSG omitted
any mention of the three options. Instead, the OSG skipped to a side discussion of the
National Government 50 percent effect of indirect taxes, which had nothing at all to do with the additional government
Provincial Government 10 percent share, to begin with. Unfortunately, this move created the wrong impression, pointed out
Municipal Government 20 percent in Justice Antonio T. Carpios Opinion, that the OSG had taken the position that the
Affected Barangays 20 percent additional government share consisted of indirect taxes.
The portion of revenues remaining after the deduction of the basic and additional In any event, what is quite evident is the fact that the additional government
government shares is what goes to the contractor. share, as formulated, has nothing to do with taxes -- direct or indirect -- or with duties,
fees or charges. To repeat, it is over and above the basic government share composed of
taxes and duties. Simply put, the additional share may be (a) an amount that will result in
Governments Share in an a 50-50 sharing of the cumulative present value of the cash flows[69] of the enterprise; (b)
FTAA Not Consisting Solely an amount equivalent to 25 percent of the additional or excess profits of the enterprise,
of Taxes, Duties and Fees reckoned against a benchmark return on investments; or (c) an amount that will result in
a fifty-fifty sharing of the cumulative net mining revenue from the end of the recovery
period up to the taxable year in question. The contractor is required to select one of the
three options or formulae for computing the additional share, an option it will apply to
In connection with the foregoing discussion on the basic and additional
all of its mining operations.
government shares, it is pertinent at this juncture to mention the criticism leveled at the
second paragraph of Section 81 of RA 7942, quoted earlier. The said proviso has been As used above, net mining revenue is defined as the gross output from mining
denounced, because, allegedly, the States share in FTAAs with foreign contractors has operations for a calendar year, less deductible expenses (inclusive of taxes, duties and
been limited to taxes, fees and duties only; in effect, the State has been deprived of fees). Such revenue would roughly be equivalent to taxable income or income before
a share in the after-tax income of the enterprise. In the face of this allegation, one has to income tax. Definitely, as compared with, say, calculating the additional government
consider that the law does not define the term among other things; and the Office of the share on the basis of net income (after income tax), the net mining revenue is a better
Solicitor General, in its Motion for Reconsideration, appears to have erroneously claimed and much more reasonable basis for such computation, as it gives a truer picture of the
that the phrase refers to indirect taxes. profitability of the company.
The law provides no definition of the term among other things, for the reason that To demonstrate that the three options or formulations will operate as intended,
Congress deliberately avoided setting unnecessary limitations as to what may constitute Messrs. Ramos and de Vera also performed some quantifications of the government
compensation to the State for the exploitation and use of mineral resources. But the share via a financial modeling of each of the three options discussed above. They found
inclusion of that phrase clearly and unmistakably reveals the legislative intent to have the that the government would get the highest share from the option that is based on the net
State collect more than just the usual taxes, duties and fees. Certainly, there is nothing in mining revenue, as compared with the other two options, considering only the basic and
that phrase -- or in the second paragraph of Section 81 -- that would suggest that such the additional shares; and that, even though production rate decreases, the government
phrase should be interpreted as referring only to taxes, duties, fees and the like. share will actually increase when the net mining revenue and the additional profit-based
options are used.
Precisely for that reason, to fulfill the legislative intent behind the inclusion of the
phrase among other things in the second paragraph of Section 81, [67] the DENR structured Furthermore, it should be noted that the three options or formulae do not yet take
and formulated in DAO 99-56 the said additional government share. Such a share was into account the indirect taxes [70]and other financial contributions [71] of mining projects.
to consist not of taxes, but of a share in the earnings or cash flows of the mining These indirect taxes and other contributions are real and actual benefits enjoyed by the
Filipino people and/or government. Now, if some of the quantifiable items are taken into We believe that Congress did not set any time limit for the grace period, preferring
account in the computations, the financial modeling would show that the total to leave it to the concerned agencies, which are, on account of their technical expertise
government share increases to 60 percent or higher -- in one instance, as much as 77 and training, in a better position to determine the appropriate durations for such
percent and even 89 percent -- of the net present value of total benefits from the project. recovery periods. After all, these recovery periods are determined, to a great extent, by
As noted in the Ramos-DeVera paper, these results are not at all shabby, considering that technical and technological factors peculiar to the mining industry. Besides, with
the contractor puts in all the capital requirements and assumes all the risks, without the developments and advances in technology and in the geosciences, we cannot discount
government having to contribute or risk anything. the possibility of shorter recovery periods. At any rate, the concerned agencies have not
been remiss in this area. The 1995 and 1996 Implementing Rules and Regulations of RA
Despite the foregoing explanation, Justice Carpio still insisted during the Courts 7942 specify that the period of recovery, reckoned from the date of commercial
deliberations that the phrase among other things refers only to taxes, duties and fees. We operation, shall be for a period not exceeding five years, or until the date
are bewildered by his position. On the one hand, he condemns the Mining Law for of actual recovery, whichever comes earlier.
allegedly limiting the governments benefits only to taxes, duties and fees; and on the
other, he refuses to allow the State to benefit from the correct and proper interpretation
of the DENR/MGB. To remove all doubts then, we hold that the States share is not limited
to taxes, duties and fees only and that the DENR/MGB interpretation of the Approval of Pre-Operating
phrase among other things is correct. Definitely, this DENR/MGB interpretation is not Expenses Required by RA 7942
only legally sound, but also greatly advantageous to the government.
One last point on the subject. The legislature acted judiciously in not defining the Still, RA 7942 is criticized for allegedly not requiring government approval of pre-
terms among other things and, instead, leaving it to the agencies concerned to devise and operating, exploration and development expenses of the foreign contractors, who are in
develop the various modes of arriving at a reasonable and fair amount for the additional effect given unfettered discretion to determine the amounts of such expenses.
government share. As can be seen from DAO 99-56, the agencies concerned did an Supposedly, nothing prevents the contractors from recording such expenses in amounts
admirable job of conceiving and developing not just one formula, but three different equal to the mining revenues anticipated for the first 10 or 15 years of commercial
formulae for arriving at the additional government share. Each of these options is quite production, with the result that the share of the State will be zero for the first 10 or 15
fair and reasonable; and, as Messrs. Ramos and De Vera stated, other alternatives or years. Moreover, under the circumstances, the government would be unable to say when
schemes for a possible improvement of the fiscal regime for FTAAs are also being studied it would start to receive its share under the FTAA.
by the government.
We believe that the argument is based on incorrect information as well as
Besides, not locking into a fixed definition of the term among other things will speculation. Obviously, certain crucial provisions in the Mining Law were overlooked.
ultimately be more beneficial to the government, as it will have that innate flexibility to Section 23, dealing with the rights and obligations of the exploration permit grantee,
adjust to and cope with rapidly changing circumstances, particularly those in the states: The permittee shall undertake exploration work on the area as specified by its
international markets. Such flexibility is especially significant for the government in permit based on an approved work program. The next proviso reads: Any expenditure in
terms of helping our mining enterprises remain competitive in world markets despite excess of the yearly budget of the approved work program may be carried forward and
challenging and shifting economic scenarios. credited to the succeeding years covering the duration of the permit. x x x.(underscoring
In conclusion, we stress that we do not share the view that in FTAAs with supplied)
foreign contractors under RA 7942, the governments share is limited to taxes, fees Clearly, even at the stage of application for an exploration permit, the applicant is
and duties. Consequently, we find the attacks on the second paragraph of Section required to submit -- for approval by the government -- a proposed work program for
81 of RA 7942 totally unwarranted. exploration, containing a yearly budget of proposed expenditures. The State has the
opportunity to pass upon (and approve or reject) such proposed expenditures, with the
foreknowledge that -- if approved -- these will subsequently be recorded as pre-
Collections Not Made Uncertain operating expenses that the contractor will have to recoup over the grace period. That is
by the Third Paragraph of Section 81 not all.
Under Section 24, an exploration permit holder who determines the commercial
viability of a project covering a mining area may, within the term of the permit, file with
The third or last paragraph of Section 81 provides that the government share in
[72]
the Mines and Geosciences Bureau a declaration of mining project feasibility. This
FTAAs shall be collected when the contractor shall have recovered its pre-operating declaration is to be accompanied by a work program for development for the Bureaus
expenses and exploration and development expenditures. The objection has been approval, the necessary prelude for entering into an FTAA, a mineral production sharing
advanced that, on account of the proviso, the collection of the States share is not even agreement (MPSA), or some other mineral agreement. At this stage, too, the government
certain, as there is no time limit in RA 7942 for this grace period or recovery period. obviously has the opportunity to approve or reject the proposed work program and
budgeted expenditures for development works on the project. Such expenditures will
ultimately become the pre-operating and development costs that will have to be did the parties argue upon them in their pleadings. Hence, this Court cannot make any
recovered by the contractor. pronouncement in this case regarding the constitutionality of Sections 80 and 84 without
violating the fundamental rules of due process. Indeed, the two provisos will have to
Naturally, with the submission of approved work programs and budgets for the await another case specifically placing them in issue.
exploration and the development/construction phases, the government will be able to
scrutinize and approve or reject such expenditures. It will be well-informed as to the On the other hand, Section 112[74] is disparaged for allegedly reverting FTAAs and
amounts of pre-operating and other expenses that the contractor may legitimately all mineral agreements to the old and discredited license, concession or lease system.
recover and the approximate period of time needed to effect such a recovery. There is This Section states in relevant part that the provisions of Chapter XIV [which includes
therefore no way the contractor can just randomly post any amount of pre-operating Sections 80 to 82] on government share in mineral production-sharing agreement x x x
expenses and expect to recover the same. shall immediately govern and apply to a mining lessee or contractor. (underscoring
supplied) This provision is construed as signifying that the 2 percent excise tax which,
The aforecited provisions on approved work programs and budgets have pursuant to Section 80, comprises the government share in MPSAs shall now also
counterparts in Section 35, which deals with the terms and conditions exclusively constitute the government share in FTAAs -- as well as in co-production agreements and
applicable to FTAAs. The said provision requires certain terms and conditions to be joint venture agreements -- to the exclusion of revenues of any other nature or from any
incorporated into FTAAs; among them, a firm commitment x x x of an amount other source.
corresponding to the expenditure obligation that will be invested in the contract
area and representations and warranties x x x to timely deploy these [financing, Apart from the fact that Section 112 likewise does not come within the issues
managerial and technical expertise and technological] resources under its supervision delineated by this Court during the Oral Argument, and was never touched upon by the
pursuant to the periodic work programs and related budgets x x x, as well as work parties in their pleadings, it must also be noted that the criticism hurled against this
programs and minimum expenditures commitments. (underscoring supplied) Section is rooted in unwarranted conclusions made without considering other relevant
provisions in the statute. Whether Section 112 may properly apply to co-production or
Unarguably, given the provisions of Section 35, the State has every opportunity to joint venture agreements, the fact of the matter is that it cannot be made to apply to
pass upon the proposed expenditures under an FTAA and approve or reject them. It has FTAAs.
access to all the information it may need in order to determine in advance the amounts of
pre-operating and developmental expenses that will have to be recovered by the First, Section 112 does not specifically mention or refer to FTAAs; the only reason it
contractor and the amount of time needed for such recovery. is being applied to them at all is the fact that it happens to use the word contractor.
Hence, it is a bit of a stretch to insist that it covers FTAAs as well. Second, mineral
In summary, we cannot agree that the third or last paragraph of Section 81 of agreements, of which there are three types -- MPSAs, co-production agreements, and
RA 7942 is in any manner unconstitutional. joint venture agreements -- are covered by Chapter V of RA 7942. On the other hand,
FTAAs are covered by and in fact are the subject of Chapter VI, an entirely different
chapter altogether. The law obviously intends to treat them as a breed apart from
No Deprivation of mineral agreements, since Section 35 (found in Chapter VI) creates a long list of specific
Beneficial Rights terms, conditions, commitments, representations and warranties -- which have not been
made applicable to mineral agreements -- to be incorporated into FTAAs.
Third, under Section 39, the FTAA contractor is given the option to downgrade -- to
It is also claimed that aside from the second and the third paragraphs of Section 81 convert the FTAA into a mineral agreement at any time during the term if the economic
(discussed above), Sections 80, 84 and 112 of RA 7942 also operate to deprive the State viability of the contract area is inadequate to sustain large-scale mining operations. Thus,
of beneficial rights of ownership over mineral resources; and give them away for free to there is no reason to think that the law through Section 112 intends to exact from FTAA
private business enterprises (including foreign owned corporations). Likewise, the said contractors merely the same government share (a 2 percent excise tax) that it apparently
provisions have been construed as constituting, together with Section 81, an ingenious demands from contractors under the three forms of mineral agreements. In brief,
attempt to resurrect the old and discredited system of license, concession or lease. Section 112 does not apply to FTAAs.
Specifically, Section 80 is condemned for limiting the States share in a mineral Notwithstanding the foregoing explanation, Justices Carpio and Morales maintain
production-sharing agreement (MPSA) to just the excise tax on the mineral product. that the Court must rule now on the constitutionality of Sections 80, 84 and 112,
Under Section 151(A) of the Tax Code, such tax is only 2 percent of the market value of allegedly because the WMCP FTAA contains a provision which grants the contractor
the gross output of the minerals. The colatilla in Section 84, the portion considered unbridled and automatic authority to convert the FTAA into an MPSA; and should such
offensive to the Constitution, reiterates the same limitation made in Section 80. [73] conversion happen, the State would be prejudiced since its share would be limited to the
2 percent excise tax. Justice Carpio adds that there are five MPSAs already signed just
It should be pointed out that Section 80 and the colatilla in Section 84 pertain only
awaiting the judgment of this Court on respondents and intervenors Motions for
to MPSAs and have no application to FTAAs. These particular statutory provisions do not
Reconsideration. We hold however that, at this point, this argument is based on pure
come within the issues that were defined and delineated by this Court during the Oral
speculation. The Court cannot rule on mere surmises and hypothetical assumptions,
Argument -- particularly the third issue, which pertained exclusively to FTAAs. Neither
without firm factual anchor. We repeat: basic due process requires that we hear the simply ignored. And assuming that the foreign contractors are successful in finding ore
parties who have a real legal interest in the MPSAs (i.e. the parties who executed them) bodies that are viable for commercial exploitation, they do not just pluck out the
before these MPSAs can be reviewed, or worse, struck down by the Court. Anything less minerals and cart them off. They have first to build camp sites and roadways; dig mine
than that requirement would be arbitrary and capricious. shafts and connecting tunnels; prepare tailing ponds, storage areas and vehicle depots;
install their machinery and equipment, generator sets, pumps, water tanks and sewer
In any event, the conversion of the present FTAA into an MPSA is systems, and so on.
problematic. First, the contractor must comply with the law, particularly Section 39 of RA
7942; inter alia, it must convincingly show that the economic viability of the contract is In short, they need to expend a great deal more of their funds for facilities,
found to be inadequate to justify large-scale mining operations; second, it must contend equipment and supplies, fuel, salaries of local labor and technical staff, and other
with the Presidents exercise of the power of State control over the EDU of natural operating expenses. In the meantime, they also have to pay taxes, [75] duties, fees, and
resources; and third, it will have to risk a possible declaration of the unconstitutionality royalties. All told, the exploration, pre-feasibility, feasibility, development and
(in a proper case) of Sections 80, 84 and 112. construction phases together add up to as many as eleven years. [76] The contractors have
to continually shell out funds for the duration of over a decade, before they can
The first requirement is not as simple as it looks. Section 39 contemplates a commence commercial production from which they would eventually derive revenues.
situation in which an FTAA has already been executed and entered into, and is All that money translates into a lot of pump-priming for the local economy.
presumably being implemented, when the contractor discovers that the mineral ore reserves
in the contract area are not sufficient to justify large-scale mining, and thus the Granted that the contractors are allowed subsequently to recover their pre-
contractor requests the conversion of the FTAA into an MPSA. The contractor in effect operating expenses, still, that eventuality will happen only after they shall have first put
needs to explain why, despite its exploration activities, including the conduct of various out the cash and fueled the economy. Moreover, in the process of recouping their
geologic and other scientific tests and procedures in the contract area, it was unable to investments and costs, the foreign contractors do not actually pull out the money from the
determine correctly the mineral ore reserves and the economic viability of the area. The economy. Rather, they recover or recoup their investments out of actual commercial
contractor must explain why, after conducting such exploration activities, it decided to production by not paying a portion of the basic government share corresponding to
file a declaration of mining feasibility, and to apply for an FTAA, thereby leading the State national taxes, along with the additional government share, for a period of not more than
to believe that the area could sustain large-scale mining. The contractor must justify fully five years[77] counted from the commencement of commercial production.
why its earlier findings, based on scientific procedures, tests and data, turned out to be
wrong, or were way off. It must likewise prove that its new findings, also based on It must be noted that there can be no recovery without commencing actual
scientific tests and procedures, are correct. Right away, this puts the contractors commercial production. In the meantime that the contractors are recouping costs, they
technical capabilities and expertise into serious doubt. We wonder if anyone would need to continue operating; in order to do so, they have to disburse money to meet their
relish being in this situation. The State could even question and challenge the contractors various needs. In short, money is continually infused into the economy.
qualification and competence to continue the activity under an MPSA. The foregoing discussion should serve to rid us of the mistaken belief that, since the
All in all, while there may be cogent grounds to assail the aforecited Sections, foreign contractors are allowed to recover their investments and costs, the end result is
this Court -- on considerations of due process -- cannot rule upon them here. that they practically get the minerals for free, which leaves the Filipino people none the
Anyway, if later on these Sections are declared unconstitutional, such declaration better for it.
will not affect the other portions since they are clearly separable from the rest.

All Businesses Entitled

Our Mineral Resources Not to Cost Recovery
Given Away for Free by RA 7942

Let it be put on record that not only foreign contractors, but all businessmen and all
Nevertheless, if only to disabuse our minds, we should address the contention that business entities in general, have to recoup their investments and costs. That is one of the
our mineral resources are effectively given away for free by the law (RA 7942) in general first things a student learns in business school. Regardless of its nationality, and whether
and by Sections 80, 81, 84 and 112 in particular. or not a business entity has a five-year cost recovery period, it will -- must -- have to
recoup its investments, one way or another. This is just common business sense.
Foreign contractors do not just waltz into town one day and leave the next, taking Recovery of investments is absolutely indispensable for business survival; and business
away mineral resources without paying anything. In order to get at the minerals, they survival ensures soundness of the economy, which is critical and contributory to the
have to invest huge sums of money (tens or hundreds of millions of dollars) in general welfare of the people. Even government corporations must recoup their
exploration works first. If the exploration proves unsuccessful, all the cash spent thereon investments in order to survive and continue in operation. And, as the preceding
will not be returned to the foreign investors; rather, those funds will have been infused discussion has shown, there is no business that gets ahead or earns profits without any
into the local economy, to remain there permanently. The benefits therefrom cannot be cost to it.
 It must also be stressed that, though the State owns vast mineral wealth, such be impossible to maintain a business as a going concern if the entire net profit earned in
wealth is not readily accessible or transformable into usable and negotiable currency any particular year will be taken out and repatriated. The net income figure reflected in
without the intervention of the credible mining companies. Those untapped mineral the bottom line is a mere accounting figure not necessarily corresponding to cash in the
resources, hidden beneath tons of earth and rock, may as well not be there for all the bank, or other quick assets. In order to produce and set aside cash in an amount
good they do us right now. They have first to be extracted and converted into marketable equivalent to the bottom line figure, one may need to sell off assets or immediately
form, and the country needs the foreign contractors funds, technology and know-how for collect receivables or liquidate short-term investments; but doing so may very likely
that. disrupt normal business operations.
After about eleven years of pre-operation and another five years for cost recovery, In terms of cash flows, the funds corresponding to the net income as of a particular
the foreign contractors will have just broken even. Is it likely that they would at that point in time are actually in use in the normal course of business operations. Pulling out
point stop their operations and leave? Certainly not. They have yet to make profits. Thus, such net income disrupts the cash flows and cash position of the enterprise and, depending
for the remainder of the contract term, they must strive to maintain profitability. During on the amount being taken out, could seriously cripple or endanger the normal
this period, they pay the whole of the basic government share and the additional operations and financial health of the business enterprise. In short, no sane business
government share which, taken together with indirect taxes and other contributions, person, concerned with maintaining the mining enterprise as a going concern and
amount to approximately 60 percent or more of the entire financial benefits generated by keeping a foothold in its market, can afford to repatriate the entire after-tax
the mining venture. income to the home country.
In sum, we can hardly talk about foreign contractors taking our mineral
resources for free. It takes a lot of hard cash to even begin to do what they do. And what
they do in this country ultimately benefits the local economy, grows businesses, generates The States Receipt of Sixty
employment, and creates infrastructure, as discussed above. Hence, we definitely disagree Percent of an FTAA Contractors
with the sweeping claim that no FTAA under Section 81 will ever make any real After-Tax Income Not Mandatory
contribution to the growth of the economy or to the general welfare of the country. This
is not a plea for foreign contractors. Rather, this is a question of focusing the judicial
spotlight squarely on all the pertinent facts as they bear upon the issue at hand, in order to We now come to the next objection which runs this way: In FTAAs with a foreign
avoid leaping precipitately to ill-conceived conclusions not solidly grounded upon fact. contractor, the State must receive at least 60 percent of the after-tax income from the
exploitation of its mineral resources. This share is the equivalent of the constitutional
requirement that at least 60 percent of the capital, and hence 60 percent of the income,
of mining companies should remain in Filipino hands.
Repatriation of
After-Tax Income First, we fail to see how we can properly conclude that the Constitution mandates
the State to extract at least 60 percent of the after-tax income from a mining company
run by a foreign contractor. The argument is that the Charter requires the States partner
Another objection points to the alleged failure of the Mining Law to ensure real in a co-production agreement, joint venture agreement or MPSA to be a Filipino
contributions to the economic growth and general welfare of the country, as mandated corporation (at least 60 percent owned by Filipino citizens).
by Section 2 of Article XII of the Constitution. Pursuant to Section 81 of the law, the entire
after-tax income arising from the exploitation of mineral resources owned by the State We question the logic of this reasoning, premised on a supposedly parallel or
supposedly belongs to the foreign contractors, which will naturally repatriate the said analogous situation. We are, after all, dealing with an essentially different equation, one
after-tax income to their home countries, thereby resulting in no real contribution to the that involves different elements. The Charter did not intend to fix an iron-clad rule
economic growth of this country. Clearly, this contention is premised on erroneous on the 60 percent share, applicable to all situations at all times and in all
assumptions. circumstances. If ever such was the intention of the framers, they would have spelt it
out in black and white. Verba legis will serve to dispel unwarranted and untenable
First, as already discussed in detail hereinabove, the concerned agencies have conclusions.
correctly interpreted the second paragraph of Section 81 of RA 7942 to mean that the
government is entitled to an additional share, to be computed based on any one of the Second, if we would bother to do the math, we might better appreciate the impact
following factors: net mining revenues, the present value of the cash flows, or excess (and reasonableness) of what we are demanding of the foreign contractor. Let us use
profits reckoned against a benchmark rate of return on investments. So it is not correct a simplified illustration. Let us base it on gross revenues of, say, P500. After deducting
to say that all of the after-tax income will accrue to the foreign FTAA contractor, as the operating expenses, but prior to income tax, suppose a mining firm makes a taxable
government effectively receives a significant portion thereof. income of P100. A corporate income tax of 32 percent results in P32 of taxable income
going to the government, leaving the mining firm with P68. Government then takes 60
Second, the foreign contractors can hardly repatriate the entire after-tax income to percent thereof, equivalent to P40.80, leaving only P27.20 for the mining firm.
their home countries. Even a bit of knowledge of corporate finance will show that it will
 At this point the government has pocketed P32.00 plus P40.80, or a total of P72.80 analogy. The only factor common to the two disparate situations is the extraction of
for every P100 of taxable income, leaving the mining firm with only P27.20. But that is natural resources.
not all. The government has also taken 2 percent excise tax off the top, equivalent to
another P10. Under the minimum 60 percent proposal, the government nets Indeed, we should take note of the fact that Congress made a distinction between
around P82.80 (not counting other taxes, duties, fees and charges) from a taxable income mining firms and petroleum companies. In Republic Act No. 7729 -- An Act Reducing the
of P100 (assuming gross revenues of P500, for purposes of illustration). On the other Excise Tax Rates on Metallic and Non-Metallic Minerals and Quarry Resources, Amending
hand, the foreign contractor, which provided all the capital, equipment and labor, and took for the Purpose Section 151(a) of the National Internal Revenue Code, as amended -- the
all the entrepreneurial risks -- receives P27.20. One cannot but wonder whether such a lawmakers fixed the excise tax rate on metallic and non-metallic minerals at two
distribution is even remotely equitable and reasonable, considering the nature of the percent of the actual market value of the annual gross output at the time of removal.
mining business. The amount of P82.80 out of P100.00 is really a lot it does not matter However, in the case of petroleum, the lawmakers set the excise tax rate for the first
that we call part of it excise tax or income tax, and another portion thereof income from taxable sale at fifteen percent of the fair international market price thereof.
exploitation of mineral resources. Some might think it wonderful to be able to take the There must have been a very sound reason that impelled Congress to impose two
lions share of the benefits. But we have to ask ourselves if we are really serious in very dissimilar excise tax rate. We cannot assume, without proof, that our honorable
attracting the investments that are the indispensable and key element in generating the legislators acted arbitrarily, capriciously and whimsically in this instance. We cannot just
monetary benefits of which we wish to take the lions share. Fairness is a credo not only ignore the reality of two distinctly different situations and stubbornly insist on going
in law, but also in business. minimum 60 percent.
Third, the 60 percent rule in the petroleum industry cannot be insisted upon at all To repeat, the mere fact that gas and oil exploration contracts grant the State 60
times in the mining business. The reason happens to be the fact that in petroleum percent of the net revenues does not necessarily imply that mining contracts should
operations, the bulk of expenditures is in exploration, but once the contractor has found likewise yield a minimum of 60 percent for the State. Jumping to that erroneous
and tapped into the deposit, subsequent investments and expenditures are relatively conclusion is like comparing apples with oranges. The exploration, development and
minimal. The crude (or gas) keeps gushing out, and the work entailed is just a matter of utilization of gas and oil are simply different from those of mineral resources.
piping, transporting and storing. Not so in mineral mining. The ore body does not pop
out on its own. Even after it has been located, the contractor must continually invest in To stress again, the main risk in gas and oil is in the exploration. But once oil in
machineries and expend funds to dig and build tunnels in order to access and extract the commercial quantities is struck and the wells are put in place, the risk is relatively over
minerals from underneath hundreds of tons of earth and rock. and black gold simply flows out continuously with comparatively less need for fresh
investments and technology.
As already stated, the numerous intrinsic differences involved in their respective
operations and requirements, cost structures and investment needs render it highly On the other hand, even if minerals are found in viable quantities, there is still need
inappropriate to use petroleum operations FTAAs as benchmarks for mining FTAAs. for continuous fresh capital and expertise to dig the mineral ores from the mines. Just
Verily, we cannot just ignore the realities of the distinctly different situations and because deposits of mineral ores are found in one area is no guarantee that an equal
stubbornly insist on the minimum 60 percent. amount can be found in the adjacent areas. There are simply continuing risks and need
for more capital, expertise and industry all the time.
Note, however, that the indirect benefits -- apart from the cash revenues -- are
The Mining and the Oil Industries much more in the mineral industry. As mines are explored and extracted, vast
Different From Each Other employment is created, roads and other infrastructure are built, and other multiplier
effects arise. On the other hand, once oil wells start producing, there is less need for
employment. Roads and other public works need not be constructed continuously. In
To stress, there is no independent showing that the taking of at least a 60 percent fine, there is no basis for saying that government revenues from the oil industry and
share in the after-tax income of a mining company operated by a foreign contractor from the mineral industries are to be identical all the time.
is fair and reasonable under most if not all circumstances. The fact that some petroleum
companies like Shell acceded to such percentage of sharing does not ipso facto mean that Fourth, to our mind, the proffered minimum 60 percent suggestion tends to limit
it is per se reasonable and applicable to non-petroleum situations (that is, mining the flexibility and tie the hands of government, ultimately hampering the countrys
companies) as well. We can take judicial notice of the fact that there are, after competitiveness in the international market, to the detriment of the Filipino people. This
all, numerous intrinsic differences involved in their respective operations and equipment or you-have-to-give-us-60-percent-of-after-tax-income-or-we-dont-do- business-with-you
technological requirements, costs structures and capital investment needs, and product approach is quite perilous. True, this situation may not seem too unpalatable to the
pricing and markets. foreign contractor during good years, when international market prices are up and the
mining firm manages to keep its costs in check. However, under unfavorable economic
There is no showing, for instance, that mining companies can readily cope with a 60 and business conditions, with costs spiraling skywards and minerals prices plummeting,
percent government share in the same way petroleum companies apparently can. What a mining firm may consider itself lucky to make just minimal profits.
we have is a suggestion to enforce the 60 percent quota on the basis of a disjointed
 The inflexible, carved-in-granite demand for a 60 percent government share may Here, we will repeat what has not been emphasized and appreciated enough: the
spell the end of the mining venture, scare away potential investors, and thereby further fact that the contractor in an FTAA provides all the needed capital, technical and
worsen the already dismal economic scenario. Moreover, such an unbending or managerial expertise, and technology required to undertake the project.
unyielding policy prevents the government from responding appropriately to changing
economic conditions and shifting market forces. This inflexibility further renders our In regard to the WMCP FTAA, the then foreign-owned WMCP as contractor
country less attractive as an investment option compared with other countries. committed, at the very outset, to make capital investments of up to US$50 million in that
single mining project. WMCP claims to have already poured in well over P800 million
And fifth, for this Court to decree imperiously that the governments share should into the country as of February 1998, with more in the pipeline. These resources, valued
be not less than 60 percent of the after-tax income of FTAA contractors at all times is in the tens or hundreds of millions of dollars, are invested in a mining project that
nothing short of dictating upon the government. The result, ironically, is that the State provides no assurance whatsoever that any part of the investment will be ultimately
ends up losing control. To avoid compromising the States full control and supervision recouped.
over the exploitation of mineral resources, this Court must back off from insisting upon a
minimum 60 percent rule. It is sufficient that the State has the power and means, should At the same time, the contractor must comply with legally imposed environmental
it so decide, to get a 60 percent share (or more) in the contractors net mining revenues standards and the social obligations, for which it also commits to make significant
or after-tax income, or whatever other basis the government may decide to use in expenditures of funds. Throughout, the contractor assumes all the risks [79] of the
reckoning its share. It is not necessary for it to do so in every case, regardless of business, as mentioned earlier. These risks are indeed very high, considering that the
circumstances. rate of success in exploration is extremely low. The probability of finding any mineral or
petroleum in commercially viable quantities is estimated to be about 1:1,000 only. On
In fact, the government must be trusted, must be accorded the liberty and the that slim chance rides the contractors hope of recouping investments and generating
utmost flexibility to deal, negotiate and transact with contractors and third parties as it profits. And when the contractor has recouped its initial investments in the project, the
sees fit; and upon terms that it ascertains to be most favorable or most acceptable under government share increases to sixty percent of net benefits -- without the State ever
the circumstances, even if it means agreeing to less than 60 percent. Nothing must being in peril of incurring costs, expenses and losses.
prevent the State from agreeing to a share less than that, should it be deemed fit;
otherwise the State will be deprived of full control over mineral exploitation that the And even in the worst possible scenario -- an absence of commercial quantities of
Charter has vested in it. minerals to justify development -- the contractor would already have spent several
million pesos for exploration works, before arriving at the point in which it can make
To stress again, there is simply no constitutional or legal provision fixing the that determination and decide to cut its losses. In fact, during the first year alone of the
minimum share of the government in an FTAA at 60 percent of the net profit. For this exploration period, the contractor was already committed to spend not less than P24
Court to decree such minimum is to wade into judicial legislation, and thereby million. The FTAA therefore clearly ensures benefits for the local economy, courtesy of
inordinately impinge on the control power of the State. Let it be clear: the Court is not the contractor.
against the grant of more benefits to the State; in fact, the more the better. If during the
FTAA negotiations, the President can secure 60 percent, [78] or even 90 percent, then all All in all, this setup cannot be regarded as disadvantageous to the State or the
the better for our people. But, if under the peculiar circumstances of a specific contract, Filipino people; it certainly cannot be said to convey beneficial ownership of our
the President could secure only 50 percent or 55 percent, so be it. Needless to say, the mineral resources to foreign contractors.
President will have to report (and be responsible for) the specific FTAA to Congress, and
eventually to the people.
Finally, if it should later be found that the share agreed to is grossly Deductions Allowed by the
disadvantageous to the government, the officials responsible for entering into such a WMCP FTAA Reasonable
contract on its behalf will have to answer to the courts for their malfeasance. And the
contract provision voided. But this Court would abuse its own authority should it force
the governments hand to adopt the 60 percent demand of some of our esteemed Petitioners question whether the States weak control might render the sharing
colleagues. arrangements ineffective. They cite the so-called suspicious deductions allowed by the
WMCP FTAA in arriving at the net mining revenue, which is the basis for computing the
government share. The WMCP FTAA, for instance, allows expenditures for development
within and outside the Contract Area relating to the Mining Operations, [80] consulting fees
Capital and Expertise Provided, incurred both inside and outside the Philippines for work related directly to the Mining
Yet All Risks Assumed by Contractor Operations,[81] and the establishment and administration of field offices including
administrative overheads incurred within and outside the Philippines which are properly
allocatable to the Mining Operations and reasonably related to the performance of the
Contractors obligations and exercise of its rights under this Agreement. [82]
 It is quite well known, however, that mining companies do perform some operation of Section 7.9, without need of further action by any party, and removed the
marketing activities abroad in respect of selling their mineral products and by-products. States right to receive the 60 percent share in net mining revenues.
Hence, it would not be improper to allow the deduction of reasonableconsulting fees
incurred abroad, as well as administrative expenses and overheads related to marketing At bottom, Section 7.9 has the effect of depriving the State of its 60 percent share in
offices also located abroad -- provided that these deductions are directly related or the net mining revenues of WMCP without any offset or compensation whatsoever. It is
properly allocatable to the mining operations and reasonably related to the performance possible that the inclusion of the offending provision was initially prompted by the
of the contractors obligations and exercise of its rights. In any event, more facts are desire to provide some form of incentive for the principal foreign stockholder in WMCP
needed. Until we see how these provisions actually operate, mere suspicions will not to eventually reduce its equity position and ultimately divest in favor of Filipino citizens
suffice to propel this Court into taking action. and corporations. However, as finally structured, Section 7.9 has the deleterious effect of
depriving government of the entire 60 percent share in WMCPs net mining revenues,
without any form of compensation whatsoever. Such an outcome is completely
unacceptable.
Section 7.9 of the WMCP FTAA
Invalid and Disadvantageous The whole point of developing the nations natural resources is to benefit the
Filipino people, future generations included. And the State as sovereign and custodian of
the nations natural wealth is mandated to protect, conserve, preserve and develop that
Having defended the WMCP FTAA, we shall now turn to two defective provisos. Let part of the national patrimony for their benefit. Hence, the Charter lays great emphasis
us start with Section 7.9 of the WMCP FTAA. While Section 7.7 gives the government a 60 on real contributions to the economic growth and general welfare of the country [85] as
percent share in the net mining revenues of WMCP from the commencement of essential guiding principles to be kept in mind when negotiating the terms and
commercial production, Section 7.9 deprives the government of part or all of the said 60 conditions of FTAAs.
percent. Under the latter provision, should WMCPs foreign shareholders -- who Earlier, we held (1) that the State must be accorded the liberty and the utmost
originally owned 100 percent of the equity -- sell 60 percent or more of its outstanding flexibility to deal, negotiate and transact with contractors and third parties as it sees fit,
capital stock to a Filipino citizen or corporation, the State loses its right to receive its 60 and upon terms that it ascertains to be most favorable or most acceptable under the
percent share in net mining revenues under Section 7.7. circumstances, even if that should mean agreeing to less than 60 percent; (2) that it is not
Section 7.9 provides: necessary for the State to extract a 60 percent share in every case and regardless of
circumstances; and (3) that should the State be prevented from agreeing to a share less
than 60 percent as it deems fit, it will be deprived of the full control over mineral
The percentage of Net Mining Revenues payable to the Government pursuant to Clause 7.7 exploitation that the Charter has vested in it.
shall be reduced by 1percent of Net Mining Revenues for every 1percent ownership interest
in the Contractor (i.e., WMCP) held by a Qualified Entity.[83] That full control is obviously not an end in itself; it exists and subsists precisely
because of the need to serve and protect the national interest. In this instance, national
Evidently, what Section 7.7 grants to the State is taken away in the next breath by interest finds particular application in the protection of the national patrimony and the
Section 7.9 without any offsetting compensation to the State. Thus, in reality, the State has development and exploitation of the countrys mineral resources for the benefit of the
no vested right to receive any income from the FTAA for the exploitation of its mineral Filipino people and the enhancement of economic growth and the general welfare of the
resources. Worse, it would seem that what is given to the State in Section 7.7 is by mere country. Undoubtedly, such full control can be misused and abused, as we now
tolerance of WMCPs foreign stockholders, who can at any time cut off the governments witness.
entire 60 percent share. They can do so by simply selling 60 percent of WMCPs Section 7.9 of the WMCP FTAA effectively gives away the States share of net mining
outstanding capital stock to a Philippine citizen or corporation. Moreover, the proceeds revenues (provided for in Section 7.7) without anything in exchange. Moreover, this
of such sale will of course accrue to the foreign stockholders of WMCP, not to the State. outcome constitutes unjust enrichment on the part of the local and foreign stockholders
The sale of 60 percent of WMCPs outstanding equity to a corporation that is 60 of WMCP. By their mere divestment of up to 60 percent equity in WMCP in favor of
percent Filipino-owned and 40 percent foreign-owned will still trigger the operation of Filipino citizens and/or corporations, the local and foreign stockholders get a windfall.
Section 7.9. Effectively, the State will lose its right to receive all 60 percent of the net Their share in the net mining revenues of WMCP is automatically increased, without
mining revenues of WMCP; and foreign stockholders will own beneficially up to 64 percent their having to pay the government anything for it. In short, the provision in question is
of WMCP, consisting of the remaining 40 percent foreign equity therein, plus the 24 without a doubt grossly disadvantageous to the government, detrimental to the interests of
percent pro-rata share in the buyer-corporation. [84] the Filipino people, and violative of public policy.

In fact, the January 23, 2001 sale by WMCPs foreign stockholder of the entire Moreover, it has been reiterated in numerous decisions [86] that the parties to a
outstanding equity in WMCP to Sagittarius Mines, Inc. -- a domestic corporation at least contract may establish any agreements, terms and conditions that they deem convenient;
60 percent Filipino owned -- may be deemed to have automatically triggered the but these should not be contrary to law, morals, good customs, public order or public
policy.[87] Being precisely violative of anti-graft provisions and contrary to public policy,
Section 7.9 must therefore be stricken off as invalid.
 Whether the government officials concerned acceded to that provision by sheer (f) all of the foregoing items which have not previously been
mistake or with full awareness of the ill consequences, is of no moment. It is hornbook offset against the Government Share in an earlier
doctrine that the principle of estoppel does not operate against the government for the Fiscal Year, adjusted for inflation. (underscoring
act of its agents, [88] and that it is never estopped by any mistake or error on their part. supplied)
[89]
It is therefore possible and proper to rectify the situation at this time. Moreover, we
may also say that the FTAA in question does not involve mere contractual rights; being Section 7.8(e) is out of place in the FTAA. It makes no sense why, for instance,
impressed as it is with public interest, the contractual provisions and stipulations must money spent by the government for the benefit of the contractor in building roads
yield to the common good and the national interest. leading to the mine site should still be deductible from the States share in net mining
revenues. Allowing this deduction results in benefiting the contractor twice over. It
Since the offending provision is very much separable [90] from Section 7.7 and the constitutes unjust enrichment on the part of the contractor at the expense of the
rest of the FTAA, the deletion of Section 7.9 can be done without affecting or requiring government, since the latter is effectively being made to pay twice for the same item.
[91]
the invalidation of the WMCP FTAA itself. Such a deletion will preserve for the For being grossly disadvantageous and prejudicial to the government and contrary to
government its due share of the benefits. This way, the mandates of the Constitution are public policy, Section 7.8(e) is undoubtedly invalid and must be declared to be without
complied with and the interests of the government fully protected, while the business effect. Fortunately, this provision can also easily be stricken off without affecting the rest
operations of the contractor are not needlessly disrupted. of the FTAA.

Section 7.8(e) of the WMCP FTAA Nothing Left Over

Also Invalid and Disadvantageous After Deductions?

Section 7.8(e) of the WMCP FTAA is likewise invalid. It provides thus: In connection with Section 7.8, an objection has been raised: Specified in Section
7.8 are numerous items of deduction from the States 60 percent share. After taking these
7.8 The Government Share shall be deemed to include all of the following sums: into account, will the State ever receive anything for its ownership of the mineral
resources?
(a) all Government taxes, fees, levies, costs, imposts, duties and We are confident that under normal circumstances, the answer will be yes. If we
royalties including excise tax, corporate income examine the various items of deduction listed in Section 7.8 of the WMCP FTAA, we will
tax, customs duty, sales tax, value added tax, find that they correspond closely to the components or elements of the basic
occupation and regulatory fees, Government government share established in DAO 99-56, as discussed in the earlier part of this
controlled price stabilization schemes, any other Opinion.
form of Government backed schemes, any tax on
dividend payments by the Contractor or its Likewise, the balance of the governments 60 percent share -- after netting out the
Affiliates in respect of revenues from the Mining items of deduction listed in Section 7.8 --corresponds closely to the additional
Operations and any tax on interest on domestic government share provided for in DAO 99-56 which, we once again stress, has nothing
and foreign loans or other financial arrangements at all to do with indirect taxes. The Ramos-DeVera paper [92] concisely presents the fiscal
or accommodations, including loans extended to contribution of an FTAA under DAO 99-56 in this equation:
the Contractor by its stockholders; Receipts from an FTAA = basic govt share + addl govt share
(b) any payments to local and regional government, including
taxes, fees, levies, costs, imposts, duties, royalties, Transposed into a similar equation, the fiscal payments system from the WMCP
occupation and regulatory fees and infrastructure FTAA assumes the following formulation:
contributions;
(c) any payments to landowners, surface rights holders, Governments 60 percent share in net mining revenues of WMCP = items listed in Sec. 7.8
occupiers, indigenous people or Claimowners; of the FTAA + balance of Govt share, payable 4 months from the end of the fiscal year
(d) costs and expenses of fulfilling the Contractors obligations
to contribute to national development in
accordance with Clause 10.1(i) (1) and 10.1(i) (2); It should become apparent that the fiscal arrangement under the WMCP FTAA is
(e) an amount equivalent to whatever benefits that may be very similar to that under DAO 99-56, with the balance of government share payable 4
extended in the future by the Government to the months from end of fiscal year being the equivalent of the additional government
Contractor or to financial or technical assistance share computed in accordance with the net-mining-revenue-based option under DAO
agreement contractors in general; 99-56, as discussed above. As we have emphasized earlier, we find each of the three
options for computing the additional government share-- as presented in DAO 99-56 -- The President may enter into agreements with foreign-owned corporations involving either
to be sound and reasonable. technical or financial assistance for large-scale exploration, development, and utilization of
minerals, petroleum, and other mineral oils according to the general terms and conditions
We therefore conclude that there is nothing inherently wrong in the fiscal provided by law, based on real contributions to the economic growth and general welfare
regime of the WMCP FTAA, and certainly nothing to warrant the invalidation of the of the country. In such agreements, the State shall promote the development and use of
FTAA in its entirety. local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with
Section 3.3 of the WMCP this provision, within thirty days from its execution. [93]
FTAA Constitutional
We hold that the term limitation of twenty-five years does not apply to FTAAs. The
reason is that the above provision is found within paragraph 1 of Section 2 of Article XII,
Section 3.3 of the WMCP FTAA is assailed for violating supposed constitutional which refers to mineral agreements -- co-production agreements, joint venture
restrictions on the term of FTAAs. The provision in question reads: agreements and mineral production-sharing agreements -- which the government may
enter into with Filipino citizens and corporations, at least 60 percent owned by Filipino
3.3 This Agreement shall be renewed by the Government for a further period of citizens. The word such clearly refers to these three mineral agreements -- CPAs, JVAs
twenty-five (25) years under the same terms and conditions provided and MPSAs -- not to FTAAs.
that the Contractor lodges a request for renewal with the Government
Specifically, FTAAs are covered by paragraphs 4 and 5 of Section 2 of Article XII of
not less than sixty (60) days prior to the expiry of the initial term of this
the Constitution. It will be noted that there are no term limitations provided for in the
Agreement and provided that the Contractor is not in breach of any of
said paragraphs dealing with FTAAs. This shows that FTAAs are sui generis, in a class of
the requirements of this Agreement.
their own. This omission was obviously a deliberate move on the part of the framers.
They probably realized that FTAAs would be different in many ways from MPSAs, JVAs
Allegedly, the above provision runs afoul of Section 2 of Article XII of the 1987 and CPAs. The reason the framers did not fix term limitations applicable to FTAAs is that
Constitution, which states: they preferred to leave the matter to the discretion of the legislature and/or the agencies
involved in implementing the laws pertaining to FTAAs, in order to give the latter enough
Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral flexibility and elbow room to meet changing circumstances.
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, Note also that, as previously stated, the exploratory phrases of an FTAA lasts up to
eleven years. Thereafter, a few more years would be gobbled up in start-up operations. It
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. may take fifteen years before an FTAA contractor can start earning profits. And thus, the
period of 25 years may really be short for an FTAA. Consider too that in this kind of
The State may directly undertake such activities, or it may enter into co-production, joint
venture or production-sharing agreements with Filipino citizens or corporations or agreement, the contractor assumes all entrepreneurial risks. If no commercial quantities
of minerals are found, the contractor bears all financial losses. To compensate for this
associations at least sixty per centum of whose capital is owned by such citizens. Such
agreements may be for a period not exceeding twenty-five years, renewable for not long gestation period and extra business risks, it would not be totally unreasonable to
allow it to continue EDU activities for another twenty five years.
more than twenty-five years, and under such terms and conditions as may be
provided by law. In cases of water rights for irrigation, water supply, fisheries, or In any event, the complaint is that, in essence, Section 3.3 gives the contractor the
industrial uses other than the development of water power, beneficial use may be the power to compel the government to renew the WMCP FTAA for another 25 years and
measure and limit of the grant. deprives the State of any say on whether to renew the contract.

The State shall protect the nations marine wealth in its archipelagic waters, territorial sea, While we agree that Section 3.3 could have been worded so as to prevent it from
and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino favoring the contractor, this provision does not violate any constitutional limits, since the
citizens. said term limitation does not apply at all to FTAAs. Neither can the provision be deemed
in any manner to be illegal, as no law is being violated thereby. It is certainly not illegal
for the government to waive its option to refuse the renewal of a commercial contract.
The Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fish- Verily, the government did not have to agree to Section 3.3. It could have said No to
workers in rivers, lakes, bays and lagoons. the stipulation, but it did not. It appears that, in the process of negotiations, the other
contracting party was able to convince the government to agree to the renewal terms.
Under the circumstances, it does not seem proper for this Court to intervene and step in
to undo what might have perhaps been a possible miscalculation on the part of the State.
If government believes that it is or will be aggrieved by the effects of Section 3.3, the more contractors, the government shall provide inputs to the mining operations other
remedy is the renegotiation of the provision in order to provide the State the option to than the mineral resource itself. [94]
not renew the FTAA.
In a JVA, a JV company is organized by the government and the contractor, with
both parties having equity shares (investments); and the contractor is granted the
exclusive right to conduct mining operations and to extract minerals found in the area.
[95]
Financial Benefits for Foreigners On the other hand, in an MPSA, the government grants the contractor the exclusive
Not Forbidden by the Constitution right to conduct mining operations within the contract area and shares in the gross
output; and the contractor provides the necessary financing, technology, management
and manpower.
Before leaving this subject matter, we find it necessary for us to rid ourselves of the
false belief that the Constitution somehow forbids foreign-owned corporations from The point being made here is that, in two of the three types of agreements under
deriving financial benefits from the development of our natural or mineral resources. consideration, the government has to ante up some risk capital for the enterprise. In other
words, government funds (public moneys) are withdrawn from other possible uses, put
The Constitution has never prohibited foreign corporations from acquiring and to work in the venture and placed at risk in case the venture fails. This notwithstanding,
enjoying beneficial interest in the development of Philippine natural resources. The State management and control of the operations of the enterprise are -- in all three
itself need not directly undertake exploration, development, and utilization activities. arrangements -- in the hands of the contractor, with the government being mainly a silent
Alternatively, the Constitution authorizes the government to enter into joint venture partner. The three types of agreement mentioned above apply to any natural resource,
agreements (JVAs), co-production agreements (CPAs) and mineral production sharing without limitation and regardless of the size or magnitude of the project or operations.
agreements (MPSAs) with contractors who are Filipino citizens or corporations that are
at least 60 percent Filipino-owned. They may do the actual dirty work -- the mining In contrast to the foregoing arrangements, and pursuant to paragraph 4 of Section
operations. 2 of Article XII, the FTAA is limited to large-scale projects and only for minerals,
petroleum and other mineral oils. Here, the Constitution removes the 40 percent cap on
In the case of a 60 percent Filipino-owned corporation, the 40 percent individual foreign ownership and allows the foreign corporation to own up to 100 percent of the
and/or corporate non-Filipino stakeholders obviously participate in the beneficial equity. Filipino capital may not be sufficient on account of the size of the project, so the
interest derived from the development and utilization of our natural resources. They foreign entity may have to ante up all the risk capital.
may receive by way of dividends, up to 40 percent of the contractors earnings from the
mining project. Likewise, they may have a say in the decisions of the board of directors, Correlatively, the foreign stakeholder bears up to 100 percent of the risk of loss if
since they are entitled to representation therein to the extent of their equity the project fails. In respect of the particular FTAA granted to it, WMCP (then 100 percent
participation, which the Constitution permits to be up to 40 percent of the contractors foreign owned) was responsible, as contractor, for providing the entire equity, including
equity. Hence, the non-Filipino stakeholders may in that manner also participate in the all the inputs for the project. It was to bear 100 percent of the risk of loss if the project
management of the contractors natural resource development work. All of this is failed, but its maximum potential beneficial interest consisted only of 40 percent of the
permitted by our Constitution, for any natural resource, and without limitation even in net beneficial interest, because the other 60 percent is the share of the government,
regard to the magnitude of the mining project or operations (see paragraph 1 of Section which will never be exposed to any risk of loss whatsoever.
2 of Article XII). In consonance with the degree of risk assumed, the FTAA vested in WMCP the day-
It is clear, then, that there is nothing inherently wrong with or constitutionally to-day management of the mining operations. Still such management is subject to the
objectionable about the idea of foreign individuals and entities having or enjoying overall control and supervision of the State in terms of regular reporting, approvals of
beneficial interest in -- and participating in the management of operations relative to -- the work programs and budgets, and so on.
exploration, development and utilization of our natural resources. So, one needs to consider in relative terms, the costs of inputs for, degree of risk
attendant to, and benefits derived or to be derived from a CPA, a JVA or an MPSA vis--vis
those pertaining to an FTAA. It may not be realistically asserted that the foreign grantee
of an FTAA is being unduly favored or benefited as compared with a foreign stakeholder
FTAA More Advantageous
in a corporation holding a CPA, a JVA or an MPSA. Seen the other way around, the
Than Other Schemes
government is definitely better off with an FTAA than a CPA, a JVA or an MPSA.
Like CPA, JVA and MPSA

A final point on the subject of beneficial interest. We believe the FTAA is a more Developmental Policy
advantageous proposition for the government as compared with other agreements on the Mining Industry
permitted by the Constitution. In a CPA that the government enters into with one or
 During the Oral Argument and in their Final Memorandum, petitioners repeatedly Against a fragile and finite environment, it is sustainability that holds the key. In
urged the Court to consider whether mining as an industry and economic activity sustainable mining, we take a middle ground where both production and protection goals
deserved to be accorded priority, preference and government support as against, say, are balanced, and where parties-in-interest come to terms.
agriculture and other activities in which Filipinos and the Philippines may have an
economic advantage. For instance, a recent US study [96] reportedly examined the Neither has the present leadership been remiss in addressing the concerns of
economic performance of all local US counties that were dependent on mining and 20 sustainable mining operations. Recently, on January 16, 2004 and April 20, 2004,
percent of whose labor earnings between 1970 and 2000 came from mining enterprises. President Gloria Macapagal Arroyo issued Executive Orders Nos. 270 and 270-A,
The study -- covering 100 US counties in 25 states dependent on mining -- showed respectively, to promote responsible mineral resources exploration, development and
that per capita income grew about 30 percent less in mining-dependent communities in utilization, in order to enhance economic growth, in a manner that adheres to the
the 1980s and 25 percent less for the entire period 1980 to 2000; the level of per capita principles of sustainable development and with due regard for justice and equity,
income was also lower. Therefore, given the slower rate of growth, the gap between sensitivity to the culture of the Filipino people and respect for Philippine sovereignty. [98]
these and other local counties increased.
Petitioners invite attention to the OXFAM America Reports warning to developing
nations that mining brings with it serious economic problems, including increased REFUTATION OF DISSENTS
regional inequality, unemployment and poverty. They also cite the final report [97] of the
Extractive Industries Review project commissioned by the World Bank (the WB-EIR
Report), which warns of environmental degradation, social disruption, conflict, and The Court will now take up a number of other specific points raised in the dissents
uneven sharing of benefits with local communities that bear the negative social and of Justices Carpio and Morales.
environmental impact. The Report suggests that countries need to decide on the best 1. Justice Morales introduced us to Hugh Morgan, former president and chief
way to exploit their natural resources, in order to maximize the value added from the executive officer of Western Mining Corporation (WMC) and former president of the
development of their resources and ensure that they are on the path to sustainable Australian Mining Industry Council, who spearheaded the vociferous opposition to the
development once the resources run out. filing by aboriginal peoples of native title claims against mining companies in Australia in
Whatever priority or preference may be given to mining vis--vis other economic or the aftermath of the landmark Mabo decision by the Australian High Court. According to
non-economic activities is a question of policy that the President and Congress will have sources quoted by our esteemed colleague, Morgan was also a racist and a bigot. In the
to address; it is not for this Court to decide. This Court declares what the Constitution and course of protesting Mabo, Morgan allegedly uttered derogatory remarks belittling the
the laws say, interprets only when necessary, and refrains from delving into matters of aboriginal culture and race.
policy. An unwritten caveat of this introduction is that this Court should be careful not to
Suffice it to say that the State control accorded by the Constitution over mining permit the entry of the likes of Hugh Morgan and his hordes of alleged racist-bigots at
activities assures a proper balancing of interests. More pointedly, such control will WMC. With all due respect, such scare tactics should have no place in the discussion of
enable the President to demand the best mining practices and the use of the best this case. We are deliberating on the constitutionality of RA 7942, DAO 96-40 and the
available technologies to protect the environment and to rehabilitate mined-out areas. FTAA originally granted to WMCP, which had been transferred to Sagittarius Mining, a
Indeed, under the Mining Law, the government can ensure the protection of the Filipino corporation. We are not discussing the apparition of white Anglo-Saxon
environment during and after mining. It can likewise provide for the mechanisms to racists/bigots massing at our gates.
protect the rights of indigenous communities, and thereby mold a more socially- 2. On the proper interpretation of the phrase agreements involving either technical
responsive, culturally-sensitive and sustainable mining industry. or financial assistance, Justice Morales points out that at times we conveniently omitted
Early on during the launching of the Presidential Mineral Industry Environmental the use of the disjunctive eitheror, which according to her denotes restriction; hence the
Awards on February 6, 1997, then President Fidel V. Ramos captured the essence of phrase must be deemed to connote restriction and limitation.
balanced and sustainable mining in these words: But, as Justice Carpio himself pointed out during the Oral Argument, the disjunctive
phrase either technical or financial assistance would, strictly speaking, literally mean that
Long term, high profit mining translates into higher revenues for government, more decent a foreign contractor may provide only one or the other, but not both. And if both
jobs for the population, more raw materials to feed the engines of downstream and allied technical and financial assistance were required for a project, the State would have to
industries, and improved chances of human resource and countryside development by deal with at least two different foreign contractors -- one for financial and the other for
creating self-reliant communities away from urban centers. technical assistance. And following on that, a foreign contractor, though very much
qualified to provide both kinds of assistance, would nevertheless be prohibited from
xxxxxxxxx providing one kind as soon as it shall have agreed to provide the other.
 But if the Court should follow this restrictive and literal construction, can we really 4. Justice Morales adverts to the supposedly clear intention of the framers of the
find two (or more) contractors who are willing to participate in one single project -- one Constitution to reserve our natural resources exclusively for the Filipino people. She then
to provide the financial assistance only and the other the technical assistance exclusively; quoted from the records of the ConCom deliberations a passage in which then
it would be excellent if these two or more contractors happen to be willing and are able Commissioner Davide explained his vote, arguing in the process that aliens ought not be
to cooperate and work closely together on the same project (even if they are otherwise allowed to participate in the enjoyment of our natural resources. One passage does not
competitors). And it would be superb if no conflicts would arise between or among them suffice to capture the tenor or substance of the entire extensive deliberations of the
in the entire course of the contract. But what are the chances things will turn out this commissioners, or to reveal the clear intention of the framers as a group. A re-reading of
way in the real world? To think that the framers deliberately imposed this kind of the entire deliberations (quoted here earlier) is necessary if we are to understand the
restriction is to say that they were either exceedingly optimistic, or incredibly nave. This true intent of the framers.
begs the question -- What laudable objective or purpose could possibly be served by such
strict and restrictive literal interpretation? 5. Since 1935, the Filipino people, through their Constitution, have decided that the
retardation or delay in the exploration, development or utilization of the nations natural
3. Citing Oposa v. Factoran Jr., Justice Morales claims that a service contract is not a resources is merely secondary to the protection and preservation of their ownership of
contract or property right which merits protection by the due process clause of the the natural resources, so says Justice Morales, citing Aruego. If it is true that the framers
Constitution, but merely a license or privilege which may be validly revoked, rescinded or of the 1987 Constitution did not care much about alleviating the retardation or delay in
withdrawn by executive action whenever dictated by public interest or public welfare. the development and utilization of our natural resources, why did they bother to write
paragraph 4 at all? Were they merely paying lip service to large-scale exploration,
Oposa cites Tan v. Director of Forestry and Ysmael v. Deputy Executive Secretary as development and utilization? They could have just completely ignored the subject matter
authority. The latter cases dealt specifically with timber licenses only. Oposa allegedly and left it to be dealt with through a future constitutional amendment. But we have to
reiterated that a license is merely a permit or privilege to do what otherwise would be harmonize every part of the Constitution and to interpret each provision in a manner
unlawful, and is not a contract between the authority, federal, state or municipal, granting that would give life and meaning to it and to the rest of the provisions. It is obvious that a
it and the person to whom it is granted; neither is it property or a property right, nor does literal interpretation of paragraph 4 will render it utterly inutile and inoperative.
it create a vested right; nor is it taxation. Thus this Court held that the granting of license
does not create irrevocable rights, neither is it property or property rights. 6. According to Justice Morales, the deliberations of the Constitutional Commission
do not support our contention that the framers, by specifying such agreements involving
Should Oposa be deemed applicable to the case at bar, on the argument that natural financial or technical assistance, necessarily gave implied assent to everything that these
resources are also involved in this situation? We do not think so. A grantee of a timber agreements implicitly entailed, or that could reasonably be deemed necessary to make
license, permit or license agreement gets to cut the timber already growing on the them tenable and effective, including management authority in the day-to-day
surface; it need not dig up tons of earth to get at the logs. In a logging concession, the operations. As proof thereof, she quotes one single passage from the ConCom
investment of the licensee is not as substantial as the investment of a large-scale mining deliberations, consisting of an exchange among Commissioners Tingson, Garcia and
contractor. If a timber license were revoked, the licensee packs up its gear and moves to Monsod.
a new area applied for, and starts over; what it leaves behind are mainly the trails
leading to the logging site. However, the quoted exchange does not serve to contradict our argument; it even
bolsters it. Comm. Christian Monsod was quoted as saying: xxx I think we have to make a
In contrast, the mining contractor will have sunk a great deal of money (tens of distinction that it is not really realistic to say that we will borrow on our own terms. Maybe
millions of dollars) into the ground, so to speak, for exploration activities, for we can say that we inherited unjust loans, and we would like to repay these on terms that
development of the mine site and infrastructure, and for the actual excavation and are not prejudicial to our own growth. But the general statement that we should only
extraction of minerals, including the extensive tunneling work to reach the ore body. The borrow on our own terms is a bit unrealistic.Comm. Monsod is one who knew whereof he
cancellation of the mining contract will utterly deprive the contractor of its investments spoke.
(i.e., prevent recovery of investments), most of which cannot be pulled out.
7. Justice Morales also declares that the optimal time for the conversion of an FTAA
To say that an FTAA is just like a mere timber license or permit and does not into an MPSA is after completion of the exploration phase and just before undertaking
involve contract or property rights which merit protection by the due process clause of the development and construction phase, on account of the fact that the requirement for
the Constitution, and may therefore be revoked or cancelled in the blink of an eye, is to a minimum investment of $50 million is applicable only during the development,
adopt a well-nigh confiscatory stance; at the very least, it is downright dismissive of the construction and utilization phase, but not during the exploration phase, when the
property rights of businesspersons and corporate entities that have investments in the foreign contractor need merely comply with minimum ground expenditures. Thus by
mining industry, whose investments, operations and expenditures do contribute to the converting, the foreign contractor maximizes its profits by avoiding its obligation to
general welfare of the people, the coffers of government, and the strength of the make the minimum investment of $50 million.
economy. Such a pronouncement will surely discourage investments (local and foreign)
which are critically needed to fuel the engine of economic growth and move this country This argument forgets that the foreign contractor is in the game precisely to make
out of the rut of poverty. In sum, Oposa is not applicable. money. In order to come anywhere near profitability, the contractor must first extract
and sell the mineral ore. In order to do that, it must also develop and construct the
mining facilities, set up its machineries and equipment and dig the tunnels to get to the things was not intended as a delegation of legislative power to the DENR secretary, much
deposit. The contractor is thus compelled to expend funds in order to make profits. If it less could it be deemed a valid delegation of legislative power, since there is nothing in
decides to cut back on investments and expenditures, it will necessarily sacrifice the pace the second paragraph of Section 81 which can be said to grant any delegated legislative
of development and utilization; it will necessarily sacrifice the amount of profits it can power to the DENR secretary. And even if there were, such delegation would be void, for
make from the mining operations. In fact, at certain less-than-optimal levels of operation, lack of any standards by which the delegated power shall be exercised.
the stream of revenues generated may not even be enough to cover variable expenses, let
alone overhead expenses; this is a dismal situation anyone would want to avoid. In order While there is nothing in the second paragraph of Section 81 which can directly be
to make money, one has to spend money. This truism applies to the mining industry as construed as a delegation of legislative power to the DENR secretary, it does not mean
well. that DAO 99-56 is invalid per se, or that the secretary acted without any authority or
jurisdiction in issuing DAO 99-56. As we stated earlier in our Prologue, Who or what
8. Mortgaging the minerals to secure a foreign FTAA contractors obligations is organ of government actually exercises this power of control on behalf of the State? The
anomalous, according to Justice Morales since the contractor was from the beginning Constitution is crystal clear: the President. Indeed, the Chief Executive is the official
obliged to provide all financing needed for the mining operations. However, the constitutionally mandated to enter into agreements with foreign owned corporations. On
mortgaging of minerals by the contractor does not necessarily signify that the contractor the other hand, Congress may review the action of the President once it is notified of every
is unable to provide all financing required for the project, or that it does not have the contract entered into in accordance with this [constitutional] provision within thirty days
financial capability to undertake large-scale operations. Mortgaging of mineral products, from its execution. It is the President who is constitutionally mandated to enter into
just like the assignment (by way of security) of manufactured goods and goods in FTAAs with foreign corporations, and in doing so, it is within the Presidents
inventory, and the assignment of receivables, is an ordinary requirement of banks, even prerogative to specify certain terms and conditions of the FTAAs, for example, the
in the case of clients with more than sufficient financial resources. And nowadays, even fiscal regime of FTAAs -- i.e., the sharing of the net mining revenues between the
the richest and best managed corporations make use of bank credit facilities -- it does not contractor and the State.
necessarily signify that they do not have the financial resources or are unable to provide
the financing on their own; it is just a manner of maximizing the use of their funds. Being the Presidents alter ego with respect to the control and supervision of the
mining industry, the DENR secretary, acting for the President, is necessarily clothed with
9. Does the contractor in reality acquire the surface rights for free, by virtue of the the requisite authority and power to draw up guidelines delineating certain terms and
fact that it is entitled to reimbursement for the costs of acquisition and maintenance, conditions, and specifying therein the terms of sharing of benefits from mining, to be
adjusted for inflation? We think not. The reimbursement is possible only at the end of the applicable to FTAAs in general. It is important to remember that DAO 99-56 has been in
term of the contract, when the surface rights will no longer be needed, and the land existence for almost six years, and has not been amended or revoked by the President.
previously acquired will have to be disposed of, in which case the contractor gets
reimbursement from the sales proceeds. The contractor has to pay out the acquisition The issuance of DAO 99-56 did not involve the exercise of delegated legislative
price for the land. That money will belong to the seller of the land. Only if and when the power. The legislature did not delegate the power to determine the nature, extent and
land is finally sold off will the contractor get any reimbursement. In other words, the composition of the items that would come under the phrase among other things. The
contractor will have been cash-out for the entire duration of the term of the contract -- legislatures power pertains to the imposition of taxes, duties and fees. This power was
25 or 50 years, depending. If we calculate the cost of money at say 12 percent per annum, not delegated to the DENR secretary. But the power to negotiate and enter into FTAAs
that is the cost or opportunity loss to the contractor, in addition to the amount of the was withheld from Congress, and reserved for the President. In determining the sharing
acquisition price. 12 percent per annum for 50 years is 600 percent; this, without any of mining benefits, i.e., in specifying what the phrase among other things include, the
compounding yet. The cost of money is therefore at least 600 percent of the original President (through the secretary acting in his/her behalf) was not determining the
acquisition cost; it is in addition to the acquisition cost. For free? Not by a long shot. amount or rate of taxes, duties and fees, but rather the amount of INCOME to be derived
from minerals to be extracted and sold, income which belongs to the State as owner of
10. The contractor will acquire and hold up to 5,000 hectares? We doubt it. The the mineral resources. We may say that, in the second paragraph of Section 81, the
acquisition by the State of land for the contractor is just to enable the contractor to legislature in a sense intruded partially into the Presidents sphere of authority when the
establish its mine site, build its facilities, establish a tailings pond, set up its machinery former provided that
and equipment, and dig mine shafts and tunnels, etc. It is impossible that the surface
requirement will aggregate 5,000 hectares. Much of the operations will consist of the The Government share in financial or technical assistance agreement shall consist of,
tunneling and digging underground, which will not require possessing or using any land among other things, the contractors corporate income tax, excise tax, special allowance,
surface. 5,000 hectares is way too much for the needs of a mining operator. It simply will withholding tax due from the contractors foreign stockholders arising from dividend or
not spend its cash to acquire property that it will not need; the cash may be better interest payments to the said foreign stockholder in case of a foreign national and all such
employed for the actual mining operations, to yield a profit. other taxes, duties and fees as provided for under existing laws. (Italics supplied)
11. Justice Carpio claims that the phrase among other things (found in the second
paragraph of Section 81 of the Mining Act) is being incorrectly treated as a delegation of But it did not usurp the Presidents authority since the provision merely included
legislative power to the DENR secretary to issue DAO 99-56 and prescribe the formulae the enumerated items as part of the government share, without foreclosing or in any way
therein on the States share from mining operations. He adds that the phrase among other preventing (as in fact Congress could not validly prevent) the President from
determining what constitutes the States compensation derived from FTAAs. In this case, 14. Based on the first sentence of Section 5 of DAO 99-56, which states [A]ll FTAAs
the President in effect directed the inclusion or addition of other things, viz., INCOME for approved prior to the effectivity of this Administrative Order shall remain valid and be
the owner of the resources, in the governments share, while adopting the items recognized by the Government, Justice Carpio concludes that said Administrative Order
enumerated by Congress as part of the government share also. allegedly exempts FTAAs approved prior to its effectivity -- like the WMCP FTAA -- from
having to pay the State any share from their mining income, apart from taxes, duties and
12. Justice Carpios insistence on applying the ejusdem generis rule of statutory fees.
construction to the phrase among other things is therefore useless, and must fall by the
wayside. There is no point trying to construe that phrase in relation to the enumeration We disagree. What we see in black and white is the statement that the FTAAs
of taxes, duties and fees found in paragraph 2 of Section 81, precisely because the approved before the DAO came into effect are to continue to be valid and will be
constitutional power to prescribe the sharing of mining income between the State recognized by the State. Nothing is said about their fiscal regimes. Certainly, there is no
and mining companies, to quote Justice Carpio pursuant to an FTAA is constitutionally basis to claim that the contractors under said FTAAs were being exempted from paying
lodged with the President, not with Congress. It thus makes no sense to persist in the government a share in their mining incomes.
giving the phrase among other things a restricted meaning referring only to taxes, duties
and fees. For the record, the WMCP FTAA is NOT and has never been exempt from paying the
government share. The WMCP FTAA has its own fiscal regime -- Section 7.7 -- which
13. Strangely, Justice Carpio claims that the DENR secretary can change the gives the government a 60 percent share in the net mining revenues of WMCP from
formulae in DAO 99-56 any time even without the approval of the President, and the the commencement of commercial production.
secretary is the sole authority to determine the amount of consideration that the State
shall receive in an FTAA, because Section 5 of the DAO states that xxx any amendment of For that very reason, we have never said that DAO 99-56 is the basis for claiming
an FTAA other than the provision on fiscal regime shall require the negotiation with the that the WMCP FTAA has a consideration. Hence, we find quite out of place Justice
Negotiation Panel and the recommendation of the Secretary for approval of the President Carpios statement that ironically, DAO 99-56, the very authority cited to support the claim
xxx. Allegedly, because of that provision, if an amendment in the FTAA involves non-fiscal that the WMCP FTAA has a consideration, does not apply to the WMCP FTAA. By its own
matters, the amendment requires approval of the President, but if the amendment express terms, DAO 99-56 does not apply to FTAAs executed before the issuance of DAO 99-
involves a change in the fiscal regime, the DENR secretary has the final authority, and 56, like the WMCP FTAA. The majoritys position has allegedly no leg to stand on since even
approval of the President may be dispensed with; hence the secretary is more powerful DAO 99-56, assuming it is valid, cannot save the WMCP FTAA from want of
than the President. consideration. Even assuming arguendo that DAO 99-56 does not apply to the WMCP
FTAA, nevertheless, the WMCP FTAA has its own fiscal regime, found in Section 7.7
We believe there is some distortion resulting from the quoted provision being thereof. Hence, there is no such thing as want of consideration here.
taken out of context. Section 5 of DAO 99-56 reads as follows:
Still more startling is this claim: The majority supposedly agrees that the provisions
of the WMCP FTAA, which grant a sham consideration to the State, are void. Since the
Section 5. Status of Existing FTAAs. All FTAAs approved prior to the effectivity of this majority agrees that the WMCP FTAA has a sham consideration, the WMCP FTAA thus
Administrative Order shall remain valid and be recognized by the Government: Provided, lacks the third element of a valid contract. The Decision should declare the WMCP FTAA
That should a Contractor desire to amend its FTAA, it shall do so by filing a Letter of void for want of consideration unless it treats the contract as an MPSA under Section 80.
Intent (LOI) to the Secretary thru the Director. Provided, further, That if the Contractor Indeed the only recourse of WMCP to save the validity of its contract is to convert it into an
desires to amend the fiscal regime of its FTAA, it may do so by seeking for the MPSA.
amendment of its FTAAs whole fiscal regime by adopting the fiscal regime provided
hereof: Provided, finally, That any amendment of an FTAA other than the provision on To clarify, we said that Sections 7.9 and 7.8(e) of the WMCP FTAA are provisions
fiscal regime shall require the negotiation with the Negotiating Panel and the grossly disadvantageous to government and detrimental to the interests of the Filipino
recommendation of the Secretary for approval of the President of the Republic of the people, as well as violative of public policy, and must therefore be stricken off as invalid.
Philippines. (underscoring supplied) Since the offending provisions are very much separable from Section 7.7 and the rest of
the FTAA, the deletion of Sections 7.9 and 7.8(e) can be done without affecting or
It looks like another case of misapprehension. The proviso being objected to by requiring the invalidation of the WMCP FTAA itself, and such deletion will preserve for
Justice Carpio is actually preceded by a phrase that requires a contractor desiring to government its due share of the 60 percent benefits. Therefore, the WMCP FTAA is NOT
amend the fiscal regime of its FTAA, to amend the same by adopting the fiscal regime bereft of a valid consideration (assuming for the nonce that indeed this is the
prescribed in DAO 99-56 -- i.e., solely in that manner, and in no other. Obviously, since consideration of the FTAA).
DAO 99-56 was issued by the secretary under the authority and with the presumed
approval of the President, the amendment of an FTAA by merely adopting the
fiscal regime prescribed in said DAO 99-56 (and nothing more) need not have the
SUMMATION
express clearance of the President anymore. It is as if the same had been pre-approved.
We cannot fathom the complaint that that makes the secretary more powerful than the
President, or that the former is trying to hide things from the President or Congress.
 To conclude, a summary of the key points discussed above is now in order. the exploration, development and utilization of mineral or petroleum resources. This
was prompted by the perceived insufficiency of Filipino capital and the felt need for
foreign expertise in the EDU of mineral resources.

The Meaning of Agreements Involving Despite strong opposition from some ConCom members during the final voting, the
Either Technical or Financial Assistance Article on the National Economy and Patrimony -- including paragraph 4 allowing
service contracts with foreign corporations as an exception to the general norm in
paragraph 1 of Section 2 of the same Article -- was resoundingly and overwhelmingly
Applying familiar principles of constitutional construction to the approved.
phrase agreements involving either technical or financial assistance, the framers choice of
words does not indicate the intent to exclude other modes of assistance, but rather The drafters, many of whom were economists, academicians, lawyers,
implies that there are other things being included or possibly being made part of the businesspersons and politicians knew that foreign entities will not enter into agreements
agreement, apart from financial or technical assistance. The drafters avoided the use of involving assistance without requiring measures of protection to ensure the success of
restrictive and stringent phraseology; a verba legis scrutiny of Section 2 of Article XII of the venture and repayment of their investments, loans and other financial assistance, and
the Constitution discloses not even a hint of a desire to prohibit foreign involvement in ultimately to protect the business reputation of the foreign corporations. The drafters, by
the management or operation of mining activities, or to eradicate service contracts. Such specifying such agreements involving assistance, necessarily gave implied assent to
moves would necessarily imply an underlying drastic shift in fundamental economic and everything that these agreements entailed or that could reasonably be deemed necessary
developmental policies of the State. That change requires a much more definite and to make them tenable and effective -- including management authority with respect to
irrefutable basis than mere omission of the words service contract from the new the day-to-day operations of the enterprise, and measures for the protection of the
Constitution. interests of the foreign corporation, at least to the extent that they are consistent with
Philippine sovereignty over natural resources, the constitutional requirement of State
Furthermore, a literal and restrictive interpretation of this paragraph leads to control, and beneficial ownership of natural resources remaining vested in the State.
logical inconsistencies. A constitutional provision specifically allowing foreign-owned
corporations to render financial or technical assistance in respect of mining or any other From the foregoing, it is clear that agreements involving either technical or financial
commercial activity was clearly unnecessary; the provision was meant to refer to more assistance referred to in paragraph 4 are in fact service contracts, but such new service
than mere financial or technical assistance. contracts are between foreign corporations acting as contractors on the one hand, and on
the other hand government as principal or owner (of the works), whereby the foreign
Also, if paragraph 4 permits only agreements for financial or technical assistance, contractor provides the capital, technology and technical know-how, and managerial
there would be no point in requiring that they be based on real contributions to the expertise in the creation and operation of the large-scale mining/extractive enterprise,
economic growth and general welfare of the country. And considering that there were and government through its agencies (DENR, MGB) actively exercises full control and
various long-term service contracts still in force and effect at the time the new Charter supervision over the entire enterprise.
was being drafted, the absence of any transitory provisions to govern the termination
and closing-out of the then existing service contracts strongly militates against the Such service contracts may be entered into only with respect to minerals,
theory that the mere omission of service contracts signaled their prohibition by the new petroleum and other mineral oils. The grant of such service contracts is subject to several
Constitution. safeguards, among them: (1) that the service contract be crafted in accordance with a
general law setting standard or uniform terms, conditions and requirements; (2) the
Resort to the deliberations of the Constitutional Commission is therefore President be the signatory for the government; and (3) the President report the executed
unavoidable, and a careful scrutiny thereof conclusively shows that the ConCom agreement to Congress within thirty days.
members discussed agreements involving either technical or financial assistance in the
same sense as service contracts and used the terms interchangeably. The drafters in fact
knew that the agreements with foreign corporations were going to entail not mere
technical or financial assistance but, rather, foreign investment in and management of an Ultimate Test:
enterprise for large-scale exploration, development and utilization of minerals. Full State Control

The framers spoke about service contracts as the concept was understood in the 1973
Constitution. It is obvious from their discussions that they did not intend to ban or eradicate To repeat, the primacy of the principle of the States sovereign ownership of all
service contracts. Instead, they were intent on crafting provisions to put in place safeguards mineral resources, and its full control and supervision over all aspects of exploration,
that would eliminate or minimize the abuses prevalent during the martial law regime. In development and utilization of natural resources must be upheld. But full control and
brief, they were going to permit service contracts with foreign corporations as supervision cannot be taken literally to mean that the State controls and
contractors, but with safety measures to prevent abuses, as an exception to the general supervises everything down to the minutest details and makes all required actions, as this
norm established in the first paragraph of Section 2 of Article XII, which reserves or would render impossible the legitimate exercise by the contractor of a reasonable degree
limits to Filipino citizens and corporations at least 60 percent owned by such citizens of management prerogative and authority, indispensable to the proper functioning of the
mining enterprise. Also, government need not micro-manage mining operations and day- mining community, and pay royalties to the indigenous peoples concerned. And violation
to-day affairs of the enterprise in order to be considered as exercising full control and of any of the FTAAs terms and conditions, and/or non-compliance with statutes or
supervision. regulations, may be penalized by cancellation of the FTAA. Such sanction is significant to
a contractor who may have yet to recover the tens or hundreds of millions of dollars
Control, as utilized in Section 2 of Article XII, must be taken to mean a degree of sunk into a mining project.
control sufficient to enable the State to direct, restrain, regulate and govern the affairs of
the extractive enterprises. Control by the State may be on a macro level, through the Overall, the State definitely has a pivotal say in the operation of the individual
establishment of policies, guidelines, regulations, industry standards and similar enterprises, and can set directions and objectives, detect deviations and non-
measures that would enable government to regulate the conduct of affairs in various compliances by the contractor, and enforce compliance and impose sanctions should the
enterprises, and restrain activities deemed not desirable or beneficial, with the end in occasion arise. Hence, RA 7942 and DAO 96-40 vest in government more than a sufficient
view of ensuring that these enterprises contribute to the economic development and degree of control and supervision over the conduct of mining operations.
general welfare of the country, conserve the environment, and uplift the well-being of the
local affected communities. Such a degree of control would be compatible with Section 3(aq) of RA 7942 was objected to as being unconstitutional for allowing a
permitting the foreign contractor sufficient and reasonable management authority over foreign contractor to apply for and hold an exploration permit. During the exploration
the enterprise it has invested in, to ensure efficient and profitable operation. phase, the permit grantee (and prospective contractor) is spending and investing heavily
in exploration activities without yet being able to extract minerals and generate
revenues. The exploration permit issued under Sections 3(aq), 20 and 23 of RA 7942,
which allows exploration but not extraction, serves to protect the interests and rights of
Government Granted Full Control the exploration permit grantee (and would-be contractor), foreign or local. Otherwise,
by RA 7942 and DAO 96-40 the exploration works already conducted, and expenditures already made, may end up
only benefiting claim-jumpers. Thus, Section 3(aq) of RA 7942 is not unconstitutional.

Baseless are petitioners sweeping claims that RA 7942 and its Implementing Rules
and Regulations make it possible for FTAA contracts to cede full control and
management of mining enterprises over to fully foreign owned corporations. Equally WMCP FTAA Likewise Gives the
wobbly is the assertion that the State is reduced to a passive regulator dependent on State Full Control and Supervision
submitted plans and reports, with weak review and audit powers and little say in the
decision-making of the enterprise, for which reasons beneficial ownership of the mineral
resources is allegedly ceded to the foreign contractor. The WMCP FTAA obligates the contractor to account for the value of production
and sale of minerals (Clause 1.4); requires that the contractors work program, activities
As discussed hereinabove, the States full control and supervision over mining and budgets be approved by the State (Clause 2.1); gives the DENR secretary power to
operations are ensured through the following provisions in RA 7942: Sections 8, 9, 16, extend the exploration period (Clause 3.2-a); requires approval by the State for
19, 24, 35[(b), (e), (f), (g), (h), (k), (l), (m) and (o)], 40, 57, 66, 69, 70, and Chapters XI and incorporation of lands into the contract area (Clause 4.3-c); requires Bureau of Forest
XVII; as well as the following provisions of DAO 96-40: Sections7[(d) and (f)], 35(a-2), Development approval for inclusion of forest reserves as part of the FTAA contract area
53[(a-4) and (d)], 54, 56[(g), (h), (l), (m) and (n)], 56(2), 60, 66, 144, 168, 171 and 270, (Clause 4.5); obligates the contractor to periodically relinquish parts of the contract area
and also Chapters XV, XVI and XXIV. not needed for exploration and development (Clause 4.6); requires submission of a
declaration of mining feasibility for approval by the State (Clause 4.6-b); obligates the
Through the foregoing provisions, the government agencies concerned are contractor to report to the State the results of its exploration activities (Clause 4.9);
empowered to approve or disapprove -- hence, in a position to influence, direct, and requires the contractor to obtain State approval for its work programs for the succeeding
change -- the various work programs and the corresponding minimum expenditure two year periods, containing the proposed work activities and expenditures budget
commitments for each of the exploration, development and utilization phases of the related to exploration (Clause 5.1); requires the contractor to obtain State approval for
enterprise. Once they have been approved, the contractors compliance with its its proposed expenditures for exploration activities (Clause 5.2); requires the contractor
commitments therein will be monitored. Figures for mineral production and sales are to submit an annual report on geological, geophysical, geochemical and other
regularly monitored and subjected to government review, to ensure that the products information relating to its explorations within the FTAA area (Clause 5.3-a); requires the
and by-products are disposed of at the best prices; copies of sales agreements have to be contractor to submit within six months after expiration of exploration period a final
submitted to and registered with MGB. report on all its findings in the contract area (Clause 5.3-b); requires the contractor after
The contractor is mandated to open its books of accounts and records for scrutiny, conducting feasibility studies to submit a declaration of mining feasibility, along with a
to enable the State to determine that the government share has been fully paid. The State description of the area to be developed and mined, a description of the proposed mining
may likewise compel compliance by the contractor with mandatory requirements on operations and the technology to be employed, and the proposed work program for the
mine safety, health and environmental protection, and the use of anti-pollution development phase, for approval by the DENR secretary (Clause 5.4); obligates the
technology and facilities. The contractor is also obligated to assist the development of the contractor to complete the development of the mine, including construction of the
production facilities, within the period stated in the approved work program (Clause
6.1); requires the contractor to submit for approval a work program covering each contractor is a foreign-owned corporation, hence, not qualified to own land. The
period of three fiscal years (Clause 6.2); requires the contractor to submit reports to the contractor identifies the surface areas needed for it to construct the infrastructure for
secretary on the production, ore reserves, work accomplished and work in progress, mining operations, and the State then acquires the surface rights on behalf of the former.
profile of its work force and management staff, and other technical information (Clause The provision does not call for the exercise of the power of eminent domain (or
6.3); subjects any expansions, modifications, improvements and replacements of mining determination of just compensation); it seeks to avoid a violation of the anti-dummy law.
facilities to the approval of the secretary (Clause 6.4); subjects to State control the
amount of funds that the contractor may borrow within the Philippines (Clause 7.2); Clause 10.2(l) of the WMCP FTAA giving the contractor the right to mortgage and
subjects to State supervisory power any technical, financial and marketing issues (Clause encumber the mineral products extracted may have been a result of conditions imposed
10.1-a); obligates the contractor to ensure 60 percent Filipino equity in the contractor by creditor-banks to secure the loan obligations of WMCP. Banks lend also upon the
within ten years of recovering specified expenditures unless not so required by security of encumbrances on goods produced, which can be easily sold and converted
subsequent legislation (Clause 10.1); gives the State the right to terminate the FTAA for into cash and applied to the repayment of loans. Thus, Clause 10.2(l) is not something out
unremedied substantial breach thereof by the contractor (Clause 13.2); requires State of the ordinary. Neither is it objectionable, because even though the contractor is allowed
approval for any assignment of the FTAA by the contractor to an entity other than an to mortgage or encumber the mineral end-products themselves, the contractor is not
affiliate (Clause 14.1). thereby relieved of its obligation to pay the government its basic and additional shares in
the net mining revenue. The contractors ability to mortgage the minerals does not negate
In short, the aforementioned provisions of the WMCP FTAA, far from constituting a the States right to receive its share of net mining revenues.
surrender of control and a grant of beneficial ownership of mineral resources to the
contractor in question, vest the State with control and supervision over practically all Clause 10.2(k) which gives the contractor authority to change its equity structure
aspects of the operations of the FTAA contractor, including the charging of pre-operating at any time, means that WMCP, which was then 100 percent foreign owned, could permit
and operating expenses, and the disposition of mineral products. Filipino equity ownership. Moreover, what is important is that the contractor, regardless
of its ownership, is always in a position to render the services required under the FTAA,
There is likewise no relinquishment of control on account of specific provisions of under the direction and control of the government.
the WMCP FTAA. Clause 8.2 provides a mechanism to prevent the mining operations
from grinding to a complete halt as a result of possible delays of more than 60 days in the Clauses 10.4(e) and (i) bind government to allow amendments to the FTAA if
governments processing and approval of submitted work programs and budgets. Clause required by banks and other financial institutions as part of the conditions of new
8.3 seeks to provide a temporary, stop-gap solution in case a disagreement between the lendings. There is nothing objectionable here, since Clause 10.4(e) also provides that
State and the contractor (over the proposed work program or budget submitted by the such financing arrangements should in no event reduce the contractors obligations or
contractor) should result in a deadlock or impasse, to avoid unreasonably long delays in the governments rights under the FTAA. Clause 10.4(i) provides that government shall
the performance of the works. favourably consider any request for amendments of this agreement necessary for the
contractor to successfully obtain financing. There is no renunciation of control, as the
The State, despite Clause 8.3, still has control over the contract area, and it may, as proviso does not say that government shall automatically grant any such request. Also, it
sovereign authority, prohibit work thereon until the dispute is resolved, or it may is up to the contractor to prove the need for the requested changes. The government
terminate the FTAA, citing substantial breach thereof. Hence, the State clearly retains full always has the final say on whether to approve or disapprove such requests.
and effective control.
In fine, the FTAA provisions do not reduce or abdicate State control.
Clause 8.5, which allows the contractor to make changes to approved work
programs and budgets without the prior approval of the DENR secretary, subject to
certain limitations with respect to the variance/s, merely provides the contractor a
certain amount of flexibility to meet unexpected situations, while still guaranteeing that No Surrender of
the approved work programs and budgets are not abandoned altogether. And if the Financial Benefits
secretary disagrees with the actions taken by the contractor in this instance, he may also
resort to cancellation/termination of the FTAA as the ultimate sanction.
The second paragraph of Section 81 of RA 7942 has been denounced for allegedly
Clause 4.6 of the WMCP FTAA gives the contractor discretion to select parts of the limiting the States share in FTAAs with foreign contractors to just taxes, fees and duties,
contract area to be relinquished. The State is not in a position to substitute its judgment and depriving the State of a share in the after-tax income of the enterprise. However, the
for that of the contractor, who knows exactly which portions of the contract area do not inclusion of the phrase among other things in the second paragraph of Section 81 clearly
contain minerals in commercial quantities and should be relinquished. Also, since the and unmistakably reveals the legislative intent to have the State collect more than just
annual occupation fees paid to government are based on the total hectarage of the the usual taxes, duties and fees.
contract area, net of the areas relinquished, the contractors self-interest will assure
proper and efficient relinquishment. Thus, DAO 99-56, the Guidelines Establishing the Fiscal Regime of Financial or
Technical Assistance Agreements,spells out the financial benefits government will receive
Clause 10.2(e) of the WMCP FTAA does not mean that the contractor can compel from an FTAA, as consisting of not only a basic government share, comprised of all
government to use its power of eminent domain. It contemplates a situation in which the
direct taxes, fees and royalties, as well as other payments made by the contractor during Section 80 of RA 7942 allegedly limits the States share in a mineral production-
the term of the FTAA, but also an additional government share, being a share in the sharing agreement (MPSA) to just the excise tax on the mineral product, i.e., only 2
earnings or cash flows of the mining enterprise, so as to achieve a fifty-fifty sharing of percent of market value of the minerals. The colatilla in Section 84 reiterates the same
net benefits from mining between the government and the contractor. limitation in Section 80. However, these two provisions pertain only to MPSAs, and
have no application to FTAAs. These particular provisions do not come within the
The additional government share is computed using one of three (3) options or issues defined by this Court. Hence, on due process grounds, no pronouncement
schemes detailed in DAO 99-56, viz.,(1) the fifty-fifty sharing of cumulative present value can be made in this case in respect of the constitutionality of Sections 80 and 84.
of cash flows; (2) the excess profit-related additional government share; and (3) the
additional sharing based on the cumulative net mining revenue. Whichever option or Section 112 is disparaged for reverting FTAAs and all mineral agreements to the
computation is used, the additional government share has nothing to do with taxes, old license, concession or lease system, because it allegedly effectively reduces the
duties, fees or charges. The portion of revenues remaining after the deduction of the government share in FTAAs to just the 2 percent excise tax which pursuant to Section 80
basic and additional government shares is what goes to the contractor. comprises the government share in MPSAs. However, Section 112 likewise does not
come within the issues delineated by this Court, and was never touched upon by the
The basic government share and the additional government share do not yet take parties in their pleadings. Moreover, Section 112 may not properly apply to FTAAs. The
into account the indirect taxes and other financial contributions of mining mining law obviously meant to treat FTAAs as a breed apart from mineral agreements.
projects, which are real and actual benefits enjoyed by the Filipino people; if these are There is absolutely no basis to believe that the law intends to exact from FTAA
taken into account, total government share increases to 60 percent or higher (as much as contractors merely the same government share (i.e., the 2 percent excise tax) that it
77 percent, and 89 percent in one instance) of the net present value of total benefits from apparently demands from contractors under the three forms of mineral agreements.
the project.
While there is ground to believe that Sections 80, 84 and 112 are indeed
The third or last paragraph of Section 81 of RA 7942 is slammed for deferring the unconstitutional, they cannot be ruled upon here. In any event, they are separable; thus,
payment of the government share in FTAAs until after the contractor shall have a later finding of nullity will not affect the rest of RA 7942.
recovered its pre-operating expenses, exploration and development expenditures.
Allegedly, the collection of the States share is rendered uncertain, as there is no time In fine, the challenged provisions of RA 7942 cannot be said to surrender
limit in RA 7942 for this grace period or recovery period. But although RA 7942 did not financial benefits from an FTAA to the foreign contractors.
limit the grace period, the concerned agencies (DENR and MGB) in formulating the 1995
and 1996 Implementing Rules and Regulations provided that the period of recovery, Moreover, there is no concrete basis for the view that, in FTAAs with a foreign
reckoned from the date of commercial operation, shall be for a period not exceeding five contractor, the State must receive at least 60 percent of the after-tax income from the
years, or until the date of actual recovery, whichever comes earlier. exploitation of its mineral resources, and that such share is the equivalent of the
constitutional requirement that at least 60 percent of the capital, and hence 60 percent of
And since RA 7942 allegedly does not require government approval for the pre- the income, of mining companies should remain in Filipino hands. Even if the State is
operating, exploration and development expenses of the foreign contractors, it is feared entitled to a 60 percent share from other mineral agreements (CPA, JVA and MPSA), that
that such expenses could be bloated to wipe out mining revenues anticipated for 10 would not create a parallel or analogous situation for FTAAs. We are dealing with an
years, with the result that the States share is zero for the first 10 years. However, the essentially different equation. Here we have the old apples and oranges syndrome.
argument is based on incorrect information.
The Charter did not intend to fix an iron-clad rule of 60 percent share, applicable to
Under Section 23 of RA 7942, the applicant for exploration permit is required to all situations, regardless of circumstances. There is no indication of such an intention on
submit a proposed work program for exploration, containing a yearly budget of the part of the framers. Moreover, the terms and conditions of petroleum FTAAs cannot
proposed expenditures, which the State passes upon and either approves or rejects; if serve as standards for mineral mining FTAAs, because the technical and operational
approved, the same will subsequently be recorded as pre-operating expenses that the requirements, cost structures and investment needs of off-shore petroleum
contractor will have to recoup over the grace period. exploration and drilling companies do not have the remotest resemblance to those
of on-shore mining companies.
Under Section 24, when an exploration permittee files with the MGB a declaration
of mining project feasibility, it must submit a work program for development, with To take the position that governments share must be not less than 60 percent of
corresponding budget, for approval by the Bureau, before government may grant an after-tax income of FTAA contractors is nothing short of this Court dictating upon the
FTAA or MPSA or other mineral agreements; again, government has the opportunity to government. The State resultantly ends up losing control. To avoid compromising the
approve or reject the proposed work program and budgeted expenditures States full control and supervision over the exploitation of mineral resources, there must
for development works, which will become the pre-operating and development costs be no attempt to impose a minimum 60 percent rule. It is sufficient that the State has the
that will have to be recovered. Government is able to know ahead of time the amounts of power and means, should it so decide, to get a 60 percent share (or greater); and it is not
pre-operating and other expenses to be recovered, and the approximate period of time necessary that the State does so in every case.
needed therefor. The aforecited provisions have counterparts in Section 35, which deals
with the terms and conditions exclusively applicable to FTAAs. In sum, the third or last
paragraph of Section 81 of RA 7942 cannot be deemed defective.
Invalid Provisions of terms of FTAAs, particularly when it comes to the government share of financial benefits
the WMCP FTAA from FTAAs. The Court believes that it is not unconstitutional to allow a wide degree of
discretion to the Chief Executive, given the nature and complexity of such agreements, the
humongous amounts of capital and financing required for large-scale mining operations,
Section 7.9 of the WMCP FTAA clearly renders illusory the States 60 percent share the complicated technology needed, and the intricacies of international trade, coupled with
of WMCPs revenues. Under Section 7.9, should WMCPs foreign stockholders (who the States need to maintain flexibility in its dealings, in order to preserve and enhance our
originally owned 100 percent of the equity) sell 60 percent or more of their equity to a countrys competitiveness in world markets.
Filipino citizen or corporation, the State loses its right to receive its share in net mining
revenues under Section 7.7, without any offsetting compensation to the State. And what We are all, in one way or another, sorely affected by the recently reported scandals
is given to the State in Section 7.7 is by mere tolerance of WMCPs foreign involving corruption in high places, duplicity in the negotiation of multi-billion peso
stockholders, who can at any time cut off the governments entire share by simply selling government contracts, huge payoffs to government officials, and other malfeasances; and
60 percent of WMCPs equity to a Philippine citizen or corporation. perhaps, there is the desire to see some measures put in place to prevent further
abuse. However, dictating upon the President what minimum share to get from an
In fact, the sale by WMCPs foreign stockholder on January 23, 2001 of the entire FTAA is not the solution. It sets a bad precedent since such a move institutionalizes the
outstanding equity in WMCP to Sagittarius Mines, Inc., a domestic corporation at least 60 very reduction if not deprivation of the States control. The remedy may be worse than
percent Filipino owned, can be deemed to have automatically triggered the operation of the problem it was meant to address. In any event, provisions in such future agreements
Section 7.9 and removed the States right to receive its 60 percent share. Section 7.9 of which may be suspected to be grossly disadvantageous or detrimental to government
the WMCP FTAA has effectively given away the States share without anything in may be challenged in court, and the culprits haled before the bar of justice.
exchange.
Verily, under the doctrine of separation of powers and due respect for co-equal and
Moreover, it constitutes unjust enrichment on the part of the local and foreign coordinate branches of government, this Court must restrain itself from intruding into
stockholders in WMCP, because by the mere act of divestment, the local and foreign policy matters and must allow the President and Congress maximum discretion in using
stockholders get a windfall, as their share in the net mining revenues of WMCP is the resources of our country and in securing the assistance of foreign groups to eradicate
automatically increased, without having to pay anything for it. the grinding poverty of our people and answer their cry for viable employment
opportunities in the country.
Being grossly disadvantageous to government and detrimental to the Filipino
people, as well as violative of public policy, Section 7.9 must therefore be stricken off as The judiciary is loath to interfere with the due exercise by coequal branches of
invalid. The FTAA in question does not involve mere contractual rights but, being government of their official functions.[99]As aptly spelled out seven decades ago by Justice
impressed as it is with public interest, the contractual provisions and stipulations must George Malcolm, Just as the Supreme Court, as the guardian of constitutional rights, should
yield to the common good and the national interest. Since the offending provision is very not sanction usurpations by any other department of government, so should it as strictly
much separable from the rest of the FTAA, the deletion of Section 7.9 can be done confine its own sphere of influence to the powers expressly or by implication conferred on it
without affecting or requiring the invalidation of the entire WMCP FTAA itself. by the Organic Act.[100] Let the development of the mining industry be the responsibility of
the political branches of government. And let not this Court interfere inordinately and
Section 7.8(e) of the WMCP FTAA likewise is invalid, since by allowing the sums unnecessarily.
spent by government for the benefit of the contractor to be deductible from the States
share in net mining revenues, it results in benefiting the contractor twice over. This The Constitution of the Philippines is the supreme law of the land. It is the
constitutes unjust enrichment on the part of the contractor, at the expense of repository of all the aspirations and hopes of all the people. We fully sympathize with the
government. For being grossly disadvantageous and prejudicial to government and plight of Petitioner La Bugal Blaan and other tribal groups, and commend their efforts to
contrary to public policy, Section 7.8(e) must also be declared without effect. It may uplift their communities. However, we cannot justify the invalidation of an otherwise
likewise be stricken off without affecting the rest of the FTAA. constitutional statute along with its implementing rules, or the nullification of an
otherwise legal and binding FTAA contract.
We must never forget that it is not only our less privileged brethren in tribal and
EPILOGUE cultural communities who deserve the attention of this Court; rather, all parties
concerned -- including the State itself, the contractor (whether Filipino or foreign), and
the vast majority of our citizens -- equally deserve the protection of the law and of this
AFTER ALL IS SAID AND DONE, it is clear that there is unanimous agreement in the Court. To stress, the benefits to be derived by the State from mining activities must
Court upon the key principle that the State must exercise full control and supervision ultimately serve the great majority of our fellow citizens. They have as much right and
over the exploration, development and utilization of mineral resources. interest in the proper and well-ordered development and utilization of the countrys
mineral resources as the petitioners.
The crux of the controversy is the amount of discretion to be accorded the Executive
Department, particularly the President of the Republic, in respect of negotiations over the Whether we consider the near term or take the longer view, we cannot
overemphasize the need for an appropriate balancing of interests and needs -- the
need to develop our stagnating mining industry and extract what NEDA Secretary
Romulo Neri estimates is some US$840 billion (approx. PhP47.04 trillion) worth of
mineral wealth lying hidden in the ground, in order to jumpstart our floundering
economy on the one hand, and on the other, the need to enhance our nationalistic
aspirations, protect our indigenous communities, and prevent irreversible ecological
damage.
This Court cannot but be mindful that any decision rendered in this case will
ultimately impact not only the cultural communities which lodged the instant Petition,
and not only the larger community of the Filipino people now struggling to survive
amidst a fiscal/budgetary deficit, ever increasing prices of fuel, food, and essential
commodities and services, the shrinking value of the local currency, and a government
hamstrung in its delivery of basic services by a severe lack of resources, but also
countless future generations of Filipinos.
For this latter group of Filipinos yet to be born, their eventual access to education,
health care and basic services, their overall level of well-being, the very shape of their
lives are even now being determined and affected partly by the policies and directions
being adopted and implemented by government today. And in part by the this Resolution
rendered by this Court today.
Verily, the mineral wealth and natural resources of this country are meant to
benefit not merely a select group of people living in the areas locally affected by mining
activities, but the entire Filipino nation, present and future, to whom the mineral wealth
really belong. This Court has therefore weighed carefully the rights and interests of all
concerned, and decided for the greater good of the greatest number. JUSTICE FOR ALL,
not just for some; JUSTICE FOR THE PRESENT AND THE FUTURE, not just for the here
and now.
WHEREFORE, the Court RESOLVES to GRANT the respondents and the intervenors
Motions for Reconsideration; to REVERSE and SET ASIDE this Courts January 27, 2004
Decision; to DISMISS the Petition; and to issue this new judgment
declaring CONSTITUTIONAL (1) Republic Act No. 7942 (the Philippine Mining Law), (2)
its Implementing Rules and Regulations contained in DENR Administrative Order (DAO)
No. 9640 -- insofar as they relate to financial and technical assistance agreements
referred to in paragraph 4 of Section 2 of Article XII of the Constitution; and (3) the
Financial and Technical Assistance Agreement (FTAA) dated March 30, 1995 executed by
the government and Western Mining Corporation Philippines Inc. (WMCP), except
Sections 7.8 and 7.9 of the subject FTAA which are hereby INVALIDATED for being
contrary to public policy and for being grossly disadvantageous to the government.
SO ORDERED.
 to recover the property in question. He therefore asks that the decision of the Court of
First Instance in regard to said lot No. 7510 be annulled and that a new trial be had. The
case is now before us upon demurrer by the respondent to the petition on the ground
that it does not state facts sufficient to constitute a cause of action.

The respondent maintains that section 513 of the Code of Civil Procedure is not
applicable to decisions in land registration proceedings which are covered by a final
EN BANC decree and this is the only question of importance raised by the demurrer.

[G.R. No. L-17768. September 1, 1922. ] A brief statement of the history of the legislation relating to the question at issue may be
of some aid in its determination. The original Land Registration Act (No. 496) which
VICENTE SOTTO, Petitioner, v. FILEMON SOTTO, Respondent. established the Torrens system of registration in these Islands, went into effect on
January 1, 1903. It created a court of land registration and its section 14 provided for an
Jose P. Fausto for Petitioner. appeal from the court to the Court of First Instance. Section 38 of the Act
reads:jgc:chanrobles.com.ph
The respondent in his own behalf.
"If the court after hearing finds that the applicant has title as stated in his application,
SYLLABUS and proper for registration, a decree of confirmation and registration shall be entered.
Every decree of registration shall bind the land, and quiet title thereto, subject only to the
1. LAND REGISTRATION; FINAL DECREE, REOPENING OF. — The final "decree of exceptions stated in the following section. It shall be conclusive upon and against all
confirmation and registration" cannot be reopened except for the reasons and in the persons, including the Insular Government and all the branches thereof, whether
manner stated in section 38 of the Land Registration Act. mentioned by name in the application, notice, or citation, or included in the general
description ’To all whom it may concern.’ Such decree shall not be opened by reason of
2. ID.; ID.; APPLICABILITY OF SECTION 513 OF THE CODE OF CIVIL PROCEDURE. — The the absence, infancy, or other disability of any person affected thereby, nor by any
final "decree of confirmation and registration" provided for in the Land Registration Act proceeding in any court for reversing judgments or decrees; subject, however, to the
is not a judgment within the meaning of section 513 of the Code of Civil Procedure and right of any person deprived of land or of any estate or interest therein by decree of
that section is not applicable to decisions covered or confirmed by such final decrees. registration obtained by fraud to file in the Court of Land Registration a petition for
review within one year after entry of the decree, provided no innocent purchaser for
3. ID., ID., ID. — The remedy provided for in section 513 of the Code of Civil Procedure value has acquired an interest. If there is any such purchaser, the decree of registration
may, in land registration matters, be applied to judgments not confirmed by final shall not be opened, but shall remain in full force and effect forever, subject only to the
decrees. right of appeal herein provided. But any person aggrieved by such decree in any case
may pursue his remedy by action for damages against the applicant or any other person
for fraud in procuring the decree. Whenever the phrase ’innocent purchaser for value’ or
DECISION an equivalent phrase occurs in this Act, it shall be deemed to include an innocent lessee,
mortgagee, or other encumbrancer for value."cralaw virtua1aw library

OSTRAND, J. : On April 5, 1904, Act No. 1108 was enacted which, by its section 4, amended section 14
of the original act so as to read as follows:jgc:chanrobles.com.ph

This is a petition under section 513 of the Code of Civil Procedure to reopen the land "SEC. 14. Every order, decision, and decree, or judgment of a Court of First Instance
registration proceedings in regard to lot No. 7510 of the Cadaster of Cebu. might be reviewed, and for that purpose sections one hundred and forty-one, one
hundred and forty-two, one hundred and forty-three, four hundred and ninety-six, four
The petitioner alleges that he is the owner of said lot No. 7510; that in or about the year hundred and ninety-seven (except that portion thereof relating to assessors), four
1907 he absented himself from the city of Cebu, leaving the respondent in charge of the hundred and ninety-nine, five hundred, five hundred and one, five hundred and two, five
lot; that on or about the 16th of April, 1921, the petitioner, upon visiting the office of the hundred and three, five hundred and four, five hundred and six, five hundred and seven,
clerk of the Court of First Instance of Cebu, discovered that the respondent had five hundred and eight, five hundred and nine, five hundred and eleven, five hundred and
fraudulently obtained the registration of said lot in his own name and that a certificate of twelve, five hundred and thirteen, five hundred and fourteen, five hundred and fifteen,
title for said lot had been issued to said respondent on January 24, 1920; that the five hundred and sixteen, and five hundred and seventeen of Act Numbered One hundred
petitioner, due to his long absence from Cebu, was unable to appear in court in the land and ninety, entitled ’An Act providing a Code of Procedure in civil actions and special
registration proceedings and to defend his rights; and that this action is his only remedy proceedings in the Philippine Islands,’ are made applicable to all the proceedings of the
Court of Land Registration and to a review thereof by the Supreme Court, except as
otherwise provided in this section: Provided, however, That no certificates of title shall The dominant principle of the Torrens system of land registration is that the titles
be issued by the Court of Land Registration until after the expiration of the period for registered thereunder are indefeasible or as nearly so as it is possible to make them.
perfecting a bill of exceptions for filing: And provided further, That the Court of Land (Niblack’s Analysis of the Torrens System, paragraph 5, 161, and 166; Sheldon on Land
Registration may grant a new trial in any case that has not passed to the Supreme Court, Registration, pp. 40 and 41; Dumas’ Registering Title to Land, p. 31; Hogg on the
in the manner and under the circumstances provided in sections one hundred and forty- Australian Torrens System, pp. 775 et seq.) This principle is recognized to the fullest
five, one hundred and forty-six, and one hundred and forty-seven of Act Numbered One extent in our Land Registration Act and gives the Act its principal value. (See Land
hundred and ninety: And provided also, That the certificates of judgment to be issued by Registration Act, sections 38 and 39.)
the Supreme Court, in cases passing to it from the Court of Land Registration, shall be
certified to the clerk of the last-named court as well as the copies of the opinion of the An examination of Act No. 1108 shows that it merely provides for the amendment of
Supreme Court: And provided also, That in the bill of exceptions to be printed no sections 6, 12, 13, 14, 17, 19, 24, 36 and 114 of the original Land Registration Act.
testimony or exhibits shall be printed except such limited portions thereof as are Sections 14 and 19 relate to matters of procedure; all the other sections mentioned deal
necessary to enable the Supreme Court to understand the points of law reserved. The with administrative matters. Nowhere in Act No. 1108 is there any direct indication of
original testimony and exhibits shall be transmitted to the Supreme Court. . . ."cralaw any intention to alter the character of the Land Registration proceedings or to impair the
virtua1aw library strength of the registered titles.

Section 513 of the Code of Civil Procedure to which reference is made in the foregoing The purpose of the amendment of section 14 of the land Registration Act was clearly to
section, reads:jgc:chanrobles.com.ph make the Court of Land Registration coordinate with the Courts of First Instance and to
make its judgments appealable to the Supreme Court instead of to the Courts of First
"When a judgment is rendered by a Court of First Instance upon default, and a party Instance. In carrying out this purpose the Legislature, by reference to certain sections of
thereto is unjustly deprived of a hearing by fraud, accident, mistake, or excusable the Code of Civil Procedure, incorporated into the Land Registration Act the then existing
negligence, and the Court of First Instance which rendered the judgment has finally provisions for bills of exceptions and appeals from the Courts of First Instance to the
adjourned so that no adequate remedy exist in that court, the party so deprived of a Supreme Court and made certain original actions in the Supreme Court applicable to land
hearing may present his petition to the Supreme Court within sixty days after he first registration matters. This was all that was done and very evidently all it was intended to
learns of the rendition of such judgment, and not thereafter, setting forth the facts and do.
praying to have such judgment set aside. The court shall summarily on notice to both
parties hear such petition, upon oral or written testimony as it shall direct, and the As Act No. 1108 only amended certain sections of the Land Registration Act and did not
judgment shall be set aside and a trial upon the merits granted, upon such terms as may purport to amend the Act as a whole, or to introduce any new principle therein, the
be just, if the facts set forth in the complaint are found to be true, otherwise the amended sections should be read in connection with the other sections of the Act as if all
complaint shall be dismissed with costs. had been enacted in the same statute, and, as far as possible, effect should be given to
them all in furtherance of the general design of the Act. Sutherland on Statutory
"If a trial on the merits is granted, the order shall forthwith be certified to the Court of Construction, 2d ed., says in paragraph 368:jgc:chanrobles.com.ph
First Instance. Pending such petition, any judge of the Supreme Court for cause shown,
may order a suspension of further proceedings to enforce the judgment complained of, "The practical inquiry is usually what a particular provision, clause, or word means. To
upon taking sufficient security from the petitioner for all costs and damages that may be answer it one must proceed as he would with any other composition — construe it with
awarded against him in case the petition is dismissed."cralaw virtua1aw library reference to the leading idea or purpose of the whole and not in parts or sections and is
animated by one general purpose and intent. Consequently each part or section should
From the time of the passage of Act No. 1108 until the filing of the petition in the recent be construed in connection with every other part or section and so as to produce a
case of Caballes v. Director of Lands (41 Phil., 357) the final decrees in land registration harmonious whole. It is not proper to confine the attention to the one section to be
cases were always regarded as indefeasible and it apparently did not occur to the construed.’It is always an unsafe way of construing a statute or contract to divide it by a
members of the legal profession that the provisions of section 513, supra, could be process of etymological dissection, into separate words, and then apply to each, thus
applied to such decrees or to the others or decisions upon which they were based. Aside separated from its context, some particular definition given by lexicographers, and then
from the dictum in the Caballes case, this court has consistently held that final decrees in reconstruct the instrument upon the basis of these definitions. An instrument must
land registration cases could not be reopened except under the circumstances, and in the always be construed as a whole, and the particular meaning to be attached to any word
manner, mentioned in section 38 of the Land Registration Act. (Grey Alba v. De la Cruz, or phrase is usually to be ascertained from the context, the nature of the subject treated
17 Phil., 49; City of Manila v. Lack, 19 Phil., 324; Cuyugan and Lim Tuico v. Sy Quia, 24 of and the purpose or intention of the parties who executed the contract, or of the body
Phil., 567; Broce v. Apurado, 26 Phil., 581; Roxas v. Enriquez, 29 Phil., 31; De Jesus v. City which enacted or framed the statute or constitution.’ (International Trust Co. v. Am. L. &
of Manila, 29 Phi., 73; Manila Railroad Co. v. Rodriguez, 29 Phil., 336; Legarda and Prieto I. Co., 62 Minn., 501.) Another court says: ’Statutes must receive a reasonable
v. Saleeby, 31 Phil., 590; Mariano Velasco & Co. v. Gochuico & Co., 33 Phil., 363; Roman construction, reference being had to their controlling purpose, to all their provisions,
Catholic Archbishop of Manila v. Sunico and Catli, 36 Phil., 279; Blas v. De la Cruz and force and effect being given not narrowly to isolated and disjointed clauses, but to their
Melendres, 37 Phil., 1, and Government of the Philippine Islands v. Abural, 39 Phil., 996.) plain spirit, broadly taking all their provisions together in one rational view. Neither
grammatical construction nor the letter of the statute nor its rhetorical framework
should be permitted to defeat its clear and definite purpose to be gathered from the Such an interpretation of the law would be in conflict with the view of the effect of final
whole act, comparing part with part. . . . A statute must receive such reasonable decrees expressed in all decisions of this court upon the subject from the time of the
construction as will, if possible, make all its parts harmonize with each other, and render enactment of Act No. 1108 until the present time, with the sole exception of the
them consistent with its scope and object.’ (Adams v. Yazoo & Miss. Val. R. R. Co., 75 aforementioned dictum in the case of Caballes v. Director of Lands, supra. It would lay a
Miss., 275.)" final land registration decree open to successive attacks by persons claiming to have
been deprived of their interest in the decreed land by default and would throw the title
Applying the principles stated, we do not think it impossible to so harmonize the various back into the realm of oral evidence, which, in land disputes in this country, has always
sections of the Land Registration Act as to carry out its general intent. been found notoriously unreliable.

It must be conceded that section 14, as amended, is repugnant to several other sections Moreover, an examination of the Land Registration Act shows clearly that its prime
of the Land Registration Act, if we hold that the final "decree of confirmation and object is to give the greatest possible protection to the bona fide holders of the
registration" provided for in section 38 of the Act is a "judgment" within the meaning of certificates of title provided for in the Act. If a final decree of confirmation and
section 513 of the Code of Civil Procedure. But we do not think it necessary to so hold. registration should be reopened and cancelled, it is, of course, obvious that all certificates
The Land Registration Act itself distinguishes between a judgment and the final decree. of title issued under the decree would fail whether the holders were guilty of bad faith or
In section 36 of the Act the decision rendered by the court is styled "a judgment." The not; as far as the validity of his title might be concerned, the bona fide holder of a transfer
final "decree of confirmation and registration" is separate and distinct from the judgment certificate — an innocent third party — would be exactly in the same position as the
and cannot be entered until at least thirty days after such judgment has been rendered. holder in bad faith of the first certificate issued under a decree, i. e., neither would have
The contents of this final decree is thus prescribed by section 40 of the any legal title whatever.
Act:jgc:chanrobles.com.ph
A bona fide holder of a title recorded in the old, or Mortgage Law, register would enjoy
"Every decree of registration shall bear the day of the year, hour, and minute of its entry, the very important benefits of article 34 of the Mortgage Law. In other words, the old
and shall be signed by the clerk. It shall state whether the owner is married or register would offer greater advantages and afford much better protection to bona fide
unmarried, and the name of the husband or wife. If the owner is under disability, it shall third parties than would the Torrens register if we were to accept the interpretation
state the nature of the disability, and if a minor, shall state his age. It shall contain a placed upon the law by the petitioner. It requires no argument to show that such an
description of the land as finally determined by the court, and shall set forth the estate of interpretation would defeat the principal object of the Land Registration Act and render
the owner, and also, in such manner as to show their relative priority, all particular a certificate of title an instrument of very slight value. It is hardly conceivable that the
estates, mortgages, easements, liens, attachments, and other incumbrances, including legislators intended to create such a state of affairs.
rights of husband or wife, if any, to which the land or owner’s estate is subject, and may
contain any other matter properly to be determined in pursuance of this Act. The decree Another circumstance also plainly indicates that in enacting Act No. 1108 it was not the
shall be stated in a convenient form for transcription upon the certificates of title purpose to make such drastic changes in the law. The theory of the American adaptation
hereinafter mentioned."cralaw virtua1aw library of the Torrens systems is that every transfer of title and every memorandum upon the
certificate of title is a judicial act and that the register of deeds merely acts in a
As provided in the last sentence of the section quoted, the decree is transcribed literally ministerial capacity as an officer of the court.
upon the certificate of title. Section 38 of the Act provides that it "shall not be opened by
reason of the absence, infancy, or other disability of any person affected thereby, nor by A transfer certificate of title is both in form and in substance merely a variation of the
any proceeding in any court for reversing judgments or decrees."cralaw virtua1aw final decree in the case; it runs in the name of the judge of the court, contains the same
library data as the final decree and transfers and confirms the title just as effectively. If,
therefore, we regard the final decree as a judgment within the meaning of section 513
It can readily be seen that such a decree possesses very special characteristics and that it the Code of Civil Procedure, we must also so regard a transfer certificate of title. Now, if
differs not only in form but also in character from the ordinary judgment. this is so, what can then be the purpose of maintaining the assurance fund? If both final
decrees and transfer certificates of title can be regarded as judgments and reopened or
Its features of finality and indefeasibility constitute the cornerstone of the Land cancelled by a proceeding under section 513, how can there ever be any demand upon
Registration Act; if we eliminate them we may still have a land registration system but it the assurance fund? Indeed, the fact that in passing Act No. 1108 the Legislature left the
will not be a Torrens system. To hold that the Legislature by a mere reference in Act No. provisions for the assurance fund intact and did not reduce the amount of the premium
1108 to section 513 of the Code of Civil Procedure intended to include such final decrees to be paid into said fund by an applicant for registration, shows sufficiently that it did not
in the term "judgment" as employed in that section would therefore be equivalent to intend to introduce a new proceeding in substitution of the action against the assurance
holding that it proposed in this casual manner to abolish the Torrens system in these fund. We cannot assume or believe that the collection of the assurance premium or fee is
Islands, a system which had given general satisfaction, and to substitute therefor a only a scheme on the part of the Government to obtain money under false pretenses.
mongrel system with all the disadvantages of Torrens registration but without its
principal advantages. If we, on the other hand, hold that in land registration matters section 513 of the Code of
Civil Procedure applies only to those judgments which are not covered by final decrees of
confirmation (of which the Caballes case offers a good example) all difficulties in by curtailing the remedies against it.
reconciling the amended section 14 of the Land Registration Act with its other section 14
of the Land Registration Act with its other sections disappear and the registration system For the reasons stated, we hold that the so called "decree of confirmation and
established by the Act will remain intact. In view of the fact that it obviously was not the registration" provided for in the Land Registration Act is not a judgment within the
intention of the Legislature to introduce any racial changes in the system itself, this meaning of section 513 of the Code of Civil Procedure, and that such a decree cannot be
seems to be only rational construction which can be placed upon the law. reopened except for the reasons and in the manner stated in section 38 of the Land
Registration Act.
Such an interpretation can in reality impose no material hardship upon the aggrieved
party; he still has his right of action for damages against the person who has unjustly The demurrer must, accordingly, be sustained and it being evident that the petition
deprived him of his land and if the title has not been transferred to a third party, an suffers from defects not curable by an amendment, an order absolute will be entered
attachment may be levied upon the land. Recourse may also be had to the assurance fund dismissing the same with costs. So ordered.
in proper cases. Furthermore, we have already held in the case of Cabanos v. Register of
Deeds of Laguna and Obianana (40 Phil., 620), that in certain cases a suit in equity may Johnson, Avanceñ a, Villamor, and Romualdez, JJ., concur.
be maintained to compel the conveyance of registered land to the true owner.

A person who, through no fault of his own, has been deprived of his land through
registration proceedings is thus offered all the remedies which he, in justice and equity,
ought to have; to go farther and allow his claims to prevail against the rights of a bona
fide purchaser for value from the holder of a registered title is neither justice nor
common sense and is, as we have seen, subversive of the object of the Land Registration
Act. This, as far as we can see, would be the inevitable and logical consequence of
adopting the doctrine that final land registration decrees may be reopened; it is
inconceivable that a certificate of title can stand when the decree upon which it is based
fails.

It has been suggested by some of the opponents of the views set forth that as under the
final decree in a land registration case the petitioner acquires a legal title, a purchaser
from him in good faith also acquires a good title and cannot be disturbed through
proceedings under section 513, and that such proceedings can, therefore, only reach the
original holder of the title and his mala fides transferees. This view is in itself a
recognition of the that the sweeping language of the section in question is not, to its full
extent, applicable to land registration cases; the only difference between this theory and
ours is that the line of the inapplicably of the section is drawn at a different point. Instead
of being placed at the issuance of the final decree, thus making the section applicable
only to judgments not covered by such decrees, the line of demarcation is drawn at the
point where the land passes into the hands of an innocent purchaser for value.

While this interpretation of the law has an appearance of reasonableness and, at first
sight, may seem harmless, its adoption would in reality be only slightly less disastrous
than the holding that section 513 is applicable to all land registration matters. The fact
that the question of good or bad faith on the part of a purchaser would often have to be
determined by oral evidence, would introduce an element of uncertainty which would
impair the value of Torrens titles out of all proportion to the benefits to be derived from
the application of the remedy prescribed by section 513 in the manner suggested. There
might be few successful attacks on such titles, but from a practical point of view the
possibility of attacks and of litigation in regard to which the Statute of Limitations does
not apply, would necessarily have a deterrent effect on possible investors in lands
covered by such titles. And, as we have seen, there is not now, and never has been, any
real necessity for such an application of the remedy in land registration cases; the field is
sufficiently covered by other remedies, equally effective and much less harmful to the
public interests. It is, therefore, not at all a question of sanctioning or encouraging fraud
G.R. No. L-8936 October 2, 1915 Under these facts, who is the owner of the wall and the land occupied by it?

CONSUELO LEGARDA, with her husband MAURO PRIETO, plaintiffs-appellants, The decision of the lower court is based upon the theory that the action for the
vs. registration of the lot of the defendant was a judicial proceeding and that the judgment
N.M. SALEEBY, defendant-appellee. or decree was binding upon all parties who did not appear and oppose it. In other words,
by reason of the fact that the plaintiffs had not opposed the registration of that part of the
Singson, Ledesma and Lim for appellants. lot on which the wall was situate they had lost it, even though it had been theretofore
D.R. Williams for appellee. registered in their name. Granting that theory to be correct one, and granting even that
the wall and the land occupied by it, in fact, belonged to the defendant and his
predecessors, then the same theory should be applied to the defendant himself. Applying
that theory to him, he had already lost whatever right he had therein, by permitting the
plaintiffs to have the same registered in their name, more than six years before. Having
thus lost hid right, may he be permitted to regain it by simply including it in a petition for
JOHNSON, J.: registration? The plaintiffs having secured the registration of their lot, including the wall,
were they obliged to constantly be on the alert and to watch all the proceedings in the
From the record the following facts appear: land court to see that some one else was not having all, or a portion of the same,
registered? If that question is to be answered in the affirmative, then the whole scheme
and purpose of the torrens system of land registration must fail. The real purpose of that
First. That the plaintiffs and the defendant occupy, as owners, adjoining lots in the system is to quiet title to land; to put a stop forever to any question of the legality of the
district of Ermita in the city of Manila. title, except claims which were noted at the time of registration, in the certificate, or
which may arise subsequent thereto. That being the purpose of the law, it would seem
Second. That there exists and has existed a number of years a stone wall between the that once a title is registered the owner may rest secure, without the necessity of waiting
said lots. Said wall is located on the lot of the plaintiffs. in the portals of the court, or sitting in the "mirador de su casa," to avoid the possibility of
losing his land. Of course, it can not be denied that the proceeding for the registration of
Third. That the plaintiffs, on the 2d day of March, 1906, presented a petition in the Court land under the torrens system is judicial (Escueta vs. .Director of Lands, 16 Phil. Rep.,
of Land Registration for the registration of their lot. After a consideration of said petition 482). It is clothed with all the forms of an action and the result is final and binding upon
the court, on the 25th day of October, 1906, decreed that the title of the plaintiffs should all the world. It is an action in rem. (Escueta vs. Director of Lands (supra); Grey
be registered and issued to them the original certificate provided for under the torrens Alba vs. De la Cruz, 17 Phil. rep., 49 Roxas vs. Enriquez, 29 Phil. Rep., 31; Tyler vs. Judges,
system. Said registration and certificate included the wall. 175 Mass., 51 American Land Co. vs. Zeiss, 219 U.S., 47.)

Fourth. Later the predecessor of the defendant presented a petition in the Court of Land While the proceeding is judicial, it involves more in its consequences than does an
Registration for the registration of the lot now occupied by him. On the 25th day of ordinary action. All the world are parties, including the government. After the
March, 1912, the court decreed the registration of said title and issued the original registration is complete and final and there exists no fraud, there are no innocent third
certificate provided for under the torrens system. The description of the lot given in the parties who may claim an interest. The rights of all the world are foreclosed by the
petition of the defendant also included said wall. decree of registration. The government itself assumes the burden of giving notice to all
parties. To permit persons who are parties in the registration proceeding (and they are
all the world) to again litigate the same questions, and to again cast doubt upon the
Fifth. Several months later (the 13th day of December, 1912) the plaintiffs discovered validity of the registered title, would destroy the very purpose and intent of the law. The
that the wall which had been included in the certificate granted to them had also been registration, under the torrens system, does not give the owner any better title than he
included in the certificate granted to the defendant .They immediately presented a had. If he does not already have a perfect title, he can not have it registered. Fee simple
petition in the Court of Land Registration for an adjustment and correction of the error titles only may be registered. The certificate of registration accumulates in open
committed by including said wall in the registered title of each of said parties. The lower document a precise and correct statement of the exact status of the fee held by its owner.
court however, without notice to the defendant, denied said petition upon the theory The certificate, in the absence of fraud, is the evidence of title and shows exactly the real
that, during the pendency of the petition for the registration of the defendant's land, they interest of its owner. The title once registered, with very few exceptions, should not
failed to make any objection to the registration of said lot, including the wall, in the name thereafter be impugned, altered, changed, modified, enlarged, or diminished, except in
of the defendant. some direct proceeding permitted by law. Otherwise all security in registered titles
would be lost. A registered title can not be altered, modified, enlarged, or diminished in
Sixth. That the land occupied by t he wall is registered in the name of each of the owners a collateral proceeding and not even by a direct proceeding, after the lapse of the period
of the adjoining lots. The wall is not a joint wall. prescribed by law.
For the difficulty involved in the present case the Act (No. 496) providing for the however, to the right of any person deprived of land or of any estate or interest therein
registration of titles under the torrens system affords us no remedy. There is no by decree of registration obtained by fraud to file in the Court of Land Registration a
provision in said Act giving the parties relief under conditions like the present. There is petition for review within one year after entry of the decree (of registration), provided
nothing in the Act which indicates who should be the owner of land which has been no innocent purchaser for value has acquired an interest.
registered in the name of two different persons.
It will be noted, from said section, that the "decree of registration" shall not be opened,
The rule, we think, is well settled that the decree ordering the registration of a particular for any reason, in any court, except for fraud, and not even for fraud, after the lapse of one
parcel of land is a bar to future litigation over the same between the same parties .In year. If then the decree of registration can not be opened for any reason, except for fraud,
view of the fact that all the world are parties, it must follow that future litigation over the in a direct proceeding for that purpose, may such decree be opened or set aside in a
title is forever barred; there can be no persons who are not parties to the action. This, we collateral proceeding by including a portion of the land in a subsequent certificate or
think, is the rule, except as to rights which are noted in the certificate or which arise decree of registration? We do not believe the law contemplated that a person could be
subsequently, and with certain other exceptions which need not be dismissed at present. deprived of his registered title in that way.
A title once registered can not be defeated, even by an adverse, open, and notorious
possession. Registered title under the torrens system can not be defeated by prescription We have in this jurisdiction a general statutory provision which governs the right of the
(section 46, Act No. 496). The title, once registered, is notice to the world. All persons ownership of land when the same is registered in the ordinary registry in the name of
must take notice. No one can plead ignorance of the registration. two persons. Article 1473 of the Civil Code provides, among other things, that when one
piece of real property had been sold to two different persons it shall belong to the person
The question, who is the owner of land registered in the name of two different persons, acquiring it, who first inscribes it in the registry. This rule, of course, presupposes that
has been presented to the courts in other jurisdictions. In some jurisdictions, where the each of the vendees or purchasers has acquired title to the land. The real ownership in
"torrens" system has been adopted, the difficulty has been settled by express statutory such a case depends upon priority of registration. While we do not now decide that the
provision. In others it has been settled by the courts. Hogg, in his excellent discussion of general provisions of the Civil Code are applicable to the Land Registration Act, even
the "Australian Torrens System," at page 823, says: "The general rule is that in the case of though we see no objection thereto, yet we think, in the absence of other express
two certificates of title, purporting to include the same land, the earlier in date prevails, provisions, they should have a persuasive influence in adopting a rule for governing the
whether the land comprised in the latter certificate be wholly, or only in part, comprised effect of a double registration under said Act. Adopting the rule which we believe to be
in the earlier certificate. (Oelkers vs. Merry, 2 Q.S.C.R., 193; Miller vs. Davy, 7 N.Z.R., 155; more in consonance with the purposes and the real intent of the torrens system, we are
Lloyd vs. Myfield, 7 A.L.T. (V.) 48; Stevens vs. Williams, 12 V.L. R., 152; Register of of the opinion and so decree that in case land has been registered under the Land
Titles, vs. Esperance Land Co., 1 W.A.R., 118.)" Hogg adds however that, "if it can be very Registration Act in the name of two different persons, the earlier in date shall prevail.
clearly ascertained by the ordinary rules of construction relating to written documents,
that the inclusion of the land in the certificate of title of prior date is a mistake, the In reaching the above conclusion, we have not overlooked the forceful argument of the
mistake may be rectified by holding the latter of the two certificates of title to be appellee. He says, among other things; "When Prieto et al. were served with notice of the
conclusive." (See Hogg on the "Australian torrens System," supra, and cases cited. See application of Teus (the predecessor of the defendant) they became defendants in a
also the excellent work of Niblack in his "Analysis of the Torrens System," page 99.) proceeding wherein he, Teus, was seeking to foreclose their right, and that of orders, to
Niblack, in discussing the general question, said: "Where two certificates purport to the parcel of land described in his application. Through their failure to appear and
include the same land the earlier in date prevails. ... In successive registrations, where contest his right thereto, and the subsequent entry of a default judgment against them,
more than one certificate is issued in respect of a particular estate or interest in land, the they became irrevocably bound by the decree adjudicating such land to Teus. They had
person claiming under the prior certificates is entitled to the estate or interest; and that their day in court and can not set up their own omission as ground for impugning the
person is deemed to hold under the prior certificate who is the holder of, or whose claim validity of a judgment duly entered by a court of competent jurisdiction. To decide
is derived directly or indirectly from the person who was the holder of the earliest otherwise would be to hold that lands with torrens titles are above the law and beyond
certificate issued in respect thereof. While the acts in this country do not expressly cover the jurisdiction of the courts".
the case of the issue of two certificates for the same land, they provide that a registered
owner shall hold the title, and the effect of this undoubtedly is that where two certificates
purport to include the same registered land, the holder of the earlier one continues to As was said above, the primary and fundamental purpose of the torrens system is to
hold the title" (p. 237). quiet title. If the holder of a certificate cannot rest secure in this registered title then the
purpose of the law is defeated. If those dealing with registered land cannot rely upon the
certificate, then nothing has been gained by the registration and the expense incurred
Section 38 of Act No. 496, provides that; "It (the decree of registration) shall be thereby has been in vain. If the holder may lose a strip of his registered land by the
conclusive upon and against all persons, including the Insular Government and all the method adopted in the present case, he may lose it all. Suppose within the six years
branches thereof, whether mentioned by name in the application, notice, or citation, or which elapsed after the plaintiff had secured their title, they had mortgaged or sold their
included in the general description "To all whom it may concern." Such decree shall not right, what would be the position or right of the mortgagee or vendee? That mistakes are
be opened by reason of the absence, infancy, or other disability of any person affected bound to occur cannot be denied, and sometimes the damage done thereby is
thereby, nor by any proceeding in any court for reversing judgments or decrees; subject,
irreparable. It is the duty of the courts to adjust the rights of the parties under such recorded in the public registry. It is never issued until it is recorded. The record notice to
circumstances so as to minimize such damages, taking into consideration al of the all the world. All persons are charged with the knowledge of what it contains. All persons
conditions and the diligence of the respective parties to avoid them. In the present case, dealing with the land so recorded, or any portion of it, must be charged with notice of
the appellee was the first negligent (granting that he was the real owner, and if he was whatever it contains. The purchaser is charged with notice of every fact shown by the
not the real owner he can not complain) in not opposing the registration in the name of record and is presumed to know every fact which the record discloses .This rule is so
the appellants. He was a party-defendant in an action for the registration of the lot in well established that it is scarcely necessary to cite authorities in its support
question, in the name of the appellants, in 1906. "Through his failure to appear and to (Northwestern National Bank vs. Freeman, 171 U.S., 620, 629; Delvin on Real Estate,
oppose such registration, and the subsequent entry of a default judgment against him, he sections 710, 710 [a]).
became irrevocably bound by the decree adjudicating such land to the appellants. He had
his day in court and should not be permitted to set up his own omissions as the ground When a conveyance has been properly recorded such record is constructive notice of its
for impugning the validity of a judgment duly entered by a court of competent contents and all interests, legal and equitable, included therein. (Grandin vs. Anderson,
jurisdiction." Granting that he was the owner of the land upon which the wall is located, 15 Ohio State, 286, 289; Orvis vs. Newell, 17 Conn., 97; Buchanan vs. Intentional Bank, 78
his failure to oppose the registration of the same in the name of the appellants, in the Ill., 500; Youngs vs. Wilson, 27 N.Y., 351; McCabe vs. Grey, 20 Cal., 509;
absence of fraud, forever closes his mouth against impugning the validity of that Montefiore vs. Browne, 7 House of Lords Cases, 341.)
judgment. There is no more reason why the doctrine invoked by the appellee should be
applied to the appellants than to him.
Under the rule of notice, it is presumed that the purchaser has examined every
instrument of record affecting the title. Such presumption is irrebutable. He is charged
We have decided, in case of double registration under the Land Registration Act, that the with notice of every fact shown by the record and is presumed to know every fact which
owner of the earliest certificate is the owner of the land. That is the rule between original an examination of the record would have disclosed. This presumption cannot be
parties. May this rule be applied to successive vendees of the owners of such certificates? overcome by proof of innocence or good faith. Otherwise the very purpose and object of
Suppose that one or the other of the parties, before the error is discovered, transfers his the law requiring a record would be destroyed. Such presumption cannot be defeated by
original certificate to an "innocent purchaser." The general rule is that the vendee of land proof of want of knowledge of what the record contains any more than one may be
has no greater right, title, or interest than his vendor; that he acquires the right which his permitted to show that he was ignorant of the provisions of the law. The rule that all
vendor had, only. Under that rule the vendee of the earlier certificate would be the owner persons must take notice of the facts which the public record contains is a rule of law.
as against the vendee of the owner of the later certificate. The rule must be absolute. Any variation would lead to endless confusion and useless
litigation.
We find statutory provisions which, upon first reading, seem to cast some doubt upon
the rule that the vendee acquires the interest of the vendor only. Sections 38, 55, and 112 While there is no statutory provision in force here requiring that original deeds of
of Act No. 496 indicate that the vendee may acquire rights and be protected against conveyance of real property be recorded, yet there is a rule requiring mortgages to be
defenses which the vendor would not. Said sections speak of available rights in favor of recorded. (Arts. 1875 and 606 of the Civil Code.) The record of a mortgage is
third parties which are cut off by virtue of the sale of the land to an "innocent purchaser." indispensable to its validity. (Art .1875.) In the face of that statute would the courts allow
That is to say, persons who had had a right or interest in land wrongfully included in an a mortgage to be valid which had not been recorded, upon the plea of ignorance of the
original certificate would be unable to enforce such rights against an "innocent statutory provision, when third parties were interested? May a purchaser of land,
purchaser," by virtue of the provisions of said sections. In the present case Teus had his subsequent to the recorded mortgage, plead ignorance of its existence, and by reason of
land, including the wall, registered in his name. He subsequently sold the same to the such ignorance have the land released from such lien? Could a purchaser of land, after
appellee. Is the appellee an "innocent purchaser," as that phrase is used in said sections? the recorded mortgage, be relieved from the mortgage lien by the plea that he was
May those who have been deprived of their land by reason of a mistake in the original a bona fide purchaser? May there be a bona fide purchaser of said land, bona fide in the
certificate in favor of Teus be deprived of their right to the same, by virtue of the sale by sense that he had no knowledge of the existence of the mortgage? We believe the rule
him to the appellee? Suppose the appellants had sold their lot, including the wall, to an that all persons must take notice of what the public record contains in just as obligatory
"innocent purchaser," would such purchaser be included in the phrase "innocent upon all persons as the rule that all men must know the law; that no one can plead
purchaser," as the same is used in said sections? Under these examples there would be ignorance of the law. The fact that all men know the law is contrary to the presumption.
two innocent purchasers of the same land, is said sections are to be applied .Which of the The conduct of men, at times, shows clearly that they do not know the law. The rule,
two innocent purchasers, if they are both to be regarded as innocent purchasers, should however, is mandatory and obligatory, notwithstanding. It would be just as logical to
be protected under the provisions of said sections? These questions indicate the allow the defense of ignorance of the existence and contents of a public record.
difficulty with which we are met in giving meaning and effect to the phrase "innocent
purchaser," in said sections.
In view, therefore, of the foregoing rules of law, may the purchaser of land from the
owner of the second original certificate be an "innocent purchaser," when a part or all of
May the purchaser of land which has been included in a "second original certificate" ever such land had theretofore been registered in the name of another, not the vendor? We
be regarded as an "innocent purchaser," as against the rights or interest of the owner of are of the opinion that said sections 38, 55, and 112 should not be applied to such
the first original certificate, his heirs, assigns, or vendee? The first original certificate is
purchasers. We do not believe that the phrase "innocent purchaser should be applied to In view of our conclusions, above stated, the judgment of the lower court should be and
such a purchaser. He cannot be regarded as an "innocent purchaser" because of the facts is hereby revoked. The record is hereby returned to the court now having and exercising
contained in the record of the first original certificate. The rule should not be applied to the jurisdiction heretofore exercised by the land court, with direction to make such
the purchaser of a parcel of land the vendor of which is not the owner of the original orders and decrees in the premises as may correct the error heretofore made in
certificate, or his successors. He, in nonsense, can be an "innocent purchaser" of the including the land in the second original certificate issued in favor of the predecessor of
portion of the land included in another earlier original certificate. The rule of notice of the appellee, as well as in all other duplicate certificates issued.
what the record contains precludes the idea of innocence. By reason of the prior registry
there cannot be an innocent purchaser of land included in a prior original certificate and Without any findings as to costs, it is so ordered.
in a name other than that of the vendor, or his successors. In order to minimize the
difficulties we think this is the safe rule to establish. We believe the phrase "innocent
purchaser," used in said sections, should be limited only to cases where unregistered
land has been wrongfully included in a certificate under the torrens system. When land is
once brought under the torrens system, the record of the original certificate and all
subsequent transfers thereof is notice to all the world. That being the rule, could Teus
even regarded as the holder in good fifth of that part of the land included in his certificate
of the appellants? We think not. Suppose, for example, that Teus had never had his lot
registered under the torrens system. Suppose he had sold his lot to the appellee and had
included in his deed of transfer the very strip of land now in question. Could his vendee
be regarded as an "innocent purchaser" of said strip? Would his vendee be an "innocent
purchaser" of said strip? Certainly not. The record of the original certificate of the
appellants precludes the possibility. Has the appellee gained any right by reason of the
registration of the strip of land in the name of his vendor? Applying the rule of notice
resulting from the record of the title of the appellants, the question must be answered in
the negative. We are of the opinion that these rules are more in harmony with the
purpose of Act No. 496 than the rule contended for by the appellee. We believe that the
purchaser from the owner of the later certificate, and his successors, should be required
to resort to his vendor for damages, in case of a mistake like the present, rather than to
molest the holder of the first certificate who has been guilty of no negligence. The holder
of the first original certificate and his successors should be permitted to rest secure in
their title, against one who had acquired rights in conflict therewith and who had full and
complete knowledge of their rights. The purchaser of land included in the second original
certificate, by reason of the facts contained in the public record and the knowledge with
which he is charged and by reason of his negligence, should suffer the loss, if any,
resulting from such purchase, rather than he who has obtained the first certificate and
who was innocent of any act of negligence.

The foregoing decision does not solve, nor pretend to solve, all the difficulties resulting
from double registration under the torrens system and the subsequent transfer of the
land. Neither do we now attempt to decide the effect of the former registration in the
ordinary registry upon the registration under the torrens system. We are inclined to the
view, without deciding it, that the record under the torrens system, supersede all other
registries. If that view is correct then it will be sufficient, in dealing with land registered
and recorded alone. Once land is registered and recorded under the torrens system, that
record alone can be examined for the purpose of ascertaining the real status of the title
to the land.

It would be seen to a just and equitable rule, when two persons have acquired equal
rights in the same thing, to hold that the one who acquired it first and who has complied
with all the requirements of the law should be protected.
G.R. No. L-16257 January 31, 1963 and, in its stead, transfer Certificate of Title No. 17166 0151 — which, owing to its
subsequent loss, had to be reconstituted as Transfer Certificate of Title No. RT-1371 — in
CAPITOL SUBDIVISION, INC., plaintiff-appellant, the name of the Bank, was issued on March 14, 1934 (Exhibit P). Soon, later, or on
vs. November 8, 1935, the Bank agreed to sell the Hacienda to Carlos P. Benares, son of Jose
PROVINCE OF NEGROS OCCIDENTAL, defendant-appellee. Banares, for the sum of P400,000, payable in annual installments, subject to the
condition that, until full payment thereof, title would remain in the Bank (Exhibit R).
Thereafter, Carlos P. Benares transferred his rights, under this contract with the Bank, to
San Juan, Africa & Benedicto for plaintiff-appellant. plaintiff herein, which completed the payment of the installments due to the Bank in
Eduardo P. Arboleda and Jesus S. Rodriguez for defendant-appellee. 1949. Hence, on September 29, 1949, the Bank executed the corresponding deed of
absolute sale to the plaintiff (Exhibit Q) and Transfer Certificate of Title No. 1798,
CONCEPCION, J.: covering 378 was issued, in lieu of Transfer Certificate of Title No. 17166 (or
reconstituted Transfer Certificate of Title RT-1371), in plaintiff's name (Exhibit O).
Plaintiff, Capitol Subdivision, Inc., seeks to recover from defendant, the Province of
Negros Occidental, the possession of Lot 378 of the cadastral survey of Bacolod, Negros Wherefore, the parties respectfully pray that the foregoing stipulation of facts be
Occidental, and a reasonable compensation for the use and occupation of said lot by the admitted and approved by this Honorable Court, without prejudice to the parties
defendant from November 8, 1935, in addition to attorney's fees and costs. On June 28, adducing other evidence to prove their case not covered by this stipulation of
1951, the Court of First Instance of Negros Occidental rendered judgment for the facts. 1äwphï1.ñët
plaintiff. On appeal taken by the defendant, this judgment was, however, set aside by the
Supreme Court (see G.R. No. L-6204, decided on July 31, 1956), which, likewise, ordered At this juncture, it should be noted that, despite the acquisition of the Hacienda in 1934
the case remanded to the lower court "for further trial", after which another decision was by the Bank, the latter did not take possession of the property for Jose Benares claimed
rendered by said court of first instance dismissing plaintiff's complaint and ordering to be entitled to retain it under an alleged right of lease. For this reason, the deed of
plaintiff to execute a deed conveying Lot 378 to the defendant. The case is, once again, promise to sell, executed by the Bank in favor of Carlos P. Benares, contained a caveat
before us, this time on appeal by the plaintiff, the subject matter of litigation being worth emptor stipulation. When, upon the execution of the deed of absolute sale (Exhibit Q) by
more than P200,000, exclusive of interest and costs. the Bank, on September 29, 1949, plaintiff took steps to take possession the Hacienda, it
was discovered that Lot 378 was the land occupied by the Provincial Hospital of Negros
The main facts are not in dispute. Said Lot 378 is part of Hacienda Mandalagan, Occidental. Immediately, thereafter, or on October 4, 1949, plaintiff made
consisting of Lots 378, 405, 407, 410, 1205, 1452 and 1641 of the aforementioned representations with the proper officials to clarify the status of said occupation and, not
cadastral survey, with an aggregate area of over 502 hectares, originally registered in the being satisfied with the explanations given by said officials, it brought the present action
name of Agustin Amenabar and Pilar Amenabar. Lot 378 has an area of 22,783 sq. on June 10, 1950.
meters, more or less, and was covered by Original Certificate of Title No. 1776 (Exhibit
4), issued on August 25, 1916, in the name of the Amenabars. On November 30, 1920, the In its answer dated June 24, 1950, defendant maintained that it had acquired Lot 378 in
latter sold the aforementioned hacienda to Jose Benares (also referred to in some the year; 1924-1925, through expropriation proceedings; that immediately after the
documents as Jose Benares Montelibano) for the sum of P300,000, payable installments, commencement of said proceedings in 1924, it took possession of said lot and began the
as set forth in the deed of sale, Exhibit 21. On February 8, 1924, said Original Certificate construction thereon of the provincial hospital, which was completed in 1926; that since
of Title No. 1776 was cancelled and Jose Benares obtained, in lieu thereof, Transfer then it had occupied said lot publicly, adversely, notoriously and continuously as owner
Certificate of Title No. 6295 in his name. Meanwhile, or on March 12, 1921, the Hacienda, thereof; that, "for some reason or other and for cause beyond comprehension of the
including Lot 378, had been mortgaged by Jose Benares to the Bacolod-Murcia Milling Co. defendant title thereto was never transferred in the name of said defendant"; that said
for the sum of P27,991.74 (Exhibit Y-2). On December 6, 1926, Jose Benares again lot had been placed in defendant's name for assessment purposes under Tax Declaration
mortgaged the Hacienda, including said Lot 378, on the Philippine National Bank, subject No. 16269 (dated December 31, 1937); and that plaintiff had acted in bad faith in
to the first mortgage held by the Bacolod-Murcia Milling Co. (Exhibit Y-1). These purchasing said lot from the Bank in 1935, for plaintiff knew then that the provincial
transactions were duly recorded in the office of the Register of Deeds of Negros hospital was where it is up to the present, and did not declare said lot in its name for
Occidental and annotated on the corresponding certificate of title, including said assessment purposes until 1950, aside from the fact that Alfredo Montelibano, the
Transfer Certificate of Title No. 6295, covering Lot 378. controlling stockholder, president and general manager of plaintiff corporation, was the
first City Mayor of Bacolod which contributed to the support, operation and maintenance
The mortgage in favor of the Bank was subsequently foreclosed, in pursuance of a of said hospital. In an amended answer, dated November 8, 1950, defendant alleged, also,
decision of the Court of First Instance of Negros Occidental dated September 29, 1931 that the aforementioned expropriation case was "amicably settled as between the parties
(Exhibit U-1), and the Bank acquired the Hacienda, including Lot 378, as purchaser at the herein, in the sense that the ... Province of Negros Occidental would pay ... and did in fact
foreclosure sale. Accordingly, said Transfer Certificate of Title No. 6295 was cancelled pay to Jose Benares the assessed value of Lot 378 ... and whatever consideration
pertaining to said lot in excess of its assessed value which was paid by the Province 4. Jose Benares was, also, contradicted by defendant's witness Ildefonso
would be donated and was in fact donated by said ... Jose Benares in favor of the Province Coscolluela, the provincial treasurer of Negros Occidental at the time of the
purposely for hospital site". expropriation, who positively assured the Court that the expropriation case
"was not yet terminated" and that "negotiations were still pending" for the
The main question for determination in this case is whether or not defendant herein had acquisition of Lot 378 by the Government when he retired from the service in
acquired Lot 378 in the aforementioned expropriation proceedings. This decision 1934.
appealed from in effect decided this question in the affirmative and declared that plaintiff
merely holds it in trust for the defendant, in view of which it ordered the former to Upon the other hand, several circumstances strongly indicate that no compromise
convey said lot to the latter. This conclusion is predicated, substantially, upon the agreement for the acquisition of the land by the Government had been reached and that
following premises, namely that case No. 3041 of the Court of First Instance of Negros the expropriation had not been consummated. For instance:
Occidental for the expropriation of the hospital site of said province, was actually
commenced on January 26, 1924; that, among the lands sought to be expropriated in said 1. The only entries in the docket relative to the expropriation case refer to its
case was Lot 377 of the aforementioned cadastral survey, belonging to one Anacleta filing and the publication in the newspaper of the corresponding notices
Agsam, who sold it, on July 10, 1926, to the defendant (Exhibit BB), in whose favor the (Exhibit 1);.
corresponding transfer certificate of title (Exhibit BB-2) was issued on July 12, 1926;
that, according the testimony of Jose Benares, the expropriation of Lot 378 was settled
amicably upon payment to him of the sum of P12,000; and that defendant's failure to 2. The registration of the deed of sale of Lot 377 by Anacleta Agsam to the
secure the corresponding transfer certificate of title to Lot 378 was due to "the mistaken Government, followed by the cancellation of the certificate of title in her name
notion or belief that said lot forms part of Lot No. 405-B" in the plan (Exhibit X.). and the issuance, in lieu thereof, of another title in the name of the Province,
when contrasted with the absence of a similar deed of assignment and of a
transfer certificate title in favor of the Province as regards Lot 378, strongly
The testimony of Jose Benares does not deserve, however, full faith and credence, suggest that no such assignment or agreement with respect to Lot 378 had been
because: made or reached;.

1. Jose Benares appears to be strongly biased and prejudiced against the 3. The property was mortgaged to the Bacolod-Murcia Milling Co. since March
plaintiff and its president, for the former believes that the latter had 12, 1921, and this mortgage, duly registered and annotated, inter alia, on
"manipulated" to exclude him from plaintiff corporation, and there have been Transfer Certificate of Title No. 1776, in the name of Jose Benares, was not
four (4) litigations between Jose Benares and plaintiff, all of which have been cancelled until September 28, 1935. Moreover, Lot 378 could not have been
finally decided against the former; expropriated without the intervention of the Milling Co. Yet, the latter was not
made a party in the expropriation proceedings;
2. The testimony of Jose Benares is extremely contradictory. Thus: (a) he
testified to having been paid P12,000 by the Government, although, at the rate 4. On December 26, 1926, Jose Benares constituted second mortgage in favor of
of P1,000 a hectare at which, he would have us believe, he agreed to sell Lot the Bank, which would not have accepted the mortgage had Lot 378 not
378; he should have received less than P3,000 for its 22,783 sq. meters; (b) he belonged then to the mortgagor. Neither could said lot have been expropriated
claimed to have received said sum of P12,000.00 "in the year 1924 or 1925", subsequently thereto without the Bank's knowledge and participation. What is
about "2 or 3 days" after the Government had taken possession of the land, and more, in the deed executed by the Bank, on November 8, 1935 (Exhibit R),
to have sent the money next day to Pilar Amenabar, but the latter promising to sell the Hacienda Mandalagan to Carlos Benares, it was explicitly
acknowledged to have received the said sum of P12,000 on November 7, 1928; stated that portions of Lots 405, 407 and 410, forming part of said Hacienda
and designated as Lots 405-A, 407-A; 407-B and 410-A, had been expropriated
3. Said testimony was contradicted by that of defendant's witness Jose Marco, by the Provincial Government of Negros Occidental, thus indicating, by necessary
former deputy clerk of court of Negros Occidental, for: (a) Jose Benares implication, that Lot 378 had not been expropriated.
asserted that there was a written compromise agreement between him and the
Government, whereas Marco averred that agreement was merely oral; and (b) The decision appealed from says:
Marco stated that Benares had agreed to accept, as compensation for Lot 378,
the assessed value thereof, which was P430, and to donate to the Government
the difference between this sum and the true value of the property, but Benares ... It is evident that there were no further proceedings in connection with the
affirmed that he was first offered P300 per hectare, which he rejected, and that expropriation case and the chances are that the case was dismissed. The Court
he later demanded P1,000 a hectare, which the Government agreed to pay, had to examine carefully and minutely every single piece of evidence adduced
although, subsequently, he said that Rafael Alunan and Mariano Yulo had by both parties in order to arrive at the correct solution of the mystery. The
prevailed upon him to accept P1,000 per hectare; Court believes that the failure of the government to secure the corresponding
 transfer of title to Lot 378 lies in the mistaken notion or belief that said lot How about the P12,000 received by Jose Benares from the Government and applied by
forms a part of Lot 405-B. This conclusion was arrived at after examining him to the payment of his debt to Pilar Amenabar? Said amount could not possibly be the
closely the plan, Exhibit X. The plan shows that while all the subdivided lots price of Lot 378, for, at the rate of P1,000 a hectare allegedly agreed therefor, its price
were properly identified by lot numbers, that particular portion at the lower could not have exceeded P3,000.00. In this connection, it should be noted that, aside
corner of the plan encircled with red pencil, marked Exhibit X-1, is not labelled from the expropriation proceedings for the hospital site, another expropriation case for
with the corresponding lot number and that portion is precisely lot No. 378, the Capitol site, affecting another property of Jose Benares, appears to have been
now in question, where the hospital building was constructed. This plan was instituted in the Court of First Instance of Negros Occidental. Jose Benares may have
prepared for the government on May 12, 1927 by public land surveyor, Mr. mistaken the payment for his land included in the Capitol site, as one intended for Lot
Formento, embracing lots covering over 22 hectares for the Capitol and 378, which was affected by the hospital site. And this possibility may amount to a
hospital sites. The fact that this particular portion was not labelled with the probability when we consider that he erroneously believed that there had been
corresponding lot number might have misled the authorities to believe that it only one expropriation case, instead of two cases, against him, and that Lot 378, was not
formed a part of lot 405-B, which adjoins it, although separated by the creek. included in the mortgage constituted by him in favor of the Philippine National Bank.
This lack of reasonable explanation why the government failed to secure the Evidently, he did not have, at least, an accurate recollection of the events or transactions
corresponding certificate of title to lot 378, when there is sufficient proof that affecting his properties, and, hence, his testimony may not be relied upon.
Jose Benares was paid and he executed the deed of sale in favor of the
government. Thus, the evidence on record is far from sufficient to establish the alleged acquisition by
the defendant of Lot 378, which must be held, therefore, to be the exclusive property of
Although said decision appears to have been prepared with the conscientiousness and plaintiff herein.
moral courage that account for the well earned reputation and prestige of the Philippine
judiciary, we find ourselves unable to concur in the foregoing view. To begin with, there The lower court entertained no doubts about the veracity of the testimony of plaintiff's
is no evidence, and defendant has not even tried to prove, that the expropriation case president to the effect that he did not know until 1949 that the land on which the
had ever been dismissed insofar as Lot 378 is concerned. Hence, the lower court merely Provincial Hospital Building stands is Lot 378. Yet, it held that plaintiff was "not a
speculated about the "chances that the (expropriation) case was dismissed." By the way, purchaser in good faith for having constructive knowledge of defendant's possession of
the contrary was intimated by defendant's witness, Ildefonso Coscolluela, for he testified the property at the time it was bought by the plaintiff", because Carlos P. Benares —
that the expropriation case was still pending in 1934, when he ceased to be the whose right to buy the Hacienda Mandalagan from the Bank was acquired by plaintiff —
provincial treasurer, and the record before us suggests that since the Province took "is a part owner of the Capitol Subdivision and holds a responsible position therein";
possession of the land in 1924 or 1925 and completed the construction of the hospital in because the hospital was already constructed in Lot 378 since 1926 and the lot was
1926, there were no further proceedings in said case.. declared in the name of the Government" and "when plaintiff bought the lot in 1935 the
purchaser should have inquired as to its location and improvement"; because "it took the
With respect to the plan, Exhibit X, there is, likewise, no evidence whatsoever that the plaintiff 14 years to sleep over the supposed rights to take possession of lot No. 378"; and
authorities had been "misled ... to believe" that the portion at the lower corner of said because "of the overwhelming fact that lot No. 378 was erroneously or inadvertently
plan — which was enclosed, during the trial, within a circle in red pencil, and marked as included by the deeds of sale (Exhibits Q & R) executed by the Philippine National Bank
Exhibit X-1 — formed part of Lot 405-B, which had been expropriated by the Province of in favor of the plaintiff subdivision and that same lot was occupied by the defendant
Negros Occidental. In fact, said portion, Exhibit X-1, is not part of the land covered by the government for the provincial hospital for the last 34 years, as owner thereof".
plan Exhibit X. A close examination of the latter shows that the boundaries of said
portion are not delimited on the plan. More important still, on the right hand side of As above stated, however, and the lower court conceded, plaintiff's president did not
Exhibit X, the following appears in bold letters: "Subdivision & Consolidation PLAN of know until 1949 that lot 378 was the very land occupied by the provincial hospital.
Lots Nos. 400, 401, 403,405, 406, 407 and 410 Bacolod Cadastre as surveyed for the Moreover, there is a total absence of evidence that this fact was known to Carlos P.
Provincial Government of Bacolod, Negros Occidental (Capitol site)". The absence of Lot Benares before 1949. Neither may such knowledge be deduced from the circumstances
378 from said enumeration and the explicit statement in Exhibit X to the effect that it that he is a son of its former owner, Jose Benares, for even the latter appears not to be
refers to the "Capitol Site", negates the possibility of its being mistaken by any body, well-posted on the status of his properties. Indeed, Jose Benares did not apparently know
much less by government engineers, as including the hospital site, and, hence, said Lot that there were two (2) expropriation proceedings effecting said properties: that the
378. Lastly, the very evidence for the defendant herein, specially the assessor's field P12,000 received by him from the Government was not meant for Lot 378; and that this
sheets and declarations of real property for tax purposes (Exhibits 9, 10, 11, 12 and 13) lot was one of the properties mortgaged by him to the Bank.
show that the Government had always regarded Lot 378, not Lot 405, as part of the
Provincial Hospital Site. In any event, said possibility of mistake, if any, which would be
remote, cannot suffice to warrant — in the face of documentary evidence to the contrary "Upon the other hand, the main purpose of the Torrens System is to avoid possible
— the conclusion that Lot 378 has already been acquired by the Government. conflicts of title in and to real estate, and to facilitate transactions relative thereto giving
the public the right to rely upon the face of Torrens certificate of title and to dispense
with the of inquiring further, except when the party concerned has actual knowledge of
facts and circumstances that should impel a reasonably cautious man to make such
further inquiry (Tiburcio vs. PHHC, L-13479, October 31, 1959; Revilla vs. Galindez, G.R.
No. L-19940, March 30, 1960; Manacop, Jr. vs. Cansino, G.R. No. L-13791, February 27,
1961). In the case at bar plaintiff had no such actual knowledge, it being an established
fact that he was not aware until 1949 that the land on which the provincial hospital stood
was Lot 378. Furthermore, since the year 1921, or before the expropriation case for the
hospital site had begun, said lot was mortgaged to the Bacolod-Murcia Milling Co., and
the mortgage, duly registered, as well as annotated on the corresponding certificate of
title, was not cancelled until September 28, 1935. Prior to this date, or on December 26,
1926, Lot 378 was subjected to a second mortgage in favor of the Bank, which acquired
title thereto, thru foreclosure proceedings, in 1934. When the Bank agreed on November
8, 1935, to sell the property to Carlos P. Benares and the latter, subsequently conveyed
his rights to plaintiff herein, as well as when the bank executed the deed of absolute sale
in plaintiff's favor on September 20, 1949, the title to the property was in the name of the
Bank. Considering that sugar centrals as well as banks are known to have an array of
experienced and competent lawyers, it cannot be said that plaintiff was not justified in
assuming that said institutions had scrutinized the background of Lot 378 and were
satisfied that the same belonged to the mortgagor when said mortgages were
constituted, and to the Bank when said deed of sale was executed. In short, we find that
plaintiff herein is a purchaser in good faith and for value..

As regards the compensation that, as such, it may collect from the defendant, we are of
the opinion, and so hold, that, since the latter's right to expropriate Lot 378 is not
contested, and is seemingly conceded, the plaintiff may demand what is due by reason of
the expropriation of said lot. In short, plaintiff is entitled to recover from the defendant
the fair and full equivalent to Lot 378, as of the time when possession thereof was
actually taken by the defendant, plus consequential damages — including attorney's fees
— from which consequential damages the consequential benefits, if any, should be
deducted, with interests, at the legal rate, on the aggregate sum due to the plaintiff, from
and after the date of said actual taking. The case should be remanded, therefore, to the
lower court for the reception of evidence on the date of said actual taking and the
amount of compensation collectible from the defendant, and the rendition, thereafter, of
the corresponding decision thereon..

WHEREFORE, the decision appealed from is hereby reversed and the records remanded
to the lower court for further proceedings, as above stated, with costs against the
defendant. It is so ordered..
G.R. No. L-41278 April 15, 1988 b) Order of the respondent Judge dated January 23, 1975 declaring, in effect, the Director
of Lands in default;
DIRECTOR OF LANDS, petitioner,
vs. c) Decision of the respondent Judge dated February 17, 1975, adjudicating the parcels of
HON. PEDRO T. SANTIAGO, Presiding Judge, Court of First Instance of Bataan, land in favor of the respondent corporation; and
Branch II, MARIA O. GARCIA, and IMPERIAL DEVELOPMENT
CORPORATION, respondents. d) Order of the respondent Judge dated August 7, 1976, denying the petitioner's Motion
for New Trial;
The Solicitor General for petitioner.
and for mandamus, to order the respondent Judge to give due course to the petitioner's
Filoteo T. Banzon for respondents. Motion for New Trial; alternatively, the petitioner prays for the dismissal of the
respondent corporation's application for registration. 2

According to Sec. 34 of the Land Registration Act, and as adopted in Sec. 151 of the Public
SARMIENTO, J.: Land Act:

On September 8, 1973, an application for land registration was filed by respondent Maria Any person claiming an interest, whether named in the notice or not,
O. Garcia in the Second Branch of the Court of First Instance of Bataan; 1 a copy of the may appear and file an answer on or before the return day, or within
application was forwarded to the Solicitor General thru the Director of Lands. On such further time as may be allowed by the court. The answer shall
February 19, 1974, the Director of Lands filed an opposition to this application, and at state all the objections to the application, and shall set forth the
the same time the Solicitor General entered his appearance and authorized the Provincial interest claimed by the party filing the same and apply for the remedy
Fiscal to appear on his behalf at the hearings of the same. Subsequently, respondent desired, and shall be signed and sworn to by him or by some person in
Inperial Development Corporation, with the conformity of respondent Garcia, filed a his behalf. (As amended by Sec. 1, Act No. 3621.)
Motion to Substitute Party Applicant from Maria O. Garcia to Imperial Development
Corporation without amending the boundaries and the area of the parcels of land stated It is undisputed that on February 19, 1974, or prior to the issuance of the Notice of Initial
in the original application, which motion was granted by the respondent Judge. A Notice Hearing, an opposition was filed by the petitioner Director of Lands to the original
of Initial Hearing was sent by the respondent Judge to all parties concerned, with the application for land registration of respondent Garcia. 3 That verified opposition was
warning that a party who failed to appear would be declared in default. The same notice precisely the answer referred to in the above-quoted section, for, as therein alleged by
was likewise published in the Official Gazette and posted by the sheriff as required by the Director of Lands, neither the applicant nor her predecessors-in-interest possess
law. On January 23, 1975, the date of the initial hearing, neither petitioner nor his sufficient title to acquire ownership in fee simple of the parcels of land applied for;
counsel was present; an order of general default was issued by the respondent Judge on neither the applicant nor her predecessors-in-interest, have been in open, continuous,
the same date. After the reception of evidence for the applicant before the clerk of court, exclusive, and notorious possession and occupation of the lands in question for at least
the respondent Judge rendered the questioned decision and adjudicated the lands in 30 years immediately preceding the filing of the present application; that the said parcels
favor of the respondent corporation. of land are a portion of the public domain belonging to the Republic of the Philippines,
and that, therefore, the same should be declared part of the public domain. 4 As a matter
Thereafter, the petitioner filed a Motion for New Trial on the grounds that the failure of of fact, under the Property Registration Decree, issued on June 11, 1978, which
his counsel to appear at the initial hearing was excusable, and that the decision was supersedes all other laws relative to registration of property, the word used is
contrary to the facts and to law. The motion was, however, denied. "opposition" and not "answer." 5

The instant petition is for certiorari, to nullify and set aside the following orders and Thus, the opposition or answer, which is based on substantial grounds, having been
decision of the respondent Judge: formally filed, it was improper for the respondent Judge taking cognizance of such
registration case to declare the oppositor in default simply because he failed to appear
on the day set for the initial hearing. The pertinent provision of law which states: "If no
a) Order of the respondent Judge dated September 30, 1974, admitting the Amended person appears and answers within the time allowed, the court may at once upon motion
Application for Registration; of the applicant, no reason to the contrary appearing, order a general default to be
recorded ...," 6 cannot be interpreted to mean that the court can just disregard the answer
before it, which has long been filed, for such an interpretation would be nothing less than
illogical, unwarranted, and unjust. Had the law intended that failure of the oppositor to title already vested." 11 But precisely we are not convinced with the conclusion of the
appear on the date of the initial hearing would be a ground for default despite his having respondent Judge and with the arguments of the respondent corporation that the latter,
filed an answer, it would have been so stated in unmistakable terms, considering the through its predecessors-in- interest, has been in open, continuous, exclusive, and
serious consequences of an order of default. Especially in this case where the greater notorious possession and occupation of agricultural lands of the public domain, under
public interest is involved as the land sought to be registered is alleged to be public land, a bona fide claim of acquisition or ownership, for at least thirty years.
the respondent Judge should have received the applicant's evidence and set another date
for the reception of the oppositor's evidence. The oppositor in the Court below and First, it appears that Maria Garcia and Vicente Obdin, from whom the respondent
petitioner herein should have been accorded ample opportunity to establish the corporation purchased the subject lots, have pending sales applications as evidenced in
government's claim. the plans submitted to the land registration court by Maria Garcia herself which contain
the following footnotes: "This survey is covered by S.A. (x-5) 582" ... "This is covered by
True, an amended application was submitted but it is admitted by the respondents S.A. No. (x-5) 583," S.A. being the short form for Sales Application. As such sales
themselves that no significant alterations were made therein, hence, the opposition applicants, they manifestly acknowledge that they do not own the land and that the same
already filed should have been considered as the answer to the amended application as is a public land under the administration of the Bureau of Lands, to which the
well. Parenthetically, since the amendment in the application consisted merely in the applications were submitted. 12 Therefore, their possession was not that of an owner, as
substitution of the name of the applicant, it was not absolutely necessary to furnish the required by law. We note that the private respondents were conspicuously silent on this
Solicitor General with a copy of the amended application, and it sufficed that the point, as if they were trying to conceal this vital fact.
substitution was stated in the Notice of Initial Hearing. 7
Secondly, if it is true that the original owner and possessor, Generosa Santiago, had been
The respondent corporation maintains that the appropriate remedy in this instance is in possession since 1925, why were the subject lands declared for taxation purposes for
appeal, which is expressly provided in Section 2, Rule 41 of the Rules of Court, and not the first time only in 1968, and in the names of Garcia and Obdin? For although tax
certiorari. We do not agree. The declaration of default against the petitioner was patently receipts and declarations of ownership for taxation purposes are not incontrovertible
invalid because when the same was made, he had already entered an appearance and evidence of ownership, they constitute at least proof that the holder had a claim of title
filed his opposition or answer. In Omico Mining and Industrial Corporation vs. Vallejos we over the property. 13
laid down the doctrine that appeal is not an adequate remedy where a party is illegally
declared in default. Thus, we stated: More than anything else, however, registration in this instance can not be granted on the
basis of Section 48, paragraph b, of the Public Land Act, to wit:
The remedy provided for in the above-quoted rule (i.e. Sec. 2, Rule 41)
is properly, though not exclusively, available to a defendant who has SEC. 48. The following described citizens of the Philippines, occupying
been validly declared in default. It does not preclude a defendant who lands of the public domain or claiming to own any such lands or an
has been illegally declared in default from pursuing a more speedy interest therein, but whose titles have not been perfected or
and efficacious remedy, like a petition for certiorari to have the completed, may apply to the Court of First Instance of the province
judgment by default set aside as a nullity. 8 where the land is located for confirmation of their claims, and the
issuance of a certificate of title therefor, under the Land Registration
Indeed, for the above reason, we gave due course to this petition. 9 Act, to wit:

Additionally, the respondent Judge, in denying the petitioner's Motion for New Trial, xxx xxx xxx
ignored the established rule that courts should be liberal in setting aside a default
judgment. "The Court, in the exercise of wise discretion, could have restored their (b) Those who by themselves or through their predecessors-in-
standing in court and given them an even chance to face their opponents." 10 interest have been in open, continuous, exclusive and notorious
possession and occupation of agricultural lands of the public domain,
Further, we hold that the lower court gravely abused its discretion when it granted the under a bona fide claim of acquisition or ownership, for at least thirty
respondent corporation's application for registration, without sufficient proof that the years immediately preceding the filing of the application for
applicant possessed an imperfect and incomplete title that is registrable under Sec. 48, confirmation of title except when prevented by war or force majeure.
par. b, of Commonwealth Act 141, as amended by Republic Act 6236, otherwise known as These shall be conclusively presumed to have performed all the
the Public Land Act. Verily, we said in Director of Lands vs. Intermediate Appellate conditions essential to a Government grant and shall be entitled to a
Court that: "No proof being admissible to overcome a conclusive presumption, certificate of title under the provisions of this chapter.
confirmation proceedings would, in truth, be little more than 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
as the above provision applies exclusively to agricultural lands of the public domain. It
appears from Forestry Administrative Order No. 4-1157, dated April 28, 1971, 14 that the
subject lands, with an approximate area of 56,598 square meters and situated at Sitio
Babuyan, Cabcaben, Mariveles, Bataan, under Project No. 4-A, were forest lands and only
later, declared as alienable or disposable by the Secretary of Agriculture and Natural
Resources. Thus, even on the assumption that the applicant herein, through its
predecessors-in-interest, had been in possession for at least thirty years, such possession
never ripened into private ownership. The respondent Garcia and Vicente Obdin must
have applied for sales patents precisely because they wanted to acquire ownership over
the subject lands. An examination of the dates will show that the filing of the sales
applications, apparently on October 24, 1971, was done after the lands had been
declared as alienable and disposable.

In view of the basic presumption that lands of whatever clasification belong to the State,
courts must scrutinize with care applications to private ownership of real estate. But this
the respondent Judge sadly failed to heed; the tax declarations and plans submitted by
the private respondents were not carefully analyzed, and the allegations in the
petitioner's opposition to the application were so casually ignored.

We no longer deem it imperative to order a new trial of this case which would only
prolong the litigation unnecessarily, for as we said in a recent case, the remand of a case
to the lower court for Lither reception of evidence is not necessary where the court is in
a position to resolve the dispute based on the records before on the records before it. 15

WHEREFORE, in view of the foregoing, the petition is GRANTED; the Order of general
default, dated January 23, 1975, as against the petitioner, and the Order dated August 7,
1975 denying the Motion For New Trial, the Decision dated February 17, 1975, as well as
the decree of registration issued pursuant thereto, if any, are all declared VOID and SET
ASIDE. The respondent corporation's subject application for land registration is hereby
DISMISSED. No costs.

This decision is IMMEDIATELY EXECUTORY.

SO ORDERED.
G.R. No. L-43445 January 20, 1988 the ownership by a person of a parcel of land is sought to be
established. After the ownership has been proved and confirmed by
EUFEMIA VILLANUEVA VDA. DE BARROGA and SATURNINA VILLANUEVA VDA. DE judicial declaration, no further proceedings to enforce said ownership
PACADA, oppositors-appellants, is necessary, except when the adverse or losing party had been in
vs. possession of the land and the winning party desires to oust him
ANGEL ALBANO, ARSENIO ALBANO, ENCARNACION ALBANO, ROSALIA ALBANO, therefrom.
assisted by her husband, JUANITO ALBANO, ROSITA ALBANO, assisted by her
husband, ALFREDO RAMIREZ, MIGUEL ALBANO, CHARITO ALBANO, and PEDRO Furthermore, there is no provision in the Land Registration Act
ALBANO, petitioners-appellees. RICARDO Y. NAVARRO, in his capacity as Judge of similar to Sec. 6, Rule 39, regarding the execution of a judgment in a
Sala I, Court of First Instance of Ilocos Norte, respondent. civil action, except the proceedings to place the winner in possession
by virtue of a writ of possession. The decision in a land registration
case, unless the adverse or losing party is in possession, becomes final
without any further action, upon the expiration of the period for
perfecting an appeal. ...
NARVASA, J.:
... There is nothing in the law that limits the period within which the
On November 24, 1925 judgment was promulgated by this Court in Manlapas, et al. v. court may order or issue a decree. The reason is ... that the judgment is
Llorente, etc., et al., 1 ruling that: (1) a party in whose favor a decree of registration is merely declaratory in character and does not need to be asserted or
issued by a cadastral court in accordance with the Torrens Act (Act No. 496), or his enforced against the adverse party. Furthermore, the issuance of a
successor-in-interest, has "a perfect right not only to the title of the land, but also to its decree is a ministerial duty both of the judge and of the Land
possession;" (2) he has the right, too, under Section 17 of the same Act, to a writ of Registration Commission; failure of the court or of the clerk to issue
possession as against any "party to the registration proceeding and who is directly and the decree for the reason that no motion therefor has been filed can
personally affected and reached by the decree" (or who had been served with process not prejudice the owner, or the person in whom the land is ordered to
therein but had not appeared nor answered); 2 and (3) his right to obtain a writ of be registered.
possession is not subject to the provisions of the Code of Civil Procedure regarding
execution of judgments, 3since the decree "is to exist forever." These doctrines have since
been reiterated and reaffirmed. The Court restated those same principles in Lucero v. Loot 6 some months later and took
occasion to stress that in Marcelo v. Mencias, decided in 1960, the Court had gone "so far
as to hold that if the writ of possession issued in a land registration proceeding implies
"The fundamental rule," the Court said some forty-three years later, 4 "is that a writ of the delivery of possession of the land to the successful litigant therein, ... a writ of
possession can be issued not only against the original oppositors in a land registration demolition must, likewise, issue, especially considering that the latter writ is but a
case and their representatives and successors-in-interest, but also against any person complement of the former which, without said writ of demolition, would be ineffective."
unlawfully and adversely occupying said lot at any time before and up to the issuance of
the final decree." It also pointed out that neither laches nor the statute of limitations
applies to a decision in a land registration case, citing Sta. Ana v. Menla, et al. 5 to the The appeal at bar entails nothing more than the application of these established
following effect: jurisprudential precepts to the undisputed facts.

We fail to understand the arguments of the appellant. ... except insofar In Cadastral Proceeding No. 44 (LRC Rec. No. 1203) of the then Court of First Instance of
as it supports his theory that after a decision in a land registration Ilocos Norte, a decision was rendered on July 31, 1941 adjudicating a parcel of land
case has become final, it may not be enforced after the lapse of a known as Lot No. 9821 in favor of Delfina Aquino. 7One of the oppositors was Ruperta
period of 10 years, except by another proceeding to enforce the Pascual, who was declared in default. 8 However, for reasons not disclosed by the record,
judgment. ... (Sec. 6, Rule 39). This provision of the Rules refers to civil but as to which no sinister or prejudicial character is imputed by the appellants, the
actions and is not applicable to special proceedings, such as a land decree of registration did not issue except until after the lapse of fourteen (14) years or
registration case. This is so because a party in a civil action must so, or on October 14, 1955; and it was only after twenty-four (24) years had passed, or
immediately enforce a judgment that is secured as against the adverse on November 17, 1979, that an original certificate of title (No. C-2185) was issued in
party, and his failure to act to enforce the same within a reasonable Delfina Aquino's name. 9
time as provided in the Rules makes the decision unenforceable
against the losing party. In special proceedings the purpose is to On August 11, 1970, after the decree of registration had been handed down but before
establish a status, condition or fact; in land registration proceedings, title issued in Delfina Aquino's favor, the children and heirs of Ruperta Pascual —
appellants Eufemia Barroga and Saturnina Padaca-brought suit in the same Court of First The motion was heard on October 24, 1975, at which time the parties and their counsel
Instance against the children and heirs of Delfina Aquino — appellees Angel Albano, et stipulated upon the following facts, to wit:
al. 10 Said appellants alleged that they, and their mother, Ruperta Pascual, had been in
possession of Lot 9821 since 1941 and were the real owners thereof; and they prayed 1. That the claimants-petitioners Angel Albano, Arsenio Albano,
that Delfina Aquino's title be voided and cancelled, that the defendants be commanded to Encarnacion Albano, Rosalia Albano, Rosita Albano, Miguel Albano, Jr.,
reconvey the land to them, and that a new title be made out in their names. 11 Charito Albano, Federico Albano, Jr. and Pedrito Albano are the
children-heirs and successors of Delfina Aquino, who is the registered
It appears, parenthetically, that Delfina Aquino's title encroached upon a 4-square-meter owner of Lot No. 9821 covered by O.C.T. No. 0-2185, which decree
portion of an adjoining lot, No. 9822, belonging to a Cesar Castro. So, Castro filed, with was issued on July 31, 1941, marked Exh. A for the petitioners-
leave of court, a complaint in intervention on February 22, 1987 for the recovery thereof. claimants;

After trial on the merits, judgment was rendered dismissing the Barroga's and Padaca's 2. That movants-oppositors Eufemia Villanueva de Barroga and
complaint, and declaring intervenor Castro owner of the 4-square-meter portion Saturnina Vda. de Pacada are the children-heirs and successors of
overlapped by Delfina Aquino's title. 12 Ruperta Pascual, who was an oppositor in Lot No. 9821, Cad. Case No.
44, LRC Rec. No. 1203, and who was defaulted in said cadastral case,
The correctness of this judgment cannot be gainsaid in light of the recorded facts. The and decided on July 31, 1941 as follows:
familiar doctrine of res adjudicata operated to blot out any hope of success of Barroga's
and Padaca's suit for recovery of title Lot No. 9821. Their action was clearly barred by Lote No. 9821 — Por incomparecencia injustificada
the prior judgment in the cadastral proceeding affirming Delfina Aquino's ownership de la opositora Ruperta Pascual, se desestima su
over the property, and in which proceeding the former's predecessor-in-interest, contestacion. Se adjudica este lote No. 9821, con las
Ruperta Pascual, had taken part as oppositor but had been declared in default. The mejoras en el existentes, en nombre de Delfina Q.
judgment of the cadastral court was one "against a specific thing" and therefore Aquino, filipina, major de edad, viuda y residents
"conclusive upon the title to the thing." 13 It was a judgment in rem, binding generally del municipio de Lauag de la provincia de Ilocos
upon the whole world, inclusive of persons not parties thereto, 14 and particularly upon Norte.
those who had actually taken part in the proceeding (like the appellants' predecessor,
Ruperta Pascual, who had intervened therein as an oppositor) as well as "their 3. That the heirs of Ruperta Pascual, namely, Eufemia Villanueva de
successors in interest by title subsequent to the commencement of the action or special Barroga and Saturnina Vda. de Padaca , are in possession of the lot in
proceeding, litigating for the same thing and under the same title and in the same question since 1941 up to the present time. 18
capacity. 15
The motion was thereafter denied by the Court a quo, by Order dated September 22,
The judgment became final and executory, the appeal taken therefrom to the Court of 1975. The Court stated that the writ of possession could properly issue despite the not
appeals by Barroga and Padaca having been dismissed because of their failure to file inconsiderable period of time that had elapsed from the date of the registration decree,
brief, and this Court having thereafter refused to set aside that dismissal since the right to the same does not prescribe pursuant to the rulings in Heirs of Cristobal
on certiorari. Thereafter, at the instance of defendants Angel Albano, et al., the Court of Marcos v. de Banuvar and Lucero v. Loot, 19 It also declared that the segregation of the 4-
First Instance ordered execution of the judgment on December 6, 1973. Plaintiffs square meter portion from Lot 9821 and its restoration as integral part of Lot 9822, had
Barroga and Padaca - moved to quash the writ of execution, on December 22, 1973. They no effect whatever on the Albanos' right to the writ of possession, which was the
argued that there was nothing to execute since the verdict was simply one of dismiss of appropriate process for the enforcement of the judgment in the cadastral case. Barroga
the complaint; they moreover invoked Section 11, Rule 51 of the Rules of Court. 16 But and Padaca moved for reconsideration. When this proved unavailing, they appealed to
here the matter apparently ended. No further development anent this case appears in the this Court.
record.
The inevitable verdict should by now be apparent. Conformably with the established
What the record does show is that on August 8, 1975, the Cadastral Court promulgated axioms set out in the opening paragraphs of this opinion, the appellees, Angel Albano, et
an Order in Case No. 44, LRC Rec. No. 1203, granting the motion of Angel Albano, et al. for al. must be declared to be entitled to a writ of possession over Lot No. 9821 in
a writ of possession as regards Lot No. 9821; and pursuant thereto, a writ of possession enforcement of the decree of registration and vindication of the title issued in favor of
dated August 28, 1975 was issued. Again Barroga and Padaca sought to frustrate their predecessor-in-interest, Delfina Q. Aquino; the writ may correctly be enforced
acquisition of possession by Angel Albano, et al. They filed a "Motion to Nullify Order to against the appellants, Barroga and Padaca, as successors-in-interest of Ruperta Pascual,
Lift Writ of Execution Issued and to Revoke Writ of Possession Issued" under date of who was a party in the registration proceedings which resulted in the declaration of
September 23, 1975. 17 Their argument was that as possessors of the lot in question, they Delfina Q. Aquino as the owner of the land subject thereof; and the appellees are entitled
could not be ejected therefrom by a mere motion for writ of possession. to said writ of possession, despite the lapse of many, many years, their right thereto
being imprescriptible at least as against the persons who were parties to the cadastral
case or their successors-in-interest. 20 The appellants, it must be said, have succeeded in
prolonging the controversy long enough. They should no longer be allowed to continue
doing so.

WHEREFORE, the appeal taken by appellants Eufemia Villanueva Vda. de Barroga and
Saturnina Villanueva Vda. de Padaca is DISMISSED, and the Orders of the Court a
quo dated August 8, 1975, September 22, 1975 and March 17, 1976 are AFFIRMED, as
being in accord with the facts and the law. This decision is immediately executory, and no
motion for extension of time to file a motion for reconsideration will be entertained.

Teehankee, C.J., Cruz, Paras * and Gancayco, JJ., concur.

 EN BANC If you take a walk through the countryside,
from Indonesia to Peru, and you walk by field after field--in each field a
HEIRS OF MARIO MALABANAN, G.R. No. 179987 different dog is going to bark at you. Even dogs know what private
Petitioner, property is all about. The only one who does not know it is the
Present: government. The issue is that there exists a "common law" and an
PUNO, C.J., "informal law" which the Latin American formal legal system does not
QUISUMBING, know how to recognize.
YNARES-SANTIAGO,
CARPIO, - Hernando De Soto[1]
- versus - AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
TINGA,
CHICO-NAZARIO, This decision inevitably affects all untitled lands currently in possession of
VELASCO, JR.,
NACHURA, persons and entities other than the Philippine government. The petition, while
LEONARDO DE CASTRO,
BRION, unremarkable as to the facts, was accepted by the Court en banc in order to provide
REPUBLIC OF THE PHILIPPINES, PERALTA, and
Respondent. BERSAMIN, JJ. definitive clarity to the applicability and scope of original registration proceedings under

Promulgated: Sections 14(1) and 14(2) of the Property Registration Decree. In doing so, the Court

April 29, 2009 confronts not only the relevant provisions of the Public Land Act and the Civil Code, but

x--------------------------------------------------------------------------- x also the reality on the ground. The countrywide phenomenon of untitled lands, as well as

the problem of informal settlement it has spawned, has unfortunately been treated with
DECISION
benign neglect. Yet our current laws are hemmed in by their own circumscriptions in
TINGA, J.:
addressing the phenomenon. Still, the duty on our part is primarily to decide cases
One main reason why the informal sector has not become formal is that
from Indonesia to Brazil, 90 percent of the informal lands are not titled before us in accord with the Constitution and the legal principles that have developed
and registered. This is a generalized phenomenon in the so-called Third
World. And it has many consequences. our public land law, though our social obligations dissuade us from casting a blind eye on

the endemic problems.

xxx
I.
The question is: How is it that so many governments, from
Suharto's in Indonesia to Fujimori's in Peru, have wanted to title these
people and have not been able to do so effectively? One reason is that On 20 February 1998, Mario Malabanan filed an application for land registration
none of the state systems in Asia or Latin America can gather proof of
informal titles. In Peru, the informals have means of proving property covering a parcel of land identified as Lot 9864-A, Cad-452-D, Silang Cadastre,[2] situated
ownership to each other which are not the same means developed by
the Spanish legal system. The informals have their own papers, their in Barangay Tibig, Silang Cavite, and consisting of 71,324 square meters. Malabanan
own forms of agreements, and their own systems of registration, all of
which are very clearly stated in the maps which they use for their own claimed that he had purchased the property from Eduardo Velazco, [3] and that he and his
informal business transactions.
predecessors-in-interest had been in open, notorious, and continuous adverse and Department of Environment and Natural Resources (CENRO-DENR), which stated that

peaceful possession of the land for more than thirty (30) years. the subject property was verified to be within the Alienable or Disposable land per Land

Classification Map No. 3013 established under Project No. 20-A and approved as such

The application was raffled to the Regional Trial Court of (RTC) Cavite-Tagaytay City, under FAO 4-1656 on March 15, 1982.[7]

Branch 18. The Office of the Solicitor General (OSG) duly designated the Assistant

Provincial Prosecutor of Cavite, Jose Velazco, Jr., to appear on behalf of the State. [4] Apart On 3 December 2002, the RTC rendered judgment in favor of Malabanan, the

from presenting documentary evidence, Malabanan himself and his witness, Aristedes dispositive portion of which reads:

Velazco, testified at the hearing. Velazco testified that the property was originally
WHEREFORE, this Court hereby approves this application for
belonged to a twenty-two hectare property owned by his great-grandfather, Lino registration and thus places under the operation of Act 141, Act 496
and/or P.D. 1529, otherwise known as Property Registration Law, the
Velazco. Lino had four sons Benedicto, Gregorio, Eduardo and Estebanthe fourth being lands described in Plan Csd-04-0173123-D, Lot 9864-A and containing
an area of Seventy One Thousand Three Hundred Twenty Four
Aristedess grandfather. Upon Linos death, his four sons inherited the property and (71,324) Square Meters, as supported by its technical description now
forming part of the record of this case, in addition to other proofs
divided it among themselves. But by 1966, Estebans wife, Magdalena, had become the adduced in the name of MARIO MALABANAN, who is of legal age,
Filipino, widower, and with residence at Munting Ilog, Silang, Cavite.
administrator of all the properties inherited by the Velazco sons from their father, Lino.
Once this Decision becomes final and executory, the
After the death of Esteban and Magdalena, their son Virgilio succeeded them in corresponding decree of registration shall forthwith issue.

administering the properties, including Lot 9864-A, which originally belonged to his SO ORDERED.

uncle, Eduardo Velazco. It was this property that was sold by Eduardo Velazco to

Malabanan.[5]
The Republic interposed an appeal to the Court of Appeals, arguing that

Malabanan had failed to prove that the property belonged to the alienable and disposable
Assistant Provincial Prosecutor Jose Velazco, Jr. did not cross-examine
land of the public domain, and that the RTC had erred in finding that he had been in
Aristedes Velazco. He further manifested that he also [knew] the property and I affirm
possession of the property in the manner and for the length of time required by law for
the truth of the testimony given by Mr. Velazco. [6] The Republic of
confirmation of imperfect title.
the Philippines likewise did not present any evidence to controvert the application.

On 23 February 2007, the Court of Appeals rendered a Decision[8] reversing the

Among the evidence presented by Malabanan during trial was a Certification
RTC and dismissing the application of Malabanan. The appellate court held that under
dated 11 June 2001, issued by the Community Environment & Natural Resources Office,
Section 14(1) of the Property Registration Decree any period of possession prior to the
classification of the lots as alienable and disposable was inconsequential and should be The petition was referred to the Court en banc,[12] and on 11 November 2008,

excluded from the computation of the period of possession. Thus, the appellate court the case was heard on oral arguments. The Court formulated the principal issues for the

noted that since the CENRO-DENR certification had verified that the property was oral arguments, to wit:

declared alienable and disposable only on 15 March 1982, the Velazcos possession prior
1. In order that an alienable and disposable land of the public
to that date could not be factored in the computation of the period of possession. This domain may be registered under Section 14(1) of Presidential Decree
No. 1529, otherwise known as the Property Registration Decree,
interpretation of the Court of Appeals of Section 14(1) of the Property Registration should the land be classified as alienable and disposable as of June 12,
1945 or is it sufficient that such classification occur at any time prior to
Decree was based on the Courts ruling in Republic v. Herbieto.[9] the filing of the applicant for registration provided that it is established
that the applicant has been in open, continuous, exclusive and
notorious possession of the land under a bona fide claim of ownership
since June 12, 1945 or earlier?
Malabanan died while the case was pending with the Court of Appeals; [10] hence,
2. For purposes of Section 14(2) of the Property Registration
it was his heirs who appealed the decision of the appellate court. Petitioners, before this Decree may a parcel of land classified as alienable and disposable be
deemed private land and therefore susceptible to acquisition by
Court, rely on our ruling in Republic v. Naguit,[11] which was handed down just four prescription in accordance with the Civil Code?

months prior to Herbieto. Petitioners suggest that the discussion in Herbietocited by the 3. May a parcel of land established as agricultural in character
either because of its use or because its slope is below that of forest
Court of Appeals is actually obiter dictum since the Metropolitan Trial Court therein lands be registrable under Section 14(2) of the Property Registration
Decree in relation to the provisions of the Civil Code on acquisitive
which had directed the registration of the property had no jurisdiction in the first place prescription?

since the requisite notice of hearing was published only after the hearing had already 4. Are petitioners entitled to the registration of the subject
land in their names under Section 14(1) or Section 14(2) of the
begun. Naguit, petitioners argue, remains the controlling doctrine, especially when the Property Registration Decree or both?[13]

property in question is agricultural land. Therefore, with respect to agricultural lands,

any possession prior to the declaration of the alienable property as disposable may be Based on these issues, the parties formulated their respective positions.

counted in reckoning the period of possession to perfect title under the Public Land Act

and the Property Registration Decree. With respect to Section 14(1), petitioners reiterate that the analysis of the

Court in Naguit is the correct interpretation of the provision. The seemingly

contradictory pronouncement in Herbieto, it is submitted, should be considered obiter

dictum, since the land registration proceedings therein was void ab initio due to lack of

publication of the notice of initial hearing. Petitioners further point out that in Republic v.

Bibonia,[14] promulgated in June of 2007, the Court applied Naguit and adopted the same
observation that the preferred interpretation by the OSG of Section 14(1) was patently said period should be reckoned from the time the public land was declared alienable and

absurd. For its part, the OSG remains insistent that for Section 14(1) to apply, the land disposable.

should have been classified as alienable and disposable as of 12 June 1945. Apart

from Herbieto, the OSG also cites the subsequent rulings in Buenaventura v. Republic, Both sides likewise offer special arguments with respect to the particular
[15]
Fieldman Agricultural Trading v. Republic [16]and Republic v. Imperial Credit factual circumstances surrounding the subject property and the ownership thereof.

Corporation,[17] as well as the earlier case of Director of Lands v. Court of Appeals.[18]

II.

With respect to Section 14(2), petitioners submit that open, continuous,

exclusive and notorious possession of an alienable land of the public domain for more First, we discuss Section 14(1) of the Property Registration Decree. For a full

than 30 years ipso jure converts the land into private property, thus placing it under the understanding of the provision, reference has to be made to the Public Land Act.

coverage of Section 14(2). According to them, it would not matter whether the land

sought to be registered was previously classified as agricultural land of the public A.

domain so long as, at the time of the application, the property had already been

converted into private property through prescription. To bolster their argument, Commonwealth Act No. 141, also known as the Public Land Act, has, since its

petitioners cite extensively from our 2008 ruling in Republic v. T.A.N. Properties.[19] enactment, governed the classification and disposition of lands of the public domain. The

President is authorized, from time to time, to classify the lands of the public domain into

alienable and disposable, timber, or mineral lands. [20] Alienable and disposable lands of

The arguments submitted by the OSG with respect to Section 14(2) are more the public domain are further classified according to their uses into (a) agricultural; (b)

extensive. The OSG notes that under Article 1113 of the Civil Code, the acquisitive residential, commercial, industrial, or for similar productive purposes; (c) educational,

prescription of properties of the State refers to patrimonial property, while Section 14(2) charitable, or other similar purposes; or (d) reservations for town sites and for public

speaks of private lands. It observes that the Court has yet to decide a case that presented and quasi-public uses.[21]

Section 14(2) as a ground for application for registration, and that the 30-year

possession period refers to the period of possession under Section 48(b) of the Public May a private person validly seek the registration in his/her name of alienable

Land Act, and not the concept of prescription under the Civil Code. The OSG further and disposable lands of the public domain? Section 11 of the Public Land Act

submits that, assuming that the 30-year prescriptive period can run against public lands, acknowledges that public lands suitable for agricultural purposes may be disposed of by
confirmation of imperfect or incomplete titles through judicial legalization. [22] Section Second, the length of the requisite possession was changed from possession for thirty

48(b) of the Public Land Act, as amended by P.D. No. 1073, supplies the details and (30) years immediately preceding the filing of the application to possession since June

unmistakably grants that right, subject to the requisites stated therein: 12, 1945 or earlier. The Court in Naguit explained:

Sec. 48. The following described citizens of the Philippines, When the Public Land Act was first promulgated in 1936, the
occupying lands of the public domain or claiming to own any such period of possession deemed necessary to vest the right to register
land or an interest therein, but whose titles have not been perfected their title to agricultural lands of the public domain commenced
or completed, may apply to the Court of First Instance of the from July 26, 1894. However, this period was amended by R.A. No.
province where the land is located for confirmation of their claims 1942, which provided that the bona fide claim of ownership must have
and the issuance of a certificate of title therefor, under the Land been for at least thirty (30) years. Then in 1977, Section 48(b) of the
Registration Act, to wit: Public Land Act was again amended, this time by P.D. No. 1073, which
pegged the reckoning date at June 12, 1945. xxx
xxx

(b) Those who by themselves or through their predecessors

in interest have been in open, continuous, exclusive, and notorious
possession and occupation of alienable and disposable lands of the It bears further observation that Section 48(b) of Com. Act No, 141 is virtually the same
public domain, under a bona fide claim of acquisition of ownership,
since June 12, 1945, or earlier, immediately preceding the filing of as Section 14(1) of the Property Registration Decree. Said Decree codified the various
the application for confirmation of title except when prevented by
war or force majeure. These shall be conclusively presumed to have laws relative to the registration of property, including lands of the public domain. It is
performed all the conditions essential to a Government grant and
shall be entitled to a certificate of title under the provisions of this Section 14(1) that operationalizes the registration of such lands of the public domain. The
chapter.
provision reads:

SECTION 14. Who may apply. The following persons may file
in the proper Court of First Instance an application for registration of
Section 48(b) of Com. Act No. 141 received its present wording in 1977 when the law title to land, whether personally or through their duly authorized
representatives:
was amended by P.D. No. 1073. Two significant amendments were introduced by P.D. No.
(1) those who by themselves or through their
1073. First, the term agricultural lands was changed to alienable and disposable lands of predecessors-in-interest have been in open,
continuous, exclusive and notorious
the public domain. The OSG submits that this amendment restricted the scope of the possession and occupation of alienable and
disposable lands of the public domain under
lands that may be registered.[23] This is not actually the case. Under Section 9 of the Public a bona fide claim of ownership since June 12,
1945, or earlier.
Land Act, agricultural lands are a mere subset of lands of the public domain alienable or

open to disposition. Evidently, alienable and disposable lands of the public domain are a

larger class than only agricultural lands.

Notwithstanding the passage of the Property Registration Decree and the

inclusion of Section 14(1) therein, the Public Land Act has remained in effect. Both laws
commonly refer to persons or their predecessors-in-interest who have been in open, and occupation of alienable and disposable lands of the public domain, under a bona fide

continuous, exclusive and notorious possession and occupation of alienable and claim of acquisition of ownership, since June 12, 1945 to perfect or complete his title by

disposable lands of the public domain under a bona fide claim of ownership since June 12, applying with the proper court for the confirmation of his ownership claim and the

1945, or earlier. That circumstance may have led to the impression that one or the other issuance of the corresponding certificate of title.

is a redundancy, or that Section 48(b) of the Public Land Act has somehow been repealed

or mooted. That is not the case.

Section 48 can be viewed in conjunction with the afore-quoted Section 11 of the

Public Land Act, which provides that public lands suitable for agricultural purposes may
The opening clauses of Section 48 of the Public Land Act and Section 14 of the
be disposed of by confirmation of imperfect or incomplete titles, and given the notion that
Property Registration Decree warrant comparison:
both provisions declare that it is indeed the Public Land Act that primarily establishes the

Sec. 48 [of the Public Land Act]. The following described substantive ownership of the possessor who has been in possession of the property since
citizens of the Philippines, occupying lands of the public domain or
claiming to own any such land or an interest therein, but whose titles 12 June 1945. In turn, Section 14(a) of the Property Registration Decree recognizes the
have not been perfected or completed, may apply to the Court of
First Instance of the province where the land is located for substantive right granted under Section 48(b) of the Public Land Act, as well provides the
confirmation of their claims and the issuance of a certificate of title
therefor, under the Land Registration Act, to wit: corresponding original registration procedure for the judicial confirmation of an

xxx imperfect or incomplete title.

Sec. 14 [of the Property Registration Decree]. Who may

apply. The following persons may file in the proper Court of First There is another limitation to the right granted under Section 48(b). Section 47 of the
Instance an application for registration of title to land, whether
personally or through their duly authorized representatives: Public Land Act limits the period within which one may exercise the right to seek

xxx registration under Section 48. The provision has been amended several times, most

recently by Rep. Act No. 9176 in 2002. It currently reads thus:

It is clear that Section 48 of the Public Land Act is more descriptive of the nature
Section 47. The persons specified in the next following
of the right enjoyed by the possessor than Section 14 of the Property Registration Decree, section are hereby granted time, not to extend beyond December 31,
2020 within which to avail of the benefits of this Chapter: Provided,
which seems to presume the pre-existence of the right, rather than establishing the right That this period shall apply only where the area applied for does not
exceed twelve (12) hectares: Provided, further, That the several
itself for the first time. It is proper to assert that it is the Public Land Act, as amended by periods of time designated by the President in accordance with Section
Forty-Five of this Act shall apply also to the lands comprised in the
P.D. No. 1073 effective 25 January 1977, that has primarily established the right of a provisions of this Chapter, but this Section shall not be construed as
prohibiting any said persons from acting under this Chapter at any
Filipino citizen who has been in open, continuous, exclusive, and notorious possession time prior to the period fixed by the President. [24]
 the government from giving it effect even as it decides to reclassify
public agricultural lands as alienable and disposable. The
unreasonableness of the situation would even be aggravated
Accordingly under the current state of the law, the substantive right granted under considering that before June 12, 1945, the Philippines was not yet even
considered an independent state.
Section 48(b) may be availed of only until 31 December 2020.

Accordingly, the Court in Naguit explained:

B.

[T]he more reasonable interpretation of Section 14(1) is that

it merely requires the property sought to be registered as already
Despite the clear text of Section 48(b) of the Public Land Act, as amended and alienable and disposable at the time the application for registration of
title is filed. If the State, at the time the application is made, has not yet
Section 14(a) of the Property Registration Decree, the OSG has adopted the position that deemed it proper to release the property for alienation or disposition,
the presumption is that the government is still reserving the right to
for one to acquire the right to seek registration of an alienable and disposable land of the utilize the property; hence, the need to preserve its ownership in the
State irrespective of the length of adverse possession even if in good
public domain, it is not enough that the applicant and his/her predecessors-in-interest be faith. However, if the property has already been classified as alienable
and disposable, as it is in this case, then there is already an intention on
in possession under a bona fide claim of ownership since 12 June 1945; the alienable and the part of the State to abdicate its exclusive prerogative over the
property.
disposable character of the property must have been declared also as of 12 June 1945.

Following the OSGs approach, all lands certified as alienable and disposable after 12 June

1945 cannot be registered either under Section 14(1) of the Property Registration Decree The Court declares that the correct interpretation of Section 14(1) is that which

or Section 48(b) of the Public Land Act as amended. The absurdity of such an implication was adopted in Naguit. The contrary pronouncement in Herbieto, as pointed out

was discussed in Naguit. in Naguit, absurdly limits the application of the provision to the point of virtual inutility

since it would only cover lands actually declared alienable and disposable prior to 12
Petitioner suggests an interpretation that the alienable and
disposable character of the land should have already been established June 1945, even if the current possessor is able to establish open, continuous, exclusive
since June 12, 1945 or earlier. This is not borne out by the plain
meaning of Section 14(1). Since June 12, 1945, as used in the provision, and notorious possession under a bona fide claim of ownership long before that date.
qualifies its antecedent phrase under a bonafide claim of ownership.
Generally speaking, qualifying words restrict or modify only the words
or phrases to which they are immediately associated, and not those
distantly or remotely located.[25] Ad proximum antecedents fiat relation Moreover, the Naguit interpretation allows more possessors under a bona
nisi impediatur sentencia.
fide claim of ownership to avail of judicial confirmation of their imperfect titles than
Besides, we are mindful of the absurdity that would result if we adopt
petitioners position. Absent a legislative amendment, the rule would what would be feasible under Herbieto. This balancing fact is significant, especially
be, adopting the OSGs view, that all lands of the public domain which
were not declared alienable or disposable before June 12, 1945 would considering our forthcoming discussion on the scope and reach of Section 14(2) of the
not be susceptible to original registration, no matter the length of
unchallenged possession by the occupant. Such interpretation renders Property Registration Decree.
paragraph (1) of Section 14 virtually inoperative and even precludes
 Petitioners make the salient observation that the contradictory passages We noted in Naguit that it should be distinguished from Bracewell v. Court of

from Herbieto are obiter dicta since the land registration proceedings therein is void ab Appeals[27] since in the latter, the application for registration had been filed before the

initio in the first place due to lack of the requisite publication of the notice of initial land was declared alienable or disposable. The dissent though pronounces Bracewell as

hearing. There is no need to explicitly overturn Herbieto, as it suffices that the Courts the better rule between the two. Yet two years after Bracewell, its ponente, the

acknowledgment that the particular line of argument used therein concerning Section esteemedJustice Consuelo Ynares-Santiago, penned the ruling in Republic v. Ceniza,

14(1) is indeed obiter. [28]

which involved a claim of possession that extended back to 1927 over a public domain

land that was declared alienable and disposable only in 1980. Ceniza cited Bracewell,
It may be noted that in the subsequent case of Buenaventura,[26] the Court,
quoted extensively from it, and following the mindset of the dissent, the attempt at
citing Herbieto, again stated that [a]ny period of possession prior to the date when the
registration in Ceniza should have failed. Not so.
[s]ubject [property was] classified as alienable and disposable is inconsequential and

should be excluded from the computation of the period of possession That statement, in
To prove that the land subject of an application for
the context of Section 14(1), is certainly erroneous. Nonetheless, the passage as cited registration is alienable, an applicant must establish the existence of a
positive act of the government such as a presidential proclamation or
in Buenaventura should again be considered as obiter. The application therein was an executive order; an administrative action; investigation reports of
ultimately granted, citing Section 14(2). The evidence submitted by petitioners therein Bureau of Lands investigators; and a legislative act or a statute.

did not establish any mode of possession on their part prior to 1948, thereby precluding In this case, private respondents presented a certification
dated November 25, 1994, issued by Eduardo M. Inting, the
the application of Section 14(1). It is not even apparent from the decision whether Community Environment and Natural Resources Officer in the
Department of Environment and Natural Resources Office in Cebu
petitioners therein had claimed entitlement to original registration following Section
City, stating that the lots involved were "found to be within the
14(1), their position being that they had been in exclusive possession under a bona fide alienable and disposable (sic) Block-I, Land Classification Project No.
32-A, per map 2962 4-I555 dated December 9, 1980." This is sufficient
claim of ownership for over fifty (50) years, but not before 12 June 1945. evidence to show the real character of the land subject of private
respondents application. Further, the certification enjoys a
presumption of regularity in the absence of contradictory
Thus, neither Herbieto nor its principal discipular ruling Buenaventura has any evidence, which is true in this case. Worth noting also was the
observation of the Court of Appeals stating that:
precedental value with respect to Section 14(1). On the other hand, the ratio of Naguit is
[n]o opposition was filed by the Bureaus
embedded in Section 14(1), since it precisely involved situation wherein the applicant of Lands and Forestry to contest the application of
appellees on the ground that the property still
had been in exclusive possession under a bona fide claim of ownership prior to 12 June forms part of the public domain. Nor is there any
showing that the lots in question are forestal land....
1945. The Courts interpretation of Section 14(1) therein was decisive to the resolution of
Thus, while the Court of Appeals erred in ruling that mere
the case. Any doubt as to which between Naguit or Herbieto provides the final word of possession of public land for the period required by law would entitle
its occupant to a confirmation of imperfect title, it did not err in ruling
the Court on Section 14(1) is now settled in favor of Naguit. in favor of private respondents as far as the first requirement in
 Section 48(b) of the Public Land Act is concerned, for they were able (2) Those who have acquired ownership over
to overcome the burden of proving the alienability of the land subject private lands by prescription under the
of their application. provisions of existing laws.

As correctly found by the Court of Appeals, private

respondents were able to prove their open, continuous, exclusive and
notorious possession of the subject land even before the year 1927. As
a rule, we are bound by the factual findings of the Court of Appeals. The Court in Naguit offered the following discussion concerning Section 14(2),
Although there are exceptions, petitioner did not show that this is one
of them.[29] which we did even then recognize, and still do, to be an obiter dictum, but we nonetheless

refer to it as material for further discussion, thus:

Why did the Court in Ceniza, through the same eminent member who Did the enactment of the Property Registration Decree and
the amendatory P.D. No. 1073 preclude the application for registration
authored Bracewell, sanction the registration under Section 48(b) of public domain lands of alienable lands of the public domain, possession over which
commenced only after June 12, 1945? It did not, considering Section
declared alienable or disposable thirty-five (35) years and 180 days after 12 June 1945? 14(2) of the Property Registration Decree, which governs and
authorizes the application of those who have acquired ownership of
The telling difference is that in Ceniza, the application for registration was filed nearly six private lands by prescription under the provisions of existing laws.

(6) years after the land had been declared alienable or disposable, while in Bracewell, Prescription is one of the modes of acquiring ownership
under the Civil Code.[ [30]] There is a consistent jurisprudential rule that
the application was filed nine (9) years before the land was declared alienable or properties classified as alienable public land may be converted into
private property by reason of open, continuous and exclusive
disposable. That crucial difference was also stressed in Naguit to contradistinguish it possession of at least thirty (30) years.[ [31]] With such conversion, such
property may now fall within the contemplation of private lands under
from Bracewell, a difference which the dissent seeks to belittle. Section 14(2), and thus susceptible to registration by those who have
acquired ownership through prescription. Thus, even if possession of
the alienable public land commenced on a date later than June 12,
1945, and such possession being been open, continuous and exclusive,
III. then the possessor may have the right to register the land by virtue of
Section 14(2) of the Property Registration Decree.

We next ascertain the correct framework of analysis with respect to Section 14(2). The
Naguit did not involve the application of Section 14(2), unlike in this case where
provision reads:
petitioners have based their registration bid primarily on that provision, and where the

evidence definitively establishes their claim of possession only as far back as 1948. It is

SECTION 14. Who may apply. The following persons may file in this case that we can properly appreciate the nuances of the provision.
in the proper Court of First Instance an application for registration of
title to land, whether personally or through their duly authorized
representatives:
A.
xxx
The obiter in Naguit cited the Civil Code provisions on prescription as the possible basis the State. Thus, the critical question that needs affirmation is whether Section 14(2) does

for application for original registration under Section 14(2). Specifically, it is Article 1113 encompass original registration proceedings over patrimonial property of the State,

which provides legal foundation for the application. It reads: which a private person has acquired through prescription.

All things which are within the commerce of men are

susceptible of prescription, unless otherwise provided. Property of the The Naguit obiter had adverted to a frequently reiterated jurisprudence holding
State or any of its subdivisions not patrimonial in character shall not be
the object of prescription. that properties classified as alienable public land may be converted into private property

by reason of open, continuous and exclusive possession of at least thirty (30) years. [36] Yet

if we ascertain the source of the thirty-year period, additional complexities relating to

It is clear under the Civil Code that where lands of the public domain are patrimonial in Section 14(2) and to how exactly it operates would emerge. For there are in fact two

character, they are susceptible to acquisitive prescription. On the other hand, among the distinct origins of the thirty (30)-year rule.

public domain lands that are not susceptible to acquisitive prescription are timber lands

and mineral lands. The Constitution itself proscribes private ownership of timber or The first source is Rep. Act No. 1942, enacted in 1957, which amended Section

mineral lands. 48(b) of the Public Land Act by granting the right to seek original registration of alienable

public lands through possession in the concept of an owner for at least thirty years.

There are in fact several provisions in the Civil Code concerning the acquisition
The following-described citizens of the Philippines,
of real property through prescription. Ownership of real property may be acquired by occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been perfected
ordinary prescription of ten (10) years, [32] or through extraordinary prescription of thirty 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
(30) years.[33] Ordinary acquisitive prescription requires possession in good faith, [34] as issuance of a certificate of title therefor, under the Land Registration
Act, to wit:
well as just title.[35]
xxx xxx xxx

(b) Those who by themselves or through their predecessors

When Section 14(2) of the Property Registration Decree explicitly provides that in interest have been in open, continuous, exclusive and notorious
possession and occupation of agricultural lands of the public domain,
persons who have acquired ownership over private lands by prescription under the under a bona fide claim of acquisition of ownership, for at least
thirty years immediately preceding the filing of the application
provisions of existing laws, it unmistakably refers to the Civil Code as a valid basis for the for confirmation of title, except when prevented by war or force
majeure. These shall be conclusively presumed to have performed all
registration of lands. The Civil Code is the only existing law that specifically allows the the conditions essential to a Government grant and shall be entitled
to a certificate of title under the provisions of this Chapter. (emphasis
acquisition by prescription of private lands, including patrimonial property belonging to supplied)[37]
 (30) years. There is neither statutory nor jurisprudential basis to assert Rep. Act No. 1942

had mandated such a requirement, [38]similar to our earlier finding with respect to the

This provision was repealed in 1977 with the enactment of P.D. 1073, which present language of Section 48(b), which now sets 12 June 1945 as the point of reference.

made the date 12 June 1945 the reckoning point for the first time. Nonetheless,

applications for registration filed prior to 1977 could have invoked the 30-year rule Then, with the repeal of Rep. Act No. 1942, the thirty-year possession period as

introduced by Rep. Act No. 1942. basis for original registration became Section 14(2) of the Property Registration Decree,

which entitled those who have acquired ownership over private lands by prescription

The second source is Section 14(2) of P.D. 1529 itself, at least by implication, as under the provisions of existing laws to apply for original registration. Again, the thirty-

it applies the rules on prescription under the Civil Code, particularly Article 1113 in year period is derived from the rule on extraordinary prescription under Article 1137 of

relation to Article 1137. Note that there are two kinds of prescription under the Civil the Civil Code. At the same time, Section 14(2) puts into operation the entire regime of

Codeordinary acquisitive prescription and extraordinary acquisitive prescription, which, prescription under the Civil Code, a fact which does not hold true with respect to Section

under Article 1137, is completed through uninterrupted adverse possession for thirty 14(1).

years, without need of title or of good faith.

B.

Obviously, the first source of the thirty (30)-year period rule, Rep. Act No. 1942,

became unavailable after 1977. At present, the only legal basis for the thirty (30)-year Unlike Section 14(1), Section 14(2) explicitly refers to the principles on

period is the law on prescription under the Civil Code, as mandated under Section 14(2). prescription under existing laws. Accordingly, we are impelled to apply the civil law

However, there is a material difference between how the thirty (30)-year rule operated concept of prescription, as set forth in the Civil Code, in our interpretation of Section

under Rep. Act No. 1942 and how it did under the Civil Code. 14(2). There is no similar demand on our part in the case of Section 14(1).

Section 48(b) of the Public Land Act, as amended by Rep. Act No. 1942, did not The critical qualification under Article 1113 of the Civil Code is thus: [p]roperty

refer to or call into application the Civil Code provisions on prescription. It merely set of the State or any of its subdivisions not patrimonial in character shall not be the object

forth a requisite thirty-year possession period immediately preceding the application for of prescription. The identification what consists of patrimonial property is provided by

confirmation of title, without any qualification as to whether the property should be Articles 420 and 421, which we quote in full:

declared alienable at the beginning of, and continue as such, throughout the entire thirty-
Art. 420. The following things are property of public dominion:
 (1) Those intended for public use, such as roads, canals, rivers, property which belong to the State, without being for public use, and are intended for
torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and others of similar character; some public service or for the development of the national wealth are public dominion

(2) Those which belong to the State, without being for public property. For as long as the property belongs to the State, although already classified as
use, and are intended for some public service or for the
development of the national wealth. alienable or disposable, it remains property of the public dominion if when it is intended

Art. 421. All other property of the State, which is not of the for some public service or for the development of the national wealth.
character stated in the preceding article, is patrimonial property

Accordingly, there must be an express declaration by the State that the

It is clear that property of public dominion, which generally includes property belonging
public dominion property is no longer intended for public service or the
to the State, cannot be the object of prescription or, indeed, be subject of the commerce
development of the national wealth or that the property has been converted into
of man.[39] Lands of the public domain, whether declared alienable and disposable or not,
patrimonial. Without such express declaration, the property, even if classified as
are property of public dominion and thus insusceptible to acquisition by prescription.
alienable or disposable, remains property of the public dominion, pursuant to

Article 420(2), and thus incapable of acquisition by prescription. It is only when

Let us now explore the effects under the Civil Code of a declaration by the President or
such alienable and disposable lands are expressly declared by the State to be no
any duly authorized government officer of alienability and disposability of lands of the
longer intended for public service or for the development of the national wealth
public domain. Would such lands so declared alienable and disposable be converted,
that the period of acquisitive prescription can begin to run. Such declaration shall
under the Civil Code, from property of the public dominion into patrimonial property?
be in the form of a law duly enacted by Congress or a Presidential Proclamation in
After all, by connotative definition, alienable and disposable lands may be the object of
cases where the President is duly authorized by law.
the commerce of man; Article 1113 provides that all things within the commerce of man

are susceptible to prescription; and the same provision further provides that patrimonial
It is comprehensible with ease that this reading of Section 14(2) of the Property
property of the State may be acquired by prescription.
Registration Decree limits its scope and reach and thus affects the registrability even of

lands already declared alienable and disposable to the detriment of the bona
Nonetheless, Article 422 of the Civil Code states that [p]roperty of public
fide possessors or occupants claiming title to the lands. Yet this interpretation is in
dominion, when no longer intended for public use or for public service, shall form part of
accord with the Regalian doctrine and its concomitant assumption that all lands owned
the patrimonial property of the State. It is this provision that controls how public
by the State, although declared alienable or disposable, remain as such and ought to be
dominion property may be converted into patrimonial property susceptible to
used only by the Government.
acquisition by prescription. After all, Article 420 (2) makes clear that those
 [44]
Such purpose can be tied to either public service or the development of national

Recourse does not lie with this Court in the matter. The duty of the Court is to wealth under Article 420(2). Thus, at that time, the lands remained property of the

apply the Constitution and the laws in accordance with their language and intent. The public dominion under Article 420(2), notwithstanding their status as alienable and

remedy is to change the law, which is the province of the legislative branch. Congress can disposable. It is upon their sale as authorized under the BCDA law to a private person or

very well be entreated to amend Section 14(2) of the Property Registration Decree and entity that such lands become private property and cease to be property of the public

pertinent provisions of the Civil Code to liberalize the requirements for judicial dominion.

confirmation of imperfect or incomplete titles.

C.

The operation of the foregoing interpretation can be illustrated by an actual

example. Republic Act No. 7227, entitled An Act Accelerating The Conversion Of Military Should public domain lands become patrimonial because they are declared as

Reservations Into Other Productive Uses, etc., is more commonly known as the BCDA such in a duly enacted law or duly promulgated proclamation that they are no longer

law. Section 2 of the law authorizes the sale of certain military reservations and portions intended for public service or for the development of the national wealth, would the

of military camps in Metro Manila, including Fort Bonifacio and Villamor Air Base. For period of possession prior to the conversion of such public dominion into patrimonial be

purposes of effecting the sale of the military camps, the law mandates the President to reckoned in counting the prescriptive period in favor of the possessors? We rule in the

transfer such military lands to the Bases Conversion Development Authority (BCDA) negative.
[40]
which in turn is authorized to own, hold and/or administer them. [41] The President is

authorized to sell portions of the military camps, in whole or in part. [42] Accordingly, the The limitation imposed by Article 1113 dissuades us from ruling that the period of

BCDA law itself declares that the military lands subject thereof are alienable and possession before the public domain land becomes patrimonial may be counted for the

disposable pursuant to the provisions of existing laws and regulations governing sales of purpose of completing the prescriptive period. Possession of public dominion property

government properties.[43] before it becomes patrimonial cannot be the object of prescription according to the Civil

Code. As the application for registration under Section 14(2) falls wholly within the

From the moment the BCDA law was enacted the subject military lands have framework of prescription under the Civil Code, there is no way that possession during

become alienable and disposable. However, said lands did not become patrimonial, as the time that the land was still classified as public dominion property can be counted to

the BCDA law itself expressly makes the reservation that these lands are to be sold in meet the requisites of acquisitive prescription and justify registration.

order to raise funds for the conversion of the former American bases atClark and Subic.
 Are we being inconsistent in applying divergent rules for Section 14(1) and Section 14(2) manifests a clear intent to interrelate the registration allowed under that

Section 14(2)? There is no inconsistency. Section 14(1) mandates registration on the provision with the Civil Code, but no such intent exists with respect to Section 14(1).

basis of possession, while Section 14(2) entitles registration on the basis

of prescription. Registration under Section 14(1) is extended under the aegis of IV.

the Property Registration Decree and the Public Land Act while registration under

Section 14(2) is made available both by the Property Registration Decree and the One of the keys to understanding the framework we set forth today is seeing how our

Civil Code. land registration procedures correlate with our law on prescription, which, under the

Civil Code, is one of the modes for acquiring ownership over property.

In the same manner, we can distinguish between the thirty-year period under Section

48(b) of the Public Land Act, as amended by Rep. Act No. 1472, and the thirty-year The Civil Code makes it clear that patrimonial property of the State may be acquired by

period available through Section 14(2) of the Property Registration Decree in relation to private persons through prescription. This is brought about by Article 1113, which states

Article 1137 of the Civil Code. The period under the former speaks of a thirty-year that [a]ll things which are within the commerce of man are susceptible to prescription,

period of possession, while the period under the latter concerns a thirty-year and that [p]roperty of the State or any of its subdivisions not patrimonial in character

period of extraordinary prescription. Registration under Section 48(b) of the shall not be the object of prescription.

Public Land Act as amended by Rep. Act No. 1472 is based on thirty years of

possession alone without regard to the Civil Code, while the registration under There are two modes of prescription through which immovables may be acquired under

Section 14(2) of the Property Registration Decree is founded on extraordinary the Civil Code. The first is ordinary acquisitive prescription, which, under Article 1117,

prescription under the Civil Code. requires possession in good faith and with just title; and, under Article 1134, is

completed through possession of ten (10) years. There is nothing in the Civil Code that

It may be asked why the principles of prescription under the Civil Code should not apply bars a person from acquiring patrimonial property of the State through ordinary

as well to Section 14(1). Notwithstanding the vaunted status of the Civil Code, it acquisitive prescription, nor is there any apparent reason to impose such a rule. At the

ultimately is just one of numerous statutes, neither superior nor inferior to other statutes same time, there are indispensable requisitesgood faith and just title. The ascertainment

such as the Property Registration Decree. The legislative branch is not bound to adhere of good faith involves the application of Articles 526, 527, and 528, as well as Article

to the framework set forth by the Civil Code when it enacts subsequent legislation. 1127 of the Civil Code,[45] provisions that more or less speak for themselves.
 On the other hand, the concept of just title requires some clarification. Under

Article 1129, there is just title for the purposes of prescription when the adverse It is evident that once the possessor automatically becomes the owner of the

claimant came into possession of the property through one of the modes recognized by converted patrimonial property, the ideal next step is the registration of the property

law for the acquisition of ownership or other real rights, but the grantor was not the under the Torrens system. It should be remembered that registration of property is not a

owner or could not transmit any right. Dr. Tolentino explains: mode of acquisition of ownership, but merely a mode of confirmation of ownership. [48]

Just title is an act which has for its purpose the transmission
of ownership, and which would have actually transferred ownership if Looking back at the registration regime prior to the adoption of the Property
the grantor had been the owner. This vice or defect is the one cured by
prescription. Examples: sale with delivery, exchange, donation, Registration Decree in 1977, it is apparent that the registration system then did not fully
succession, and dacion in payment.[46]
accommodate the acquisition of ownership of patrimonial property under the Civil Code.
The OSG submits that the requirement of just title necessarily precludes the applicability
What the system accommodated was the confirmation of imperfect title brought about
of ordinary acquisitive prescription to patrimonial property. The major premise for the
by the completion of a period of possession ordained under the Public Land Act (either
argument is that the State, as the owner and grantor, could not transmit ownership to the
30 years following Rep. Act No. 1942, or since 12 June 1945 following P.D. No. 1073).
possessor before the completion of the required period of possession. [47] It is evident that

the OSG erred when it assumed that the grantor referred to in Article 1129 is the State.
The Land Registration Act[49] was noticeably silent on the requisites for
The grantor is the one from whom the person invoking ordinary acquisitive prescription
alienable public lands acquired through ordinary prescription under the Civil Code,
derived the title, whether by sale, exchange, donation, succession or any other mode of
though it arguably did not preclude such registration. [50] Still, the gap was lamentable,
the acquisition of ownership or other real rights.
considering that the Civil Code, by itself, establishes ownership over the patrimonial

property of persons who have completed the prescriptive periods ordained therein. The
Earlier, we made it clear that, whether under ordinary prescription or
gap was finally closed with the adoption of the Property Registration Decree in 1977,
extraordinary prescription, the period of possession preceding the classification of public
with Section 14(2) thereof expressly authorizing original registration in favor of persons
dominion lands as patrimonial cannot be counted for the purpose of computing
who have acquired ownership over private lands by prescription under the provisions of
prescription. But after the property has been become patrimonial, the period of
existing laws, that is, the Civil Code as of now.
prescription begins to run in favor of the possessor. Once the requisite period has been

completed, two legal events ensue: (1) the patrimonial property is ipso jure converted
V.
into private land; and (2) the person in possession for the periods prescribed under the

Civil Code acquires ownership of the property by operation of the Civil Code.
We synthesize the doctrines laid down in this case, as follows: express government manifestation that the property is already patrimonial or no longer

retained for public service or the development of national wealth, under Article 422 of

(1) In connection with Section 14(1) of the Property Registration Decree, Section 48(b) the Civil Code. And only when the property has become patrimonial can the prescriptive

of the Public Land Act recognizes and confirms that those who by themselves or through period for the acquisition of property of the public dominion begin to run.

their predecessors in interest have been in open, continuous, exclusive, and notorious

possession and occupation of alienable and disposable lands of the public domain, under (a) Patrimonial property is private property of the government. The

a bona fide claim of acquisition of ownership, since June 12, 1945 have acquired person acquires ownership of patrimonial property by prescription under the

ownership of, and registrable title to, such lands based on the length and quality of their Civil Code is entitled to secure registration thereof under Section 14(2) of the

possession. Property Registration Decree.

(a) Since Section 48(b) merely requires possession since 12 June 1945 (b) There are two kinds of prescription by which patrimonial property

and does not require that the lands should have been alienable and disposable may be acquired, one ordinary and other extraordinary. Under ordinary

during the entire period of possession, the possessor is entitled to secure acquisitive prescription, a person acquires ownership of a patrimonial property

judicial confirmation of his title thereto as soon as it is declared alienable and through possession for at least ten (10) years, in good faith and with just title.

disposable, subject to the timeframe imposed by Section 47 of the Public Land Under extraordinary acquisitive prescription, a persons uninterrupted adverse

Act.[51] possession of patrimonial property for at least thirty (30) years, regardless of

good faith or just title, ripens into ownership.

(b) The right to register granted under Section 48(b) of the Public

Land Act is further confirmed by Section 14(1) of the Property Registration B.

Decree.

We now apply the above-stated doctrines to the case at bar.

(2) In complying with Section 14(2) of the Property Registration Decree, consider that

under the Civil Code, prescription is recognized as a mode of acquiring ownership of It is clear that the evidence of petitioners is insufficient to establish that Malabanan has

patrimonial property. However, public domain lands become only patrimonial property acquired ownership over the subject property under Section 48(b) of the Public Land

not only with a declaration that these are alienable or disposable. There must also be an Act. There is no substantive evidence to establish that Malabanan or petitioners as his
predecessors-in-interest have been in possession of the property since 12 June 1945 or The informal settlement of public lands, whether declared alienable or not, is a

earlier. The earliest that petitioners can date back their possession, according to their phenomenon tied to long-standing habit and cultural acquiescence, and is common

own evidencethe Tax Declarations they presented in particularis to the year 1948. Thus, among the so-called Third World countries. This paradigm powerfully evokes the

they cannot avail themselves of registration under Section 14(1) of the Property disconnect between a legal system and the reality on the ground. The law so far has been

Registration Decree. unable to bridge that gap. Alternative means of acquisition of these

public domain lands, such as through homestead or free patent, have

Neither can petitioners properly invoke Section 14(2) as basis for registration . While the

subject property was declared as alienable or disposable in 1982, there is no competent proven unattractive due to limitations imposed on the grantee in the encumbrance or

evidence that is no longer intended for public use service or for the development of the alienation of said properties.[52] Judicial confirmation of imperfect title has emerged as

national evidence, conformably with Article 422 of the Civil Code. The classification of the most viable, if not the most attractive means to regularize the informal settlement of

the subject property as alienable and disposable land of the public domain does not alienable or disposable lands of the public domain, yet even that system, as revealed in

change its status as property of the public dominion under Article 420(2) of the Civil this decision, has considerable limits.

Code. Thus, it is insusceptible to acquisition by prescription.

There are millions upon millions of Filipinos who have individually or exclusively held

VI. residential lands on which they have lived and raised their families. Many more have

tilled and made productive idle lands of the State with their hands. They have been

A final word. The Court is comfortable with the correctness of the legal regarded for generation by their families and their communities as common law

doctrines established in this decision. Nonetheless, discomfiture over the implications of owners. There is much to be said about the virtues of according them legitimate states.

todays ruling cannot be discounted. For, every untitled property that is occupied in the Yet such virtues are not for the Court to translate into positive law, as the law itself

country will be affected by this ruling. The social implications cannot be dismissed considered such lands as property of the public dominion. It could only be up to Congress

lightly, and the Court would be abdicating its social responsibility to the Filipino people if to set forth a new phase of land reform to sensibly regularize and formalize the

we simply levied the law without comment. settlement of such lands which in legal theory are lands of the public domain before the

problem becomes insoluble. This could be accomplished, to cite two examples, by

liberalizing the standards for judicial confirmation of imperfect title, or amending the
Civil Code itself to ease the requisites for the conversion of public dominion property

into patrimonial.

Ones sense of security over land rights infuses into every aspect of well-being

not only of that individual, but also to the persons family. Once that sense of security is

deprived, life and livelihood are put on stasis. It is for the political branches to bring

welcome closure to the long pestering problem.

WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated 23

February 2007 and Resolution dated 2 October 2007 are AFFIRMED. No pronouncement

as to costs.

SO ORDERED.
G.R. No. 179987 September 3, 2013 WHEREFORE, this Court hereby approves this application for registration and thus
places under the operation of Act 141, Act 496 and/or P.D. 1529, otherwise known as
HEIRS OF MARIO MALABANAN, (Represented by Sally A. Malabanan), Petitioners, Property Registration Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-A
vs. and containing an area of Seventy One Thousand Three Hundred Twenty Four (71,324)
REPUBLIC OF THE PHILIPPINES, Respondent. Square Meters, as supported by its technical description now forming part of the record
of this case, in addition to other proofs adduced in the name of MARIO MALABANAN,
who is of legal age, Filipino, widower, and with residence at Munting Ilog, Silang, Cavite.
RESOLUTION
Once this Decision becomes final and executory, the corresponding decree of registration
BERSAMIN, J.: shall forthwith issue.

For our consideration and resolution are the motions for reconsideration of the parties SO ORDERED.3
who both assail the decision promulgated on April 29, 2009, whereby we upheld the
ruling of the Court of Appeals (CA) denying the application of the petitioners for the
registration of a parcel of land situated in Barangay Tibig, Silang, Cavite on the ground The Office of the Solicitor General (OSG) appealed the judgment to the CA, arguing that
that they had not established by sufficient evidence their right to the registration in Malabanan had failed to prove that the property belonged to the alienable and disposable
accordance with either Section 14(1) or Section 14(2) of Presidential Decree No. 1529 land of the public domain, and that the RTC erred in finding that he had been in
(Property Registration Decree). possession of the property in the manner and for the length of time required by law for
confirmation of imperfect title.
Antecedents
On February 23, 2007, the CA promulgated its decision reversing the RTC and dismissing
the application for registration of Malabanan. Citing the ruling in Republic v. Herbieto
The property subject of the application for registration is a parcel of land situated in (Herbieto),4 the CA declared that under Section 14(1) of the Property Registration
Barangay Tibig, Silang Cavite, more particularly identified as Lot 9864-A, Cad-452-D, Decree, any period of possession prior to the classification of the land as alienable and
with an area of 71,324-square meters. On February 20, 1998, applicant Mario disposable was inconsequential and should be excluded from the computation of the
Malabanan, who had purchased the property from Eduardo Velazco, filed an application period of possession. Noting that the CENRO-DENR certification stated that the property
for land registration covering the property in the Regional Trial Court (RTC) in Tagaytay had been declared alienable and disposable only on March 15, 1982, Velazco’s
City, Cavite, claiming that the property formed part of the alienable and disposable land possession prior to March 15, 1982 could not be tacked for purposes of computing
of the public domain, and that he and his predecessors-in-interest had been in open, Malabanan’s period of possession.
continuous, uninterrupted, public and adverse possession and occupation of the land for
more than 30 years, thereby entitling him to the judicial confirmation of his title. 1
Due to Malabanan’s intervening demise during the appeal in the CA, his heirs elevated
the CA’s decision of February 23, 2007 to this Court through a petition for review on
To prove that the property was an alienable and disposable land of the public domain, certiorari.
Malabanan presented during trial a certification dated June 11, 2001 issued by the
Community Environment and Natural Resources Office (CENRO) of the Department of
Environment and Natural Resources (DENR), which reads: The petitioners assert that the ruling in Republic v. Court of Appeals and Corazon
Naguit5 (Naguit) remains the controlling doctrine especially if the property involved is
agricultural land. In this regard, Naguit ruled that any possession of agricultural land
This is to certify that the parcel of land designated as Lot No. 9864 Cad 452-D, Silang prior to its declaration as alienable and disposable could be counted in the reckoning of
Cadastre as surveyed for Mr. Virgilio Velasco located at Barangay Tibig, Silang, Cavite the period of possession to perfect title under the Public Land Act (Commonwealth Act
containing an area of 249,734 sq. meters as shown and described on the Plan Ap-04- No. 141) and the Property Registration Decree. They point out that the ruling in
00952 is verified to be within the Alienable or Disposable land per Land Classification Herbieto, to the effect that the declaration of the land subject of the application for
Map No. 3013 established under Project No. 20-A and approved as such under FAO 4- registration as alienable and disposable should also date back to June 12, 1945 or earlier,
1656 on March 15, 1982.2 was a mere obiter dictum considering that the land registration proceedings therein
were in fact found and declared void ab initio for lack of publication of the notice of
After trial, on December 3, 2002, the RTC rendered judgment granting Malabanan’s initial hearing.
application for land registration, disposing thusly:
The petitioners also rely on the ruling in Republic v. T.A.N. Properties, Inc.6 to support
their argument that the property had been ipso jure converted into private property by
reason of the open, continuous, exclusive and notorious possession by their Land, which is an immovable property, 10 may be classified as either of public dominion
predecessors-in-interest of an alienable land of the public domain for more than 30 or of private ownership.11Land is considered of public dominion if it either: (a) is
years. According to them, what was essential was that the property had been "converted" intended for public use; or (b) belongs to the State, without being for public use, and is
into private property through prescription at the time of the application without regard intended for some public service or for the development of the national wealth.12 Land
to whether the property sought to be registered was previously classified as agricultural belonging to the State that is not of such character, or although of such character but no
land of the public domain. longer intended for public use or for public service forms part of the patrimonial
property of the State.13 Land that is other than part of the patrimonial property of the
As earlier stated, we denied the petition for review on certiorari because Malabanan State, provinces, cities and municipalities is of private ownership if it belongs to a private
failed to establish by sufficient evidence possession and occupation of the property on individual.
his part and on the part of his predecessors-in interest since June 12, 1945, or earlier.
Pursuant to the Regalian Doctrine (Jura Regalia), a legal concept first introduced into the
Petitioners’ Motion for Reconsideration country from the West by Spain through the Laws of the Indies and the Royal
Cedulas,14 all lands of the public domain belong to the State. 15This means that the State is
the source of any asserted right to ownership of land, and is charged with the
In their motion for reconsideration, the petitioners submit that the mere classification of conservation of such patrimony.16
the land as alienable or disposable should be deemed sufficient to convert it into
patrimonial property of the State. Relying on the rulings in Spouses De Ocampo v.
Arlos,7 Menguito v. Republic8 and Republic v. T.A.N. Properties, Inc.,9 they argue that the All lands not appearing to be clearly under private ownership are presumed to belong to
reclassification of the land as alienable or disposable opened it to acquisitive the State. Also, public lands remain part of the inalienable land of the public domain
prescription under the Civil Code; that Malabanan had purchased the property from unless the State is shown to have reclassified or alienated them to private persons. 17
Eduardo Velazco believing in good faith that Velazco and his predecessors-in-interest
had been the real owners of the land with the right to validly transmit title and Classifications of public lands
ownership thereof; that consequently, the ten-year period prescribed by Article 1134 of according to alienability
the Civil Code, in relation to Section 14(2) of the Property Registration Decree, applied in
their favor; and that when Malabanan filed the application for registration on February Whether or not land of the public domain is alienable and disposable primarily rests on
20, 1998, he had already been in possession of the land for almost 16 years reckoned the classification of public lands made under the Constitution. Under the 1935
from 1982, the time when the land was declared alienable and disposable by the State. Constitution,18 lands of the public domain were classified into three, namely, agricultural,
timber and mineral.19 Section 10, Article XIV of the 1973 Constitution classified lands of
The Republic’s Motion for Partial Reconsideration the public domain into seven, specifically, agricultural, industrial or commercial,
residential, resettlement, mineral, timber or forest, and grazing land, with the
The Republic seeks the partial reconsideration in order to obtain a clarification with reservation that the law might provide other classifications. The 1987 Constitution
reference to the application of the rulings in Naguit and Herbieto. adopted the classification under the 1935 Constitution into agricultural, forest or timber,
and mineral, but added national parks.20 Agricultural lands may be further classified by
law according to the uses to which they may be devoted. 21 The identification of lands
Chiefly citing the dissents, the Republic contends that the decision has enlarged, by according to their legal classification is done exclusively by and through a positive act of
implication, the interpretation of Section 14(1) of the Property Registration Decree the Executive Department.22
through judicial legislation. It reiterates its view that an applicant is entitled to
registration only when the land subject of the application had been declared alienable
and disposable since June 12, 1945 or earlier. Based on the foregoing, the Constitution places a limit on the type of public land that may
be alienated. Under Section 2, Article XII of the 1987 Constitution, only agricultural lands
of the public domain may be alienated; all other natural resources may not be.
Ruling
Alienable and disposable lands of the State fall into two categories, to wit: (a) patrimonial
We deny the motions for reconsideration. lands of the State, or those classified as lands of private ownership under Article 425 of
the Civil Code,23 without limitation; and (b) lands of the public domain, or the public
In reviewing the assailed decision, we consider to be imperative to discuss the different lands as provided by the Constitution, but with the limitation that the lands must only be
classifications of land in relation to the existing applicable land registration laws of the agricultural. Consequently, lands classified as forest or timber, mineral, or national parks
Philippines. are not susceptible of alienation or disposition unless they are reclassified as
agricultural.24 A positive act of the Government is necessary to enable such
Classifications of land according to ownership reclassification,25 and the exclusive prerogative to classify public lands under existing
laws is vested in the Executive Department, not in the courts.26 If, however, public land
will be classified as neither agricultural, forest or timber, mineral or national park, or ownership, since June 12, 1945, or earlier, immediately preceding the filing of the
when public land is no longer intended for public service or for the development of the applications for confirmation of title, except when prevented by war or force majeure.
national wealth, thereby effectively removing the land from the ambit of public These shall be conclusively presumed to have performed all the conditions essential to a
dominion, a declaration of such conversion must be made in the form of a law duly Government grant and shall be entitled to a certificate of title under the provisions of this
enacted by Congress or by a Presidential proclamation in cases where the President is chapter. (Bold emphasis supplied)
duly authorized by law to that effect.27 Thus, until the Executive Department exercises its
prerogative to classify or reclassify lands, or until Congress or the President declares that Note that Section 48(b) of the Public Land Act used the words "lands of the public
the State no longer intends the land to be used for public service or for the development domain" or "alienable and disposable lands of the public domain" to clearly signify that
of national wealth, the Regalian Doctrine is applicable. lands otherwise classified, i.e., mineral, forest or timber, or national parks, and lands of
patrimonial or private ownership, are outside the coverage of the Public Land Act. What
Disposition of alienable public lands the law does not include, it excludes. The use of the descriptive phrase "alienable and
disposable" further limits the coverage of Section 48(b) to only the agricultural lands of
Section 11 of the Public Land Act (CA No. 141) provides the manner by which alienable the public domain as set forth in Article XII, Section 2 of the 1987 Constitution. Bearing in
and disposable lands of the public domain, i.e., agricultural lands, can be disposed of, to mind such limitations under the Public Land Act, the applicant must satisfy the following
wit: requirements in order for his application to come under Section 14(1) of the Property
Registration Decree,28 to wit:
Section 11. Public lands suitable for agricultural purposes can be disposed of only as
follows, and not otherwise: 1. The applicant, by himself or through his predecessor-in-interest, has been in
possession and occupation of the property subject of the application;
(1) For homestead settlement;
2. The possession and occupation must be open, continuous, exclusive, and
notorious;
(2) By sale;
3. The possession and occupation must be under a bona fide claim of
(3) By lease; and acquisition of ownership;

(4) By confirmation of imperfect or incomplete titles; 4. The possession and occupation must have taken place since June 12, 1945, or
earlier; and
(a) By judicial legalization; or
5. The property subject of the application must be an agricultural land of the
(b) By administrative legalization (free patent). public domain.

The core of the controversy herein lies in the proper interpretation of Section 11(4), in Taking into consideration that the Executive Department is vested with the authority to
relation to Section 48(b) of the Public Land Act, which expressly requires possession by a classify lands of the public domain, Section 48(b) of the Public Land Act, in relation to
Filipino citizen of the land since June 12, 1945, or earlier, viz: Section 14(1) of the Property Registration Decree, presupposes that the land subject of
the application for registration must have been already classified as agricultural land of
Section 48. The following-described citizens of the Philippines, occupying lands of the the public domain in order for the provision to apply. Thus, absent proof that the land is
public domain or claiming to own any such lands or an interest therein, but whose titles already classified as agricultural land of the public domain, the Regalian Doctrine applies,
have not been perfected or completed, may apply to the Court of First Instance of the and overcomes the presumption that the land is alienable and disposable as laid down in
province where the land is located for confirmation of their claims and the issuance of a Section 48(b) of the Public Land Act. However, emphasis is placed on the requirement
certificate of title thereafter, under the Land Registration Act, to wit: that the classification required by Section 48(b) of the Public Land Act is classification or
reclassification of a public land as agricultural.
xxxx
The dissent stresses that the classification or reclassification of the land as alienable and
disposable agricultural land should likewise have been made on June 12, 1945 or earlier,
(b) Those who by themselves or through their predecessors-in-interest have been in because any possession of the land prior to such classification or reclassification
open, continuous, exclusive, and notorious possession and occupation of alienable and produced no legal effects. It observes that the fixed date of June 12, 1945 could not be
disposable lands of the public domain, under a bona fide claim of acquisition of
minimized or glossed over by mere judicial interpretation or by judicial social policy in the adjudication of alienable public land to qualified applicants, particularly residential
concerns, and insisted that the full legislative intent be respected. lands, subject to area limitations. 34

We find, however, that the choice of June 12, 1945 as the reckoning point of the requisite On the other hand, if a public land is classified as no longer intended for public use or for
possession and occupation was the sole prerogative of Congress, the determination of the development of national wealth by declaration of Congress or the President, thereby
which should best be left to the wisdom of the lawmakers. Except that said date qualified converting such land into patrimonial or private land of the State, the applicable
the period of possession and occupation, no other legislative intent appears to be provision concerning disposition and registration is no longer Section 48(b) of the Public
associated with the fixing of the date of June 12, 1945. Accordingly, the Court should Land Act but the Civil Code, in conjunction with Section 14(2) of the Property
interpret only the plain and literal meaning of the law as written by the legislators. Registration Decree.35 As such, prescription can now run against the State.

Moreover, an examination of Section 48(b) of the Public Land Act indicates that Congress To sum up, we now observe the following rules relative to the disposition of public land
prescribed no requirement that the land subject of the registration should have been or lands of the public domain, namely:
classified as agricultural since June 12, 1945, or earlier. As such, the applicant’s imperfect
or incomplete title is derived only from possession and occupation since June 12, 1945, (1) As a general rule and pursuant to the Regalian Doctrine, all lands of the
or earlier. This means that the character of the property subject of the application as public domain belong to the State and are inalienable. Lands that are not clearly
alienable and disposable agricultural land of the public domain determines its eligibility under private ownership are also presumed to belong to the State and,
for land registration, not the ownership or title over it. therefore, may not be alienated or disposed;

Alienable public land held by a possessor, either personally or through his predecessors- (2) The following are excepted from the general rule, to wit:
in-interest, openly, continuously and exclusively during the prescribed statutory period
is converted to private property by the mere lapse or completion of the period. 29 In fact,
by virtue of this doctrine, corporations may now acquire lands of the public domain for (a) Agricultural lands of the public domain are rendered alienable and
as long as the lands were already converted to private ownership, by operation of law, as disposable through any of the exclusive modes enumerated under
a result of satisfying the requisite period of possession prescribed by the Public Land Section 11 of the Public Land Act. If the mode is judicial confirmation
Act.30 It is for this reason that the property subject of the application of Malabanan need of imperfect title under Section 48(b) of the Public Land Act, the
not be classified as alienable and disposable agricultural land of the public domain for agricultural land subject of the application needs only to be classified
the entire duration of the requisite period of possession. as alienable and disposable as of the time of the application, provided
the applicant’s possession and occupation of the land dated back to
June 12, 1945, or earlier. Thereby, a conclusive presumption that the
To be clear, then, the requirement that the land should have been classified as alienable applicant has performed all the conditions essential to a government
and disposable agricultural land at the time of the application for registration is grant arises,36 and the applicant becomes the owner of the land by
necessary only to dispute the presumption that the land is inalienable. virtue of an imperfect or incomplete title. By legal fiction, the land has
already ceased to be part of the public domain and has become private
The declaration that land is alienable and disposable also serves to determine the point property.37
at which prescription may run against the State. The imperfect or incomplete title being
confirmed under Section 48(b) of the Public Land Act is title that is acquired by reason of (b) Lands of the public domain subsequently classified or declared as
the applicant’s possession and occupation of the alienable and disposable agricultural no longer intended for public use or for the development of national
land of the public domain. Where all the necessary requirements for a grant by the wealth are removed from the sphere of public dominion and are
Government are complied with through actual physical, open, continuous, exclusive and considered converted into patrimonial lands or lands of private
public possession of an alienable and disposable land of the public domain, the possessor ownership that may be alienated or disposed through any of the
is deemed to have acquired by operation of law not only a right to a grant, but a grant by modes of acquiring ownership under the Civil Code. If the mode of
the Government, because it is not necessary that a certificate of title be issued in order acquisition is prescription, whether ordinary or extraordinary, proof
that such a grant be sanctioned by the courts. 31 that the land has been already converted to private ownership prior
to the requisite acquisitive prescriptive period is a condition sine qua
If one follows the dissent, the clear objective of the Public Land Act to adjudicate and non in observance of the law (Article 1113, Civil Code) that property
quiet titles to unregistered lands in favor of qualified Filipino citizens by reason of their of the State not patrimonial in character shall not be the object of
occupation and cultivation thereof for the number of years prescribed by law 32 will be prescription.
defeated. Indeed, we should always bear in mind that such objective still prevails, as a
fairly recent legislative development bears out, when Congress enacted legislation
(Republic Act No. 10023)33in order to liberalize stringent requirements and procedures
To reiterate, then, the petitioners failed to present sufficient evidence to establish that
they and their predecessors-in-interest had been in possession of the land since June 12,
1945. Without satisfying the requisite character and period of possession - possession
and occupation that is open, continuous, exclusive, and notorious since June 12, 1945, or
earlier - the land cannot be considered ipso jure converted to private property even upon
the subsequent declaration of it as alienable and disposable. Prescription never began to
run against the State, such that the land has remained ineligible for registration under
Section 14(1) of the Property Registration Decree. Likewise, the land continues to be
ineligible for land registration under Section 14(2) of the Property Registration Decree
unless Congress enacts a law or the President issues a proclamation declaring the land as
no longer intended for public service or for the development of the national
wealth.1âwphi1

WHEREFORE, the Court DENIES the petitioners' Motion for Reconsideration and the
respondent's Partial Motion for Reconsideration for their lack of merit.

SO ORDERED.
G.R. No. L-65129 December 29, 1986 While this was a correct interpretation of the said provision, the same is, however, not
applicable to the instant case. The reason is that this case arose in 1982, after the Land
TOMAS AVERIA, JR., petitioner, Registration Act had been superseded by the Property Registration Decree, which
vs. became effective on June 11, 1979.
THE HONORABLE MILAGROS V. CAGUIOA, in her capacity as Judge of the Regional
Trial Court, Fourth Judicial Region, Branch LVII, Lucena City, and VERONICA In Section 2 of the said P.D. No. 1529, it is clearly provided that:
PADILLO, respondents.
SEC. 2. Nature of registration proceedings; jurisdiction of courts.-Judicial
proceedings for the registration of lands throughout the Philippines shall be in
rem and shall be based on the generally accepted principles underlying the
CRUZ, J.: Torrens system.

We gave due course to this petition against a decision of the Court of First Instance of Courts of First Instance shall have exclusive jurisdiction over all applications for
Lucena City, 1 which is questioned on a pure questions of law, more specifically whether original registration of title to lands, including improvements and interests
or not the court has jurisdiction to order the registration of a deed of sale which is therein, and over all petitions filed after original registration of title, with
opposed on the ground of an antecedent contract to sell. power to hear and determine a questions arising upon such applications or
petitions. The court through its clerk of court shall furnish the Land
Registration Commission with two certified copies of all pleadings, exhibits,
The oppositor, petitioner herein, refused to participate in the hearing of the registration orders, and decisions filed or issued in applications or petitions for land
proceedings below, claiming the respondent court, acting as a cadastral court, had no registration, with the exception of stenographic notes, within five days from the
competence to act upon the said case under Section 112 of Act 496, otherwise known as filing or issuance thereof.
the "Land Registration Act." The respondent court then held the hearing ex parte and
later rendered a decision ordering the registration prayed for on the basis of the
evidence presented by the private respondent herein. 2 The above provision has eliminated the distinction between the general jurisdiction
vested in the regional trial court and the limited jurisdiction conferred upon it by the
former law when acting merely as a cadastral court. Aimed at avoiding multiplicity of
In his petition for certiorari and prohibition with preliminary injunction, it is argued that suits, the change has simplified registration proceedings by conferring upon the regional
the lower court had no competence to act on the registration sought because of the trial courts the authority to act not only on applications for "original registration" but
absence of unanimity among the parties as required under Section 112 of the Land also "over all petitions filed after original registration of title, with power to hear and
Registration Act. 3 The petitioner cites Fojas as v. Grey, 4 where this Court, through Justice determine all questions arising upon such applications or petitions."
Serafin Cuevas, declared:
Consequently, and specifically with reference to Section 112 of the Land Registration Act
The aforequoted provision of the Land Registration Act (Sec. 112) was relied (now Section 108 of P.D. No. 1529), the court is no longer fettered by its former limited
upon by appellant Apolinar Fojas in petitioning the court a quo for the jurisdiction which enabled it to grant relief only in cases where there was "unanimity
annotation of the Deed of Assignment. However, while he had the right to have among the parties" or none of them raised any "adverse claim or serious objection."
the said Deed annotated in the owner's duplicate of TCT No. T-2376, the serious Under the amended law, the court is now authorized to hear and decide not only such
objection of Saturnina de Grey to the same raises a substantial controversy non-controversial cases but even this contentious and substantial issues, such as the
between the parties. question at bar, which were beyond its competence before.

In a long line of decisions dealing with proceedings under Section 112 of the It appears that the respondent court proceeded to hear the case below notwithstanding
Land Registration Act, it has been held that summary relief under Section 112 the manifestation by the petitioner of his intention to elevate to this Court the question of
of Land Registration Act can only be granted if there is unanimity among the jurisdiction he had raised. 6 The trial court should have given him the opportunity to do
parties, or there is no adverse claim or serious objection on the part of any so in the interest of due process, pending a categorical ruling on the issue. As it
party in interest; otherwise, the case becomes contentious and controversial happened, it arrived at its decision after considering only the evidence of the private
which should be threshed out in an ordinary action or in any case where the respondent and without regard to the evidence of the petitioner. 7
incident properly belongs. 5
WHEREFORE, the decision of the respondent court dated September 23, 1983, is set
aside. Let a new trial of Cadastral Case No. 1, GLRO Cad. Record No. 202, Lot No. 2810-B,
Lucena Cadastre, MC No. 374-82, be held, at which the petitioner, as well as other
interested parties, shall be given the opportunity to be heard. Our temporary restraining
order of October 5, 1983, is hereby lifted except as to the registration of the questioned
deed of sale which shall depend on the outcome of the said case.

SO ORDERED.
G.R. No. 81401 May 18, 1990 the application on the basis of exhibit "1". Pedro and Lorenzo specifically contested the
application on lots Nos. 3054 and 8131 on claims that each of them were entitled to one-
VIRGINIA FRANCO VDA. DE ARCEO, CARMELITA ARCEO, ZENAIDA ARCEO, ROMEO third thereof. 8
ARCEO, RODOLFO ARCEO and MANUEL ARCEO, petitioners,
vs. The cadastral court rejected all three documents and distributed the properties
HON. COURT OF APPEALS (Former 16th Division), PEDRO M. ARCEO, SOTERA according to the law on intestate succession. 9
ARCEO, LORENZO ARCEO, and ANTONIO ARCEO, respondents.
Virginia and her children shortly went to the Court of Appeals which affirmed the
Ricardo S. Inton and Jose F. Tiburcio for petitioners. decision of the cadastral court and dismissed the appeal.

Hermin E. Arceo for private respondents. On February 15, 1988, Virginia, et al. petitioned this Court.

The petitioners argue that the cadastral court was bereft of the power to determine
conflicting claims of ownership, and that its authority was solely to confirm an existing
SARMIENTO, J.: title, and that anyway, all the lots should have been awarded to them by virtue of open,
continuous, exclusive, and notorious possession since 1941 (1942, when Jose took
possession of the parcels) or otherwise, by acquisitive prescription. 10 They also assert
The Court grants this petition on a successful demonstration of error committed by the that exhibits "J" and "T" had validly transferred the subject lands to them.
Court of Appeals.1
In their comment, Pedro, Lorenzo, Antonio, and Sotera contend that the cadastral court
It appears that the spouses Abdon Arceo and Escolastica Geronimo were the owners of had the jurisdiction to decide questions of ownership of property; that the issue of
four parcels of unregistered land (six were involved but only four were disputed) located prescription was never ventilated below; and that exhibit "J" had been validly rescinded
in Pulilan, Bulacan, identified as lots nos. 2582, 2595, 3054, and 8131. Escolastica died on by exhibit "1".
September 16, 1942 while Abdon passed away in 1953. They had one son, Esteban, who
died on September 2, 1941. Esteban had five children, Jose, Pedro, Lorenzo, Antonio, and
Sotera. Jose married Virginia Franco, with whom he fathered six children, Carmelita, The parties do not quarrel over the genuineness of all three exhibits but rather, over the
Zenaida, Rodolfo, Manuel, Cesar, and Romeo. 2 Pedro, Lorenzo, Antonio, and Sotera are dates thereof. Pedro, et al. alleged that exhibit "J" was executed on September 27, 1941,
the private respondents herein while Jose's widow, Virginia (Jose died on March 8, and not October 27, 1941, and that exhibit "l", the instrument that revoked it, came later,
1970), and their children are the petitioners. or on October 3, 1941. Virginia et al. maintain on the other hand that exhibit "J' was
actually made on October 27, 1941, twenty-four days after the execution of exhibit "1",
and that assuming exhibit "1" came earlier, it was notarized, and took effect, only on
It also appears that on October (or September) 27, 1941, the Arceos executed a deed of November 3, 1944, after the death of Escolastica, one of the donors.
donation inter vivos, marked as Exhibit "J", in which the spouses bestowed the properties
in favor of Jose. 3 Since 1942, Jose had been paying taxes thereon. 4 In 1949, he took
personal possession thereof, worked thereon, and claimed them as owner thereof 5 Although the parties wrangle over dates, the Court observes that there is no real
question of fact to be resolved in this case. The important question, so we find, is, based
on existing facts, legal in character: Who has the right over lots Nos. 2582, 2595, 3054,
It furthermore appears that on August 2, 1950, the spouses executed another deed of and 8131?
donation inter vivos, marked as exhibit "T" disposing of the properties further in favor of
Jose. 6
As we indicated, we find merit in this petition.
On October 3 (or 30), 1941, the Arceos supposedly signed a deed of donation mortis
causa, marked as exhibit "1" revoking exhibit "J" and giving away the properties in The first question must, however, be resolved against the petitioners. We have held that
question in favor of all his grandchildren including Jose. It seems however that it was under Section 2 of the Property Registration Decree, the jurisdiction of the Regional Trial
notarized only on November 3, 1944, after Escolastica had died. Court, sitting as a land registration court, is no longer as circumscribed as it was under
Act No. 496, the former land registration law. 11 We said that the Decree "has eliminated
the distinction between the general jurisdiction vested in the regional trial court and the
On January 12, 1972, Virginia, together with her children, filed with the cadastral limited jurisdiction conferred upon it by the former law when acting merely as a
court 7 an application for registration in their names of lots Nos. 2582, 2595, 3054, and cadastral court." The amendment was "aimed at avoiding multiplicity of suits, the change
8131 on the strength of exhibits "J" and "T". Pedro, Antonio, Lorenzo, and Sotera opposed
has simplified registration proceedings by conferring upon the required trial courts the Other than the claims by Pedro, et al., that exhibit "J" had been revoked by exhibit "1",
authority to act not only on applications for 'original registration' 'but also 'over all exhibit "J" appears to have been executed in compliance with legal requirements, i.e., as
petitions filed after original registration of title, with power to hear and determine all to form and acceptance. 17 It is true that the cadastral court was supposed to have
questions arising from such applications or petitions.'" 12 At any rate, we have also stated attributed fraud on the part of Jose in making Abdon sign the exhibit, 18 (according to
that the limited jurisdiction rule governing land registration courts is subject to Pedro, Abdon affixed his signature thereon upon "the belief that it was a deed of sale of
recognized exceptions, to wit, (1) where the parties mutually agreed or have acquiesced the land purchased from one Marciano Santos" 19) but as found by the Court of Appeals, It
in submitting controversial issues for determination; (2) where they have been given full is a theory that "must be received with a 'grain of salt', 20 because, for one thing, Jose is
opportunity to present their evidence; and (3) where the court has considered the dead, and for another, the petitioners have adduced evidence that exhibit "J" was
evidence already of record and is convinced that the same is sufficient for rendering a genuine. We are bound by the factual finding of the Appellate Court and as we averred,
decision upon such controversial issues. 13 By the same token, it has been held that the we are disposing of this question on pure questions of law.
rule is not, in reality, one of jurisdiction, but rather, of mere procedure, which may be
waived. 14 It is not amiss to state likewise that where the issue, say, of ownership, is As to exhibit "T", the finding of the Court of Appeals that it was defective is just as
ineluctably tied up with the question of right of registration, the cadastral court commits controlling on this Court, that is, that "it was signed by Abdon Arceo after the death of his
no error in assuming jurisdiction over it, as, for instance, in this case, where both parties wife on September 16, 1942 and does not contain the acceptance ... by Jose Arceo." 21
rely on their respective exhibits to defeat one another's claims over the parcels sought to
be registered, in which case, registration would not be possible or would be unduly
prolonged unless the court first decided it. We can not say that exhibit "1" had validly revoked exhibit "J". The weight of authority is
that a valid donation, once accepted, becomes
irrevocable, 22 except on account of officiousness, 23 failure by the donee to comply with
The next question refers to acquisitive prescription. In support of their claims, Virginia, charges imposed in the donation, 24 or by reason of ingratitude. 25 There is simply no
et al. cite four events: (1) In 1941, Jose entered upon the properties and until his death in proof that Abdon when he executed exhibit "1", was in possession of a legal ground for
1970, worked thereon; (2) Upon his death, they, Virginia, et al., divided the same by annulment.
virtue of an extrajudicial partition; (3) Ever since, Jose had paid taxes thereon until he
died; (4) Pedro, et al., have not lifted a finger to oust him, Jose, in possession, or
otherwise, to impugn his right. Virginia, et al. now say that barring the above exhibits, We can not thus accept the Court of Appeals' holding that exhibit "1" had "neutralized the
they have anyway acquired the parcels by prescription. force and effect" 26 of exhibit "J".

We also regret that one can not agree with this proposition. The petitioners suppose that It is therefore this Court's ruling that the disposition under exhibit "J" in favor of Jose
the parcels ' had come under the category of a co-ownership, following the death of their (whose rights were transmitted to Virginia, et al.) should be respected.
grandparents, but in that case, it has been held that in order for prescription to set in, the
following requisites must concur: (1) there is a clear showing that the claimant has We find no need in settling the issue of true dates of the parties' exhibits, because first, it
repudiated the co-ownership; (2) he has made known to the rest of the co-owners that is an issue of fact and second, because whatever their true dates, there is no obstacle to
he is assuming exclusive ownership over the property; (3) there is clear and convincing the validity of the claims of Virginia, et al.
evidence thereof; and (4) his possession is open, continuous, exclusive, and notorious. 15
WHEREFORE, the Decision appealed from is SET ASIDE. The court a quo is ORDERED to
The evidence for Virginia et al. do not persuade us that they (through Jose) have acquired distribute the properties covered by the donation inter vivos, dated October (or
the lots by lapse of time. The fact that in 1941, Jose wrested possession thereof, so we September) 27, 1941, exhibit "J", according to the terms and conditions set forth therein,
hold, does not amount to adverse possession because as a co-owner, he had the right of and in the proportions indicated thereby. No costs.
enjoyment, and his use thereof can not by itself prejudice the right of his fellow co-
owners. The fact that he paid taxes thereon is not controlling either because payment of IT IS SO ORDERED.
real estate taxes does not necessarily confer title upon a claimant. 16 The fact finally that
Virginia, et al. had sought to extrajudicially divide the property is nothing conclusive
because there is no showing that they, Virginia, et al. had made this known to Pedro, et al.
Under these circumstances, we can not validly say that the lands had devolved on
Virginia., et al., by way of prescription.

We are granting the petition nonetheless on the finding that the lots had been conferred
to Jose by a valid donation inter vivos, that is, exhibit "J".
G.R. No. 164687 February 12, 2009 Meanwhile, acting on petitioner’s request for the cancellation of the respondent’s survey
plan, DENR Assistant Regional Executive Director for Legal Services and Public Affairs,
SM PRIME HOLDINGS, INC., Petitioner, Allan V. Barcena, advised the petitioner to file a petition for cancellation in due form so
vs. that the DENR could properly act on the same.4 Accordingly, petitioner formally filed
ANGELA V. MADAYAG, Respondent. with the DENR a petition5 for cancellation of the survey plan sometime in March 2002,
alleging the following grounds:
DECISION
I.
NACHURA, J.:
THERE IS NO SUCH THING AS ALIENABLE OR DISPOSABLE PROPERTY WHICH IS THE
1
SUBJECT LOT IN THIS CASE
This is a petition for review on certiorari of the Decision of the Court of Appeals (CA)
dated March 19, 2004 and Resolution dated July 15, 2004, which set aside the lower
court’s order to suspend the proceedings on respondent’s application for land II.
registration.
NO NOTICE WAS MADE UPON PETITIONER (AS ADJOINING LANDOWNER AND WHO
On July 12, 2001, respondent Angela V. Madayag filed with the Regional Trial Court BEARS INTEREST OVER THE SUBJECT LOT) MUCH LESS THE OWNERS OF ADJOINING
(RTC) of Urdaneta, Pangasinan an application for registration of a parcel of land with an LANDS.
area of 1,492 square meters located in Barangay Anonas, Urdaneta City,
Pangasinan.2 Attached to the application was a tracing cloth of Survey Plan Psu-01- III.
008438, approved by the Land Management Services (LMS) of the Department of
Environment and Natural Resources (DENR), Region 1, San Fernando City. THE CIRCUMSTANCES EVIDENTLY SHOW THAT BAD FAITH AND/OR MALICE
ATTENDED THE APPROVAL OF (PLAN WITH PSU NO. 01-008438). 6
On August 20, 2001, petitioner SM Prime Holdings, Inc., through counsel, wrote the Chief,
Regional Survey Division, DENR, Region I, demanding the cancellation of the On July 17, 2002, petitioner filed an Urgent Motion to Suspend Proceedings 7 in the land
respondent’s survey plan because the lot encroached on the properties it recently registration case, alleging that the court should await the DENR resolution of the petition
purchased from several lot owners and that, despite being the new owner of the for the cancellation of the survey plan "as the administrative case is prejudicial to the
adjoining lots, it was not notified of the survey conducted on June 8, 2001. 3 determination" of the land registration case.

Petitioner then manifested its opposition to the respondent’s application for registration. On October 8, 2002, the RTC issued an Order granting the motion, thus:
The Republic of the Philippines, through the Office of the Solicitor General, and the heirs
of Romulo Visperas also filed their respective oppositions.
WHEREFORE, PREMISES CONSIDERED, the Court hereby GRANTS the instant motion
and suspends the proceedings herein. In the meantime, and until receipt by this Court of
On February 6, 2002, petitioner filed its formal opposition. Petitioner alleged that it had a copy of the resolution of the petition for cancellation by the DENR, the instant case is
recently bought seven parcels of land in Barangay Anonas, Urdaneta, delineated as Lots hereby ARCHIVED.
B, C, D, E, G, H and I in Consolidation-Subdivision Plan No. (LRC) Pcs-21329, approved by
the Land Registration Commission on August 26, 1976, and previously covered by
Survey Plan No. Psu-236090 approved by the Bureau of Lands on December 29, 1970. SO ORDERED.8
These parcels of land are covered by separate certificates of title, some of which are
already in the name of the petitioner while the others are still in the name of the previous Emphasizing that a survey plan is one of the mandatory requirements in land
owners. registration proceedings, the RTC agreed with the petitioner that the cancellation of the
survey plan would be prejudicial to the petition for land registration. 9
On February 20, 2002, the RTC declared a general default, except as to the petitioner, the
Republic, and the heirs of Romulo Visperas. Thereafter, respondent commenced the On February 13, 2003, the RTC denied the respondent’s motion for reconsideration of its
presentation of evidence. order.10 Respondent thereafter filed a petition for certiorari with the CA assailing the
order suspending the proceedings.
On March 19, 2004, finding that the RTC committed grave abuse of discretion in proper considering that respondent was not arbitrarily deprived of her right to
suspending the proceedings, the CA granted the petition for certiorari, thus: prosecute her application for registration.16

WHEREFORE, premises considered, the instant petition is hereby GRANTED. The Undeniably, the power to stay proceedings is an incident to the power inherent in every
challenged Orders dated October 8, 2002 and February 13, 2003 of the respondent Court court to control the disposition of the cases in its dockets, with economy of time and
are declared NULL and VOID. effort for the court, counsel and litigants. But courts should be mindful of the right of
every party to a speedy disposition of his case and, thus, should not be too eager to
The Court a quo is directed to continue the proceedings until its final determination. No suspend proceedings of the cases before them. Hence, every order suspending
pronouncement as to costs. proceedings must be guided by the following precepts: it shall be done in order to avoid
multiplicity of suits and prevent vexatious litigations, conflicting judgments, confusion
between litigants and courts,17 or when the rights of parties to the second action cannot
SO ORDERED.11 be properly determined until the questions raised in the first action are
settled.18 Otherwise, the suspension will be regarded as an arbitrary exercise of the
The CA ratiocinated that the survey plan which was duly approved by the DENR should court’s discretion and can be corrected only by a petition for certiorari.
be accorded the presumption of regularity, and that the RTC has the power to hear and
determine all questions arising from an application for registration.12 None of the circumstances that would justify the stay of proceedings is present. In fact, to
await the resolution of the petition for cancellation would only delay the resolution of the
On July 15, 2004, the CA issued a Resolution13 denying the petitioner’s motion for land registration case and undermine the purpose of land registration.
reconsideration. Petitioner was, thus, compelled to file this petition for review, ascribing
the following errors to the CA: The fundamental purpose of the Land Registration Law (Presidential Decree No. 1529) is
to finally settle title to real property in order to preempt any question on the legality of
I. THE COURT OF APPEALS COMMITTED MANIFEST ERROR IN NOT FINDING THAT THE the title – except claims that were noted on the certificate itself at the time of registration
SUSPENSION OF THE PROCEEDINGS IN THE LAND REGISTRATION CASE IS LEGAL AND or those that arose subsequent thereto.1avvphi1 Consequently, once the title is
PROPER PENDING THE DETERMINATION AND RESOLUTION OF THE ADMINISTRATIVE registered under the said law, owners can rest secure on their ownership and
CASE BEFORE THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES- possession.19
REGION 1.
Glaringly, the petition for cancellation raises practically the very same issues that the
II. THE COURT OF APPEALS COMMITTED MANIFEST ERROR IN FAILING TO FIND THAT herein petitioner raised in its opposition to the respondent’s application for registration.
THE ASSAILED ORDERS OF THE LOWER COURT HAVE PROPER AND SUFFICIENT BASES Principally, it alleges that the survey plan should be cancelled because it includes
IN FACT AND IN LAW. portions of the seven properties that it purchased from several landowners, which
properties are already covered by existing certificates of title.
III. THE COURT OF APPEALS COMMITTED MANIFEST ERROR IN HOLDING THAT THE
LOWER COURT HAS ACTED WITH GRAVE ABUSE OF DISCRETION IN SUSPENDING THE Petitioner posits that it is the DENR that has the sole authority to decide the validity of
PROCEEDINGS AND ARCHIVING THE CASE. the survey plan that was approved by the LMS.20 It cites Section 4(15), Chapter 1, Title
XIV, Administrative Code of 1987 which provides that the DENR shall
IV. THE COURT OF APPEALS COMMITTED MANIFEST ERROR IN FAILING TO FIND THAT
THE FILING OF THE PETITION FOR CERTIORARI, UNDER RULE 65 OF THE REVISED (15) Exercise (of) exclusive jurisdiction on the management and disposition of all lands
RULES OF CIVIL PROCEDURE, IS NOT THE ONLY PLAIN, SPEEDY AND ADEQUATE of the public domain and serve as the sole agency responsible for classification, sub-
REMEDY IN THE ORDINARY COURSE OF LAW ON THE PART OF HEREIN classification, surveying and titling of lands in consultation with appropriate agencies.
RESPONDENT.14
However, respondent argues that the land registration court is clothed with adequate
The petition has no merit. authority to resolve the conflicting claims of the parties, and that even if the DENR
cancels her survey plan, the land registration court is not by duty bound to dismiss the
Petitioner contends that, since the respondent’s cause of action in the land registration application for registration based solely on the cancellation of the survey
case depends heavily on the survey plan, it was only prudent for the RTC to suspend the plan.21lawphil.net
proceedings therein pending the resolution of the petition for cancellation of the survey
plan by the DENR.15 It, therefore, insists that recourse to a petition for certiorari was not Without delving into the jurisdiction of the DENR to resolve the petition for cancellation,
we hold that, as an incident to its authority to settle all questions over the title of the
subject property, the land registration court may resolve the underlying issue of whether SO ORDERED.
the subject property overlaps the petitioner’s properties without necessarily having to
declare the survey plan as void.

It is well to note at this point that, in its bid to avoid multiplicity of suits and to promote
the expeditious resolution of cases, Presidential Decree (P.D.) No. 1529 eliminated the
distinction between the general jurisdiction vested in the RTC and the latter’s limited
jurisdiction when acting merely as a land registration court. Land registration courts, as
such, can now hear and decide even controversial and contentious cases, as well as those
involving substantial issues.22 When the law confers jurisdiction upon a court, the latter
is deemed to have all the necessary powers to exercise such jurisdiction to make it
effective.23 It may, therefore, hear and determine all questions that arise from a petition
for registration.

In view of the nature of a Torrens title, a land registration court has the duty to
determine whether the issuance of a new certificate of title will alter a valid and existing
certificate of title.24 An application for registration of an already titled land constitutes a
collateral attack on the existing title, 25 which is not allowed by law.26 But the RTC need
not wait for the decision of the DENR in the petition to cancel the survey plan in order to
determine whether the subject property is already titled or forms part of already titled
property. The court may now verify this allegation based on the respondent’s survey
plan vis-à-vis the certificates of title of the petitioner and its predecessors-in-interest.
After all, a survey plan precisely serves to establish the true identity of the land to ensure
that it does not overlap a parcel of land or a portion thereof already covered by a
previous land registration, and to forestall the possibility that it will be overlapped by a
subsequent registration of any adjoining land. 27

Should the court find it difficult to do so, the court may require the filing of additional
papers to aid in its determination of the propriety of the application, based on Section 21
of P.D. No. 1529:

SEC. 21. Requirement of additional facts and papers; ocular inspection. – The court may
require facts to be stated in the application in addition to those prescribed by this Decree
not inconsistent therewith and may require the filing of any additional papers.

The court may also directly require the DENR and the Land Registration Authority to
submit a report on whether the subject property has already been registered and
covered by certificates of title, like what the court did in Carvajal v. Court of Appeals. 28 In
that case, we commended such move by

the land registration court for being "in accordance with the purposes of the Land
Registration Law."29

WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals

Decision dated March 19, 2004 and Resolution dated July 15, 2004 are AFFIRMED. The
Regional Trial Court of Urdaneta, Pangasinan is DIRECTED to continue with the
proceedings in L.R.C. Case No. U-1134 and to resolve the same with dispatch.
G.R. No. L-19615 December 24, 1964 Psu-148997, previously patented on June 12, 1961 under Patent No. 95856 in
the name of Julio Hidalgo; and
IN THE MATTER OF THE APPLICATION FOR REGISTRATION OF LAND. LEONOR DE
LOS ANGELES, FEDERICO DE LOS ANGELES, ET AL., applicants-appellants, 2. That Case No. N-2671, LRC Record No. N-18332, was set for hearing on May
vs. 27, 1960 but no decision has as yet been received by this Commissioner.
ISIDORO O. SANTOS, ANTONIO ASTUDILLO, ET AL., THE DIRECTOR OF LANDS and
THE PROVINCE OF RIZAL, oppositors-appellees. WHEREFORE, it is respectfully recommended to this Honorable Court that Case
No. N-2671, LRC Record No. N-18332, be dismissed with respect to Lot 11 of
Antonio G. Ibarra and H. I. Benito for other oppositors-appellees. plan Psu-158857 only, giving due course, however, to the other lots in the
Jose W. Diokno for applicants-appellants application.
Office of the Solicitor General for oppositors-appellees Director of Lands and Province of
Rizal. Acting thereon, the court required applicants in its order of July 29, 1961, to show cause
why their application should not be dismissed as to Lot 11 (10.6609 hectares). On August
BENGZON, JP, J.: 15, 1961 applicants filed an "opposition to motion to dismiss". But on September 18,
1961 the court issued an order dismissing the application with respect to Lot 11
Squarely before this Court in this appeal is the important and fundamental question of "without prejudice on the part of applicants to pursue the corresponding remedy in any
whether a land registration court which has validly acquired jurisdiction over a parcel of ordinary action". After a motion for reconsideration was filed and denied, applicants
land for registration of title thereto could be divested of said jurisdiction by appealed to this Court.
a subsequent administrative act consisting in the issuance by the Director of Lands of a
homestead patent covering the same parcel of land. As lone assignment of error it is alleged that "the lower, court grievously erred
in dismissing the application for registration as regards Lot No. 11, over which
The court a quo held in effect that it could be, as it dismissed the application to register a homestead patent was issued by the Director of Lands during the pendency of
title to the land in its order brought here on appeal. the registration proceeding". (Emphasis supplied.)

On November 21, 1959 an application for registration of title to 12 parcels of land in To start with, it is well settled that the Director of Lands' jurisdiction, administrative
Ampid San Mateo Rizal was filed in the Court of First Instance of Rizal by Leonor de los supervision and executive control extend only over lands of the public domain and not to
Angeles and seven co-applicants. Among other things it alleged that "applicants are lands already of private ownership. (Susi vs. Razon, 48 Phil. 424; Vital vs. Anore 53 O.G.
owners pro-indiviso and in fee simple of the aforesaid land." 3739; Republic vs. Heirs of Carle L-12485, July 31, 1959; Director of Lands vs. De Luna, L-
1441, Nov. 23, 1960.) Accordingly, a homestead patent issued by him over land not of the
public domain is a nullity, devoid of force and effect against the owner (Zarate vs.
The required notices were given in which May 27, 1960 was set for the initial hearing. On Director of Lands, 34 Phil. 416; Vital vs. Anore supra).
March 3, 1960 the Director of Lands filed an opposition stating that the land "is a portion
of the public domain". The Province of Rizal also interposed an opposition on May 24,
1960, asserting "the required 3.00 meters strips of public easement" on lots along Ampid Now, in the land registration proceedings applicants contended that as of November 21,
River and a creek. 1959 — the date they applied for registration — they were already "owners pro-indiviso
and in fee simple of the aforesaid land". As a result, if applicants were to successfully
prove this averment, and thereby show their alleged registrable title to the land, it could
At the initial hearing on May 27, 1960 an order of general default was issued except as only result in the finding that when Julio Hidalgo's homestead patent was issued over Lot
against the Director of Lands, the Province of Rizal and eleven private oppositors who 11 on June 12, 1961 said lot was no longer public. The land registration court, in that
appeared therein. On July 10, 1960 the aforesaid private oppositors, Julio Hidalgo among event, would have to order a decree of title issued in applicants' favor and declare the
them, filed their written opposition claiming they "are the lawful owners of the parcels of aforesaid homestead patent a nullity which vested no title in the patentee as against the
land in question for having acquired homestead patents over said lots". real owners (Rodriguez vs. Director of Lands, 31 Phil. 273; Zarate vs. Director of
Lands, supra; Lacaste vs. Director of Lands, 63 Phil. 654).
On July 25, 1961 a "Report" was filed in court by the Land Registration Commissioner,
stating: Since the existence or non-existence of applicants' registrable title to Lot 11 is decisive of
the validity or nullity of the homestead patent issued as aforestated on said lot the
1. That the parcel of land described as Lot 11 of plan Psu-158857, applied for in court a quo's jurisdiction in the land registration proceedings could not have been
the above-entitled land registration case, is a portion of that described on plan divested by the homestead patent's issuance.
Proceedings for land registration are in rem whereas proceedings for acquisition of
homestead patent are not (De los Reyes vs. Razon, 38 Phil. 480; Philippine National Bank
vs. Ortiz Luis, 53 Phil. 649). A homestead patent, therefore, does not finally dispose of the
public or private character of the land as far as courts upon proceedings in rem are
concerned (De los Reyes vs. Razon, supra). Applicants should thus be given opportunity
to prove registrable title to Lot 11.

WHEREFORE, we hereby set aside the orders appealed from and remand the case to the
court a quo for further proceedings, without costs. So ordered.
G.R. No. L-37995 August 31, 1987 evidence adduced before it. (p. 9, Brief for the Petitioners, p. 105,
Rollo)
BUREAU OF FORESTRY, BUREAU OF LANDS and PHILIPPINE FISHERIES
COMMISSION, petitioners, The antecedent facts of the case are as follows:
vs.
COURT OF APPEALS and FILOMENO GALLO, respondents. On July 11, 1961, four (4) parcels of land situated in Buenavista, Iloilo described in Plan
Psu-150727, containing an approximate area of 30.5943 hectares were the subject of an
application for registration by Mercedes Diago who alleged among others that she
herself occupied said parcels of land having bought them from the testate estate of the
PARAS, J.: late Jose Ma. Nava who, in his lifetime, had bought the lands in turn from Canuto Gustilo
on June 21, 1934. The Director of Lands opposed said application on the ground that
neither the applicant nor her predecessors-in-interest have sufficient title over the lands
Before Us is a petition for review on certiorari, which seeks to annul and set aside the applied for, which could be registered under the Torrens systems, and that they have
Decision 1 (promulgated on April 11, 1973) of the respondent court in CA-G.R. No. never been in open, continuous and exclusive possession of the said lands for at least 30
38163-R, affirming the decision 2 (dated April 6, 1966) of the then Court of First Instance years prior to the filing of the application. The Director of Forestry on the other hand
of Iloilo in Land Registration Case No. N-506, G.L.R.O. Record No. N-20783 entitled anchored his opposition principally on the ground that certain specific portions of the
"Filomeno Gallo, Applicant vs. Bureau of Forestry, Bureau of Lands, and Philippine lands subject matter of the application, with an area of approximately 194,080 square
Fisheries Commission, oppositors. " The dispositive portion of the trial court's decision meters are mangrove swamps and are within Timberland Block "B " L.C. Project No. 38,
reads as follows: L.C. Map No. 1971 of Buenavista, Iloilo.

WHEREFORE, the court Orders the registration of Lots Nos. 2, 3, and 4 On June 30, 1965, respondent Filomeno Gallo, having purchased the subject parcels of
and the bigger portion of Lot No. 1 after excluding the portion land from Mercedes Diago on April 27, 1965, moved to be substituted in place of the
Identified as Lot 1-A together with the improvements thereon in the latter, attaching to his motion an Amended Application for Registration of Title
name of Filomeno Gallo, of legal age, widower, Filipino citizen, and substantially reproducing the allegations in the application of Mercedes Diago. Petitioner
resident of 155 Fuentes Street, Iloilo City, Philippines. Lots Nos. 1, 2 Philippine Fisheries Commission also moved on August 30, 1965 to be substituted in
and 3 are subject to the road right-of-way of 15 meters wide which is place of petitioner Bureau of Forestry as oppositor over a portion of the land sought to
presently known as Sto. Rosario Rizal Montpiller provincial Road and be registered, supervision and control of said portion having been transferred from the
Buenavista-Daraga provincial Road they being properties of the Bureau of Forestry to the Philippine Fisheries Commission.
Province of Iloilo and should be registered in the name of said
province. The oppositions of the Director of Lands, Director of
Forestry and the Philippine Fisheries Commission are dismissed. Lot On April 6, 1966, the trial court rendered its decision ordering the registration of the four
1-A with an area of 2.6864 hectares which is enclosed in red pencil (4) parcels of land in the name of respondent Filomeno Gallo after excluding a portion
and is found inside Lot No. 1 in the plan Exhibit is hereby declared Identified as Lot "1-A" which is the site of the municipal hall of Buenavista town, and
public land. After the decision has become final let the corresponding subjecting Lots Nos. 1, 2 and 3 to the road-of-way of 15 meters width.
decree be issued.
Petitioners appealed from said decision to the respondent Court of Appeals assigning the
SO ORDERED. (p. 38, Joint Record on Appeal Annex "A." p. 25, Rollo) following errors in their brief:

This appeal also seeks to annul and set aside respondent court's resolution dated THE TRIAL COURT ERRED IN ORDERING THE REGISTRATION OF
December 14, 1973 denying for lack of merit, herein petitioners' motion for THE SUBJECT LAND WHICH CONSISTS OF TIMBERLAND,
reconsideration. FORESHORELAND AND LAND BELONGING TO THE PUBLIC DOMAIN
HENCE UNREGISTERABLE.
The basic issue which petitioners raise in this appeal is —
THE TRIAL COURT ERRED IN HOLDING THAT THE POSSESSION OF
THE APPLICANT-APPELLEE AND HIS PREDECESSORS-IN-INTEREST
Whether or not the classification of lands of the public domain by the HAD BEEN PEACEFUL, OPEN, CONTINUOUS, UNINTERRUPTED AND
Executive Branch of the Government into agricultural, forest or ADVERSE TO CLAIMANTS AND IN THE CONCEPT OF OWNER. (p. 6,
mineral can be changed or varied by the court depending upon the Brief for the Petitioners, p. 105, Rollo)
Respondent court affirmed said decision and denied a motion for reconsideration of the Such contentions of private respondents do not hold water. Admittedly the controversial
same hence the present petition with two (2) assigned errors, basically the same issues area is within a timberland block as classification of the municipality and certified to by
raised with the respondent court: the Director of Forestry on February 18, 1956 as lands needed for forest purposes and
hence they are portions of the public domain which cannot be the subject of registration
RESPONDENT COURT ERRED IN NOT HOLDING THAT THE proceedings. Clearly therefore the land is public land and there is no need for the
DETERMINATION OF WHETHER A PUBLIC LAND IS AGRICULTURAL Director of Forestry to submit to the court convincing proofs that the land in dispute is
OR STILL A FOREST LAND RESTS EXCLUSIVELY UPON THE not more valuable for agriculture than for forest purposes, as there was no question of
DIRECTOR OF FORESTRY (NOW DIRECTOR OF FOREST whether the land is forest land or not. Be it remembered that said forest land had been
DEVELOPMENT), THE SECRETARY OF NATURAL RESOURCES) AND declared and certified as such by the Director of the Bureau of Forestry on February 18,
THE PRESIDENT OF THE PHILIPPINES. 1956, several years before the original applicant of the lands for registration Mercedes
Diago, filed it on July 11, 1961. In the case of Government of the Philippine Islands vs.
Abella, 49 Phil. 49, cited by private respondents themselves in their brief, We held —
RESPONDENT COURT ERRED IN NOT HOLDING THAT THE LAND IS
PRESUMED TO BELONG TO THE PUBLIC DOMAIN AND PRIVATE
RESPONDENT HEREIN HAS NOT CONVINCINGLY SHOWN THAT THE Following the decision of Ankon vs. Government of the Philippine
REMOTE PREDECESSOR-IN-INTEREST POSSESSED THE LAND IN Islands (40 Phil. 10), it is again held, that whether a particular parcel
QUESTION SINCE TIME IMMEMORIAL. (pp. 9 & 20, Brief for the of land is more valuable for forestry purposes than for agricultural
Petitioners, p. 105, Rollo) purposes, or vice versa, is a fact which must be established during the
trial of the case. Whether the particular land is agricultural, forestry or
mineral is a question to be settled in each particular case unless the
Out of the 30.5943 hectares applied for registration under the Torrens System, 11.1863 Bureau of Forestry has, under the authority conferred upon it by law,
hectares are coconut lands and admittedly within the disposable portion of the public prior to the intervention of private interest, set aside said land for
domain. These are more particularly Identified as parcels "B," B-1", "B-2" and "B-3" of the forestry or mineral resources. (Italics for emphasis)
sketch plan Exh. "1-A." The rest, consisting of 19.4080 hectares and Identified as parcels
A, A-1, A-2 and A-3 of the same plan Exh. "1-A," is now the center of controversy of the
present appeal. We also held in the case of Republic vs. Animas, 56 SCRA 499, 503 that-

Petitioners contend that respondent court completely ignored the undisputed facts that ... As a general rule, timber or forest lands are not alienable or
1) the controverted area is within Timberland Block "B," L.C. Project No. 38, L.C. Map No. disposable under either the Constitution of 1935 or the Constitution
1971 of Buenavista, Iloilo and that 2) the certification of February 18, 1956 of the then of 1973.
Director of Forestry to the effect that the area in question is needed for forest purposes.
Respondent court in affirming the decision of the Iloilo trial court ruled that although the ... It is the Bureau of Forestry that has jurisdiction and authority over
controverted portion of 19.4080 hectares are mangrove and nipa swamps within the demarcation, protection, management, reproduction, occupancy
Timberland Block "B," L.C. Project No. 38, same cannot be considered part of the public and use of all public forests and forest reservations and over the
forest not susceptible of private ownership since petitioners failed to submit convincing granting of licenses for the taking of products therefrom, including
proof that these lands are more valuable for forestry than for agricultural purposes, and stone and earth (Section 1816 of the Revised Administrative Code).
the presumption is that these are agricultural lands. Respondent court based its That the area in question is a forest or timber land is clearly
conclusion upon the premise that whether or not a controverted parcel of land is forest established by the certification made by the Bureau of Forest
land, is a question of fact which should be settled by competent proofs, and if such a Development that it is within the portion of the area which was
question be an issue in a land registration proceeding, it is incumbent upon the Director reverted to the category of forest land, approved by the President on
of Forestry to submit to the court convincing proofs that the land in dispute is not more March 7, 1958.
valuable for agriculture than for forest purposes. It is the position of respondent that
respondent court did "not hesitate to apply this presumption with full force particularly As provided for under Sec. 6 of Commonwealth Act No. 141, which was lifted from Act
where, as in the case at bar, the lands applied for have been possessed and cultivated by No. 2874, the classification or reclassification of public lands into alienable or disposable,
the applicant and his predecessors-in-interest for a long number of years without the mineral or forest lands is now a prerogative of the Executive Department of the
government taking any positive step to dislodge the occupants from their holdings which government and not of the courts. With these rules, there should be no more room for
have passed from one to another by inheritance or by purchase." (p. 9, Brief for private doubt that it is not the court which determines the classification of lands of the public
respondents) Otherwise stated, it is Our impression that private respondents claim the domain into agricultural, forest or mineral but the Executive Branch of the Government,
rule of prescription against the government. through the Office of the President. Hence, it was grave error and/or abuse of discretion
for the 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.

Furthermore, private respondents Cannot claim to have obtained their title by

prescription inasmuch as the application filed by them necessarily implied an admission
that the portions applied for are part of the public domain which cannot be acquired by
prescription, unless the law expressly permits it. It is a rule of law that possession of
forest lands, however long, cannot ripen into private ownership (Director of Forestry vs.
Munoz, 23 SCRA 1184).

WHEREFORE, in the light of the foregoing, the assailed decision is hereby SET ASIDE, and
a new one is hereby rendered, declaring that:

1) Parcels "B," "B-1," "B-2 and "B-3" of the sketch plan Exhibit "1-A" consisting of
11.1863 hectares of coconut land and admittedly within the disposable portion of the
public domain are hereby ordered registered in the name of the applicant Filomeno Gallo
and/or his successors-in-interest as provided for by the Public Land Law; and

2) Parcels "A," "A-1," and "A-2," and "A-3" of the same plan Exh. "1-A," consisting of
19.4080 hectares, are forest lands or lands of the public domain of the Republic of the
Philippines and are therefore inalienable.

SO ORDERED.
REV. FR. DANTE MARTINEZ, petitioner, vs. HONORABLE COURT OF APPEALS, [SGD.] METRING HIPOLITO
HONORABLE JUDGE JOHNSON BALLUTAY, PRESIDING JUDGE, BRANCH 25,
REGIONAL TRIAL COURT OF CABANATUAN CITY, HONORABLE JUDGE [SGD.] JOSE GODOFREDO DE LA PAZ[9]
ADRIANO TUAZON, JR., PRESIDING JUDGE, BRANCH 28, REGIONAL TRIAL
COURT OF CABANATUAN CITY, SPOUSES REYNALDO VENERACION and
SUSAN VENERACION, SPOUSES MAXIMO HIPOLITO and MANUELA DE LA The second writing (Exh. O) read:
PAZ and GODOFREDO DE LA PAZ, respondents.
Cabanatuan City
DECISION
March 19, 1986
MENDOZA, J.:
TO WHOM IT MAY CONCERN:
This is a petition for review on certiorari of the decision, dated September 7, 1995,
and resolution, dated January 31, 1996, of the Court of Appeals, which affirmed the
This is to certify that Freddie dela Paz has agreed to sign tomorrow (March 20) the
decisions of the Regional Trial Court, Branches 25 [1] and 28,[2] Cabanatuan City, finding
affidavit of sale of lot located at Villa Fe Subdivision sold to Fr. Dante Martinez.
private respondents spouses Reynaldo and Susan Veneracion owners of the land in
dispute, subject to petitioners rights as a builder in good faith.
[Sgd.] Freddie dela Paz
The facts are as follows:
Sometime in February 1981, private respondents Godofredo De la Paz and his FREDDIE DELA PAZ[10]
sister Manuela De la Paz, married to Maximo Hipolito, entered into an oral contract with
petitioner Rev. Fr. Dante Martinez, then Assistant parish priest of Cabanatuan City, for However, private respondents De la Paz never delivered the Deed of Sale they
the sale of Lot No. 1337-A-3 at the Villa Fe Subdivision in Cabanatuan City for the sum promised to petitioner.
of P15,000.00. The lot is located along Maharlika Road near the Municipal Hall of
Cabanatuan City. At the time of the sale, the lot was still registered in the name of Claudia In the meantime, in a Deed of Absolute Sale with Right to Repurchase dated
De la Paz, mother of private respondents, although the latter had already sold it to October 28, 1981 (Exh. 10), [11] private respondents De la Paz sold three lots with right to
private respondent Manuela de la Paz by virtue of a Deed of Absolute Sale dated May 26, repurchase the same within one year to private respondents spouses Reynaldo and
1976 (Exh. N/Exh. 2-Veneracion).[3] Private respondent Manuela subsequently registered Susan Veneracion for the sum of P150,000.00. One of the lots sold was the lot previously
the sale in her name on October 22, 1981 and was issued TCT No. T-40496 (Exh. 9). sold to petitioner.[12]
[4]
When the land was offered for sale to petitioner, private respondents De la Paz were
Reynaldo Veneracion had been a resident of Cabanatuan City since birth. He used to
accompanied by their mother, since petitioner dealt with the De la Pazes as a family and
pass along Maharlika Highway in going to the Municipal Hall or in going to and from
not individually.He was assured by them that the lot belonged to Manuela De la Paz. It
Manila. Two of the lots subject of the sale were located along Maharlika Highway, one of
was agreed that petitioner would give a downpayment of P3,000.00 to private
which was the lot sold earlier by the De la Pazes to petitioner. The third lot (hereinafter
respondents De la Paz and that the balance would be payable by installment. After giving
referred to as the Melencio lot) was occupied by private respondents De la Paz. Private
the P3,000.00 downpayment, petitioner started the construction of a house on the lot
respondents Veneracion never took actual possession of any of these lots during the
after securing a building permit from the City Engineers Office on April 23, 1981, with
period of redemption, but all titles to the lots were given to him. [13]
the written consent of the then registered owner, Claudia de la Paz (Exh. B/Exh, 1).
[5]
Petitioner likewise began paying the real estate taxes on said property (Exh. D, D-1, D- Before the expiration of the one year period, private respondent Godofredo De la
2).[6] Construction on the house was completed on October 6, 1981 (Exh. V). [7] Since then, Paz informed private respondent Reynaldo Veneracion that he was selling the three lots
petitioner and his family have maintained their residence there. [8] to another person for P200,000.00. Indeed, private respondent Veneracion received a
call from a Mr. Tecson verifying if he had the titles to the properties, as private
On January 31, 1983, petitioner completed payment of the lot for which private
respondents De la Paz were offering to sell the two lots along Maharlika Highway to him
respondents De la Paz executed two documents. The first document (Exh. A) read:
(Mr. Tecson) for P180,000.00 The offer included the lot purchased by petitioner in
February, 1981.Private respondent Veneracion offered to purchase the same two lots
1-31-83 from the De la Pazes for the same amount. The offer was accepted by private
respondents De la Paz. Accordingly, on June 2, 1983, a Deed of Absolute Sale was
Ang halaga ng Lupa sa Villa Fe Subdivision na ipinagbili kay Fr. Dante Martinez ay executed over the two lots (Exh. I/Exh. 5-Veneracion). [14] Sometime in January, 1984,
P15,000.00 na pinangangako namin na ibibigay ang Deed of Sale sa ika-25 ng Febrero private respondent Reynaldo Veneracion asked a certain Renato Reyes, petitioners
1983. neighbor, who the owner of the building erected on the subject lot was. Reyes told him
that it was Feliza Martinez, petitioners mother, who was in possession of the On March 3, 1987, private respondents Veneracion filed a notice of appeal with the
property. Reynaldo Veneracion told private respondent Godofredo about the matter and Regional Trial Court, but failed to pay the docket fee. On June 6, 1989, or over two years
was assured that Godofredo would talk to Feliza. Based on that assurance, private after the filing of the notice of appeal, petitioner filed a Motion for Execution of the
respondents Veneracion registered the lots with the Register of Deeds of Cabanatuan on Judgment, alleging finality of judgment for failure of private respondents Veneracion to
March 5, 1984. The lot in dispute was registered under TCT No. T-44612 (Exh. L/Exh. 4- perfect their appeal and failure to prosecute the appeal for an unreasonable length of
Veneracion).[15] time.
Petitioner discovered that the lot he was occupying with his family had been sold to Upon objection of private respondents Veneracion, the trial court denied on June
the spouses Veneracion after receiving a letter (Exh. P/Exh. 6-Veneracion) from private 28, 1989 the motion for execution and ordered the records of the case to be forwarded to
respondent Reynaldo Veneracion on March 19, 1986, claiming ownership of the land and the appropriate Regional Trial Court. On July 11, 1989, petitioner appealed from this
demanding that they vacate the property and remove their improvements thereon. order. The appeal of private respondents Veneracion from the decision of the MTC and
[16]
Petitioner, in turn, demanded through counsel the execution of the deed of sale from the appeal of petitioner from the order denying petitioners motion for execution were
private respondents De la Paz and informed Reynaldo Veneracion that he was the owner forwarded to the Regional Trial Court, Branch 28, Cabanatuan City. The cases were
of the property as he had previously purchased the same from private respondents De la thereafter consolidated under Civil Case No. 670-AF.
Paz.[17]
On February 20, 1991, the Regional Trial Court rendered its decision finding
The matter was then referred to the Katarungang Pambarangay of San Juan, private respondents Veneracion as the true owners of the lot in dispute by virtue of their
Cabanatuan City for conciliation, but the parties failed to reach an agreement (Exh. prior registration with the Register of Deeds, subject to petitioners rights as builder in
M/Exh. 13).[18] As a consequence, on May 12, 1986, private respondent Reynaldo good faith, and ordering petitioner and his privies to vacate the lot after receipt of the
Veneracion brought an action for ejectment in the Municipal Trial Court, Branch III, cost of the construction of the house, as well as to pay the sum of P5,000.00 as attorneys
Cabanatuan City against petitioner and his mother (Exh. 14). [19] fees and the costs of the suit. It, however, failed to rule on petitioners appeal of the
Municipal Trial Courts order denying their Motion for Execution of Judgment.
On the other hand, on June 10, 1986, petitioner caused a notice of lis pendens to be
recorded on TCT No. T-44612 with the Register of Deeds of Cabanatuan City (Exh. U). [20] Meanwhile, on May 30, 1986, while the ejectment case was pending before the
Municipal Trial Court, petitioner Martinez filed a complaint for annulment of sale with
During the pre-trial conference, the parties agreed to have the case decided under damages against the Veneracions and De la Pazes with the Regional Trial Court, Branch
the Rules on Summary Procedure and defined the issues as follows: 25, Cabanatuan City. On March 5, 1990, the trial court rendered its decision finding
1. Whether or not defendant (now petitioner) may be judicially ejected. private respondents Veneracion owners of the land in dispute, subject to the rights of
petitioner as a builder in good faith, and ordering private respondents De la Paz to pay
2. Whether or not the main issue in this case is ownership. petitioner the sum of P50,000.00 as moral damages and P10,000.00 as attorneys fees,
and for private respondents to pay the costs of the suit.
3. Whether or not damages may be awarded. [21]
On March 20, 1991, petitioner then filed a petition for review with the Court of
On January 29, 1987, the trial court rendered its decision, pertinent portions of Appeals of the RTCs decision in Civil Case No. 670-AF (for ejectment). Likewise, on April
which are quoted as follows: 2, 1991, petitioner appealed the trial courts decision in Civil Case No. 44-[AF]-8642-R
(for annulment of sale and damages) to the Court of Appeals. The cases were designated
With the foregoing findings of the Court, defendants [petitioner Rev. Fr. Dante Martinez as CA G.R. SP. No. 24477 and CA G.R. CV No. 27791, respectively, and were subsequently
and his mother] are the rightful possessors and in good faith and in concept of owner, consolidated. The Court of Appeals affirmed the trial courts decisions, without ruling on
thus cannot be ejected from the land in question. Since the main issue is ownership, the petitioners appeal from the Municipal Trial Courts order denying his Motion for
better remedy of the plaintiff [herein private respondents Veneracion] is Accion Execution of Judgment. It declared the Veneracions to be owners of the lot in dispute as
Publiciana in the Regional Trial Court, having jurisdiction to adjudicate on ownership. they were the first registrants in good faith, in accordance with Art. 1544 of the Civil
Code. Petitioner Martinez failed to overcome the presumption of good faith for the
Defendants counterclaim will not be acted upon it being more than P20,000.00 is beyond following reasons:
this Courts power to adjudge. 1. when private respondent Veneracion discovered the construction on the
lot, he immediately informed private respondent Godofredo about it and
WHEREFORE, judgment is hereby rendered, dismissing plaintiffs complaint and ordering relied on the latters assurance that he will take care of the matter.
plaintiff to pay Attorneys fee of P5,000.00 and cost of suit.
2. the sale between petitioner Martinez and private respondents De la Paz
was not notarized, as required by Arts. 1357 and 1358 of the Civil Code,
SO ORDERED.[22] thus it cannot be said that the private respondents Veneracion had
knowledge of the first sale.[23]
 Petitioners motion for reconsideration was likewise denied in a resolution dated First. It is apparent from the first and second assignment of errors that petitioner
January 31, 1996.[24] Hence this petition for review. Petitioner raises the following is assailing the findings of fact and the appreciation of the evidence made by the trial
assignment of errors: courts and later affirmed by the respondent court. While, as a general rule, only
questions of law may be raised in a petition for review under Rule 45 of the Rules of
I THE PUBLIC RESPONDENTS HONORABLE COURT OF APPEALS AND Court, review may nevertheless be granted under certain exceptions, namely: (a) when
REGIONAL TRIAL COURT JUDGES JOHNSON BALLUTAY AND ADRIANO the conclusion is a finding grounded entirely on speculation, surmises, or conjectures;
TUAZON ERRED IN HOLDING THAT PRIVATE RESPONDENTS REYNALDO (b) when the inference made is manifestly mistaken, absurd, or impossible; (c) where
VENERACION AND WIFE ARE BUYERS AND REGISTRANTS IN GOOD there is a grave abuse of discretion; (d) when the judgment is based on a
FAITH IN RESOLVING THE ISSUE OF OWNERSHIP AND POSSESSION OF misapprehension of facts; (e) when the findings of fact are conflicting; (f) when the Court
THE LAND IN DISPUTE. of Appeals, in making its findings, went beyond the issue of the case and the same is
II THAT PUBLIC RESPONDENTS ERRED IN NOT RESOLVING AND DECIDING contrary to the admissions of both appellant and appellee; (g) when the findings of the
THE APPLICABILITY OF THE DECISION OF THIS HONORABLE COURT IN Court of Appeals are contrary to those of the trial court; (h) when the findings of fact are
THE CASES OF SALVORO VS. TANEGA, ET AL., G.R. NO. L 32988 AND IN conclusions without citation of specific evidence on which they are based; (i) when the
ARCENAS VS. DEL ROSARIO, 67 PHIL 238, BY TOTALLY IGNORING THE facts set forth in the petition as well as in the petitioners main and reply briefs are not
SAID DECISIONS OF THIS HONORABLE COURT IN THE ASSAILED disputed by the respondents; (j) when the finding of fact of the Court of Appeals is
DECISIONS OF THE PUBLIC RESPONDENTS. premised on the supposed absence of evidence but is contradicted by the evidence on
record; and (k) when the Court of Appeals manifestly overlooked certain relevant facts
III THAT THE HONORABLE COURT OF APPEALS ERRED IN NOT GIVING DUE not disputed by the parties and which, if properly considered, would justify a different
COURSE TO THE PETITION FOR REVIEW IN CA G.R. SP. NO. 24477. conclusion.[25]

IV THAT THE HONORABLE COURT OF APPEALS IN DENYING PETITIONERS In this case, the Court of Appeals based its ruling that private respondents
PETITION FOR REVIEW AFORECITED INEVITABLY SANCTIONED Veneracion are the owners of the disputed lot on their reliance on private respondent
AND/OR WOULD ALLOW A VIOLATION OF LAW AND DEPARTURE FROM Godofredo De la Pazs assurance that he would take care of the matter concerning
THE USUAL COURSE OF JUDICIAL PROCEEDINGS BY PUBLIC petitioners occupancy of the disputed lot as constituting good faith. This case, however,
RESPONDENT HONORABLE JUDGE ADRIANO TUAZON WHEN THE involves double sale and, on this matter, Art. 1544 of the Civil Code provides that where
LATTER RENDERED A DECISION IN CIVIL CASE NO. 670-AF [ANNEX D] immovable property is the subject of a double sale, ownership shall be transferred (1) to
REVERSING THE DECISION OF THE MUNICIPAL TRIAL COURT JUDGE the person acquiring it who in good faith first recorded it to the Registry of Property ; (2)
SENDON DELIZO IN CIVIL CASE NO. 9523 [ANNEX C] AND IN NOT in default thereof, to the person who in good faith was first in possession; and (3) in
RESOLVING IN THE SAME CASE THE APPEAL INTERPOSED BY default thereof, to the person who presents the oldest title.[26] The requirement of the
DEFENDANTS ON THE ORDER OF THE SAME COURT DENYING THE law, where title to the property is recorded in the Register of Deeds, is two-fold:
MOTION FOR EXECUTION. acquisition in good faith and recording in good faith. To be entitled to priority, the
second purchaser must not only prove prior recording of his title but that he acted in
V THAT THE RESOLUTION [ANNEX B] (OF THE COURT OF APPEALS) good faith, i.e., without knowledge or notice of a prior sale to another. The presence of
DENYING PETITIONERS MOTION FOR RECONSIDERATION [ANNEX I] good faith should be ascertained from the circumstances surrounding the purchase of
WITHOUT STATING CLEARLY THE FACTS AND THE LAW ON WHICH the land.[27]
SAID RESOLUTION WAS BASED, (IS ERRONEOUS).
1. With regard to the first sale to private respondents Veneracion, private
These assignment of errors raise the following issues: respondent Reynaldo Veneracion testified that on October 10, 1981, 18 days before the
1. Whether or not private respondents Veneracion are buyers in good faith of execution of the first Deed of Sale with Right to Repurchase, he inspected the premises
the lot in dispute as to make them the absolute owners thereof in and found it vacant.[28] However, this is belied by the testimony of Engr. Felix D. Minor,
accordance with Art. 1544 of the Civil Code on double sale of immovable then building inspector of the Department of Public Works and Highways, that he
property. conducted on October 6, 1981 an ocular inspection of the lot in dispute in the
performance of his duties as a building inspector to monitor the progress of the
2. Whether or not payment of the appellate docket fee within the period to construction of the building subject of the building permit issued in favor of petitioner on
appeal is not necessary for the perfection of the appeal after a notice of April 23, 1981, and that he found it 100 % completed (Exh. V).[29] In the absence of
appeal has been filed within such period. contrary evidence, he is to be presumed to have regularly performed his official duty.
[30]
Thus, as early as October, 1981, private respondents Veneracion already knew that
3. Whether or not the resolution of the Court of Appeals denying petitioners there was construction being made on the property they purchased.
motion for reconsideration is contrary to the constitutional requirement
that a denial of a motion for reconsideration must state the legal reasons 2. The Court of Appeals failed to determine the nature of the first contract of sale
on which it is based. between the private respondents by considering their contemporaneous and subsequent
acts.[31] More specifically, it overlooked the fact that the first contract of sale between the Art. 1357[36] and Art. 1358,[37] in relation to Art. 1403(2)[38] of the Civil Code,
private respondents shows that it is in fact an equitable mortgage. requires that the sale of real property must be in writing for it to be enforceable. It need
not be notarized. If the sale has not been put in writing, either of the contracting parties
The requisites for considering a contract of sale with a right of repurchase as an can compel the other to observe such requirement. [39] This is what petitioner did when
equitable mortgage are (1) that the parties entered into a contract denominated as a he repeatedly demanded that a Deed of Absolute Sale be executed in his favor by private
contract of sale and (2) that their intention was to secure an existing debt by way of respondents De la Paz. There is nothing in the above provisions which require that a
mortgage.[32] A contract of sale with right to repurchase gives rise to the presumption contract of sale of realty must be executed in a public document. In any event, it has been
that it is an equitable mortgage in any of the following cases: (1) when the price of a sale shown that private respondents Veneracion had knowledge of facts which would put
with a right to repurchase is unusually inadequate; (2) when the vendor remains in them on inquiry as to the nature of petitioners occupancy of the disputed lot.
possession as lessee or otherwise; (3) when, upon or after the expiration of the right to
repurchase, another instrument extending the period of redemption or granting a new Second. Petitioner contends that the MTC in Civil Case No. 9523 (for ejectment)
period is executed; (4) when the purchaser retains for himself a part of the purchase erred in denying petitioners Motion for Execution of the Judgment, which the latter filed
price; (5) when the vendor binds himself to pay the taxes on the thing sold; (6) in any on June 6, 1989, two years after private respondents Veneracion filed a notice of appeal
other case where it may be fairly inferred that the real intention of the parties is that the with the MTC on March 3, 1987 without paying the appellate docket fee. He avers that
transaction shall secure the payment of a debt or the performance of any other the trial courts denial of his motion is contrary to this Courts ruling in the cases
obligation.[33] In case of doubt, a contract purporting to be a sale with right to repurchase of Republic v. Director of Lands,[40] and Aranas v. Endona[41] in which it was held that
shall be construed as an equitable mortgage. [34] where the appellate docket fee is not paid in full within the reglementary period, the
decision of the MTC becomes final and unappealable as the payment of docket fee is not
In this case, the following circumstances indicate that the private respondents only a mandatory but also a jurisdictional requirement.
intended the transaction to be an equitable mortgage and not a contract of sale: (1)
Private respondents Veneracion never took actual possession of the three lots; (2) Petitioners contention has no merit. The case of Republic v. Director of Lands deals
Private respondents De la Paz remained in possession of the Melencio lot which was co- with the requirement for appeals from the Courts of First Instance, the Social Security
owned by them and where they resided; (3) During the period between the first sale and Commission, and the Court of Agrarian Relations to the Court of Appeals. The case
the second sale to private respondents Veneracion, they never made any effort to take of Aranas v. Endona, on the other hand, was decided under the 1964 Rules of Court and
possession of the properties; and (4) when the period of redemption had expired and prior to the enactment of the Judiciary Reorganization Act of 1981 (B.P. Blg. 129) and the
private respondents Veneracion were informed by the De la Pazes that they are offering issuance of its Interim Rules and Guidelines by this Court on January 11, 1983.Hence,
the lots for sale to another person for P200,000.00, they never objected. To the contrary, these cases are not applicable to the matter at issue.
they offered to purchase the two lots for P180,000.00 when they found that a certain Mr.
Tecson was prepared to purchase it for the same amount. Thus, it is clear from these On the other hand, in Santos v. Court of Appeals,[42] it was held that although an
circumstances that both private respondents never intended the first sale to be a appeal fee is required to be paid in case of an appeal taken from the municipal trial court
contract of sale, but merely that of mortgage to secure a debt of P150,000.00. to the regional trial court, it is not a prerequisite for the perfection of an appeal under
20[43]and 23[44] of the Interim Rules and Guidelines issued by this Court on January 11,
With regard to the second sale, which is the true contract of sale between the 1983 implementing the Judiciary Reorganization Act of 1981 (B.P. Blg. 129). Under these
parties, it should be noted that this Court in several cases, [35] has ruled that a purchaser sections, there are only two requirements for the perfection of an appeal, to wit: (a) the
who is aware of facts which should put a reasonable man upon his guard cannot turn a filing of a notice of appeal within the reglementary period; and (b) the expiration of the
blind eye and later claim that he acted in good faith. Private respondent Reynaldo himself last day to appeal by any party. Even in the procedure for appeal to the regional trial
admitted during the pre-trial conference in the MTC in Civil Case No. 9523 (for courts,[45] nothing is mentioned about the payment of appellate docket fees.
ejectment) that petitioner was already in possession of the property in dispute at the
time the second Deed of Sale was executed on June 1, 1983 and registered on March 4, Indeed, this Court has ruled that, in appealed cases, the failure to pay the appellate
1984. He, therefore, knew that there were already occupants on the property as early as docket fee does not automatically result in the dismissal of the appeal, the dismissal
1981. The fact that there are persons, other than the vendors, in actual possession of the being discretionary on the part of the appellate court. [46] Thus, private respondents
disputed lot should have put private respondents on inquiry as to the nature of Veneracions failure to pay the appellate docket fee is not fatal to their appeal.
petitioners right over the property. But he never talked to petitioner to verify the nature Third. Petitioner contends that the resolution of the Court of Appeals denying his
of his right. He merely relied on the assurance of private respondent Godofredo De la motion for reconsideration was rendered in violation of the Constitution because it does
Paz, who was not even the owner of the lot in question, that he would take care of the not state the legal basis thereof.
matter. This does not meet the standard of good faith.
This contention is likewise without merit.
3. The appellate courts reliance on Arts. 1357 and 1358 of the Civil Code to
determine private respondents Veneracions lack of knowledge of petitioners ownership Art. VIII, Sec. 14 of the Constitution provides that No petition for review or motion
of the disputed lot is erroneous. for reconsideration of a decision of the court shall be refused due course or denied
without stating the basis therefor. This requirement was fully complied with when the
Court of Appeals, in denying reconsideration of its decision, stated in its resolution that it
found no reason to change its ruling because petitioner had not raised anything new.
[47]
Thus, its resolution denying petitioners motion for reconsideration states:

For resolution is the Motion for Reconsideration of Our Decision filed by the petitioners.

Evidently, the motion poses nothing new. The points and arguments raised by the
movants have been considered and passed upon in the Decision sought to be
reconsidered. Thus, We find no reason to disturb the same.

WHEREFORE, the motion is hereby DENIED.

SO ORDERED.[48]

Attorneys fees should be awarded as petitioner was compelled to litigate to protect

his interest due to private respondents act or omission. [49]
WHEREFORE, the decision of the Court of Appeals is REVERSED and a new one is
RENDERED:

(1) declaring as null and void the deed of sale executed by private respondents
Godofredo and Manuela De la Paz in favor of private respondents spouses Reynaldo and
Susan Veneracion;

(2) ordering private respondents Godofredo and Manuela De la Paz to execute a deed of
absolute sale in favor of petitioner Rev. Fr. Dante Martinez;

(3) ordering private respondents Godofredo and Manuela De la Paz to reimburse private
respondents spouses Veneracion the amount the latter may have paid to the former;

(4) ordering the Register of Deeds of Cabanatuan City to cancel TCT No. T-44612 and
issue a new one in the name of petitioner Rev. Fr. Dante Martinez; and

(5) ordering private respondents to pay petitioner jointly and severally the sum
of P20,000.00 as attorneys fees and to pay the costs of the suit.

SO ORDERED.
G.R. No. 162243 December 3, 2009 Mandamus1 against then DENR Secretary Heherson T. Alvarez. PICOP seeks the issuance
of a privileged writ of mandamus to compel the DENR Secretary to sign, execute and
HON. HEHERSON ALVAREZ substituted by HON. ELISEA G. GOZUN, in her capacity as deliver an IFMA to PICOP, as well as to –
Secretary of the Department of Environment and Natural Resources, Petitioner,
vs. [I]ssue the corresponding IFMA assignment number on the area covered by the IFMA,
PICOP RESOURCES, INC., Respondent. formerly TLA No. 43, as amended; b) to issue the necessary permit allowing petitioner to
act and harvest timber from the said area of TLA No. 43, sufficient to meet the raw
x - - - - - - - - - - - - - - - - - - - - - - -x material requirements of petitioner’s pulp and paper mills in accordance with the
warranty and agreement of July 29, 1969 between the government and PICOP’s
predecessor-in-interest; and c) to honor and respect the Government Warranties and
G.R. No. 164516 contractual obligations to PICOP strictly in accordance with the warranty and agreement
dated July 29, [1969] between the government and PICOP’s predecessor-in-interest. x x
PICOP RESOURCES, INC., Petitioner, x.2
vs.
HON. HEHERSON ALVAREZ substituted by HON. ELISEA G. GOZUN, in her capacity as On 11 October 2002, the RTC rendered a Decision granting PICOP’s Petition for
Secretary of the Department of Environment and Natural Resources Respondent. Mandamus, thus:

x - - - - - - - - - - - - - - - - - - - - - - -x WHEREFORE, premises considered, the Petition for Mandamus is hereby GRANTED.

G.R. No. 171875 The Respondent DENR Secretary Hon. Heherson Alvarez is hereby ordered:

THE HON. ANGELO T. REYES (formerly Hon. Elisea G. Gozun), in his capacity as 1. to sign, execute and deliver the IFMA contract and/or documents to PICOP
Secretary of the Department of Environment and Natural Resources and issue the corresponding IFMA assignment number on the area covered by
(DENR), Petitioner, the IFMA, formerly TLA No. 43, as amended;
vs.
PAPER INDUSTRIES CORP. OF THE PHILIPPINES (PICOP), Respondent.
2. to issue the necessary permit allowing petitioner to act and harvest timber
from the said area of TLA No. 43, sufficient to meet the raw material
RESOLUTION requirements of petitioner’s pulp and paper mills in accordance with the
warranty and agreement of July 29, 1969 between the government and PICOP’s
CHICO-NAZARIO, J.: predecessor-in-interest; and

The cause of action of PICOP Resources, Inc. (PICOP) in its Petition for Mandamus with 3. to honor and respect the Government Warranties and contractual obligations
the trial court is clear: the government is bound by contract, a 1969 Document signed by to PICOP strictly in accordance with the warranty and agreement dated July 29,
then President Ferdinand Marcos, to enter into an Integrated Forest Management 1999 (sic) between the government and PICOP’s predecessor-in-interest
Agreement (IFMA) with PICOP. Since the remedy of mandamus lies only to compel an (Exhibits "H", "H-1" to "H-5", particularly the following:
officer to perform a ministerial duty, and since the 1969 Document itself has a proviso
requiring compliance with the laws and the Constitution, the issues in this Motion for a) the area coverage of TLA No. 43, which forms part and parcel of the
Reconsideration are the following: (1) firstly, is the 1969 Document a contract government warranties;
enforceable under the Non-Impairment Clause of the Constitution, so as to make the
signing of the IFMA a ministerial duty? (2) secondly, did PICOP comply with all the legal
and constitutional requirements for the issuance of an IFMA? b) PICOP tenure over the said area of TLA No. 43 and exclusive right
to cut, collect and remove sawtimber and pulpwood for the period
ending on April 26, 1977; and said period to be renewable for
To recall, PICOP filed with the Department of Environment and Natural Resources [an]other 25 years subject to compliance with constitutional and
(DENR) an application to have its Timber License Agreement (TLA) No. 43 converted statutory requirements as well as with existing policy on timber
into an IFMA. In the middle of the processing of PICOP’s application, however, PICOP concessions; and
refused to attend further meetings with the DENR. Instead, on 2 September 2002, PICOP
filed before the Regional Trial Court (RTC) of Quezon City a Petition for
 c) The peaceful and adequate enjoyment by PICOP of the area as On 18 January 2006, PICOP filed the instant Motion for Reconsideration, based on the
described and specified in the aforesaid amended Timber License following grounds:
Agreement No. 43.
I.
The Respondent Secretary Alvarez is likewise ordered to pay petitioner the sum of ₱10
million a month beginning May 2002 until the conversion of TLA No. 43, as amended, to THE HONORABLE COURT ERRED IN HOLDING THAT THE CONTRACT WITH
IFMA is formally effected and the harvesting from the said area is granted. 3 PRESIDENTIAL WARRANTY SIGNED BY THE PRESIDENT OF THE REPUBLIC ON 29 JUNE
1969 ISSUED TO PICOP IS A MERE PERMIT OR LICENSE AND IS NOT A CONTRACT,
On 25 October 2002, the DENR Secretary filed a Motion for Reconsideration.4 In a 10 PROPERTY OR PROPERTY RIGHT PROTECTED BY THE DUE PROCESS CLAUSE OF THE
February 2003 Order, the RTC denied the DENR Secretary’s Motion for Reconsideration CONSTITUTION
and granted PICOP’s Motion for the Issuance of Writ of Mandamus and/or Writ of
Mandatory Injunction.5 The fallo of the 11 October 2002 Decision was practically copied II.
in the 10 February 2003 Order, although there was no mention of the damages imposed
against then DENR Secretary Alvarez. 6 The DENR Secretary filed a Notice of Appeal7 from
the 11 October 2002 Decision and the 10 February 2003 Order. THE EVALUATION OF PICOP’S MANAGEMENT OF THE TLA 43 NATURAL FOREST
CLEARLY SHOWED SATISFACTORY PERFORMANCE FOR KEEPING THE NATURAL
FOREST GENERALLY INTACT AFTER 50 YEARS OF FOREST OPERATIONS. THIS
On 19 February 2004, the Seventh Division of the Court of Appeals affirmed 8 the Decision COMPLETES THE REQUIREMENT FOR AUTOMATIC CONVERSION UNDER SECTION 9 OF
of the RTC, to wit: DAO 99-53.

WHEREFORE, the appealed Decision is hereby AFFIRMED with modification that the III.
order directing then DENR Secretary Alvarez "to pay petitioner-appellee the sum of P10
million a month beginning May, 2002 until the conversion to IFMA of TLA No. 43, as
amended, is formally effected and the harvesting from the said area is granted" is hereby WITH DUE RESPECT, THE HONORABLE COURT, IN REVERSING THE FINDINGS OF
deleted. 9 FACTS OF THE TRIAL COURT AND THE COURT OF APPEALS, MISAPPRECIATED THE
EVIDENCE, TESTIMONIAL AND DOCUMENTARY, WHEN IT RULED THAT:
Challenging the deletion of the damages awarded to it, PICOP filed a Motion for Partial
Reconsideration10 of this Decision, which was denied by the Court of Appeals in a 20 July i.
2004 Resolution.11
PICOP FAILED TO SUBMIT A FIVE-YEAR FOREST PROTECTION PLAN AND A SEVEN-
The DENR Secretary and PICOP filed with this Court separate Petitions for Review of the YEAR REFORESTATION PLAN FOR THE YEARS UNDER REVIEW.
19 February 2004 Court of Appeals Decision. These Petitions were docketed as G.R. No.
162243 and No. 164516, respectively. These cases were consolidated with G.R. No. ii.
171875, which relates to the lifting of a Writ of Preliminary Injunction enjoining the
execution pending appeal of the foregoing Decision. PICOP FAILED TO COMPLY WITH THE PAYMENT OF FOREST CHARGES.

On 29 November 2006, this Court rendered the assailed Decision on the Consolidated iii.
Petitions:
PICOP DID NOT COMPLY WITH THE REQUIREMENT FOR A CERTIFICATION FROM THE
WHEREFORE, the Petition in G.R. No. 162243 is GRANTED. The Decision of the Court of NCIP THAT THE AREA OF TLA 43 DOES NOT OVERLAP WITH ANY ANCESTRAL DOMAIN.
Appeals insofar as it affirmed the RTC Decision granting the Petition for Mandamus filed
by Paper Industries Corp. of the Philippines (PICOP) is hereby REVERSED and SET
ASIDE. The Petition in G.R. No. 164516 seeking the reversal of the same Decision insofar iv.
as it nullified the award of damages in favor of PICOP is DENIED for lack of merit. The
Petition in G.R. No. 171875, assailing the lifting of the Preliminary Mandatory Injunction PICOP FAILED TO HAVE PRIOR CONSULTATION WITH AND APPROVAL FROM THE
in favor of the Secretary of Environment and Natural Resources is DISMISSED on the SANGUNIAN CONCERNED, AS REQUIRED BY SECTION 27 OF THE REPUBLIC ACT NO.
ground of mootness.12 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991.

v.
PCIOP FAILED TO SECURE SOCIAL ACCEPTABILITY UNDER PRESIDENTIAL DECREE NO. Respondent secretary has unlawfully refused and/or neglected to sign and execute the
1586. IFMA contract of PICOP even as the latter has complied with all the legal requirements
for the automatic conversion of TLA No. 43, as amended, into an IFMA.
IV
II
THE MOTIVATION OF ALVAREZ IN RECALLING THE CLEARANCE FOR AUTOMATIC
CONVERSION HE ISSUED ON 25 OCTOBER 2001 WAS NOT DUE TO ANY SHORTCOMING Respondent Secretary acted with grave abuse of discretion and/or in excess of
FROM PICOP BUT DUE TO HIS DETERMINATION TO EXCLUDE 28,125 HECTARES FROM jurisdiction in refusing to sign and execute PICOP’s IFMA contract, notwithstanding that
THE CONVERSION AND OTHER THINGS. PICOP had complied with all the requirements for Automatic Conversion under DAO 99-
53, as in fact Automatic Conversion was already cleared in October, 2001, and was a
On 15 December 2008, on Motion by PICOP, the Third Division of this Court resolved to completed process.
refer the consolidated cases at bar to the Court en banc. On 16 December 2008, this
Court sitting en banc resolved to accept the said cases and set them for oral arguments. III
Oral arguments were conducted on 10 February 2009.
Respondent Secretary has impaired the obligation of contract under a valid and binding
PICOP’s Cause of Action: Matters PICOP Should Have Proven to Be Entitled to a Writ of warranty and agreement of 29 July 1969 between the government and PICOP’s
Mandamus predecessor-in-interest, by refusing to respect: a) the tenure of PICOP, and its renewal
for another twenty five (25) years, over the TLA No.43 area covered by said agreement;
In seeking a writ of mandamus to compel the issuance of an IFMA in its favor, PICOP b) the exclusive right to cut, collect and remove sawtimber and pulpwood timber; and c)
relied on a 29 July 1969 Document, the so-called Presidential Warranty approved by the peaceful and adequate enjoyment of the said area.
then President Ferdinand E. Marcos in favor of PICOP’s predecessor-in-interest, Bislig
Bay Lumber Company, Inc. (BBLCI). PICOP’s cause of action is summarized in paragraphs IV
1.6 and 4.19 of its Petition for Mandamus:
As a result of respondent Secretary’s unlawful refusal and/or neglect to sign and deliver
1.6 Respondent Secretary impaired the obligation of contract under the said Warranty the IFMA contract, and violation of the constitutional rights of PICOP against non-
and Agreement of 29 July 1969 by refusing to respect the tenure; and its renewal for impairment of the obligation of contract (Sec. 10, Art. III, 1997 [sic] Constitution), PICOP
another twenty five (25) years, of PICOP over the area covered by the said Agreement suffered grave and irreparable damages.15
which consists of permanent forest lands with an aggregate area of 121,587 hectares and
alienable and disposable lands with an aggregate area of approximately 21,580 hectares, Petitions for Mandamus are governed by Rule 65 of the Rules of Court, Section 3 of which
and petitioner’s exclusive right to cut, collect and remove sawtimber and pulpwood provides:
therein and the peaceful and adequate enjoyment of the said area as described and
specified in petitioner’s Timber License Agreement (TLA) No. 43 guaranteed by the
Government, under the Warranty and Agreement of 29 July 1969. 13 SEC. 3. Petition for mandamus.—When any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes another from the use
4.19 Respondent is in violation of the Constitution and has impaired the obligation of and enjoyment of a right or office to which such other is entitled, and there is no other
contract by his refusal to respect: a) the tenurial rights of PICOP over the forest area plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved
covered by TLA No. 43, as amended and its renewal for another twenty five (25) years; thereby may file a verified petition in the proper court, alleging the facts with certainty
b) the exclusive right of PICOP to cut, collect and remove sawtimber and pulpwood and praying that judgment be rendered commanding the respondent, immediately or at
therein; and c) PICOP’s peaceful and adequate enjoyment of the said area which the some other time to be specified by the court, to do the act required to be done to protect
government guaranteed under the Warranty and Agreement of 29 July 1969. 14 the rights of the petitioner, and to pay the damages sustained by the petitioner by reason
of the wrongful acts of the respondent. (Emphasis supplied.)
The grounds submitted by PICOP in its Petition for Mandamus are as follows:
PICOP is thus asking this Court to conclude that the DENR Secretary is specifically
I enjoined by law to issue an IFMA in its favor. An IFMA, as defined by DENR
Administrative Order (DAO) No. 99-53,16 is -
[A] production-sharing contract entered into by and between the DENR and a qualified automatic conversion provision in DAO No. 99-53 would have expired on the same date,
applicant wherein the DENR grants to the latter the exclusive right to develop, manage, 26 April 2002, and the PICOP’s Petition for Mandamus would have become moot.
protect and utilize a specified area of forestland and forest resource therein for a period
of 25 years and may be renewed for another 25-year period, consistent with the This is where the 1969 Document, the purported Presidential Warranty, comes into play.
principle of sustainable development and in accordance with an approved CDMP, and When PICOP’s application was brought to a standstill upon the evaluation that PICOP had
under which both parties share in its produce. 17 yet to comply with the requirements for such conversion, PICOP refused to attend
further meetings with the DENR and instead filed a Petition for Mandamus, insisting that
PICOP stresses the word "automatic" in Section 9 of this DAO No. 99-53: the DENR Secretary had impaired the obligation of contract by his refusal to respect: a)
the tenurial rights of PICOP over the forest area covered by TLA No. 43, as amended, and
Sec. 9. Qualifications of Applicants. – The applicants for IFMA shall be: its renewal for another twenty-five (25) years; b) the exclusive right of PICOP to cut,
collect and remove sawtimber and pulpwood therein; and c) PICOP’s peaceful and
adequate enjoyment of the said area which the government guaranteed under the
(a) A Filipino citizen of legal age; or, Warranty and Agreement of 29 July 1969. 23

(b) Partnership, cooperative or corporation whether public or private, duly PICOP is, thus, insisting that the government is obligated by contract to issue an IFMA in
registered under Philippine laws. its favor because of the 1969 Document.

However, in the case of application for conversion of TLA into IFMA, an automatic A contract, being the law between the parties, can indeed, with respect to the State when
conversion after proper evaluation shall be allowed, provided the TLA holder shall have it is a party to such contract, qualify as a law specifically enjoining the performance of an
signified such intention prior to the expiry of the TLA, PROVIDED further, that the TLA act. Hence, it is possible that a writ of mandamus may be issued to PICOP, but only if it
holder has showed satisfactory performance and have complied in the terms of condition proves both of the following:
of the TLA and pertinent rules and regulations. (Emphasis supplied.) 18
1) That the 1969 Document is a contract recognized under the non-impairment
This administrative regulation provision allowing automatic conversion after proper clause; and
evaluation can hardly qualify as a law, much less a law specifically enjoining the
execution of a contract. To enjoin is "to order or direct with urgency; to instruct with
authority; to command."19 "‘Enjoin’ is a mandatory word, in legal parlance, always; in 2) That the 1969 Document specifically enjoins the government to issue the
common parlance, usually." 20 The word "allow," on the other hand, is not equivalent to IFMA.
the word "must," and is in no sense a command.21
If PICOP fails to prove any of these two matters, the grant of a privileged writ of
As an extraordinary writ, the remedy of mandamus lies only to compel an officer to mandamus is not warranted. This was why we pronounced in the assailed Decision that
perform a ministerial duty, not a discretionary one; mandamus will not issue to control the overriding controversy involved in the Petition was one of law. 24 If PICOP fails to
the exercise of discretion of a public officer where the law imposes upon him the duty to prove any of these two matters, more significantly its assertion that the 1969 Document
exercise his judgment in reference to any manner in which he is required to act, because is a contract, PICOP fails to prove its cause of action. 25 Not even the satisfactory
it is his judgment that is to be exercised and not that of the court. 22 compliance with all legal and administrative requirements for an IFMA would save
PICOP’s Petition for Mandamus.
The execution of agreements, in itself, involves the exercise of discretion. Agreements are
products of negotiations and mutual concessions, necessitating evaluation of their The reverse, however, is not true. The 1969 Document expressly states that the warranty
provisions on the part of both parties. In the case of the IFMA, the evaluation on the part as to the tenure of PICOP is "subject to compliance with constitutional and statutory
of the government is specifically mandated in the afore-quoted Section 3 of DAO No. 99- requirements as well as with existing policy on timber concessions." Thus, if PICOP
53. This evaluation necessarily involves the exercise of discretion and judgment on the proves the two above-mentioned matters, it still has to prove compliance with statutory
part of the DENR Secretary, who is tasked not only to negotiate the sharing of the profit and administrative requirements for the conversion of its TLA into an IFMA.
arising from the IFMA, but also to evaluate the compliance with the requirements on the
part of the applicant. Exhaustion of Administrative Remedies

Furthermore, as shall be discussed later, the period of an IFMA that was merely PICOP uses the same argument –– that the government is bound by contract to issue the
automatically converted from a TLA in accordance with Section 9, paragraph 2 of DAO IFMA –– in its refusal to exhaust all administrative remedies by not appealing the alleged
No. 99-53 would only be for the remaining period of the TLA. Since the TLA of PICOP illegal non-issuance of the IFMA to the Office of the President. PICOP claimed in its
expired on 26 April 2002, the IFMA that could have been granted to PICOP via the Petition for Mandamus with the trial court that:
1.10 This petition falls as an exception to the exhaustion of administrative remedies. The Needless to say, all licenses may thus be revoked or rescinded by executive action. It is
acts of respondent DENR Secretary complained of in this petition are patently illegal; in not a contract, property or a property right protected by the due process clause of the
derogation of the constitutional rights of petitioner against non-impairment of the Constitution. In Tan vs. Director of Forestry, this Court held:
obligation of contracts; without jurisdiction, or in excess of jurisdiction or so capriciously
as to constitute an abuse of discretion amounting to excess or lack of jurisdiction; and "x x x A timber license is an instrument by which the State regulates the utilization and
moreover, the failure or refusal of a high government official such as a Department head disposition of forest resources to the end that public welfare is promoted. A timber
from whom relief is brought to act on the matter was considered equivalent to license is not a contract within the purview of the due process clause; it is only a license
exhaustion of administrative remedies (Sanoy v. Tantuico, 50 SCRA 455 [1973]), and or a privilege, which can be validly withdrawn whenever dictated by public interest or
there are compelling and urgent reasons for judicial intervention (Bagatsing v. Ramirez, public welfare as in this case.
74 SCRA 306 [1976]).
‘A license is merely a permit or privilege to do what otherwise would be unlawful, and is
Thus, if there has been no impairment of the obligation of contracts in the DENR not a contract between the authority, federal, state, or municipal, granting it and the
Secretary’s non-issuance of the IFMA, the proper remedy of PICOP in claiming that it has person to whom it is granted; neither is it a property or a property right, nor does it
complied with all statutory and administrative requirements for the issuance of the IFMA create a vested right; nor is it taxation' (C.J. 168). Thus, this Court held that the granting
should have been with the Office of the President. This makes the issue of the of license does not create irrevocable rights, neither is it property or property rights
enforceability of the 1969 Document as a contract even more significant. (People vs. Ong Tin, 54 O.G. 7576). x x x"

The Nature and Effects of the Purported 29 July 1969 Presidential Warranty We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive
Secretary:
Base Metals Case
"x x x Timber licenses, permits and license agreements are the principal instruments by
PICOP challenges our ruling that the 1969 Document is not a contract. Before we review which the State regulates the utilization and disposition of forest resources to the end
this finding, however, it must be pointed out that one week after the assailed Decision, that public welfare is promoted. And it can hardly be gainsaid that they merely evidence
another division of this Court promulgated a Decision concerning the very same 1969 a privilege granted by the State to qualified entities, and do not vest in the latter a
Document. Thus, in PICOP Resources, Inc. v. Base Metals Mineral Resources permanent or irrevocable right to the particular concession area and the forest products
Corporation,26 five other Justices who were still unaware of this Division’s therein. They may be validly amended, modified, replaced or rescinded by the Chief
Decision,27 came up with the same conclusion as regards the same issue of whether Executive when national interests so require. Thus, they are not deemed contracts within
former President Marcos’s Presidential Warranty is a contract: the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree
No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27,
Finally, we do not subscribe to PICOP’s argument that the Presidential Warranty dated 1983, 125 SCRA 302]."
September 25, 1968 is a contract protected by the non-impairment clause of the 1987
Constitution. Since timber licenses are not contracts, the non-impairment clause, which reads:

An examination of the Presidential Warranty at once reveals that it simply reassures "SEC. 10. No law impairing the obligation of contracts shall be passed."
PICOP of the government’s commitment to uphold the terms and conditions of its timber
license and guarantees PICOP’s peaceful and adequate possession and enjoyment of the cannot be invoked.
areas which are the basic sources of raw materials for its wood processing complex. The
warranty covers only the right to cut, collect, and remove timber in its concession area,
and does not extend to the utilization of other resources, such as mineral resources, The Presidential Warranty cannot, in any manner, be construed as a contractual
occurring within the concession. undertaking assuring PICOP of exclusive possession and enjoyment of its concession
areas. Such an interpretation would result in the complete abdication by the State in
favor of PICOP of the sovereign power to control and supervise the exploration,
The Presidential Warranty cannot be considered a contract distinct from PTLA No. 47 development and utilization of the natural resources in the area. 28
and FMA No. 35. We agree with the OSG’s position that it is merely a collateral
undertaking which cannot amplify PICOP’s rights under its timber license. Our definitive
ruling in Oposa v. Factoran that a timber license is not a contract within the purview of The Motion for Reconsideration was denied with finality on 14 February 2007. A Second
the non-impairment clause is edifying. We declared: Motion for Reconsideration filed by PICOP was denied on 23 May 2007.
PICOP insists that the pronouncement in Base Metals is a mere obiter dictum, which and the Honorable Court ruled that the Mining Act of 1995 as well as the Department
would not bind this Court in resolving this Motion for Reconsideration. In the oral Order of DENR does not disallow mining activity under a forest reserve.
arguments, however, upon questioning from the ponente himself of Base Metals, it was
agreed that the issue of whether the 1969 Document is a contract was necessary in the JUSTICE TINGA:
resolution of Base Metals:
But it was PICOP itself which raised the claim that a Presidential Warranty is a contract.
JUSTICE TINGA: And therefore be, should be protected on the under the non-impairment clause of the
Constitution.
And do you confirm that one of the very issues raised by PICOP in that case [PICOP
Resources Inc. v. Base Metal Mineral Resources Corporation] revolves around its claim ATTY. AGABIN:
that a Presidential Warranty is protected by the non-impairment c[l]ause of the
Constitution.
Yes, Your Honor. Except that…
ATTY. AGABIN:
JUSTICE TINGA:
Yes, I believe that statement was made by the Court, your Honor.
So, how can you say now that the Court merely uttered, declared, laid down an obiter
dictum in saying that the Presidential Warranty is not a contract, and it is not being a
JUSTICE TINGA: contract, it is not prohibited by the non-impairment clause.

Yes. And that claim on the part of PICOP necessarily implies that the Presidential ATTY. AGABIN:
Warranty according to PICOP is a contract protected by the non-impairment clause.
This Honorable Court could have just ruled, held that the mining law allows mining
ATTY. AGABIN: activities under a forest reserve without deciding on that issue that was raised by PICOP,
your Honor, and therefore we believe….
Yes, Your Honor.
JUSTICE TINGA:
JUSTICE TINGA:
It could have been better if PICOP has not raised that issue and had not claimed that the
Essentially, the PICOP raised the issue of whether the Presidential Warranty is a contract Presidential Warranty is not a contract.
or not.
ATTY. AGABIN:
ATTY. AGABIN:
Well, that is correct, your Honor except that the Court could have just avoided that
Yes, Your Honor. question. Because…

JUSTICE TINGA: JUSTICE TINGA:

And therefore any ruling on the part of the Court on that issue could not be an obiter Why[?]
dictum.
ATTY. AGABIN:
ATTY. AGABIN:
It already settled the issue, the basic issue.
Your Honor, actually we believe that the basic issue in that case was whether or not Base
Metals could conduct mining activities underneath the forest reserve allotted to PICOP JUSTICE TINGA:
Yes, because the Court in saying that merely reiterated a number of rulings to the effect Interpretation of the 1969 Document That Would Be in Harmony with the Constitution
that the Presidential Warranty, a Timber License for that matter is not a contract
protected by the non-impairment laws. To remove any doubts as to the contents of the 1969 Document, the purported
Presidential Warranty, below is a complete text thereof:
ATTY. AGABIN:
Republic of the Philippines
Well, it is our submission, your Honor, that it is obiter because, that issue even a phrase Department of Agriculture and Natural Resources
by PICOP was not really fully argued by the parties for the Honorable Court and it seems OFFICE OF THE SECRETARY
from my reading at least it was just an aside given by the Honorable Court to decide on Diliman, Quezon City
that issue raised by PICOP but it was not necessary to the decision of the court.
D-53, Licenses (T.L.A. No. 43)
JUSTICE TINGA: Bislig Bay Lumber Co., Inc.
(Bislig, Surigao)
It was not necessary[?]
July 29, 1969
ATTY. AGABIN:
Bislig Bay Lumber Co., Inc.
To the decision of the Court. [unreadable word] Bldg.
Makati, Rizal
JUSTICE TINGA:
S i r s:
It was.
This has reference to the request of the Board of Investments through its Chairman in a
letter dated July 16, 1969 for a warranty on the boundaries of your concession area
ATTY. AGABIN: under Timber License Agreement No. 43, as amended.

It was not necessary. We are made to understand that your company is committed to support the first large
scale integrated wood processing complex hereinafter called: "The Project") and that
JUSTICE TINGA: such support will be provided not only in the form of the supply of pulpwood and other
wood materials from your concession but also by making available funds generated out
It was. of your own operations, to supplement PICOP’s operational sources of funds and other
financial arrangements made by him. In order that your company may provide such
support effectively, it is understood that you will call upon your stockholders to take
ATTY. AGABIN: such steps as may be necessary to effect a unification of managerial, technical, economic
and manpower resources between your company and PICOP.
Yes.
It is in the public interest to promote industries that will enhance the proper
JUSTICE TINGA: conservation of our forest resources as well as insure the maximum utilization thereof to
the benefit of the national economy. The administration feels that the PICOP project is
And PICOP devoted quite a number of pages in [its] memorandum to that issue and so one such industry which should enjoy priority over the usual logging operations hitherto
did the Court [in its Decision]. practiced by ordinary timber licensees: For this reason, we are pleased to consider
favorably the request.
ATTY. AGABIN:

Anyway, your Honor, we beg the Court to revisit, not to… 29

We confirm that your Timber License Agreement No. 43, as amended (copy of which is 6.1 It is clear that the thrust of the government warranty is to establish a particular area
attached as Annex "A" hereof which shall form part and parcel of this warranty) defined by boundary lines of TLA No. 43 for the PICOP Project. In consideration for
definitely establishes the boundary lines of your concession area which consists of PICOP’s commitment to pursue and establish the project requiring huge
permanent forest lands with an aggregate area of 121,587 hectares and alienable or investment/funding from stockholders and lending institutions, the government
disposable lands with an aggregate area of approximately 21,580 hectares. provided a warranty that ensures the continued and exclusive right of PICOP to source
its raw materials needs from the forest and renewable trees within the areas established.
We further confirm that your tenure over the area and exclusive right to cut, collect and
remove sawtimber and pulpwood shall be for the period ending on April 26, 1977; said 6.2 As a long-term support, the warranty covers the initial twenty five (25) year period
period to be renewable for other 25 years subject to compliance with constitutional and and is renewable for periods of twenty five (25) years provided the project continues to
statutory requirements as well as with existing policy on timber concessions. exist and operate. Very notably, the wording of the Presidential Warranty connotes that
for as long as the holder complies with all the legal requirements, the term of the
The peaceful and adequate enjoyment by you of your area as described and specified in warranty is not limited to fifty (50) years but other twenty five (25) years.
your aforesaid amended Timber License Agreement No. 43 is hereby warranted
provided that pertinent laws, regulations and the terms and conditions of your license 6.3 Note must be made that the government warranted that PICOP’s tenure over the area
agreement are observed. and exclusive right to cut, collect and remove saw timber and pulpwood shall be for the
period ending on 26 April 1977 and said period to be renewable for other 25 years
Very truly yours, subject to "compliance with constitutional and statutory requirements as well as existing
policy on timber requirements". It is clear that the renewal for other 25 years, not
necessarily for another 25 years is guaranteed. This explains why on 07 October 1977,
(Sgd.) FERNANDO LOPEZ TLA No. 43, as amended, was automatically renewed for another period of twenty five
Secretary of Agriculture (25) years to expire on 26 April 2002.30
and Natural Resources
PICOP’s interpretation of the 1969 Document cannot be sustained. PICOP’s claim that the
Encl.: term of the warranty is not limited to fifty years, but that it extends to other fifty years,
perpetually, violates Section 2, Article XII of the Constitution which provides:
RECOMMENDED BY:
Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
(Sgd.) JOSE VIADO mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
Acting Director of Forestry 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,
APPROVED: development, and utilization of natural resources shall be under the full control and
supervision of the State. The State may directly undertake such activities, or it may enter
into co-production, joint venture, or production-sharing agreements with Filipino
(Sgd.) FERDINAND E. MARCOS citizens, or corporations or associations at least sixty per centum of whose capital is
President of the Philippines owned by such citizens. Such agreements may be for a period not exceeding twenty-five
years, renewable for not more than twenty-five years, and under such terms and
ACCEPTED: conditions as may be provided by law. In cases of water rights for irrigation, water
supply fisheries, or industrial uses other than the development of water power,
BISLIG BAY LBR. CO., INC. beneficial use may be the measure and limit of the grant.

By: Mr. Justice Dante O. Tinga’s interpretation of the 1969 Document is much more in accord
with the laws and the Constitution. What one cannot do directly, he cannot do indirectly.
Forest lands cannot be alienated in favor of private entities. Granting to private entities,
(Sgd.) JOSE E. SORIANO via a contract, a permanent, irrevocable, and exclusive possession of and right over forest
President lands is tantamount to granting ownership thereof. PICOP, it should be noted, claims
nothing less than having exclusive, continuous and uninterrupted possession of its
PICOP interprets this document in the following manner: concession areas,31 where all other entrants are illegal, 32 and where so-called "illegal
settlers and squatters" are apprehended.33
IFMAs are production-sharing agreements concerning the development and utilization of Yes, Your Honor.
natural resources. As such, these agreements "may be for a period not exceeding twenty-
five years, renewable for not more than twenty-five years, and under such terms and JUSTICE CARPIO:
conditions as may be provided by law." Any superior "contract" requiring the State to
issue TLAs and IFMAs whenever they expire clearly circumvents Section 2, Article XII of
the Constitution, which provides for the only permissible schemes wherein the full And it was renewed for another 25 years until 2002, the 50th year?
control and supervision of the State are not derogated: co-production, joint venture, or
production-sharing agreements within the time limit of twenty-five years, renewable for ATTY. AGABIN:
another twenty-five years.
Yes, Your Honor.
On its face, the 1969 Document was meant to expire on 26 April 2002, upon the
expiration of the expected extension of the original TLA period ending on 26 April 1977: JUSTICE CARPIO:

We further confirm that your tenure over the area and exclusive right to cut, collect and Now, could PICOP before the end of the 50th year let’s say in 2001, one year before the
remove sawtimber and pulpwood shall be for the period ending on April 26, 1977; said expiration, could it have asked for an extension of another 25 years of its TLA
period to be renewable for other 25 years subject to compliance with constitutional and agreement[?]
statutory requirements as well as with existing policy on timber concessions.1avvphi1
ATTY. AGABIN:
Any interpretation extending the application of the 1969 Document beyond 26 April
2002 and any concession that may be granted to PICOP beyond the said date would
violate the Constitution, and no amount of legal hermeneutics can change that. Attempts I believe so, Your Honor.
of PICOP to explain its way out of this Constitutional provision only led to absurdities, as
exemplified in the following excerpt from the oral arguments: JUSTICE CARPIO:

JUSTICE CARPIO: But the Constitution says, maximum of fifty years. How could you ask for another 25
years of its TLA.
The maximum trend of agreement to develop and utilize natural resources like forest
products is 25 years plus another 25 years or a total of 50 years correct? ATTY. AGABIN:

ATTY. AGABIN Well, your Honor, we believe on a question like this, this Honorable Court should balance
the interest.
Yes, Your Honor.
JUSTICE CARPIO:
JUSTICE CARPIO:
The Constitution is very clear, you have only a maximum of 50 years, 25 plus another 25.
That is true for the 1987, 1973, 1935 Constitution, correct? PICOP could never have applied for an extension, for a third 25-year term whether under
the 1935 Constitution, the 1973 Constitution and the 1987 Constitution, correct?
ATTY. AGABIN:
ATTY. AGABIN:
Yes, Your Honor.
Your Honor, except that we are invoking the warranty, the terms of the warranty….
JUSTICE CARPIO:
JUSTICE CARPIO:
The TLA here, TLA 43, expired, the first 25 years expired in 1977, correct?
Can the warranty prevail over the Constitution?
ATTY. AGABIN:
ATTY. AGABIN: So, they file the petition for conversion before the end of the 50th year for IFMA.

Well, it is a vested right, your Honor. ATTY. AGABIN:

JUSTICE CARPIO: Yes, Your Honor.

Yes, but whatever it is, can it prevail over the Constitution? JUSTICE CARPIO:

ATTY. AGABIN: But IFMA is the same, it is based on Section 2, Article 12 of the Constitution, develop and
utilize natural resources because as you said when the new constitution took effect we
The Constitution itself provides that vested rights should be …. did away with the old licensing regime, we have now co-production, a production
sharing, joint venture, direct undertaking but still the same developing and utilizing the
natural resources, still comes from section 2, Art. 12 of the Constitution. It is still a license
JUSTICE CARPIO: but different format now.

If it is not in violation of specific provision of the Constitution. The Constitution says, 25 ATTY. AGABIN:
years plus another 25 years, that’s the end of it. You mean to say that a President of the
Philippines can give somebody 1,000 years license?
It is correct, Your Honor, except that the regimes of joint venture, co-production and
production sharing are what is referred to in the constitution, Your Honor, and still
ATTY. AGABIN: covered…

Well, that is not our position, Your Honor. Because our position is that …. JUSTICE CARPIO:

JUSTICE CARPIO: Yes, but it is covered by same 25 year[s], you mean to say people now can circumvent the
50 year maximum term by calling their TLA as IFMA and after fifty years calling it ISMA,
My question is, what is the maximum term, you said 50 years. So, my next question is, after another 50 years call it MAMA.
can PICOP apply for an extension of another 25 years after 2002, the 50th year?
ATTY. AGABIN:
ATTY. AGABIN:
Yes, Your Honor. Because…
Yes, based on the contract of warranty, Your Honor, because the contract of warranty….
JUSTICE CARPIO:
JUSTICE CARPIO:
It can be done.
But in the PICOP license it is very clear, it says here, provision 28, it says the license
agreement is for a total of 50 years. I mean it is very simple, the President or even ATTY. AGABIN:
Congress cannot pass a law extending the license, whatever kind of license to utilize
natural resources for more than fifty year[s]. I mean even the law cannot do that. It
cannot prevail over the Constitution. Is that correct, Counsel? That is provided for by the department itself. 34

ATTY. AGABIN: PICOP is, in effect, arguing that the DENR issued DAO No. 99-53 in order to provide a way
to circumvent the provisions of the Constitution limiting agreements for the utilization of
natural resources to a maximum period of fifty years. Official duties are, however,
It is correct, Your Honor, except that in this case, what is actually our application is that disputably considered to be regularly performed, 35 and good faith is always presumed.
the law provides for the conversion of existing TLA into IFMA.

JUSTICE CARPIO:
DAO No. 99-53 was issued to change the means by which the government enters into an ASSOCIATE JUSTICE DE CASTRO:
agreement with private entities for the utilization of forest products. DAO No. 99-53 is a
late response to the change in the constitutional provisions on natural resources from The provision of this Administrative Order regarding automatic conversion may be
the 1973 Constitution, which allowed the granting of licenses to private entities, 36 to the reasonable, if, I want to know if you agree with me, if we limit this automatic conversion
present Constitution, which provides for co-production, joint venture, or production- to the remaining period of the TLA, because in that case there will be a valid ground to
sharing agreements as the permissible schemes wherein private entities may participate make a distinction between those with existing TLA and those who are applying for the
in the utilization of forest products. Since the granting of timber licenses ceased to be a first time for IFMA?
permissible scheme for the participation of private entities under the present
Constitution, their operations should have ceased upon the issuance of DAO No. 99-53,
the rule regulating the schemes under the present Constitution. This would be iniquitous DEAN AGABIN:
to those with existing TLAs that would not have expired yet as of the issuance of DAO No.
99-53, especially those with new TLAs that were originally set to expire after 10 or even Well, Your Honor, we beg to disagree, because as I said TLA’s are completely different
20 or more years. The DENR thus inserted a provision in DAO No. 99-53 allowing these from IFMA. The TLA has no production sharing or co-production agreement or condition.
TLA holders to finish the period of their TLAs, but this time as IFMAs, without the rigors All that the licensee has to do is, to pay forest charges, taxes and other impositions from
of going through a new application, which they have probably just gone through a few the local and national government. On the other hand, the IFMAs contained terms and
years ago. conditions which are completely different, and that they either impose co-production,
production sharing or joint venture terms. So it’s a completely different regime, Your
Such an interpretation would not only make DAO No. 99-53 consistent with the Honor.
provisions of the Constitution, but would also prevent possible discrimination against
new IFMA applicants: ASSOCIATE JUSTICE DE CASTRO:

ASSOCIATE JUSTICE DE CASTRO: Precisely, that is the reason why there should be an evaluation of what you mentioned
earlier of the development plan.
I ask this question because of your interpretation that the period of the IFMA, if your TLA
is converted into IFMA, would cover a new a fresh period of twenty-five years renewable DEAN AGABIN:
by another period of twenty-five years.
Yes, Your Honor.
DEAN AGABIN:
ASSOCIATE JUSTICE DE CASTRO:
Yes, Your Honor.
So it will be reasonable to convert a TLA into an IFMA without considering the
ASSOCIATE JUSTICE DE CASTRO: development plan submitted by other applicants or the development plan itself of one
seeking conversion into IFMA if it will only be limited to the period, the original period of
Don’t you think that will, in effect, be invidious discrimination with respect to other the TLA. But once you go beyond the period of the TLA, then you will be, the DENR is I
applicants if you are granted a fresh period of twenty-five years extendible to another think should evaluate the different proposals of the applicants if we are thinking of a
twenty-five years? fresh period of twenty-five years, and which is renewable under the Constitution by
another twenty-five years. So the development plan will be important in this case, the
submission of the development plan of the different applicants must be considered. So I
DEAN AGABIN: don’t understand why you mentioned earlier that the development plan will later on be a
subject matter of negotiation between the IFMA grantee and the government. So it seems
I don’t think it would be, Your Honor, considering that the IFMA is different regime from that it will be too late in the day to discuss that if you have already converted the TLA
the TLA. And not only that, there are considerations of public health and ecology which into IFMA or if the government has already granted the IFMA, and then it will later on
should come into play in this case, and which we had explained in our opening statement study the development plan, whether it is viable or not, or it is sustainable or not, and
and, therefore the provision of the Constitution on the twenty-five limits for renewal of whether the development plan of the different applicants are, are, which of the
co-production, joint venture and production sharing agreements, should be balanced development plan of the different applicants is better or more advantageous to the
with other values stated in the Constitution, like the value of balanced ecology, which government.37
should be in harmony with the rhythm of nature, or the policy of forest preservation in
Article XII, Section 14 of the Constitution. These are all important policy considerations
which should be balanced against the term limits in Article II of the Constitution.
PICOP insists that the alleged Presidential Warranty, having been signed on 29 July 1969, official surveys and that the decision of the party of the first part as to the exact
could not have possibly considered the limitations yet to be imposed by future issuances, location of the said boundaries shall be final.
such as the 1987 Constitution. However, Section 3, Article XVIII of said Constitution,
provides: III. That if the party of the first part deems it necessary to establish on the
ground the boundary lines of the area granted under this license agreement, the
Section 3. All existing laws, decrees, executive orders, proclamations, letters of party of the second part shall furnish to the party of the first part or its
instructions, and other executive issuances not inconsistent with this Constitution shall representatives as many laborers as it needs and all the expenses to be incurred
remain operative until amended, repealed, or revoked. on the work including the wages of such laborers shall be paid by the party of
the second part.45
In the recent case Sabio v. Gordon, 38 we ruled that "(t)he clear import of this provision is
that all existing laws, executive orders, proclamations, letters of instructions and other Thus, BBLCI needed an assurance that the boundaries of its concession area, as
executive issuances inconsistent or repugnant to the Constitution are repealed." established in TLA No. 43, as amended, would not be altered despite this
provision. Hence, BBLCI endeavored to obtain the 1969 Document, which provides:
When a provision is susceptible of two interpretations, "the one that will render them
operative and effective and harmonious with other provisions of law" 39 should be We confirm that your Timber License Agreement No. 43, as amended (copy of which is
adopted. As the interpretations in the assailed Decision and in Mr. Justice Tinga’s attached as Annex "A" hereof which shall form part and parcel of this warranty)
ponencia are the ones that would not make the subject Presidential Warranty definitely establishes the boundary lines of your concession area which consists of
unconstitutional, these are what we shall adopt. permanent forest lands with an aggregate area of 121,587 hectares and alienable or
disposable lands with an aggregate area of approximately 21,580 hectares.
Purpose of the 1969 Document: Assurance That the Boundaries of Its Concession Area
Would Not Be Altered Despite the Provision in the TLA that the DENR Secretary Can We further confirm that your tenure over the area and exclusive right to cut, collect and
Amend Said Boundaries remove sawtimber and pulpwood shall be for the period ending on April 26, 1977; said
period to be renewable for other 25 years subject to compliance with constitutional and
In the assailed Decision, we ruled that the 1969 Document cannot be considered a statutory requirements as well as with existing policy on timber concessions.
contract that would bind the government regardless of changes in policy and the
demands of public interest and social welfare. PICOP claims this conclusion "did not take The peaceful and adequate enjoyment by you of your area as described and specified in
into consideration that PICOP already had a valid and current TLA before the contract your aforesaid amended Timber License Agreement No. 43 is hereby warranted
with warranty was signed in 1969."40 PICOP goes on: "The TLA is a license that equips provided that pertinent laws, regulations and the terms and conditions of your license
any TLA holder in the country for harvesting of timber. A TLA is signed by the Secretary agreement are observed.46
of the DANR now DENR. The Court ignored the significance of the need for another
contract with the Secretary of the DANR but this time with the approval of the President In Koa v. Court of Appeals,47 we ruled that a warranty is a collateral undertaking and is
of the Republic."41 PICOP then asks us: "If PICOP/BBLCI was only an ordinary TLA holder, merely part of a contract. As a collateral undertaking, it follows the principal wherever it
why will it go through the extra step of securing another contract just to harvest timber goes. When this was pointed out by the Solicitor General, PICOP changed its designation
when the same can be served by the TLA signed only by the Secretary and not requiring of the 1969 Document from "Presidential Warranty" or "government warranty" in all its
the approval of the President of the Republic(?)" 42 pleadings prior to our Decision, to "contract with warranty" in its Motion for
Reconsideration. This, however, is belied by the statements in the 29 July 1969
The answer to this query is found in TLA No. 43 itself wherein, immediately after the Document, which refers to itself as "this warranty."
boundary lines of TLA No. 43 were established, the following conditions were given:
Re: Allegation That There Were Mutual Contract Considerations
This license is granted to the said party of the second part upon the following express
conditions: Had the 29 July 1969 Document been intended as a contract, it could have easily said so.
More importantly, it could have clearly defined the mutual considerations of the parties
I. That authority is granted hereunder to the party of the second part 43 to cut, thereto. It could have also easily provided for the sanctions for the breach of the mutual
collect or remove firewood or other minor forest products from the area considerations specified therein. PICOP had vigorously argued that the 1969 Document
embraced in this license agreement except as hereinafter provided. was a contract because of these mutual considerations, apparently referring to the
following paragraph of the 1969 Document:
II. That the party of the first part44 may amend or alter the description of the
boundaries of the area covered by this license agreement to conform with
We are made to understand that your company is committed to support the first large "agreements," e.g., "Timber License Agreements," they cannot be considered contracts
scale integrated wood processing complex hereinafter called: "The Project") and that under the non-impairment clause.50
such support will be provided not only in the form of the supply of pulpwood and other
wood materials from your concession but also by making available funds generated out PICOP found this argument "lame," arguing, thus:
of your own operations, to supplement PICOP’s operational surces (sic) of funds and
other financial arrangements made by him. In order that your company may provide
such support effectively, it is understood that you will call upon your stockholders to 43. It is respectfully submitted that the aforesaid pronouncement in the Decision is an
take such steps as may be necessary to effect a unification of managerial, technical, egregious and monumental error.
economic and manpower resources between your company and PICOP.1avvphi1
44. The Decision could not dismiss as "preposterous" the mutual covenants in the
This provision hardly evinces a contract consideration (which, in PICOP’s interpretation, Presidential Warranty which calls for a huge investment of Php500 million at that time in
is in exchange for the exclusive and perpetual tenure over 121,587 hectares of forest 1969 out of which Php268,440,000 raised from domestic foreign lending institution to
land and 21,580 hectares of alienable and disposable lands). As elucidated by PICOP establish the first large scale integrated wood processing complex in the Philippines.
itself in bringing up the Investment Incentives Act which we shall discuss later, and as
shown by the tenor of the 1969 Document, the latter document was more of a 45. The Decision puts up a lame explanation that "all licensees put up investments in
conferment of an incentive for BBLCI’s investment rather than a contract creating mutual pursuing their business"
obligations on the part of the government, on one hand, and BBLCI, on the other. There
was no stipulation providing for sanctions for breach if BBLCI’s being "committed to 46. Now there are about a hundred timber licenses issued by the Government thru the
support the first large scale integrated wood processing complex" remains a DENR, but these are ordinary timber licenses which involve the mere cutting of timber in
commitment. Neither did the 1969 Document give BBLCI a period within which to the concession area, and nothing else. Records in the DENR shows that no timber
pursue this commitment. licensee has put up an integrated large wood processing complex in the Philippines
except PICOP.51
According to Article 1350 of the Civil Code, "(i)n onerous contracts the cause is
understood to be, for each contracting party, the prestation or promise of a thing or PICOP thus argues on the basis of quantity, and wants us to distinguish between the
service by the other."48 Private investments for one’s businesses, while indeed eventually investment of the tricycle driver and that of the multi-billion corporation. However, not
beneficial to the country and deserving to be given incentives, are still principally and even billions of pesos in investment can change the fact that natural resources and,
predominantly for the benefit of the investors. Thus, the "mutual" contract therefore, public interest are involved in PICOP’s venture, consequently necessitating the
considerations by both parties to this alleged contract would be both for the benefit of full control and supervision by the State as mandated by the Constitution. Not even
one of the parties thereto, BBLCI, which is not obligated by the 1969 Document to billions of pesos in investment can buy forest lands, which is practically what PICOP is
surrender a share in its proceeds any more than it is already required by its TLA and by asking for by interpreting the 1969 Document as a contract giving it perpetual and
the tax laws. exclusive possession over such lands. Among all TLA holders in the Philippines, PICOP
has, by far, the largest concession area at 143,167 hectares, a land area more than the
PICOP’s argument that its investments can be considered as contract consideration size of two Metro Manilas.52 How can it not expect to also have the largest investment?
derogates the rule that "a license or a permit is not a contract between the sovereignty
and the licensee or permittee, and is not a property in the constitutional sense, as to Investment Incentives Act
which the constitutional proscription against the impairment of contracts may extend."
All licensees obviously put up investments, whether they are as small as a tricycle unit or
as big as those put up by multi-billion-peso corporations. To construe these investments PICOP then claims that the contractual nature of the 1969 Document was brought about
as contract considerations would be to abandon the foregoing rule, which would mean by its issuance in accordance with and pursuant to the Investment Incentives Act.
that the State would be bound to all licensees, and lose its power to revoke or amend According to PICOP:
these licenses when public interest so dictates.
The conclusion in the Decision that to construe PICOP’s investments as a consideration in
The power to issue licenses springs from the State’s police power, known as "the most a contract would be to stealthily render ineffective the principle that a license is not a
essential, insistent and least limitable of powers, extending as it does to all the great contract between the sovereignty and the licensee is so flawed since the contract with
public needs."49 Businesses affecting the public interest, such as the operation of public the warranty dated 29 July 1969 was issued by the Government in accordance with and
utilities and those involving the exploitation of natural resources, are mandated by law to pursuant to Republic Act No. 5186, otherwise known as "The Investment Incentives
acquire licenses. This is so in order that the State can regulate their operations and Act."53
thereby protect the public interest. Thus, while these licenses come in the form of
PICOP then proceeds to cite Sections 2 and 4(d) and (e) of said act:
Section 2. Declaration of Policy – To accelerate the sound development of the national and supervision by the State of exploitation activities; or (3) limiting exploitation
economy in consonance with the principles and objectives of economic nationalism, and agreements to twenty-five years, renewable for another twenty-five years.
in pursuance of a planned, economically feasible and practicable dispersal of industries,
under conditions which will encourage competition and discharge monopolies, it is Section 4(d) and (e), on the other hand, is a recognition of rights already guaranteed
hereby declared to be the policy of the state to encourage Filipino and foreign under the Constitution. Freedom from expropriation is granted under Section 9 of Article
investments, as hereinafter set out, in projects to develop agricultural, mining and III55 of the Constitution, while the provision on requisition is a negative restatement of
manufacturing industries which increase national income most at the least cost, increase Section 6, Article XII.56
exports, bring about greater economic stability, provide more opportunities for
employment, raise the standards of living of the people, and provide for an equitable
distribution of wealth. It is further declared to be the policy of the state to welcome and Refusal to grant perpetual and exclusive possession to PICOP of its concession area
encourage foreign capital to establish pioneer enterprises that are capital intensive and would not result in the expropriation or requisition of PICOP’s property, as these forest
would utilize a substantial amount of domestic raw materials, in joint venture with lands belong to the State, and not to PICOP. This is not changed by PICOP’s allegation
substantial Filipino capital, whenever available. that:

Section 4. Basic Rights and Guarantees. – All investors and enterprises are entitled to the Since it takes 35 years before the company can go back and harvest their residuals in a
basic rights and guarantees provided in the constitution. Among other rights recognized logged-over area, it must be assured of tenure in order to provide an inducement for the
by the Government of the Philippines are the following: company to manage and preserve the residuals during their growth period. This is a
commitment of resources over a span of 35 years for each plot for each cycle. No
company will undertake the responsibility and cost involved in policing, preserving and
xxxx managing residual forest areas until it were sure that it had firm title to the timber. 57

d) Freedom from Expropriation. – There shall be no expropriation by the government of The requirement for logging companies to preserve and maintain forest areas, including
the property represented by investments or of the property of enterprises except for the reforestation thereof, is one of the prices a logging company must pay for the
public use or in the interest of national welfare and defense and upon payment of just exploitation thereof. Forest lands are meant to be enjoyed by countless future
compensation. x x x. generations of Filipinos, and not just by one logging company. The requirements of
reforestation and preservation of the concession areas are meant to protect them, the
e) Requisition of Investment. – There shall be no requisition of the property represented future generations, and not PICOP. Reforestation and preservation of the concession
by the investment or of the property of enterprises, except in the event of war or national areas are not required of logging companies so that they would have something to cut
emergency and only for the duration thereof. Just compensation shall be determined and again, but so that the forest would remain intact after their operations. That PICOP would
paid either at the time of requisition or immediately after cessation of the state of war or not accept the responsibility to preserve its concession area if it is not assured of tenure
national emergency. Payments received as compensation for the requisitioned property thereto does not speak well of its corporate policies.
may be remitted in the currency in which the investment was originally made and at the
exchange rate prevailing at the time of remittance, subject to the provisions of Section Conclusion
seventy-four of republic Act Numbered Two hundred sixty-five.
In sum, PICOP was not able to prove either of the two things it needed to prove to be
Section 2 speaks of the policy of the State to encourage Filipino and foreign investments. entitled to a Writ of Mandamus against the DENR Secretary. The 1969 Document is not a
It does not speak of how this policy can be implemented. Implementation of this policy is contract recognized under the non-impairment clause and, even if we assume for the
tackled in Sections 5 to 12 of the same law,54 which PICOP failed to mention, and for a sake of argument that it is, it did not enjoin the government to issue an IFMA in 2002
good reason. None of the 24 incentives enumerated therein relates to, or even remotely either. These are the essential elements in PICOP’s cause of action, and the failure to
suggests that, PICOP’s proposition that the 1969 Document is a contract. prove the same warrants a dismissal of PICOP’s Petition for Mandamus, as not even
PICOP’s compliance with all the administrative and statutory requirements can save its
PICOP could indeed argue that the enumeration is not exclusive. Certainly, granting Petition now.
incentives to investors, whether included in the enumeration or not, would be an
implementation of this policy. However, it is presumed that whatever incentives may be Whether PICOP Has Complied with the Statutory and Administrative Requirements for
given to investors should be within the bounds of the laws and the Constitution. The the Conversion of the TLA to an IFMA
declaration of policy in Section 2 cannot, by any stretch of the imagination, be read to
provide an exception to either the laws or, heaven forbid, the Constitution. Exceptions
are never presumed and should be convincingly proven. Section 2 of the Investment In the assailed Decision, our ruling was based on two distinct grounds, each one being
Incentives Act cannot be read as exempting investors from the Constitutional provisions sufficient in itself for us to rule that PICOP was not entitled to a Writ of Mandamus: (1)
(1) prohibiting private ownership of forest lands; (2) providing for the complete control the 1969 Document, on which PICOP hinges its right to compel the issuance of an IFMA,
is not a contract; and (2) PICOP has not complied with all administrative and statutory The Performance Evaluation Team tasked to appraise PICOP’s performance on its TLA
requirements for the issuance of an IFMA. No. 43 found that PICOP had not submitted its Five-Year Forest Protection Plan and its
Seven-Year Reforestation Plan.60
When a court bases its decision on two or more grounds, each is as authoritative as the
other and neither is obiter dictum.58 Thus, both grounds on which we based our ruling in In its Motion for Reconsideration, PICOP asserts that, in its Letter of Intent dated 28
the assailed Decision would become judicial dictum, and would affect the rights and August 2000 and marked as Exhibit L in the trial court, there was a reference to a Ten-
interests of the parties to this case unless corrected in this Resolution on PICOP’s Motion Year Sustainable Forest Management Plan (SFMP), in which a Five-Year Forest
for Reconsideration. Therefore, although PICOP would not be entitled to a Writ of Protection Plan and a Seven-Year Reforestation Plan were allegedly incorporated. PICOP
Mandamus even if the second issue is resolved in its favor, we should nonetheless submitted a machine copy of a certified photocopy of pages 50-67 and 104-110 of this
resolve the same and determine whether PICOP has indeed complied with all SFMP in its Motion for Reconsideration. PICOP claims that the existence of this SFMP was
administrative and statutory requirements for the issuance of an IFMA. repeatedly asserted during the IFMA application process. 61

While the first issue (on the nature of the 1969 Document) is entirely legal, this second Upon examination of the portions of the SFMP submitted to us, we cannot help but notice
issue (on PICOP’s compliance with administrative and statutory requirements for the that PICOP’s concept of forest protection is the security of the area against "illegal"
issuance of an IFMA) has both legal and factual sub-issues. Legal sub-issues include entrants and settlers. There is no mention of the protection of the wildlife therein, as the
whether PICOP is legally required to (1) consult with and acquire an approval from the focus of the discussion of the silvicultural treatments and the SFMP itself is on the
Sanggunian concerned under Sections 26 and 27 of the Local Government Code; and (2) protection and generation of future timber harvests. We are particularly disturbed by the
acquire a Certification from the National Commission on Indigenous Peoples (NCIP) that portions stating that trees of undesirable quality shall be removed.
the concession area does not overlap with any ancestral domain. Factual sub-issues
include whether, at the time it filed its Petition for Mandamus, PICOP had submitted the However, when we required the DENR Secretary to comment on PICOP’s Motion for
required Five-Year Forest Protection Plan and Seven-Year Reforestation Plan and Reconsideration, the DENR Secretary did not dispute the existence of this SFMP, or
whether PICOP had paid all forest charges. question PICOP’s assertion that a Ten-Year Forest Protection Plan and a Ten-Year
Reforestation Plan are already incorporated therein. Hence, since the agency tasked to
For the factual sub-issues, PICOP invokes the doctrine that factual findings of the trial determine compliance with IFMA administrative requirements chose to remain silent in
court, especially when upheld by the Court of Appeals, deserve great weight. However, the face of allegations of compliance, we are constrained to withdraw our
deserving of even greater weight are the factual findings of administrative agencies that pronouncement in the assailed Decision that PICOP had not submitted a Five-Year Forest
have the expertise in the area of concern. The contentious facts in this case relate to the Protection Plan and a Seven-Year Reforestation Plan for its TLA No. 43. As previously
licensing, regulation and management of forest resources, the determination of which mentioned, the licensing, regulation and management of forest resources are the primary
belongs exclusively to the DENR: responsibilities of the DENR.62

SECTION 4. Mandate. – The Department shall be the primary government agency The compliance discussed above is, of course, only for the purpose of determining
responsible for the conservation, management, development and proper use of the PICOP’s satisfactory performance as a TLA holder, and covers a period within the
country’s environment and natural resources, specifically forest and grazing lands, subsistence of PICOP’s TLA No. 43. This determination, therefore, cannot prohibit the
mineral resources, including those in reservation and watershed areas, and lands of the DENR from requiring PICOP, in the future, to submit proper forest protection and
public domain, as well as the licensing and regulation of all natural resources as may be reforestation plans covering the period of the proposed IFMA.
provided for by law in order to ensure equitable sharing of the benefits derived
therefrom for the welfare of the present and future generations of Filipinos. 59 Forest Charges

When parties file a Petition for Certiorari against judgments of administrative agencies In determining that PICOP did not have unpaid forest charges, the Court of Appeals relied
tasked with overseeing the implementation of laws, the findings of such administrative on the assumption that if it were true that PICOP had unpaid forest charges, it should not
agencies are entitled to great weight. In the case at bar, PICOP could not have filed a have been issued an approved Integrated Annual Operation Plan (IAOP) for the year
Petition for Certiorari, as the DENR Secretary had not yet even determined whether 2001-2002 by Secretary Alvarez himself.63
PICOP should be issued an IFMA. As previously mentioned, when PICOP’s application
was brought to a standstill upon the evaluation that PICOP had yet to comply with the
requirements for the issuance of an IFMA, PICOP refused to attend further meetings with In the assailed Decision, we held that the Court of Appeals had been selective in its
the DENR and instead filed a Petition for Mandamus against the latter. By jumping the evaluation of the IAOP, as it disregarded the part thereof that shows that the IAOP was
gun, PICOP did not diminish the weight of the DENR Secretary’s initial determination. approved subject to several conditions, not the least of which was the submission of
proof of the updated payment of forest charges from April 2001 to June 2001. 64 We also
held that even if we considered for the sake of argument that the IAOP should not have
Forest Protection and Reforestation Plans
been issued if PICOP had existing forestry accounts, the issuance of the IAOP could not be 3. The 21 August 2002 PICOP-requested certification issued by Bill Collector
considered proof that PICOP had paid the same. Firstly, the best evidence of payment is Amelia D. Arayan, and attested to by CENRO Calunsag himself, shows that
the receipt thereof. PICOP has not presented any evidence that such receipts were lost or PICOP paid only regular forest charges for its log production covering 1 July
destroyed or could not be produced in court. 65 Secondly, the government cannot be 2001 to 21 September 2001. However, there were log productions after 21
estopped by the acts of its officers. If PICOP has been issued an IAOP in violation of the September 2001, the regular forest charges for which have not been paid,
law, allegedly because it may not be issued if PICOP had existing forestry accounts, the amounting to ₱15,056,054.05.72 The same certification shows delayed payment
government cannot be estopped from collecting such amounts and providing the of forest charges, thereby corroborating the testimony of SFMS Evangelista and
necessary sanctions therefor, including the withholding of the IFMA until such amounts substantiating the imposition of penalties and surcharges.
are paid.
In its Motion for Reconsideration, PICOP claims that SFMS Evangelista is assigned to an
We therefore found that, as opposed to the Court of Appeals’ findings, which were based office that has nothing to do with the collection of forest charges, and that he based his
merely on estoppel of government officers, the positive and categorical evidence testimony on the Memoranda of Forest Management Specialist II (FMS II) Teofila Orlanes
presented by the DENR Secretary was more convincing with respect to the issue of and DENR, Bislig City Bill Collector Amelia D. Arayan, neither of whom was presented to
payment of forestry charges: testify on his or her Memorandum. PICOP also submitted an Addendum to Motion for
Reconsideration, wherein it appended certified true copies of CENRO Summaries with
1. Forest Management Bureau (FMB) Senior Forest Management Specialist attached Official Receipts tending to show that PICOP had paid a total of ₱81,184,747.70
(SFMS) Ignacio M. Evangelista testified that PICOP had failed to pay its regular in forest charges for 10 January 2001 to 20 December 2002, including the period during
forest charges covering the period from 22 September 2001 to 26 April 2002 in which SFMS Evangelista claims PICOP did not pay forest charges (22 September 2001 to
the total amount of ₱15,056,054.0566 PICOP also allegedly paid late most of its 26 April 2002).
forest charges from 1996 onwards, by reason of which, PICOP is liable for a
surcharge of 25% per annum on the tax due and interest of 20% per annum Before proceeding any further, it is necessary for us to point out that, as with our ruling
which now amounts to ₱150,169,485.02.67 Likewise, PICOP allegedly had on the forest protection and reforestation plans, this determination of compliance with
overdue and unpaid silvicultural fees in the amount of ₱2,366,901.00 as of 30 the payment of forest charges is exclusively for the purpose of determining PICOP’s
August 2002.68 Summing up the testimony, therefore, it was alleged that PICOP satisfactory performance on its TLA No. 43. This cannot bind either party in a possible
had unpaid and overdue forest charges in the sum of ₱167,592,440.90 as of 10 collection case that may ensue.
August 2002.69
An evaluation of the DENR Secretary’s position on this matter shows a heavy reliance on
2. Collection letters were sent to PICOP, but no official receipts are extant in the the testimony of SFMS Evangelista, making it imperative for us to strictly scrutinize the
DENR record in Bislig City evidencing payment of the overdue amount stated in same with respect to its contents and admissibility.
the said collection letters.70 There were no official receipts for the period
covering 22 September 2001 to 26 April 2002. PICOP claims that SFMS Evangelista’s office has nothing to do with the collection of forest
charges. According to PICOP, the entity having administrative jurisdiction over it is
We also considered these pieces of evidence more convincing than the other ones CENRO, Bislig City by virtue of DENR Administrative Order No. 96-36, dated 20
presented by PICOP: November 1996, which states:

1. PICOP presented the certification of Community Environment and Natural 1. In order for the DENR to be able to exercise closer and more effective supervision,
Resources Office (CENRO) Officer Philip A. Calunsag, which refers only to management and control over the forest resources within the areas covered by TLA No.
PICOP’s alleged payment of regular forest charges covering the period from 14 43, PTLA No. 47 and IFMA No. 35 of the PICOP Resources, Inc., (PRI) and, at the same
September 2001 to 15 May 2002.71 We noted that it does not mention similar time, provide greater facility in the delivery of DENR services to various publics, the
payment of the penalties, surcharges and interests that PICOP incurred in aforesaid forest holdings of PRI are hereby placed under the exclusive jurisdiction of
paying late several forest charges, which fact was not rebutted by PICOP. DENR Region No. XIII with the CENR Office at Bislig, Surigao del Sur, as directly
responsible thereto. x x x.
2. The 27 May 2002 Certification by CENRO Calunsag specified only the period
covering 14 September 2001 to 15 May 2002 and the amount of We disagree. Evangelista is an SFMS assigned at the Natural Forest Management Division
P53,603,719.85 paid by PICOP without indicating the corresponding volume of the FMB, DENR. In Evangelista’s aforementioned affidavit submitted as part of his
and date of production of the logs. This is in contrast to the findings of SFMS direct examination, Evangelista enumerated his duties and functions as SFMS:
Evangelista, which cover the period from CY 1996 to 30 August 2002 and
includes penalties, interests, and surcharges for late payment pursuant to DAO 1. As SFMS, I have the following duties and functions:
80, series of 1987.
 a) To evaluate and act on cases pertaining to forest management 8. After the evaluation, I found that the unpaid forest charges adverted to in the
referred to in the Natural forest Management Division; Memoranda of Mr. Orlanes and Arayan covering the period from May 8, 2001 to
July 7, 2001 had already been paid but late. I further found out that PICOP had
b) To monitor, verify and validate forest management and related not paid its forest charges covering the period from September 22, 2001 to
activities by timber licences as to their compliance to approved plans April 26, 2002 in the total amount of ₱15,056,054.05.
and programs;
9. I also discovered that from 1996 up to august 30, 2002, PICOP paid late some
c) To conduct investigation and verification of compliance by timber of its forest charges in 1996 and consistently failed to pay late its forest charges
licenses/permittees to existing DENR rules and regulations; from 1997 up to the present time.

d) To gather field data and information to be used in the formulation 10. Under Section 7.4 of DAO No. 80 Series of 197\87 and Paragraph (4a),
of forest policies and regulations; and Section 10 of BIR revenue Regulations No. 2-81 dated November 18, 1980,
PICOP is mandated to pay a surcharge of 25% per annum of the tax due and
interest of 20% per annum for late payment of forest charges.
e) To perform other duties and responsibilities as may be directed by
superiors.73
11. The overdue unpaid forest charges of PICOP as shown in the attached
tabulation marked as Annex 4 hereof is ₱150,169,485.02. Likewise, PICOP has
PICOP also alleges that the testimony of SFMS Evangelista was based on the overdue and unpaid silvicultural fees in the amount of ₱2,366,901.00 from
aforementioned Memoranda of Orlanes and Arayan and that, since neither 1996 to the present.
Orlanes nor Arayan was presented as a witness, SFMS Evangelista’s testimony
should be deemed hearsay. SFMS Evangelista’s 1 October 2002
Affidavit,74 which was offered as part of his testimony, provides: 12. In all, PICOP has an outstanding and overdue total obligation of
₱167,592,440.90 as of August 30, 2002 based on the attached tabulation which
is marked as Annex 5 hereof.75
2. Sometime in September, 2001 the DENR Secretary was furnished a copy of
forest Management Specialist II (FMS II) Teofila L. Orlanes’ Memorandum dated
September 24, 2001 concerning unopaid forest charges of PICOP. Attached to Clearly, SFMS Evangelista had not relied on the Memoranda of Orlanes and Arayan. On
the said Memorandum was a Memorandum dated September 19, 2001 of the contrary, he traveled to Surigao del Sur in order to verify the contents of these
Amelia D. Arayan, Bill collector of the DENR R13-14, Bislig City. Copies of the Memoranda. SFMS Evangelista, in fact, revised the findings therein, as he discovered that
said Memoranda are attached as Annexes 1 and 2, respectively. certain forest charges adverted to as unpaid had already been paid.

3. The said Memoranda were referred to the FMB Director for appropriate This does not mean, however, that SFMS Evangelista’s testimony was not hearsay. A
action. witness may testify only on facts of which he has personal knowledge; that is, those
derived from his perception, except in certain circumstances allowed by the
Rules.76 Otherwise, such testimony is considered hearsay and, hence, inadmissible in
4. Thus, on August 5, 2002, I was directed by the FMB Director to proceed to evidence.77
Region 13 to gather forestry-related data and validate the report contained in
the Memoranda of Ms. Orlanes and Arayan.
SFMS Evangelista, while not relying on the Memoranda of Orlanes and Arayan,
nevertheless relied on records, the preparation of which he did not participate
5. On August 6, 2002, I proceeded to DENR Region 13 in Bislig City. A copy of in.78 These records and the persons who prepared them were not presented in court,
my Travel Order is attached as Annex 3. either. As such, SFMS Evangelista’s testimony, insofar as he relied on these records, was
on matters not derived from his own perception, and was, therefore, hearsay.
6. Upon my arrival at CENRO, Bislig, surigao del Sur, I coordinated with CENRO
Officer Philip A. Calunsag and requested him to make available to me the Section 44, Rule 130 of the Rules of Court, which speaks of entries in official records as
records regarding the forest products assessments of PICOP. an exception to the hearsay rule, cannot excuse the testimony of SFMS Evangelista.
Section 44 provides:
7. After I was provided with the requested records, I evaluated and collected
the data. SEC. 44. Entries in official records. – Entries in official records made in the performance
of his duty by a public officer of the Philippines, or by a person in the performance of a
duty specially enjoined by law, are prima facie evidence of the facts therein stated.
In Africa v. Caltex,79 we enumerated the following requisites for the admission of entries SEC. 59. Certification Precondition. – All departments and other governmental agencies
in official records as an exception to the hearsay rule: (1) the entries were made by a shall henceforth be strictly enjoined from issuing, renewing or granting any concession,
public officer or a private person in the performance of a duty; (2) the performance of license or lease, or entering into any production-sharing agreement, without prior
the duty is especially enjoined by law; (3) the public officer or the private person had certification from the NCIP that the area affected does not overlap with any ancestral
sufficient knowledge of the facts stated by him, which must have been acquired by him domain. Such certification shall only be issued after a field-based investigation is
personally or through official information. conducted by the Ancestral Domains Office of the area concerned: Provided, That no
certification shall be issued by the NCIP without the free and prior informed and written
The presentation of the records themselves would, therefore, have been admissible as an consent of the ICCs/IPs concerned: Provided, further, That no department, government
exception to the hearsay rule even if the public officer/s who prepared them was/were agency or government-owned or controlled corporation may issue new concession,
not presented in court, provided the above requisites could be adequately proven. In the license, lease, or production sharing agreement while there is a pending application for a
case at bar, however, neither the records nor the persons who prepared them were CADT: Provided, finally, That the ICCs/IPs shall have the right to stop or suspend, in
presented in court. Thus, the above requisites cannot be sufficiently proven. Also, since accordance with this Act, any project that has not satisfied the requirement of this
SFMS Evangelista merely testified based on what those records contained, his testimony consultation process.
was hearsay evidence twice removed, which was one step too many to be covered by the
official-records exception to the hearsay rule. PICOP had tried to put a cloud of ambiguity over Section 59 of Republic Act No. 8371 by
invoking the definition of Ancestral Domains in Section 3(a) thereof, wherein the
SFMS Evangelista’s testimony of nonpayment of forest charges was, furthermore, based possesssion by Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) must
on his failure to find official receipts corresponding to billings sent to PICOP. As stated have been continuous to the present. However, we noted the exception found in the very
above, PICOP attached official receipts in its Addendum to Motion for Reconsideration to same sentence invoked by PICOP:
this Court. While this course of action is normally irregular in judicial proceedings, we
merely stated in the assailed Decision that "the DENR Secretary has adequately proven a) Ancestral domains – Subject to Section 56 hereof, refers to all areas generally
that PICOP has, at this time, failed to comply with administrative and statutory belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and natural
requirements for the conversion of TLA No. 43 into an IFMA," 80 and that "this disposition resources therein, held under a claim of ownership, occupied or possessed by ICCs/IPs,
confers another chance to comply with the foregoing requirements." 81 by themselves or through their ancestors, communally or individually since time
immemorial, continuously to the present except when interrupted by war, force majeure
In view of the foregoing, we withdraw our pronouncement that PICOP has unpaid or displacement by force, deceit, stealth or as a consequence of government projects or
forestry charges, at least for the purpose of determining compliance with the IFMA any other voluntary dealings entered into by government and private
requirements. individuals/corporations, and which are necessary to ensure their economic, social and
cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural,
and other lands individually owned whether alienable and disposable or otherwise,
NCIP Certification hunting grounds, burial grounds, worship areas, bodies of water, mineral and other
natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs
The Court of Appeals held that PICOP need not comply with Section 59 of Republic Act but from which they traditionally had access to for their subsistence and traditional
No. 8371, which requires prior certification from the NCIP that the areas affected do not activities, particularly the home ranges of ICCs/IPs who are still nomadic and/or shifting
overlap with any ancestral domain before any IFMA can be entered into by the cultivators;
government. According to the Court of Appeals, Section 59 should be interpreted to refer
to ancestral domains that have been duly established as such by the continuous Ancestral domains, therefore, remain as such even when possession or occupation of
possession and occupation of the area concerned by indigenous peoples since time these areas has been interrupted by causes provided under the law, such as voluntary
immemorial up to the present. The Court of Appeals held that PICOP had acquired dealings entered into by the government and private individuals/corporations.
property rights over TLA No. 43 areas, being in exclusive, continuous and uninterrupted Consequently, the issuance of TLA No. 43 in 1952 did not cause the ICCs/IPs to lose their
possession and occupation of these areas since 1952 up to the present. possession or occupation over the area covered by TLA No. 43.

In the assailed Decision, we reversed the findings of the Court of Appeals. Firstly, the Thirdly, we held that it was manifestly absurd to claim that the subject lands must first
Court of Appeals ruling defies the settled jurisprudence we have mentioned earlier, that be proven to be part of ancestral domains before a certification that the lands are not
a TLA is neither a property nor a property right, and that it does not create a vested part of ancestral domains can be required, and invoked the separate opinion of now
right.82 Chief Justice Reynato Puno in Cruz v. Secretary of DENR 83:

Secondly, the Court of Appeals’ resort to statutory construction is misplaced, as Section As its subtitle suggests, [Section 59 of R.A. No. 8371] requires as a precondition for the
59 of Republic Act No. 8379 is clear and unambiguous: issuance of any concession, license or agreement over natural resources, that a
certification be issued by the NCIP that the area subject of the agreement does not lie under the provisions of DENR Administrative Order No. 2 Series of 1993, nor to any
within any ancestral domain. The provision does not vest the NCIP with power over the other community / ancestral domain program prior to R.A. 8371.
other agencies of the State as to determine whether to grant or deny any concession or
license or agreement. It merely gives the NCIP the authority to ensure that the ICCs/IPs xxxx
have been informed of the agreement and that their consent thereto has been obtained.
Note that the certification applies to agreements over natural resources that do not
necessarily lie within the ancestral domains. For those that are found within the said 87. One can not imagine the terrible damage and chaos to the country, its economy, its
domains, Sections 7(b) and 57 of the IPRA apply. people and its future if a mere claim filed for the issuance of a CADC or CADT will already
provide those who filed the application, the authority or right to stop the renewal or
issuance of any concession, license or lease or any production-sharing agreement. The
PICOP rejects the entire disposition of this Court on the matter, relying on the following same interpretation will give such applicants through a mere application the right to stop
theory: or suspend any project that they can cite for not satisfying the requirements of the
consultation process of R.A. 8371. If such interpretation gets enshrined in the statures of
84. It is quite clear that Section 59 of R.A. 8371 does not apply to the automatic the land, the unscrupulous and the extortionists can put any ongoing or future project or
conversion of TLA 43 to IFMA. activity to a stop in any part of the country citing their right from having filed an
application for issuance of a CADC or CADT claim and the legal doctrine established by
First, the automatic conversion of TLA 43 to an IFMA is not a new project. It is a mere the Supreme Court in this PICOP case.85
continuation of the harvesting process in an area that PICOP had been managing,
conserving and reforesting for the last 50 years since 1952. Hence any pending We are not sure whether PICOP’s counsels are deliberately trying to mislead us, or are
application for a CADT within the area, cannot affect much less hold back the automatic just plainly ignorant of basic precepts of law. The term "claim" in the phrase "claim of
conversion. That the government now wishes to change the tenurial system to an IFMA ownership" is not a document of any sort. It is an attitude towards something. The
could not change the PICOP project, in existence and operating for the last 30 (sic) years, phrase "claim of ownership" means "the possession of a piece of property with the
into a new one.84 intention of claiming it in hostility to the true owner." 86 It is also defined as "a party’s
manifest intention to take over land, regardless of title or right." 87 Other than in Republic
PICOP’s position is anything but clear. What is clearly provided for in Section 59 is that it Act No. 8371, the phrase "claim of ownership" is thoroughly discussed in issues relating
covers "issuing, renewing or granting (of) any concession, license or lease, or entering to acquisitive prescription in Civil Law.
into any production sharing agreement." PICOP is implying that, when the government
changed the tenurial system to an IFMA, PICOP’s existing TLA would just be upgraded or Before PICOP’s counsels could attribute to us an assertion that a mere attitude or
modified, but would be the very same agreement, hence, dodging the inclusion in the intention would stop the renewal or issuance of any concession, license or lease or any
word "renewing." However, PICOP is conveniently leaving out the fact that its TLA production-sharing agreement, we should stress beforehand that this attitude or
expired in 2002. If PICOP really intends to pursue the argument that the conversion of intention must be clearly shown by overt acts and, as required by Section 3(a), should
the TLA into an IFMA would not create a new agreement, but would only be a have been in existence "since time immemorial, continuously to the present except when
modification of the old one, then it should be willing to concede that the IFMA expired as interrupted by war, force majeure or displacement by force, deceit, stealth or as a
well in 2002. An automatic modification would not alter the terms and conditions of the consequence of government projects or any other voluntary dealings entered into by
TLA except when they are inconsistent with the terms and conditions of an IFMA. government and private individuals/corporations."
Consequently, PICOP’s concession period under the renewed TLA No. 43, which is from
the year 1977 to 2002, would remain the same. Another argument of PICOP involves the claim itself that there was no overlapping:

PICOP cannot rely on a theory of the case whenever such theory is beneficial to it, but Second, there could be no overlapping with any Ancestral Domain as proven by the
refute the same whenever the theory is damaging to it. In the same way, PICOP cannot evidence presented and testimonies rendered during the hearings in the Regional Trial
claim that the alleged Presidential Warranty is "renewable for other 25 years" and later Court. x x x.
on claim that what it is asking for is not a renewal. Extensions of agreements must
necessarily be included in the term renewal. Otherwise, the inclusion of "renewing" in
Section 59 would be rendered inoperative. x x x x.

PICOP further claims: 88. The DENR issued a total of 73 CADCs as of December 11, 1996. The DENR
Undersecretary for Field Operations had recommended another 11 applications for
issuance of CADCs. None of the CADCs overlap the TLA 43 area.
85. Verily, in interpreting the term "held under claim of ownership," the Supreme Court
could not have meant to include claims that had just been filed and not yet recognized
89. However former DENR Secretary Alvarez, in a memorandum dated 13 September, SEC. 2. x x x.
2002 addressed to PGMA, insisted that PICOP had to comply with the requirement to
secure a Free and Prior Informed Concent because CADC 095 was issued covering 17,112 xxxx
hectares of TLA 43.
(c) It is likewise the policy of the State to require all national agencies and offices to
90. This CADC 095 is a fake CADC and was not validly released by the DENR. While the conduct periodic consultations with appropriate local government units,
Legal Department of the DENR was still in the process of receiving the filings for nongovernmental and people’s organizations, and other concerned sectors of the
applicants and the oppositors to the CADC application, PICOP came across filed copies of community before any project or program is implemented in their respective
a CADC 095 with the PENRO of Davao Oriental as part of their application for a jurisdictions.
Community Based Forest Management Agreement (CBFMA). Further research came
across the same group filing copies of the alleged CADC 095 with the Mines and
Geosciences Bureau in Davao City for a mining agreement application. The two SEC. 26. Duty of National Government Agencies in the Maintenance of Ecological Balance.
applications had two different versions of the CADCs second page. One had Mr. Romeo T. – It shall be the duty of every national agency or government-owned or controlled
Acosta signing as the Social reform Agenda Technical Action Officer, while the other had corporation authorizing or involved in the planning and implementation of any project
him signing as the Head, Community-Based Forest Management Office. One had the word or program that may cause pollution, climatic change, depletion of non-renewable
"Eight" crossed out and "Seven" written to make it appear that the CADC was issued on resources, loss of crop land, rangeland, or forest cover, and extinction of animal or plant
September 25, 1997, the other made it appear that there were no alterations and the species, to consult with the local government units, nongovernmental organizations, and
date was supposed to be originally 25 September 1997. other sectors concerned and explain the goals and objectives of the project or program,
its impact upon the people and the community in terms of environmental or ecological
balance, and the measures that will be undertaken to prevent or minimize the adverse
What is required in Section 59 of Republic Act No. 8379 is a Certification from the NCIP effects thereof.
that there was no overlapping with any Ancestral Domain. PICOP cannot claim that the
DENR gravely abused its discretion for requiring this Certification, on the ground that
there was no overlapping. We reiterate that it is manifestly absurd to claim that the SEC. 27. Prior Consultations Required. – No project or program shall be implemented by
subject lands must first be proven to be part of ancestral domains before a certification government authorities unless the consultations mentioned in Sections 2(c) and 26
that they are not can be required. As discussed in the assailed Decision, PICOP did not hereof are complied with, and prior approval of the sanggunian concerned is obtained:
even seek any certification from the NCIP that the area covered by TLA No. 43, subject of Provided, That occupants in areas where such projects are to be implemented shall not
its IFMA conversion, did not overlap with any ancestral domain. 88 be evicted unless appropriate relocation sites have been provided, in accordance with
the provisions of the Constitution.
Sanggunian Consultation and Approval
As stated in the assailed Decision, the common evidence of the DENR Secretary and
PICOP, namely, the 31 July 2001 Memorandum of Regional Executive Director (RED)
While PICOP did not seek any certification from the NCIP that the former’s concession Elias D. Seraspi, Jr., enumerated the local government units and other groups which had
area did not overlap with any ancestral domain, PICOP initially sought to comply with expressed their opposition to PICOP’s application for IFMA conversion:
the requirement under Sections 26 and 27 of the Local Government Code to procure
prior approval of the Sanggunians concerned. However, only one of the many provinces
affected approved the issuance of an IFMA to PICOP. Undaunted, PICOP nevertheless 7. During the conduct of the performance evaluation of TLA No. 43 issues complaints
submitted to the DENR the purported resolution 89 of the Province of Surigao del Sur against PRI were submitted thru Resolutions and letters. It is important that these are
indorsing the approval of PICOP’s application for IFMA conversion, apparently hoping included in this report for assessment of what are their worth, viz:
either that the disapproval of the other provinces would go unnoticed, or that the
Surigao del Sur approval would be treated as sufficient compliance. xxxx

Surprisingly, the disapproval by the other provinces did go unnoticed before the RTC and 7.2 Joint Resolution (unnumbered), dated March 19, 2001 of the Barangay Council and
the Court of Appeals, despite the repeated assertions thereof by the Solicitor General. Barangay Tribal Council of Simulao, Boston, Davao Oriental (ANNEX F) opposing the
When we pointed out in the assailed Decision that the approval must be by all the conversion of TLA No. 43 into IFMA over the 17,112 hectares allegedly covered with
Sanggunians concerned and not by only one of them, PICOP changed its theory of the CADC No. 095.
case in its Motion for Reconsideration, this time claiming that they are not required at all
to procure Sanggunian approval. 7.3 Resolution Nos. 10, s-2001 and 05, s-2001 (ANNEXES G & H) of the Bunawan Tribal
Council of Elders (BBMTCE) strongly demanding none renewal of PICOP TLA. They claim
Sections 2(c), 26 and 27 of the Local Government Code provide: to be the rightful owner of the area it being their alleged ancestral land.
7.4 Resolution No. 4, S-2001 of Sitio Linao, San Jose, Bislig City (ANNEX I) requesting not b) Communal forests of less than 5000 hectares
to renew TLA 43 over the 900 hectares occupied by them.
c) Small watershed areas which are sources of local water supply. 93
7.5 Resolution No. 22, S-2001 (ANNEX J) of the Sanguniang Bayan, Lingig, Surigao del Sur
not to grant the conversion of TLA 43 citing the plight of former employees of PRI who We have to remind PICOP again of the contents of Section 2, Article XII of the
were forced to enter and farm portion of TLA No. 43, after they were laid off. Constitution:

7.6 SP Resolution No. 2001-113 and CDC Resolution Nos. 09-2001 of the Sanguniang Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other
Panglungsod of Bislig City (ANNEXES K & L) requesting to exclude the area of TLA No. 43 mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and
for watershed purposes. 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,
7.7 Resolution No. 2001-164, dated June 01, 2001 (ANNEX M) Sanguniang Panglungsod development, and utilization of natural resources shall be under the full control and
of Bislig City opposing the conversion of TLA 43 to IFMA for the reason that IFMA do not supervision of the State. The State may directly undertake such activities, or it may enter
give revenue benefits to the City.90 into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of whose capital is
PICOP had claimed that it complied with the Local Government Code requirement of owned by such citizens. Such agreements may be for a period not exceeding twenty-five
obtaining prior approval of the Sanggunian concerned by submitting a purported years, renewable for not more than twenty-five years, and under such terms and
resolution91 of the Province of Surigao del Sur indorsing the approval of PICOP’s conditions as may be provided by law. In cases of water rights for irrigation, water
application for IFMA conversion. We ruled that this cannot be deemed sufficient supply, fisheries, or industrial uses other than the development of water power,
compliance with the foregoing provision. Surigao del Sur is not the only province affected beneficial use may be the measure and limit of the grant.
by the area covered by the proposed IFMA. As even the Court of Appeals found, PICOP’s
TLA No. 43 traverses the length and breadth not only of Surigao del Sur but also of All projects relating to the exploration, development and utilization of natural resources
Agusan del Sur, Compostela Valley and Davao Oriental. 92 are projects of the State. While the State may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations or associations at
On Motion for Reconsideration, PICOP now argues that the requirement under Sections least sixty per centum of whose capital is owned by these citizens, such as PICOP, the
26 and 27 does not apply to it: projects nevertheless remain as State projects and can never be purely private
endeavors.
97. PICOP is not a national agency. Neither is PICOP government owned or controlled.
Thus Section 26 does not apply to PICOP. Also, despite entering into co-production, joint venture, or production-sharing
agreements, the State remains in full control and supervision over such projects. PICOP,
thus, cannot limit government participation in the project to being merely its bouncer,
98. It is very clear that Section 27 refers to projects or programs to be implemented by whose primary participation is only to "warrant and ensure that the PICOP project shall
government authorities or government-owned and controlled corporations. PICOP’s have peaceful tenure in the permanent forest allocated to provide raw materials for the
project or the automatic conversion is a purely private endevour. First the PICOP project project."
has been implemented since 1969. Second, the project was being implemented by
private investors and financial institutions.
PICOP is indeed neither a national agency nor a government-owned or controlled
corporation. The DENR, however, is a national agency and is the national agency
99. The primary government participation is to warrant and ensure that the PICOP prohibited by Section 27 from issuing an IFMA without the prior approval of the
project shall have peaceful tenure in the permanent forest allocated to provide raw Sanggunian concerned. As previously discussed, PICOP’s Petition for Mandamus can only
materials for the project. To rule now that a project whose foundations were commenced be granted if the DENR Secretary is required by law to issue an IFMA. We, however, see
as early as 1969 shall now be subjected to a 1991 law is to apply the law retrospectively here the exact opposite: the DENR Secretary was actually prohibited by law from issuing
in violation of Article 4 of the Civil Code that laws shall not be applied retroactively. an IFMA, as there had been no prior approval by all the other Sanggunians concerned.

100. In addition, under DAO 30, Series of 1992, TLA and IFMA operations were not
among those devolved function from the National Government / DENR to the local
government unit. Under its Section 03, the devolved function cover only:

a) Community Based forestry projects.

As regards PICOP’s assertion that the application to them of a 1991 law is in violation of prove compliance with statutory and administrative requirements for the conversion of
the prohibition against the non-retroactivity provision in Article 4 of the Civil Code, we its TLA into an IFMA.
have to remind PICOP that it is applying for an IFMA with a term of 2002 to 2027. Section
2, Article XII of the Constitution allows exploitation agreements to last only "for a period While we have withdrawn our pronouncements in the assailed Decision that (1) PICOP
not exceeding twenty-five years, renewable for not more than twenty-five years." PICOP, had not submitted the required forest protection and reforestation plans, and that (2)
thus, cannot legally claim that the project’s term started in 1952 and extends all the way PICOP had unpaid forestry charges, thus effectively ruling in favor of PICOP on all factual
to the present. issues in this case, PICOP still insists that the requirements of an NCIP certification and
Sanggunian consultation and approval do not apply to it. To affirm PICOP’s position on
Finally, the devolution of the project to local government units is not required before these matters would entail nothing less than rewriting the Indigenous Peoples’ Rights
Sections 26 and 27 would be applicable. Neither Section 26 nor 27 mentions such a Act and the Local Government Code, an act simply beyond our jurisdiction.
requirement. Moreover, it is not only the letter, but more importantly the spirit of
Sections 26 and 27, that shows that the devolution of the project is not required. The WHEREFORE, the Motion for Reconsideration of PICOP Resources, Inc. is DENIED.
approval of the Sanggunian concerned is required by law, not because the local
government has control over such project, but because the local government has the duty
to protect its constituents and their stake in the implementation of the project. Again, SO ORDERED.
Section 26 states that it applies to projects that "may cause pollution, climatic change,
depletion of non-renewable resources, loss of crop land, rangeland, or forest cover, and
extinction of animal or plant species." The local government should thus represent the
communities in such area, the very people who will be affected by flooding, landslides or
even climatic change if the project is not properly regulated, and who likewise have a
stake in the resources in the area, and deserve to be adequately compensated when these
resources are exploited.

Indeed, it would be absurd to claim that the project must first be devolved to the local
government before the requirement of the national government seeking approval from
the local government can be applied. If a project has been devolved to the local
government, the local government itself would be implementing the project. That the
local government would need its own approval before implementing its own project is
patently silly.

EPILOGUE AND DISPOSITION

PICOP’c cause of action consists in the allegation that the DENR Secretary, in not issuing
an IFMA, violated its constitutional right against non-impairment of contracts. We have
ruled, however, that the 1969 Document is not a contract recognized under the non-
impairment clause, much less a contract specifically enjoining the DENR Secretary to
issue the IFMA. The conclusion that the 1969 Document is not a contract recognized
under the non-impairment clause has even been disposed of in another case decided by
another division of this Court, PICOP Resources, Inc. v. Base Metals Mineral Resources
Corporation,94 the Decision in which case has become final and executory. PICOP’s
Petition for Mandamus should, therefore, fail.

Furthermore, even if we assume for the sake of argument that the 1969 Document is a
contract recognized under the non-impairment clause, and even if we assume for the
sake of argument that the same is a contract specifically enjoining the DENR Secretary to
issue an IFMA, PICOP’s Petition for Mandamus must still fail. The 1969 Document
expressly states that the warranty as to the tenure of PICOP is "subject to compliance
with constitutional and statutory requirements as well as with existing policy on timber
concessions." Thus, if PICOP proves the two above-mentioned matters, it still has to
 THIRD DIVISION In their Complaint, [respondents] claim that they are the owners of the various parcels of
real property that form part of Lot No. 666, (plan II-5121 Amd.2) situated in Mandaue
City, Cebu, which lot allegedly belonged originally to Claudio Ermac. Upon the latters
death, the said Lot No. 666 was inherited and partitioned by his children, namely,
[G.R. No. 149679. May 30, 2003] Esteban, Pedro and Balbina. Siblings Pedro and Balbina requested their brother Esteban
to have their title over the property registered. Esteban, however, was unable to do so,
and the task of registration fell to his son, Clemente. Clemente applied for registration of
the title, but did so in his own name, and did not include his fathers brother and sister,
nor his cousins. Despite having registered the lot in his name, Clemente did not disturb
HEIRS OF CLEMENTE ERMAC, namely: IRENEA E. SENO, LIBRADA E. MALINAO, INES or claim ownership over those portions occupied by his uncle, aunt and cousins even up
E. MIOZA, SOLEDAD E. CENIZA, RODULFO ERMAC and AMELITA E. to the time of his death. Among the occupants of Lot No. 666 are the [respondents] in this
BASUBAS, petitioners, vs. HEIRS OF VICENTE ERMAC, namely: BENJAMIN, case. [Respondents]-heirs of Vicente Ermac claim ownership over the portions of Lot No.
VIRGINIA, PRECIOSA, DANILO, as HEIRS OF URBANO ADOLFO; BERNARDINO, 666 now occupied by them by right of succession as direct descendants of the original
CLIMACO, CESAR, ELSA, FLORAME and FE, all surnamed ERMAC, as HEIRS OF owner, Claudio Ermac. [Respondents] Luisa Del Castillo and Estaneslao Dionson
CLIMACO ERMAC, ESTELITA ERMAC, ESTANESLAO DIONSON, VICENTE DIONSON, allegedly derived their title by purchase from the children of Claudio
EUFEMIA LIGARAY, EMIGDIO BUSTILLO and LIZA PARAJELE, LUISA DEL Ermac. [Respondent] Vicente Dionson, on the other hand, bought his land from the heirs
CASTILLO,*respondents. of Pedro Ermac, while [Respondents] Emigdio Bustillo and Liza Parajele derived their
ownership from the Heirs of Balbina Ermac-Dabon. [respondents] ownership and
DECISION possession had been peaceful and undisturbed, until recently when the [petitioners]-
heirs of Clemente Ermac filed an action for ejectment against them. The filing of the said
PANGANIBAN, J.: ejectment caused a cloud of doubt upon the [respondents] ownership over their
respective parcels of land, prompting them to file this action for quieting of title.
Ownership should not be confused with a certificate of title. Registering land under
the Torrens System does not create or vest title, because registration is not a mode of [Petitioners], on the other hand, denied the material allegations of the [respondents], and
acquiring ownership. A certificate of title is merely an evidence of ownership or title over claimed that the [respondents] have no cause of action against them. It is essentially
the particular property described therein. claimed that it was Clemente Ermac and not his grandfather Claudio Ermac who is the
original claimant of dominion over Lot No. 666. During his lifetime, Clemente Ermac was
in actual, peaceful, adverse and continuous possession in the concept of an owner of the
entire Lot No. 666. With the help of his children, he cultivated the said lot, and planted
The Case corn, peanuts, cassava and fruit products. Clemente also effected the registration of the
subject lot in his name. Upon Clementes death, [petitioners] inherited Lot No. 666, and
they constructed their residential houses thereon. [Petitioners] claim that [respondents]
Before us is a Petition for Review [1] under Rule 45 of the Rules of Court, seeking to recent occupation of some portions of Lot No. 666 was only tolerated by Clemente Ermac
set aside the February 16, 2001 Decision[2] and the August 6, 2001 Resolution [3] of the and the [petitioners]. [Petitioners] in fact had never surrendered ownership or
Court of Appeals[4] (CA) in CA-GR CV No. 59564. The dispositive part of the Decision possession of the property to the [respondents]. [Petitioners] also set up the defense of
reads: prescription and laches.

WHEREFORE, premises considered, the instant appeal is hereby DISMISSED, and the xxxxxxxxx
assailed [D]ecision of the Regional Trial Court of Mandaue City is hereby AFFIRMED. [5]
After trial, the lower [court] rendered its [D]ecision, finding that the original owner of
The assailed Resolution denied petitioners Motion for Reconsideration. the lot in question was Claudio Ermac, and therefore, the property was inherited upon
his death by his children Esteban, Balbina and Pedro. All the heirs of Claudio Ermac,
therefore, should share in the ownership over Lot No. 666, by right of succession. The
The Facts ruling [was] supported by the admissions of Irene[a] Seno, witness for the [petitioners]
and daughter of Clemente Ermac, establishing facts which show that [petitioners] and
their predecessor Clemente did not own the entire property, but that the other heirs of
Claudio Ermac are entitled to two-thirds (2/3) of the lot. Since the entire lot is now
The factual antecedents of the case are summarized by the CA as follows:
registered in the name of Clemente Ermac, the shares belonging to the other heirs of
Claudio Ermac, some of which have already been purchased by some of the
[respondents], are being held in trust by the [petitioners] in favor of their actual The Petition is unmeritorious.
occupants.[6]

First Issue:
Ruling of the Court of Appeals Preliminary Injunction

The CA held that the factual finding of the Regional Trial Court (RTC) [7] should not Petitioners assail the validity of the Writ of Preliminary Injunction issued by the
be disturbed on appeal. The latter found that Lot No. 666 was originally owned by RTC to restrain the ejectment proceedings they had filed earlier.
Claudio Ermac and, after his death, was inherited by his children -- Esteban, Balbina and
Pedro. It ruled that respondents were able to prove consistently and corroboratively that This question is not only late, but also moot. If petitioners truly believed that the
they -- as well as their predecessors-in-interests -- had been in open, continuous and issuance of the Writ was tainted with grave abuse of discretion, they should have
undisturbed possession and occupation thereof in the concept of owners. challenged it by a special civil action for certiorari within the reglementary period. Any
ruling by the Court at this point would be moot and academic, as the resolution of the
According to the appellate court, [t]he fact that [petitioners] have in their issue would not involve the merits of the case, which this appeal -- as it is now -- touches
possession certificates of title which apparently bear out that it [was] Clemente Ermac upon.
alone who claimed the entire property described therein [has] no discrediting effect
upon plaintiffs claim, it appearing that such titles were acquired in derogation of the
existing valid and adverse interests of the plaintiffs whose title by succession were
effectively disregarded.[8] Second Issue:
Indefeasibility and Incontrovertibility of Title
Hence, this Petition.[9]

Petitioners posit that pursuant to Section 32 of PD 1529 (the Property Registration

Decree), the certificate of title issued in favor of their predecessor-in-interest, Clemente
The Issues Ermac, became incontrovertible after the lapse of one year from its issuance. Hence, it
can no longer be challenged.
In their Memorandum,[10] petitioners raise the following issues for our We clarify. While it is true that Section 32[12] of PD 1529 provides that the decree of
consideration: registration becomes incontrovertible after a year, it does not altogether deprive an
aggrieved party of a remedy[13] in law.[14] The acceptability of the Torrens System would
I. The validity of the Writ of Preliminary Injunction dated February 5, 1996 be impaired, if it is utilized to perpetuate fraud against the real owners. [15]
issued by the Regional Trial Court, Branch 28, directing the Municipal Trial Furthermore, ownership is not the same as a certificate of title. Registering a piece
Court in Cities, Branch 2, to cease and desist from conducting further of land under the Torrens System does not create or vest title, because registration is not
proceedings in Civil Case No. 2401[;] a mode of acquiring ownership.[16] A certificate of title is merely an evidence of
ownership or title over the particular property described therein. [17] Its issuance in favor
II. Whether or not O.C.T. No. RO-752 issued in the names of [Spouses] of a particular person does not foreclose the possibility that the real property may be co-
Clemente Ermac [and] Anunciacion Suyco is indefeasible and owned with persons not named in the certificate, or that it may be held in trust for
incontrovertible under the Torrens System[;] another person by the registered owner.[18]

III. Whether or not the alleged tax declarations and tax receipts are sufficient
to defeat the title over the property in the names of petitioners predecessors-
Third Issue:
in-interest [Spouses] Clemente Ermac and Anunciacion Suyco[;] Ownership of the Disputed Lot

[IV]. Whether or not laches ha[s] set in on the claims by the respondents on
portions of Lot No. 666[.][11] Petitioners claim that the CA erred in relying on the hearsay and unsubstantiated
testimony of respondents, as well as on tax declarations and realty tax receipts, in order
to support its ruling that the land was owned by Claudio Ermac.
The Courts Ruling
 We are not persuaded. The credence given to the testimony of the witnesses for
respondents is a factual issue already passed upon and resolved by the trial and the
appellate courts. It is a hornbook doctrine that only questions of law are entertained in
appeals by certiorari under Rule 45 of the Rules of Court. The trial courts findings of fact,
which the CA affirmed, are generally conclusive and binding upon this Court. [19]
Moreover, while tax declarations and realty tax receipts do not conclusively prove
ownership, they may constitute strong evidence of ownership when accompanied by
possession for a period sufficient for prescription.[20] Considering that respondents have
been in possession of the property for a long period of time, there is legal basis for their
use of tax declarations and realty tax receipts as additional evidence to support their
claim of ownership.

Fourth Issue:
Prescription and Laches

Petitioners assert that the ownership claimed by respondents is barred by

prescription and laches, because it took the latter 57 years to bring the present
action. We disagree.
When a party uses fraud or concealment to obtain a certificate of title to property, a
constructive trust is created in favor of the defrauded party.[21] Since Claudio Ermac has
already been established in the present case as the original owner of the land, the
registration in the name of Clemente Ermac meant that the latter held the land in trust
for all the heirs of the former. Since respondents were in actual possession of the
property, the action to enforce the trust, and recover the property, and thereby quiet title
thereto, does not prescribe.[22]
Because laches is an equitable doctrine, its application is controlled by equitable
considerations.[23] It cannot be used to defeat justice or to perpetuate fraud and injustice .
[24]
Its application should not prevent the rightful owners of a property to recover what
has been fraudulently registered in the name of another.
WHEREFORE, the Petition is hereby DENIED and the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
EPUBLIC OF THE PHILIPPINES, G.R. No. 180067 FOUR THOUSAND TWO HUNDRED AND ONE (4201) SQUARE
Petitioner, METERS. x x x
- versus - Present:

YNARES-SANTIAGO, Chairperson,
IGLESIA NI CRISTO, Trustee and APPLICANT, with its CHICO-NAZARIO, On November 19, 1998, Iglesia Ni Cristo (INC), represented by Erao G. Manalo,
Executive Minister ERAO MANALO as Corporate VELASCO, JR., as corporate sole, filed its Application for Registration of Title before the MCTC in Paoay-
Sole, NACHURA, and
Respondent. PERALTA, JJ. Currimao. Appended to the application were the sepia or tracing cloth of plan Swo-1-

Promulgated: 001047, the technical description of subject lot, [3] the Geodetic Engineers Certificate,
[4]
Tax Declaration No. (TD) 508026[5] covering the subject lot, and the September 7, 1970
June 30, 2009
x-----------------------------------------------------------------------------------------x Deed of Sale[6] executed by Bernardo Bandaguio in favor of INC.

DECISION
The Republic, through the Office of the Solicitor General (OSG), entered its
VELASCO, JR., J.:
appearance and deputized the Provincial Prosecutor of Laoag City to appear on its

behalf. It also filed an Opposition to INCs application.

The Case

In this Petition for Review on Certiorari under Rule 45, the Republic of the The Ruling of the Cadastral Court
Philippines assails the October 11, 2007 Decision [1] of the Court of Appeals (CA) in CA-
G.R. CV No. 85348, which affirmed the April 26, 2005 Decision [2] of the Municipal Circuit
After the required jurisdictional publication, notification, and posting, hearing
Trial Court (MCTC) in Paoay-Currimao, Ilocos Norte, in Land Registration Case No. 762-C
ensued where the INC presented three testimonial witnesses, [7] the MCTC, acting as
for Application for Registration of Title, entitled Iglesia Ni Cristo, Trustee and Applicant
with its Executive Minister Erao Manalo as Corporate Sole v. Republic of the Philippines as cadastral court, rendered its Decision on April 26, 2005, granting INCs application. The

oppositor. decretal portion reads:

The Facts Wherefore, the application for registration is hereby

granted. Upon finality of this decision, let an Order be issued directing
the Land Registration Authority to register and issue an Original
Subject of the instant controversy is Lot No. 3946 of the Currimao Cadastre, Certificate of Title to the applicant Iglesia Ni Cristo, as Corporation
Sole, with official address at No. 1 Central Avenue, New Era, Diliman
particularly described as follows: Quezon City.

SO ORDERED.
A parcel of land (Plan Swo-I-001047, L.R.C. Rec. No. ______)
situated in the Barrio of Baramban, Municipality of Currimao,
Province of Ilocos Norte, Island of Luzon. Bounded on the SE., along
line 1-2 by the National Road (20.00 m. wide); on the SW. & NW., The cadastral court held that based on documentary and testimonial evidence,
along lines 2-3-4 by lot 3946, Cads-562-D, Currimao Cadastral
Sketching, Bernardo Badanguio; on the NE., along line 4-1 by lot 3947, the essential requisites for judicial confirmation of an imperfect title over the subject lot
portion, Cads-562-D; (Pacita B. Lazaro) and lot 3948, Pacita B. Lazaro,
Cads-562-D, Currimao Cadastral Sketching x x x containing an area of have been complied with.
 meters. With the presentation of the requisite sepia or tracing cloth of plan Swo-1-

It was established during trial that the subject lot formed part of a bigger lot 001047, technical description of the subject lot, Geodetic Engineers Certificate, and

owned by one Dionisio Sabuco.On February 23, 1952, Sabuco sold a small portion of the Report given by the City Environment and Natural Resources Office special investigator

bigger lot to INC which built a chapel on the lot.Saturnino Sacayanan, who was born in showing that the subject lot is within alienable and disposable public zone, the MCTC

1941 and became a member of INC in 1948, testified to the sale by Sabuco and the found and appreciated the continuous possession by INC of the subject lot for over 40

erection of the small chapel by INC in 1952. Subsequently, Sabuco sold the bigger lot to years after its acquisition of the lot. Besides, it noted that Badanguio and Sabuco, the

Bernardo Badanguio less the small portion where the INC chapel was built. predecessors-in-interest of INC, were never disturbed in their possession of the portions

they sold to INC constituting the subject lot.

Badanguio in 1954 then declared the entire bigger lot he purchased from

Sabuco for tax purposes and was issued TD 006114. [8] In 1959, Badanguio also sold a Aggrieved, the Republic seasonably interposed its appeal before the CA,

small portion of the bigger lot to INC for which a Deed of Absolute Sale [9] was executed on docketed as CA-G.R. CV No. 85348.

January 8, 1959. Jaime Alcantara, the property custodian of INC, testified to the

purchases constituting the subject lot and the issuance of TDs covering it as declared by

INC for tax purposes. Thus, these two purchases by INC of a small portion of the bigger

lot originally owned by Sabuco, who inherited it from his parents and later sold it to

Badanguio, constituted the subject lot. The Ruling of the CA

On September 7, 1970, a Deed of Sale was executed by Badanguio in favor of On October 11, 2007, the appellate court rendered the assailed Decision

INC formally ceding and conveying to INC the subject lot which still formed part of the affirming the April 26, 2005 MCTC Decision. The fallo reads:

TD of the bigger lot under his name. This was testified to by Teofilo Tulali who became a
WHEREFORE, the foregoing considered, the instant appeal is
tenant of the bigger lot in 1965 and continued to be its tenant under Badanguio. Tulali hereby DENIED and the assailed decision AFFIRMED in toto.
testified further that the ownership and possession of Sabuco and Badanguio of the
SO ORDERED.
bigger lot were never disturbed.

In denying the Republics appeal, the CA found that the documentary and
Subsequently, TD 6485[10] was issued in 1970 in the name of INC pursuant to
testimonial evidence on record sufficiently established the continuous, open, and
the September 7, 1970 Deed of Sale. This was subsequently replaced by TD No.
peaceful possession and occupation of the subject lot in the concept of an owner by INC
406056[11] in 1974, TD 508026 in 1980, and TD 605153 in 1985.
of more than 40 years and by its predecessors-in-interest prior to the conveyance of the

lot to INC.
For the processing of its application for judicial confirmation of title, subject Lot

No. 3946 of the Currimao Cadastre was surveyed and consisted of 4,201 square
 Hence, we have this petition. The Republic maintains further that since the application was filed only on

November 19, 1998 or a scant five years from the declaration of the subject lot to be

The Issue alienable and disposable land on May 16, 1993, INCs possession fell short of the 30-year

period required under Section 48(b) of Commonwealth Act No. (CA) 141, otherwise
THE COURT OF APPEALS ERRED ON A QUESTION OF LAW IN
AFFIRMING THE [MCTC] DECISION GRANTING known as the Public Land Act.
THE APPLICATION FOR LAND REGISTRATION DESPITE EVIDENCE
THAT THE LAND WAS DECLARED ALIENABLE
AND DISPOSABLE LAND OF THE PUBLIC DOMAIN ONLY ON MAY 16, The Argument of INC
1993, OR FIVE (5) YEARS BEFORE THE FILING OF THE APPLICATION
FOR REGISTRATION ON NOVEMBER 19, 1998.[12]
Respondent INC counters that the Court has already clarified this issue
The Courts Ruling in Republic v. Court of Appeals(Naguit case), in which we held that what is merely

required by Sec. 14(1) of Presidential Decree No. (PD) 1529, otherwise known as the
May a judicial confirmation of imperfect title prosper when the subject Property Registration Decree, is that the property sought to be registered [is]
property has been declared as alienable only after June 12, 1945? This is the sole issue to already alienable and disposable at the time of the application for registration of
be resolved. title is filed.[15] Moreover, INC asserts that the Herbieto pronouncement quoted by the

Republic cannot be considered doctrinal in that it is merely an obiter dictum, stated only
The petition is bereft of merit. The sole issue raised is not novel. after the case was dismissed for the applicants failure to comply with the jurisdictional

requirement of publication.

Necessity of declaration of public agricultural land as alienable and

The Republics Contention
disposable

The Republic contends that subject Lot No. 3946 was certified as alienable and
It is well-settled that no public land can be acquired by private persons without
disposable land of the public domain only on May 16, 1993. Relying on Republic v.
any grant, express or implied, from the government, and it is indispensable that the
Herbieto,[13] it argues that prior to said date, the subject lot remained to be of the public
persons claiming title to a public land should show that their title was acquired from the
dominion or res publicae in nature incapable of private appropriation, and, consequently,
State or any other mode of acquisition recognized by law. [16] In the instant case, it is
INC and its predecessors-in-interests possession and occupation cannot confer
undisputed that the subject lot has already been declared alienable and disposable by the
ownership or possessory rights and any period of possession prior to the date when the
government on May 16, 1993 or a little over five years before the application for
lot was classified as alienable and disposable is inconsequential and should be excluded
registration was filed by INC.
in the computation of the period of possession.[14]

Conflicting rulings
in Herbieto and Naguit
 Sec. 14(1) of PD 1529 pertinently provides:

It must be noted that this Court had conflicting rulings in Naguit and Herbieto,
SEC. 14. Who may apply.The following persons may file in the
relied on by the parties contradictory positions. proper Court of First Instance [now Regional Trial Court] an
application for registration of title to land, whether personally or
through their duly authorized representatives:
Herbieto essentially ruled that reckoning of the possession of an applicant for
(1) Those who by themselves or through their predecessors-
judicial confirmation of imperfect title is counted from the date when the lot was in-interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of the
classified as alienable and disposable, and possession before such date is inconsequential
public domain under a bona fide claim of ownership since June 12,
and must be excluded in the computation of the period of possession. This ruling is very 1945, or earlier.

stringent and restrictive, for there can be no perfection of title when the declaration of

public agricultural land as alienable and disposable is made after June 12, 1945, since the In declaring that the correct interpretation of Sec. 14(1) of PD 1529 is that
reckoning of the period of possession cannot comply with the mandatory period under which was adopted in Naguit, the Court ruled that the more reasonable interpretation
Sec. 14(1) of PD 1529. of Sec. 14(1) of PD 1529 is that it merely requires the property sought to be

registered as already alienable and disposable at the time the application for
In Naguit, this Court held a less stringent requirement in the application of Sec. registration of title is filed.
14(1) of PD 1529 in that the reckoning for the period of possession is the actual

possession of the property and it is sufficient for the property sought to be registered to The Court in Malabanan traced the rights of a citizen to own alienable and
be already alienable and disposable at the time of the application for registration of title disposable lands of the public domain as granted under CA 141, otherwise known as the
is filed. Public Land Act, as amended by PD 1073, and PD 1529.The Court observed that Sec.

48(b) of CA 141 and Sec. 14(1) of PD 1529 are virtually the same, with the latter law
A review of subsequent and recent rulings by this Court shows that the specifically operationalizing the registration of lands of the public domain and codifying
pronouncement in Herbieto has been applied to Buenaventura v. Republic,[17] Republic v. the various laws relative to the registration of property. We cited Naguit and
Diloy, [18]
Ponciano, Jr. v. Laguna Lake Development Authority, [19]
and Preciosa v. Pascual. ratiocinated:
[20]
This Courts ruling in Naguit, on the other hand, has been applied to Republic v. Despite the clear text of Section 48(b) of the Public Land Act,
Bibonia. [21] as amended and Section 14(a) of the Property Registration Decree, the
OSG has adopted the position that for one to acquire the right to seek
registration of an alienable and disposable land of the public domain,
Core issue laid to rest in Heirs of Mario Malabanan v. Republic it is not enough that the applicant and his/her predecessors-in-
interest be in possession under a bona fide claim of ownership since
12 June 1945; the alienable and disposable character of the property
must have been declared also as of 12 June 1945. Following the OSGs
In Heirs of Mario Malabanan v. Republic (Malabanan),[22] the Court
approach, all lands certified as alienable and disposable after 12 June
upheld Naguit and abandoned the stringent ruling in Herbieto. 1945 cannot be registered either under Section 14(1) of the Property
Registration Decree or Section 48(b) of the Public Land Act as
amended. The absurdity of such an implication was discussed prior to 12 June 1945, even if the current possessor is able to establish
in Naguit. open, continuous, exclusive and notorious possession under a bona
fideclaim of ownership long before that date.
Petitioner suggests an interpretation that the alienable and
disposable character of the land should have already been established Moreover, the Naguit interpretation allows more possessors
since June 12, 1945 or earlier. This is not borne out by the plain under a bona fide claim of ownership to avail of judicial confirmation
meaning of Section 14(1). Since June 12, 1945, as used in the of their imperfect titles than what would be feasible
provision, qualifies its antecedent phrase under a bonafide claim of under Herbieto. This balancing fact is significant, especially
ownership. Generally speaking, qualifying words restrict or modify considering our forthcoming discussion on the scope and reach of
only the words or phrases to which they are immediately associated, Section 14(2) of the Property Registration Decree.
and not those distantly or remotely located. Ad proximum
antecedents fiat relation nisi impediatur sentencia. Petitioners make the salient observation that the
contradictory passages from Herbieto are obiter dicta since the land
Besides, we are mindful of the absurdity that would result if registration proceedings therein is void ab initio in the first place due
we adopt petitioners position. Absent a legislative amendment, the to lack of the requisite publication of the notice of initial
rule would be, adopting the OSGs view, that all lands of the public hearing. There is no need to explicitly overturn Herbieto, as it suffices
domain which were not declared alienable or disposable before June that the Courts acknowledgment that the particular line of argument
12, 1945 would not be susceptible to original registration, no matter used therein concerning Section 14(1) is indeed obiter.
the length of unchallenged possession by the occupant. Such
interpretation renders paragraph (1) of Section 14 virtually
inoperative and even precludes the government from giving it effect Naguit as affirmed in Malabanan more in accord with the States policy
even as it decides to reclassify public agricultural lands as alienable
and disposable. The unreasonableness of the situation would even be
aggravated considering that before June 12, 1945, the Philippines was
not yet even considered an independent state. Moreover, we wish to emphasize that our affirmation of Naguit in Malabananas

regards the correct interpretation of Sec. 14(1) of PD 1529 relative to the reckoning of
Accordingly, the Court in Naguit explained:
possession vis--vis the declaration of the property of the public domain as alienable and
[T]he more reasonable interpretation of
Section 14(1) is that it merely requires the disposableis indeed more in keeping with the spirit of the Public Land Act, as amended,
property sought to be registered as already
and of PD 1529. These statutes were enacted to conform to the States policy of
alienable and disposable at the time the application
for registration of title is filed. If the State, at the encouraging and promoting the distribution of alienable public lands to spur economic
time the application is made, has not yet deemed it
proper to release the property for alienation or growth and remain true to the ideal of social justice.[23] The statutes requirements, as
disposition, the presumption is that the
government is still reserving the right to utilize the couched and amended, are stringent enough to safeguard against fraudulent applications
property; hence, the need to preserve its for registration of title over alienable and disposable public land. The application of the
ownership in the State irrespective of the length of
adverse possession even if in good faith. However, more stringent pronouncement in Herbieto would indeed stifle and repress the States
if the property has already been classified as
alienable and disposable, as it is in this case, then policy.
there is already an intention on the part of the State
to abdicate its exclusive prerogative over the
property. Finally, the Court in Malabanan aptly synthesized the doctrine that the period

The Court declares that the correct interpretation of Section of possession required under Sec. 14(1) of PD 1527 is not reckoned from the time of the
14(1) is that which was adopted in Naguit. The contrary
pronouncement in Herbieto, as pointed out in Naguit, absurdly limits declaration of the property as alienable and disposable, thus:
the application of the provision to the point of virtual inutility since it
would only cover lands actually declared alienable and disposable
 We synthesize the doctrines laid down in this case, as including those of his parents, to INC; and from Sabuco to Badanguio to INChad been in
follows:
the concept of owners: open, continuous, exclusive, and notorious possession and
(1) In connection with Section 14(1) of the Property occupation under a bona fide claim of acquisition of property. These had not been
Registration Decree, Section 48(b) of the Public Land Act recognizes
and confirms that those who by themselves or through their disturbed as attested to by respondents witnesses.
predecessors in interest have been in open, continuous, exclusive, and
notorious possession and occupation of alienable and disposable
lands of the public domain, under a bona fide claim of acquisition of
ownership, since June 12, 1945 have acquired ownership of, and
registrable title to, such lands based on the length and quality of their
possession.

(a) Since Section 48(b) merely requires possession since

12 June 1945 and does not require that the lands should have been
alienable and disposable during the entire period of possession, the
possessor is entitled to secure judicial confirmation of his title thereto
as soon as it is declared alienable and disposable, subject to the
timeframe imposed by Section 47 of the Public Land Act.

(b) The right to register granted under Section 48(b) of the

Public Land Act is further confirmed by Section 14(1) of the Property
Registration Decree.

INC entitled to registrable right over subject lot

With the resolution of the core issue, we find no error in the findings of the WHEREFORE, this petition is hereby DENIED. Accordingly, the October 11,

courts a quo that INC had indeed sufficiently established its possession and occupation of 2007 CA Decision in CA-G.R. CV No. 85348 is hereby AFFIRMED IN TOTO.

the subject lot in accordance with the Public Land Act and Sec. 14(1) of PD 1529, and had
duly proved its right to judicial confirmation of imperfect title over subject lot. No costs.

As a rule, the findings of fact of the trial court when affirmed by the CA are final SO ORDERED.
and conclusive on, and cannot be reviewed on appeal by, this Court as long as they are
borne out by the record or are based on substantial evidence. The Court is not a trier of
facts, its jurisdiction being limited to reviewing only errors of law that may have been
committed by the lower courts.[24] This is applicable to the instant case.

The possession of INC has been established not only from 1952 and 1959 when
it purchased the respective halves of the subject lot, but is also tacked on to the
possession of its predecessors-in-interest, Badanguio and Sabuco, the latter possessing
the subject lot way before June 12, 1945, as he inherited the bigger lot, of which the
subject lot is a portion, from his parents. These possessions and occupationfrom Sabuco,
Chavez v. PEA waters of the public domain. Upon the Spanish conquest of the Philippines,
ownership of all "lands, territories and possessions" in the Philippines passed to
Fact: the Spanish Crown.42 The King, as the sovereign ruler and representative of the
In 1973, the Comissioner on Public Highways entered into a contract to reclaim people, acquired and owned all lands and territories in the Philippines except
areas of Manila Bay with the Construction and Development Corportion of the those he disposed of by grant or sale to private individuals.
Philippines (CDCP).
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine
PEA (Public Estates Authority) was created by President Marcos under P.D. substituting, however, the State, in lieu of the King, as the owner of all lands and
1084, tasked with developing and leasing reclaimed lands. These lands were waters of the public domain. The Regalian doctrine is the foundation of the
transferred to the care of PEA under P.D. 1085 as part of the Manila Cavite Road time-honored principle of land ownership that "all lands that were not acquired
and Reclamation Project (MCRRP). CDCP and PEA entered into an agreement from the Government, either by purchase or by grant, belong to the public
that all future projects under the MCRRP would be funded and owned by PEA. 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.
By 1988, President Aquino issued Special Patent No. 3517 transferring lands to
PEA. It was followed by the transfer of three Titles (7309, 7311 and 7312) by
Ownership and Disposition of Reclaimed Lands
the Register of Deeds of Paranaque to PEA covering the three reclaimed islands
known as the FREEDOM ISLANDS.
The Spanish Law of Waters of 1866 was the first statutory law governing the
Subsquently, PEA entered into a joint venture agreement (JVA) with AMARI, a ownership and disposition of reclaimed lands in the Philippines. On May 18,
Thai-Philippine corporation to develop the Freedom Islands. Along with another 1907, the Philippine Commission enacted Act No. 1654 which provided for the
250 hectares, PEA and AMARI entered the JVA which would later transfer said lease, but not the sale, of reclaimed lands of the government to corporations
lands to AMARI. This caused a stir especially when Sen. Maceda assailed the and individuals. Later, on November 29, 1919, the Philippine Legislature
agreement, claiming that such lands were part of public domain (famously approved Act No. 2874, the Public Land Act, which authorized the lease, but
known as the “mother of all scams”). not the sale, of reclaimed lands of the government to corporations and
individuals. On November 7, 1936, the National Assembly passed
Peitioner Frank J. Chavez filed case as a taxpayer praying for mandamus, a writ Commonwealth Act No. 141, also known as the Public Land Act,
of preliminary injunction and a TRO against the sale of reclaimed lands by PEA which authorized the lease, but not the sale, of reclaimed lands of the
to AMARI and from implementing the JVA. Following these events, under government to corporations and individuals. CA No. 141 continues to this day
President Estrada’s admin, PEA and AMARI entered into an Amended JVA and as the general law governing the classification and disposition of lands of the
Mr. Chaves claim that the contract is null and void. public domain.

Issue: The Spanish Law of Waters of 1866 and the Civil Code of 1889
w/n: the transfer to AMARI lands reclaimed or to be reclaimed as part of the
stipulations in the (Amended) JVA between AMARI and PEA violate Sec. 3 Art. Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all
XII of the 1987 Constitution waters within the maritime zone of the Spanish territory belonged to the public
w/n: the court is the proper forum for raising the issue of whether the amended domain for public use.44 The Spanish Law of Waters of 1866 allowed the
joint venture agreement is grossly disadvantageous to the government. reclamation of the sea under Article 5, which provided as follows:

whether stipulations in the Amended JVA for the transfer to AMARI of lands, "Article 5. Lands reclaimed from the sea in consequence of works
reclaimed or to be reclaimed, violate the Constitution. constructed by the State, or by the provinces, pueblos or private
persons, with proper permission, shall become the property of the
The Regalian Doctrine party constructing such works, unless otherwise provided by the terms
of the grant of authority."
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
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the On May 8, 1907, the Philippine Commission enacted Act No. 1654 which
party undertaking the reclamation, provided the government issued the regulated the lease of reclaimed and foreshore lands. The salient provisions of
necessary permit and did not reserve ownership of the reclaimed land to the this law were as follows:
State.
"Section 1. The control and disposition of the foreshore as defined in
Article 339 of the Civil Code of 1889 defined property of public dominion as existing law, and the title to all Government or public lands made or
follows: reclaimed by the Government by dredging or filling or otherwise
throughout the Philippine Islands, shall be retained by the
"Art. 339. Property of public dominion is – Government without prejudice to vested rights and without prejudice
to rights conceded to the City of Manila in the Luneta Extension.
1. That devoted to public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, riverbanks, shores, Section 2. (a) The Secretary of the Interior shall cause all Government
roadsteads, and that of a similar character; 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
2. That belonging exclusively to the State which, without being of streets and alleyways located thereon, and shall cause plats and plans
general public use, is employed in some public service, or in the of such surveys to be prepared and filed with the Bureau of Lands.
development of the national wealth, such as walls, fortresses, and other
works for the defense of the territory, and mines, until granted to (b) Upon completion of such plats and plans the Governor-General
private individuals." 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
Property devoted to public use referred to property open for use by the public. commercial and business purposes, x x x.
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 xxx
property.
(e) The leases above provided for shall be disposed of to the highest
Property of public dominion referred not only to property devoted to public use, and best bidder therefore, subject to such regulations and safeguards
but also to property not so used but employed to develop the national wealth. as the Governor-General may by executive order prescribe." (Emphasis
This class of property constituted property of public dominion although supplied)
employed for some economic or commercial activity to increase the national
wealth. 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
Article 341 of the Civil Code of 1889 governed the re-classification of property and disposition of foreshore lands. Private parties could lease lands reclaimed
of public dominion into private property, to wit: 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
"Art. 341. Property of public dominion, when no longer devoted to reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in
public use or to the defense of the territory, shall become a part of the that unlike other public lands which the government could sell to private
private property of the State." parties, these reclaimed lands were available only for lease to private parties.

This provision, however, was not self-executing. The legislature, or the Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of
executive department pursuant to law, must declare the property no longer 1866. Act No. 1654 did not prohibit private parties from reclaiming parts of the
needed for public use or territorial defense before the government could lease sea under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea
or alienate the property to private parties.45 by private parties with government permission remained private lands.

Act No. 1654 of the Philippine Commission Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the (d) Lands not included in any of the foregoing classes.
Public Land Act.46 The salient provisions of Act No. 2874, on reclaimed lands,
were as follows: x x x.

"Sec. 6. The Governor-General, upon the recommendation of the Sec. 58. The lands comprised in classes (a), (b), and (c) of section
Secretary of Agriculture and Natural Resources, shall from time to fifty-six shall be disposed of to private parties by lease only and not
time classify the lands of the public domain into – otherwise, as soon as the Governor-General, upon recommendation
by the Secretary of Agriculture and Natural Resources, shall declare
(a) Alienable or disposable, 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
(b) Timber, and be disposed of by sale or lease under the provisions of this Act."
(Emphasis supplied)
(c) Mineral lands, x x x.
Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of
Sec. 7. For the purposes of the government and disposition of alienable the public domain into x x x alienable or disposable"47 lands. Section 7 of the Act
or disposable public lands, the Governor-General, upon empowered the Governor-General to "declare what lands are open to
recommendation by the Secretary of Agriculture and Natural disposition or concession." Section 8 of the Act limited alienable or disposable
Resources, shall from time to time declare what lands are open to lands only to those lands which have been "officially delimited and classified."
disposition or concession under this Act."
Section 56 of Act No. 2874 stated that lands "disposable under this title 48 shall
Sec. 8. Only those lands shall be declared open to disposition or be classified" as government reclaimed, foreshore and marshy lands, as well as
concession which have been officially delimited or classified x x x. 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
xxx lands of the public domain into disposable lands of the public domain. These
provisions also empowered the Governor-General to classify further such
Sec. 55. Any tract of land of the public domain which, being neither disposable lands of the public domain into government reclaimed, foreshore or
timber nor mineral land, shall be classified as suitable for residential marshy lands of the public domain, as well as other non-agricultural lands.
purposes or for commercial, industrial, or other productive
purposes other than agricultural purposes, and shall be open to Section 58 of Act No. 2874 categorically mandated that disposable lands of the
disposition or concession, shall be disposed of under the provisions of public domain classified as government reclaimed, foreshore and marshy
this chapter, and not otherwise. 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
Sec. 56. The lands disposable under this title shall be classified as private parties, must formally declare that the lands were "not necessary for the
follows: 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
(a) Lands reclaimed by the Government by dredging, filling, policy first enunciated in 1907 in Act No. 1654. Government reclaimed,
or other means; 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
(b) Foreshore; private parties.

(c) Marshy lands or lands covered with water bordering upon The rationale behind this State policy is obvious. Government reclaimed,
the shores or banks of navigable lakes or rivers; 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. renewable for another 25 years. The government could alienate foreshore lands
The State always reserved these lands for some future public service. only after these lands were reclaimed and classified as alienable agricultural
lands of the public domain. Government reclaimed and marshy lands of the
Act No. 2874 did not authorize the reclassification of government reclaimed, public domain, being neither timber nor mineral lands, fell under the
foreshore and marshy lands into other non-agricultural lands under Section 56 classification of public agricultural lands.50 However, government reclaimed and
(d). Lands falling under Section 56 (d) were the only lands for non-agricultural marshy lands, although subject to classification as disposable public agricultural
purposes the government could sell to private parties. Thus, under Act No. lands, could only be leased and not sold to private parties because of Act No.
2874, the government could not sell government reclaimed, foreshore and 2874.
marshy lands to private parties, unless the legislature passed a law allowing
their sale.49 The prohibition on private parties from acquiring ownership of government
reclaimed and marshy lands of the public domain was only a statutory
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea prohibition and the legislature could therefore remove such prohibition. The
pursuant to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed 1935 Constitution did not prohibit individuals and corporations from acquiring
from the sea by private parties with government permission remained private government reclaimed and marshy lands of the public domain that were
lands. classified as agricultural lands under existing public land laws. Section 2, Article
XIII of the 1935 Constitution provided as follows:
Dispositions under the 1935 Constitution
"Section 2. No private corporation or association may acquire, lease,
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the or hold public agricultural lands in excess of one thousand and
Filipino people. The 1935 Constitution, in adopting the Regalian doctrine, twenty four hectares, nor may any individual acquire such lands by
declared in Section 1, Article XIII, that – 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
"Section 1. All agricultural, timber, and mineral lands of the public two thousand hectares, may be leased to an individual, private
domain, waters, minerals, coal, petroleum, and other mineral oils, all corporation, or association." (Emphasis supplied)
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 Still, after the effectivity of the 1935 Constitution, the legislature did not repeal
or to corporations or associations at least sixty per centum of the Section 58 of Act No. 2874 to open for sale to private parties government
capital of which is owned by such citizens, subject to any existing right, reclaimed and marshy lands of the public domain. On the contrary, the
grant, lease, or concession at the time of the inauguration of the legislature continued the long established State policy of retaining for the
Government established under this Constitution. Natural resources, government title and ownership of government reclaimed and marshy lands of
with the exception of public agricultural land, shall not be alienated, the public domain.
and no license, concession, or lease for the exploitation, development,
or utilization of any of the natural resources shall be granted for a Commonwealth Act No. 141 of the Philippine National Assembly
period exceeding twenty-five years, renewable for another twenty-five
years, except as to water rights for irrigation, water supply, fisheries, or On November 7, 1936, the National Assembly approved Commonwealth Act No.
industrial uses other than the development of water power, in which 141, also known as the Public Land Act, which compiled the then existing laws
cases beneficial use may be the measure and limit of the grant." on lands of the public domain. CA No. 141, as amended, remains to this day
(Emphasis supplied) the existing general law governing the classification and disposition of lands of
the public domain other than timber and mineral lands.51
The 1935 Constitution barred the alienation of all natural resources except
public agricultural lands, which were the only natural resources the State could Section 6 of CA No. 141 empowers the President to classify lands of the public
alienate. Thus, foreshore lands, considered part of the State's natural resources, domain into "alienable or disposable"52 lands of the public domain, which prior
became inalienable by constitutional fiat, available only for lease for 25 years, 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 purposes or for commercial, industrial, or other productive
disposition or concession." Section 8 of CA No. 141 states that the government purposes other than agricultural, and is open to disposition or
can declare open for disposition or concession only lands that are "officially concession, shall be disposed of under the provisions of this chapter
delimited and classified." Sections 6, 7 and 8 of CA No. 141 read as follows: and not otherwise.

"Sec. 6. The President, upon the recommendation of the Secretary of Sec. 59. The lands disposable under this title shall be classified as
Agriculture and Commerce, shall from time to time classify the follows:
lands of the public domain into –
(a) Lands reclaimed by the Government by dredging, filling,
(a) Alienable or disposable, or other means;

(b) Timber, and (b) Foreshore;

(c) Mineral lands, (c) Marshy lands or lands covered with water bordering upon
the shores or banks of navigable lakes or rivers;
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 (d) Lands not included in any of the foregoing classes.
disposition.
Sec. 60. Any tract of land comprised under this title may be leased or
Sec. 7. For the purposes of the administration and disposition of sold, as the case may be, to any person, corporation, or association
alienable or disposable public lands, the President, upon authorized to purchase or lease public lands for agricultural purposes. x
recommendation by the Secretary of Agriculture and Commerce, x x.
shall from time to time declare what lands are open to disposition
or concession under this Act. 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
Sec. 8. Only those lands shall be declared open to disposition or not otherwise, as soon as the President, upon recommendation by the
concession which have been officially delimited and classified and, Secretary of Agriculture, shall declare that the same are not
when practicable, surveyed, and which have not been reserved for necessary for the public service and are open to disposition under this
public or quasi-public uses, nor appropriated by the Government, nor chapter. The lands included in class (d) may be disposed of by sale or
in any manner become private property, nor those on which a private lease under the provisions of this Act." (Emphasis supplied)
right authorized and recognized by this Act or any other valid law may
be claimed, or which, having been reserved or appropriated, have Section 61 of CA No. 141 readopted, after the effectivity of the 1935
ceased to be so. x x x." Constitution, Section 58 of Act No. 2874 prohibiting the sale of government
reclaimed, foreshore and marshy disposable lands of the public domain. All
Thus, before the government could alienate or dispose of lands of the public these lands are intended for residential, commercial, industrial or other non-
domain, the President must first officially classify these lands as alienable or agricultural purposes. As before, Section 61 allowed only the lease of such lands
disposable, and then declare them open to disposition or concession. There to private parties. The government could sell to private parties only lands falling
must be no law reserving these lands for public or quasi-public uses. 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
The salient provisions of CA No. 141, on government reclaimed, foreshore and of the public domain. Foreshore lands, however, became inalienable under the
marshy lands of the public domain, are as follows: 1935 Constitution which only allowed the lease of these lands to qualified
private parties.
"Sec. 58. Any tract of land of the public domain which, being neither
timber nor mineral land, is intended to be used for residential
Section 58 of CA No. 141 expressly states that disposable lands of the public disposable lands of the public domain the government could not sell to private
domain intended for residential, commercial, industrial or other productive parties.
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 Since then and until now, the only way the government can sell to private
"disposition" includes lease of the land. Any disposition of government parties government reclaimed and marshy disposable lands of the public
reclaimed, foreshore and marshy disposable lands for non-agricultural domain is for the legislature to pass a law authorizing such sale. CA No. 141
purposes must comply with Chapter IX, Title III of CA No. 141, 54 unless a does not authorize the President to reclassify government reclaimed and
subsequent law amended or repealed these provisions. 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
In his concurring opinion in the landmark case of Republic Real Estate non-agricultural purposes that the government could sell to private parties.
Corporation v. Court of Appeals,55Justice Reynato S. Puno summarized
succinctly the law on this matter, as follows: Moreover, Section 60 of CA No. 141 expressly requires congressional authority
before lands under Section 59 that the government previously transferred to
"Foreshore lands are lands of public dominion intended for public use. government units or entities could be sold to private parties. Section 60 of CA
So too are lands reclaimed by the government by dredging, filling, or No. 141 declares that –
other means. Act 1654 mandated that the control and disposition of the
foreshore and lands under water remained in the national government. "Sec. 60. x x x The area so leased or sold shall be such as shall, in the
Said law allowed only the 'leasing' of reclaimed land. The Public Land judgment of the Secretary of Agriculture and Natural Resources, be
Acts of 1919 and 1936 also declared that the foreshore and lands reasonably necessary for the purposes for which such sale or lease is
reclaimed by the government were to be "disposed of to private parties requested, and shall not exceed one hundred and forty-four hectares:
by lease only and not otherwise." Before leasing, however, the Provided, however, That this limitation shall not apply to grants,
Governor-General, upon recommendation of the Secretary of donations, or transfers made to a province, municipality or branch or
Agriculture and Natural Resources, had first to determine that the land subdivision of the Government for the purposes deemed by said
reclaimed was not necessary for the public service. This requisite must entities conducive to the public interest; but the land so granted,
have been met before the land could be disposed of. But even then, the donated, or transferred to a province, municipality or branch or
foreshore and lands under water were not to be alienated and sold subdivision of the Government shall not be alienated, encumbered,
to private parties. The disposition of the reclaimed land was only by or otherwise disposed of in a manner affecting its title, except when
lease. The land remained property of the State." (Emphasis supplied) authorized by Congress: x x x." (Emphasis supplied)

As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. The congressional authority required in Section 60 of CA No. 141 mirrors the
141 has remained in effect at present." legislative authority required in Section 56 of Act No. 2874.

The State policy prohibiting the sale to private parties of government reclaimed, One reason for the congressional authority is that Section 60 of CA No. 141
foreshore and marshy alienable lands of the public domain, first implemented in exempted government units and entities from the maximum area of public lands
1907 was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. that could be acquired from the State. These government units and entities
The prohibition on the sale of foreshore lands, however, became a constitutional should not just turn around and sell these lands to private parties in violation of
edict under the 1935 Constitution. Foreshore lands became inalienable as constitutional or statutory limitations. Otherwise, the transfer of lands for non-
natural resources of the State, unless reclaimed by the government and agricultural purposes to government units and entities could be used to
classified as agricultural lands of the public domain, in which case they would circumvent constitutional limitations on ownership of alienable or disposable
fall under the classification of government reclaimed lands. 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
After the effectivity of the 1935 Constitution, government reclaimed and marshy reclaimed and marshy lands of the public domain to private parties. Section 60
disposable lands of the public domain continued to be only leased and not sold of CA No. 141 constitutes by operation of law a lien on these lands. 57
to private parties.56 These lands remained sui generis, as the only alienable or
In case of sale or lease of disposable lands of the public domain falling under Art. 422. Property of public dominion, when no longer intended for
Section 59 of CA No. 141, Sections 63 and 67 require a public bidding. Sections public use or for public service, shall form part of the patrimonial
63 and 67 of CA No. 141 provide as follows: property of the State."

"Sec. 63. Whenever it is decided that lands covered by this chapter are Again, the government must formally declare that the property of public
not needed for public purposes, the Director of Lands shall ask the dominion is no longer needed for public use or public service, before the same
Secretary of Agriculture and Commerce (now the Secretary of Natural could be classified as patrimonial property of the State. 59 In the case of
Resources) for authority to dispose of the same. Upon receipt of such government reclaimed and marshy lands of the public domain, the declaration
authority, the Director of Lands shall give notice by public of their being disposable, as well as the manner of their disposition, is governed
advertisement in the same manner as in the case of leases or sales of by the applicable provisions of CA No. 141.
agricultural public land, x x x.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public
Sec. 67. The lease or sale shall be made by oral bidding; and dominion those properties of the State which, without being for public use, are
adjudication shall be made to the highest bidder. x x x." (Emphasis intended for public service or the "development of the national wealth." Thus,
supplied) 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
Thus, CA No. 141 mandates the Government to put to public auction all leases or classified as property of public dominion.
sales of alienable or disposable lands of the public domain. 58
Dispositions under the 1973 Constitution
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 The 1973 Constitution, which took effect on January 17, 1973, likewise adopted
portions of the sea with government permission. However, the reclaimed land the Regalian doctrine. Section 8, Article XIV of the 1973 Constitution stated that
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 "Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum
lands. and other mineral oils, all forces of potential energy, fisheries, wildlife,
and other natural resources of the Philippines belong to the State. With
The Civil Code of 1950 the exception of agricultural, industrial or commercial, residential,
and resettlement lands of the public domain, natural resources
The Civil Code of 1950 readopted substantially the definition of property of shall not be alienated, and no license, concession, or lease for the
public dominion found in the Civil Code of 1889. Articles 420 and 422 of the exploration, development, exploitation, or utilization of any of the
Civil Code of 1950 state that – natural resources shall be granted for a period exceeding twenty-five
years, renewable for not more than twenty-five years, except as to
"Art. 420. The following things are property of public dominion: 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
(1) Those intended for public use, such as roads, canals, rivers, torrents, supplied)
ports and bridges constructed by the State, banks, shores, roadsteads,
and others of similar character;
The 1973 Constitution prohibited the alienation of all natural resources with the
exception of "agricultural, industrial or commercial, residential, and
(2) Those which belong to the State, without being for public use, and resettlement lands of the public domain." In contrast, the 1935 Constitution
are intended for some public service or for the development of the barred the alienation of all natural resources except "public agricultural lands."
national wealth. However, the term "public agricultural lands" in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the
x x x.
public domain.60 If the land of public domain were neither timber nor mineral "Sec. 4. Purpose. The Authority is hereby created for the following
land, it would fall under the classification of agricultural land of the public purposes:
domain. Both the 1935 and 1973 Constitutions, therefore, prohibited the
alienation of all natural resources except agricultural lands of the public (a) To reclaim land, including foreshore and submerged areas, by
domain. dredging, filling or other means, or to acquire reclaimed land;

The 1973 Constitution, however, limited the alienation of lands of the public (b) To develop, improve, acquire, administer, deal in, subdivide,
domain to individuals who were citizens of the Philippines. Private dispose, lease and sell any and all kinds of lands, buildings, estates
corporations, even if wholly owned by Philippine citizens, were no longer and other forms of real property, owned, managed, controlled and/or
allowed to acquire alienable lands of the public domain unlike in the 1935 operated by the government;
Constitution. Section 11, Article XIV of the 1973 Constitution declared that –
(c) To provide for, operate or administer such service as may be
"Sec. 11. The Batasang Pambansa, taking into account conservation, necessary for the efficient, economical and beneficial utilization of the
ecological, and development requirements of the natural resources, above properties.
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, Sec. 5. Powers and functions of the Authority. The Authority shall, in
corporation, or association, and the conditions therefor. No private carrying out the purposes for which it is created, have the following
corporation or association may hold alienable lands of the public powers and functions:
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
(a)To prescribe its by-laws.
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 xxx
timber or forest resources in excess of one hundred thousand hectares.
However, such area may be increased by the Batasang Pambansa upon (i) To hold lands of the public domain in excess of the area permitted
recommendation of the National Economic and Development to private corporations by statute.
Authority." (Emphasis supplied)
(j) To reclaim lands and to construct work across, or otherwise, any
Thus, under the 1973 Constitution, private corporations could hold alienable stream, watercourse, canal, ditch, flume x x x.
lands of the public domain only through lease. Only individuals could now
acquire alienable lands of the public domain, and private corporations became xxx
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 (o) To perform such acts and exercise such functions as may be
public domain, while the statutory ban under CA No. 141 applied only to necessary for the attainment of the purposes and objectives herein
government reclaimed, foreshore and marshy alienable lands of the public specified." (Emphasis supplied)
domain.
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of
PD No. 1084 Creating the Public Estates Authority 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
On February 4, 1977, then President Ferdinand Marcos issued Presidential regardless of the ebb and flow of the tide.62 Foreshore and submerged areas
Decree No. 1084 creating PEA, a wholly government owned and controlled indisputably belong to the public domain63 and are inalienable unless reclaimed,
corporation with a special charter. Sections 4 and 8 of PD No. 1084, vests PEA classified as alienable lands open to disposition, and further declared no longer
with the following purposes and powers: needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring Section 3. Lands of the public domain are classified into agricultural,
alienable lands of the public domain did not apply to PEA since it was then, and forest or timber, mineral lands, and national parks. Agricultural lands of
until today, a fully owned government corporation. The constitutional ban the public domain may be further classified by law according to the
applied then, as it still applies now, only to "private corporations and uses which they may be devoted. Alienable lands of the public domain
associations." PD No. 1084 expressly empowers PEA "to hold lands of the shall be limited to agricultural lands. Private corporations or
public domain" even "in excess of the area permitted to private corporations by associations may not hold such alienable lands of the public domain
statute." Thus, PEA can hold title to private lands, as well as title to lands of except by lease, for a period not exceeding twenty-five years,
the public domain. renewable for not more than twenty-five years, and not to exceed
one thousand hectares in area. Citizens of the Philippines may lease
In order for PEA to sell its reclaimed foreshore and submerged alienable lands not more than five hundred hectares, or acquire not more than twelve
of the public domain, there must be legislative authority empowering PEA to hectares thereof by purchase, homestead, or grant.
sell these lands. This legislative authority is necessary in view of Section 60 of
CA No.141, which states – Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the
"Sec. 60. x x x; but the land so granted, donated or transferred to a Congress shall determine, by law, the size of lands of the public domain
province, municipality, or branch or subdivision of the Government which may be acquired, developed, held, or leased and the conditions
shall not be alienated, encumbered or otherwise disposed of in a therefor." (Emphasis supplied)
manner affecting its title, except when authorized by Congress; x x x."
(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
Without such legislative authority, PEA could not sell but only lease its public domain. Like the 1973 Constitution, the 1987 Constitution allows
reclaimed foreshore and submerged alienable lands of the public domain. private corporations to hold alienable lands of the public domain only through
Nevertheless, any legislative authority granted to PEA to sell its reclaimed lease. As in the 1935 and 1973 Constitutions, the general law governing the
alienable lands of the public domain would be subject to the constitutional ban lease to private corporations of reclaimed, foreshore and marshy alienable
on private corporations from acquiring alienable lands of the public domain. lands of the public domain is still CA No. 141.
Hence, such legislative authority could only benefit private individuals.
The Rationale behind the Constitutional Ban
Dispositions under the 1987 Constitution
The rationale behind the constitutional ban on corporations from acquiring,
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has except through lease, alienable lands of the public domain is not well
adopted the Regalian doctrine. The 1987 Constitution declares that all natural understood. During the deliberations of the 1986 Constitutional Commission,
resources are "owned by the State," and except for alienable agricultural lands the commissioners probed the rationale behind this ban, thus:
of the public domain, natural resources cannot be alienated. Sections 2 and 3,
Article XII of the 1987 Constitution state that – "FR. BERNAS: Mr. Vice-President, my questions have reference to page
3, line 5 which says:
"Section 2. All lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy, `No private corporation or association may hold alienable lands of the
fisheries, forests or timber, wildlife, flora and fauna, and other public domain except by lease, not to exceed one thousand hectares in
natural resources are owned by the State. With the exception of area.'
agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of natural If we recall, this provision did not exist under the 1935 Constitution,
resources shall be under the full control and supervision of the State. x but this was introduced in the 1973 Constitution. In effect, it prohibits
x x. 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 nominees as stockholders of the corporation. The corporation is a convenient
purpose of this is to prevent large landholdings. Is that the intent of vehicle to circumvent the constitutional limitation on acquisition by individuals
this provision? of alienable lands of the public domain.

MR. VILLEGAS: I think that is the spirit of the provision. 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
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there qualified individual. This constitutional intent is safeguarded by the provision
were instances where the Iglesia ni Cristo was not allowed to acquire a prohibiting corporations from acquiring alienable lands of the public domain,
mere 313-square meter land where a chapel stood because the since the vehicle to circumvent the constitutional intent is removed. The
Supreme Court said it would be in violation of this." (Emphasis available alienable public lands are gradually decreasing in the face of an ever-
supplied) 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
In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional to individuals. This, it would seem, is the practical benefit arising from the
ban in this way: constitutional ban.

"Indeed, one purpose of the constitutional prohibition against The Amended Joint Venture Agreement
purchases of public agricultural lands by private corporations is to
equitably diffuse land ownership or to encourage 'owner-cultivatorship The subject matter of the Amended JVA, as stated in its second Whereas clause,
and the economic family-size farm' and to prevent a recurrence of cases consists of three properties, namely:
like the instant case. Huge landholdings by corporations or private
persons had spawned social unrest." 1. "[T]hree partially reclaimed and substantially eroded islands along
Emilio Aguinaldo Boulevard in Paranaque and Las Pinas, Metro Manila,
However, if the constitutional intent is to prevent huge landholdings, the with a combined titled area of 1,578,441 square meters;"
Constitution could have simply limited the size of alienable lands of the public
domain that corporations could acquire. The Constitution could have followed 2. "[A]nother area of 2,421,559 square meters contiguous to the three
the limitations on individuals, who could acquire not more than 24 hectares of islands;" and
alienable lands of the public domain under the 1973 Constitution, and not more
than 12 hectares under the 1987 Constitution. 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
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 PEA confirms that the Amended JVA involves "the development of the Freedom
break-up of farmlands. If the farmland is registered in the name of a Islands and further reclamation of about 250 hectares x x x," plus an option
corporation, upon the death of the owner, his heirs would inherit shares in the "granted to AMARI to subsequently reclaim another 350 hectares x x x."66
corporation instead of subdivided parcels of the farmland. This would prevent
the continuing break-up of farmlands into smaller and smaller plots from one In short, the Amended JVA covers a reclamation area of 750 hectares. Only
generation to the next. 157.84 hectares of the 750-hectare reclamation project have been
reclaimed, and the rest of the 592.15 hectares are still submerged areas
In actual practice, the constitutional ban strengthens the constitutional forming part of Manila Bay.
limitation on individuals from acquiring more than the allowed area of alienable
lands of the public domain. Without the constitutional ban, individuals who Under the Amended JVA, AMARI will reimburse PEA the sum of
already acquired the maximum area of alienable lands of the public domain P1,894,129,200.00 for PEA's "actual cost" in partially reclaiming the Freedom
could easily set up corporations to acquire more alienable public lands. An Islands. AMARI will also complete, at its own expense, the reclamation of the
individual could own as many corporations as his means would allow him. An Freedom Islands. AMARI will further shoulder all the reclamation costs of all the
individual could even hide his ownership of a corporation by putting his 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 fisheries, forests or timber, wildlife, flora and fauna, and other natural
usable area which is defined in the Amended JVA as the total reclaimed area less resources are owned by the State. With the exception of agricultural
30 percent earmarked for common areas. Title to AMARI's share in the net lands, all other natural resources shall not be alienated. x x x.
usable area, totaling 367.5 hectares, will be issued in the name of AMARI.
Section 5.2 (c) of the Amended JVA provides that – xxx

"x x x, PEA shall have the duty to execute without delay the necessary Section 3. x x x Alienable lands of the public domain shall be limited to
deed of transfer or conveyance of the title pertaining to AMARI's Land agricultural lands. Private corporations or associations may not hold
share based on the Land Allocation Plan. PEA, when requested in such alienable lands of the public domain except by lease, x x
writing by AMARI, shall then cause the issuance and delivery of the x."(Emphasis supplied)
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 Classification of Reclaimed Foreshore and Submerged Areas
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,
PEA readily concedes that lands reclaimed from foreshore or submerged areas
until such time when a corresponding proportionate area of additional
of Manila Bay are alienable or disposable lands of the public domain. In its
land pertaining to PEA has been titled." (Emphasis supplied)
Memorandum,67 PEA admits that –
Indisputably, under the Amended JVA AMARI will acquire and own a
"Under the Public Land Act (CA 141, as amended), reclaimed lands are
maximum of 367.5 hectares of reclaimed land which will be titled in its
classified as alienable and disposable lands of the public domain:
name.

'Sec. 59. The lands disposable under this title shall be classified
To implement the Amended JVA, PEA delegated to the unincorporated PEA-
as follows:
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 – (a) Lands reclaimed by the government by dredging, filling, or
other means;
"PEA hereby contributes to the joint venture its rights and privileges to
perform Rawland Reclamation and Horizontal Development as well as x x x.'" (Emphasis supplied)
own the Reclamation Area, thereby granting the Joint Venture the full
and exclusive right, authority and privilege to undertake the Project in Likewise, the Legal Task Force68 constituted under Presidential Administrative
accordance with the Master Development Plan." Order No. 365 admitted in its Report and Recommendation to then President
Fidel V. Ramos, "[R]eclaimed lands are classified as alienable and disposable
The Amended JVA is the product of a renegotiation of the original JVA dated lands of the public domain."69 The Legal Task Force concluded that –
April 25, 1995 and its supplemental agreement dated August 9, 1995.
"D. Conclusion
The Threshold Issue
Reclaimed lands are lands of the public domain. However, by statutory
The threshold issue is whether AMARI, a private corporation, can acquire and authority, the rights of ownership and disposition over reclaimed lands
own under the Amended JVA 367.5 hectares of reclaimed foreshore and have been transferred to PEA, by virtue of which PEA, as owner, may
submerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the validly convey the same to any qualified person without violating the
1987 Constitution which state that: Constitution or any statute.

"Section 2. All lands of the public domain, waters, minerals, coal, The constitutional provision prohibiting private corporations from
petroleum, and other mineral oils, all forces of potential energy, holding public land, except by lease (Sec. 3, Art. XVII,70 1987
 Constitution), does not apply to reclaimed lands whose ownership has authorizing the issuance of certificates of title corresponding to land patents. To
passed on to PEA by statutory grant." this day, these certificates of title are still in the name of PEA.

Under Section 2, Article XII of the 1987 Constitution, the foreshore and PD No. 1085, coupled with President Aquino's actual issuance of a special
submerged areas of Manila Bay are part of the "lands of the public domain, patent covering the Freedom Islands, is equivalent to an official proclamation
waters x x x and other natural resources" and consequently "owned by the classifying the Freedom Islands as alienable or disposable lands of the public
State." As such, foreshore and submerged areas "shall not be alienated," unless domain. PD No. 1085 and President Aquino's issuance of a land patent also
they are classified as "agricultural lands" of the public domain. The mere constitute a declaration that the Freedom Islands are no longer needed for
reclamation of these areas by PEA does not convert these inalienable natural public service. The Freedom Islands are thus alienable or disposable lands of
resources of the State into alienable or disposable lands of the public domain. the public domain, open to disposition or concession to qualified parties.
There must be a law or presidential proclamation officially classifying these
reclaimed lands as alienable or disposable and open to disposition or At the time then President Aquino issued Special Patent No. 3517, PEA had
concession. Moreover, these reclaimed lands cannot be classified as alienable or already reclaimed the Freedom Islands although subsequently there were
disposable if the law has reserved them for some public or quasi-public use. 71 partial erosions on some areas. The government had also completed the
necessary surveys on these islands. Thus, the Freedom Islands were no longer
Section 8 of CA No. 141 provides that "only those lands shall be declared open to part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987
disposition or concession which have been officially delimited and Constitution classifies lands of the public domain into "agricultural, forest or
classified."72 The President has the authority to classify inalienable lands of the timber, mineral lands, and national parks." Being neither timber, mineral, nor
public domain into alienable or disposable lands of the public domain, pursuant national park lands, the reclaimed Freedom Islands necessarily fall under the
to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department classification of agricultural lands of the public domain. Under the 1987
attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by Constitution, agricultural lands of the public domain are the only natural
the Philippine Government for use as the Chancery of the Philippine Embassy. resources that the State may alienate to qualified private parties. All other
Although the Chancery had transferred to another location thirteen years natural resources, such as the seas or bays, are "waters x x x owned by the
earlier, the Court still ruled that, under Article 42274 of the Civil Code, a property State" forming part of the public domain, and are inalienable pursuant to
of public dominion retains such character until formally declared otherwise. Section 2, Article XII of the 1987 Constitution.
The Court ruled that –
AMARI claims that the Freedom Islands are private lands because CDCP, then a
"The fact that the Roppongi site has not been used for a long time for private corporation, reclaimed the islands under a contract dated November 20,
actual Embassy service does not automatically convert it to patrimonial 1973 with the Commissioner of Public Highways. AMARI, citing Article 5 of the
property. Any such conversion happens only if the property is Spanish Law of Waters of 1866, argues that "if the ownership of reclaimed lands
withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, may be given to the party constructing the works, then it cannot be said that
66 SCRA 481 [1975]. A property continues to be part of the public reclaimed lands are lands of the public domain which the State may not
domain, not available for private appropriation or ownership 'until alienate."75 Article 5 of the Spanish Law of Waters reads as follows:
there is a formal declaration on the part of the government to
withdraw it from being such' (Ignacio v. Director of Lands, 108 Phil. "Article 5. Lands reclaimed from the sea in consequence of works
335 [1960]." (Emphasis supplied) constructed by the State, or by the provinces, pueblos or private
persons, with proper permission, shall become the property of the party
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land constructing such works, unless otherwise provided by the terms of
patents for lands reclaimed by PEA from the foreshore or submerged areas of the grant of authority." (Emphasis supplied)
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 Under Article 5 of the Spanish Law of Waters of 1866, private parties could
the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the reclaim from the sea only with "proper permission" from the State. Private
Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 parties could own the reclaimed land only if not "otherwise provided by the
and 7312 in the name of PEA pursuant to Section 103 of PD No. 1529 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 consisting of portions of the reclaimed land, subject to the constitutional ban on
of the reclaimed land because any reclaimed land, like the sea from which it private corporations from acquiring alienable lands of the public domain. The
emerged, belonged to the State. Thus, a private person reclaiming from the sea reclaimed land can be used as payment in kind only if the reclaimed land is first
without permission from the State could not acquire ownership of the reclaimed classified as alienable or disposable land open to disposition, and then declared
land which would remain property of public dominion like the sea it no longer needed for public service.
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 Amended JVA covers not only the Freedom Islands, but also an additional
the government, either by purchase or by grant, belong to the public domain." 77 592.15 hectares which are still submerged and forming part of Manila
Bay. There is no legislative or Presidential act classifying these submerged
Article 5 of the Spanish Law of Waters must be read together with laws areas as alienable or disposable lands of the public domain open to
subsequently enacted on the disposition of public lands. In particular, CA No. disposition. These submerged areas are not covered by any patent or certificate
141 requires that lands of the public domain must first be classified as alienable of title. There can be no dispute that these submerged areas form part of the
or disposable before the government can alienate them. These lands must not public domain, and in their present state are inalienable and outside the
be reserved for public or quasi-public purposes.78 Moreover, the contract commerce of man. Until reclaimed from the sea, these submerged areas are,
between CDCP and the government was executed after the effectivity of the under the Constitution, "waters x x x owned by the State," forming part of the
1973 Constitution which barred private corporations from acquiring any kind of public domain and consequently inalienable. Only when actually reclaimed from
alienable land of the public domain. This contract could not have converted the the sea can these submerged areas be classified as public agricultural lands,
Freedom Islands into private lands of a private corporation. which under the Constitution are the only natural resources that the State may
alienate. Once reclaimed and transformed into public agricultural lands, the
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws government may then officially classify these lands as alienable or disposable
authorizing the reclamation of areas under water and revested solely in the lands open to disposition. Thereafter, the government may declare these lands
National Government the power to reclaim lands. Section 1 of PD No. 3-A no longer needed for public service. Only then can these reclaimed lands be
declared that – considered alienable or disposable lands of the public domain and within the
commerce of man.
"The provisions of any law to the contrary notwithstanding, the
reclamation of areas under water, whether foreshore or inland, shall The classification of PEA's reclaimed foreshore and submerged lands into
be limited to the National Government or any person authorized by alienable or disposable lands open to disposition is necessary because PEA is
it under a proper contract. (Emphasis supplied) 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
x x x." 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
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because such storm drains as may be necessary." PEA is empowered to issue "rules and
reclamation of areas under water could now be undertaken only by the National regulations as may be necessary for the proper use by private parties of any or
Government or by a person contracted by the National Government. Private all of the highways, roads, utilities, buildings and/or any of its
parties may reclaim from the sea only under a contract with the National properties and to impose or collect fees or tolls for their use." Thus, part of the
Government, and no longer by grant or permission as provided in Section 5 of reclaimed foreshore and submerged lands held by the PEA would actually be
the Spanish Law of Waters of 1866. needed for public use or service since many of the functions imposed on PEA by
its charter constitute essential public services.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the
National Government's implementing arm to undertake "all reclamation Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be
projects of the government," which "shall be undertaken by the PEA or primarily responsible for integrating, directing, and coordinating all
through a proper contract executed by it with any person or entity." Under reclamation projects for and on behalf of the National Government." The same
such contract, a private party receives compensation for reclamation services section also states that "[A]ll reclamation projects shall be approved by the
rendered to PEA. Payment to the contractor may be in cash, or in kind 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 the conservation of natural resources and supportive of the national
x." Thus, under EO No. 525, in relation to PD No. 3-A and PD No.1084, PEA interest;
became the primary implementing agency of the National Government to
reclaim foreshore and submerged lands of the public domain. EO No. 525 (15) Exercise exclusive jurisdiction on the management and
recognized PEA as the government entity "to undertake the reclamation of lands disposition of all lands of the public domain and serve as the sole
and ensure their maximum utilization in promoting public welfare and agency responsible for classification, sub-classification, surveying and
interests."79 Since large portions of these reclaimed lands would obviously be titling of lands in consultation with appropriate agencies." 80 (Emphasis
needed for public service, there must be a formal declaration segregating supplied)
reclaimed lands no longer needed for public service from those still needed for
public service.1âwphi1.nêt As manager, conservator and overseer of the natural resources of the State,
DENR exercises "supervision and control over alienable and disposable public
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall lands." DENR also exercises "exclusive jurisdiction on the management and
belong to or be owned by the PEA," could not automatically operate to classify disposition of all lands of the public domain." Thus, DENR decides whether
inalienable lands into alienable or disposable lands of the public domain. areas under water, like foreshore or submerged areas of Manila Bay, should be
Otherwise, reclaimed foreshore and submerged lands of the public domain reclaimed or not. This means that PEA needs authorization from DENR before
would automatically become alienable once reclaimed by PEA, whether or not PEA can undertake reclamation projects in Manila Bay, or in any part of the
classified as alienable or disposable. country.

The Revised Administrative Code of 1987, a later law than either PD No. 1084 or DENR also exercises exclusive jurisdiction over the disposition of all lands of the
EO No. 525, vests in the Department of Environment and Natural Resources public domain. Hence, DENR decides whether reclaimed lands of PEA should be
("DENR" for brevity) the following powers and functions: 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
"Sec. 4. Powers and Functions. The Department shall: 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
(1) x x x 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
xxx No. 141.

(4) Exercise supervision and control over forest lands, alienable and In short, DENR is vested with the power to authorize the reclamation of areas
disposable public lands, mineral resources and, in the process of under water, while PEA is vested with the power to undertake the physical
exercising such control, impose appropriate taxes, fees, charges, rentals reclamation of areas under water, whether directly or through private
and any such form of levy and collect such revenues for the exploration, contractors. DENR is also empowered to classify lands of the public domain into
development, utilization or gathering of such resources; 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.
xxx
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged
(14) Promulgate rules, regulations and guidelines on the issuance areas does not make the reclaimed lands alienable or disposable lands of the
of licenses, permits, concessions, lease agreements and such other public domain, much less patrimonial lands of PEA. Likewise, the mere transfer
privileges concerning the development, exploration and utilization by the National Government of lands of the public domain to PEA does not make
of the country's marine, freshwater, and brackish water and over the lands alienable or disposable lands of the public domain, much less
all aquatic resources of the country and shall continue to oversee, patrimonial lands of PEA.
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
Absent two official acts – a classification that these lands are alienable or and assigned to the ownership and administration of the Public
disposable and open to disposition and a declaration that these lands are not Estates Authority established pursuant to PD No. 1084; Provided,
needed for public service, lands reclaimed by PEA remain inalienable lands of however, That the rights and interests of the Construction and
the public domain. Only such an official classification and formal declaration can Development Corporation of the Philippines pursuant to the aforesaid
convert reclaimed lands into alienable or disposable lands of the public domain, contract shall be recognized and respected.
open to disposition under the Constitution, Title I and Title III 83 of CA No. 141
and other applicable laws.84 Henceforth, the Public Estates Authority shall exercise the rights and
assume the obligations of the Republic of the Philippines (Department
PEA's Authority to Sell Reclaimed Lands of Public Highways) arising from, or incident to, the aforesaid contract
between the Republic of the Philippines and the Construction and
PEA, like the Legal Task Force, argues that as alienable or disposable lands of Development Corporation of the Philippines.
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 In consideration of the foregoing transfer and assignment, the Public
that reclaimed lands transferred to a branch or subdivision of the government Estates Authority shall issue in favor of the Republic of the Philippines
"shall not be alienated, encumbered, or otherwise disposed of in a manner the corresponding shares of stock in said entity with an issued value of
affecting its title, except when authorized by Congress: x x x."85 (Emphasis by said shares of stock (which) shall be deemed fully paid and non-
PEA) assessable.

In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative The Secretary of Public Highways and the General Manager of the
Code of 1987, which states that – Public Estates Authority shall execute such contracts or agreements,
including appropriate agreements with the Construction and
"Sec. 48. Official Authorized to Convey Real Property. Whenever real Development Corporation of the Philippines, as may be necessary to
property of the Government is authorized by law to be conveyed, the implement the above.
deed of conveyance shall be executed in behalf of the government by
the following: x x x." Special land patent/patents shall be issued by the Secretary of
Natural Resources in favor of the Public Estates Authority without
Thus, the Court concluded that a law is needed to convey any real property prejudice to the subsequent transfer to the contractor or his
belonging to the Government. The Court declared that - assignees of such portion or portions of the land reclaimed or to be
reclaimed as provided for in the above-mentioned contract. On the
"It is not for the President to convey real property of the government basis of such patents, the Land Registration Commission shall issue
on his or her own sole will. Any such conveyance must be authorized the corresponding certificate of title." (Emphasis supplied)
and approved by a law enacted by the Congress. It requires executive
and legislative concurrence." (Emphasis supplied) On the other hand, Section 3 of EO No. 525, issued on February 14, 1979,
provides that -
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 "Sec. 3. All lands reclaimed by PEA shall belong to or be owned by
February 4, 1977, provides that – the PEA which shall be responsible for its administration, development,
utilization or disposition in accordance with the provisions of
"The land reclaimed in the foreshore and offshore area of Manila Presidential Decree No. 1084. Any and all income that the PEA may
Bay pursuant to the contract for the reclamation and construction of derive from the sale, lease or use of reclaimed lands shall be used in
the Manila-Cavite Coastal Road Project between the Republic of the accordance with the provisions of Presidential Decree No. 1084."
Philippines and the Construction and Development Corporation of the
Philippines dated November 20, 1973 and/or any other contract or There is no express authority under either PD No. 1085 or EO No. 525 for PEA
reclamation covering the same area is hereby transferred, conveyed to sell its reclaimed lands. PD No. 1085 merely transferred "ownership and
administration" of lands reclaimed from Manila Bay to PEA, while EO No. 525 654,89 which authorizes PEA "to determine the kind and manner of payment for
declared that lands reclaimed by PEA "shall belong to or be owned by PEA." EO the transfer" of its assets and properties, does not exempt PEA from the
No. 525 expressly states that PEA should dispose of its reclaimed lands "in requirement of public auction. EO No. 654 merely authorizes PEA to decide the
accordance with the provisions of Presidential Decree No. 1084," the charter of mode of payment, whether in kind and in installment, but does not authorize
PEA. PEA to dispense with public auction.

PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, Moreover, under Section 79 of PD No. 1445, otherwise known as the
administer, deal in, subdivide, dispose, lease and sell any and all kinds of Government Auditing Code, the government is required to sell valuable
lands x x x owned, managed, controlled and/or operated by the government property through public bidding. Section 79 of PD No. 1445
government."87(Emphasis supplied) There is, therefore, legislative authority mandates that –
granted to PEA to sell its lands, whether patrimonial or alienable lands of
the public domain. PEA may sell to private parties its patrimonial "Section 79. When government property has become unserviceable for
propertiesin accordance with the PEA charter free from constitutional any cause, or is no longer needed, it shall, upon application of the officer
limitations. The constitutional ban on private corporations from acquiring accountable therefor, be inspected by the head of the agency or his duly
alienable lands of the public domain does not apply to the sale of PEA's authorized representative in the presence of the auditor concerned and,
patrimonial lands. 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
PEA may also sell its alienable or disposable lands of the public domain to the highest bidder under the supervision of the proper committee on
private individuals since, with the legislative authority, there is no longer any award or similar body in the presence of the auditor concerned or other
statutory prohibition against such sales and the constitutional ban does not authorized representative of the Commission, after advertising by
apply to individuals. PEA, however, cannot sell any of its alienable or disposable printed notice in the Official Gazette, or for not less than three
lands of the public domain to private corporations since Section 3, Article XII of consecutive days in any newspaper of general circulation, or where
the 1987 Constitution expressly prohibits such sales. The legislative authority the value of the property does not warrant the expense of publication,
benefits only individuals. Private corporations remain barred from acquiring by notices posted for a like period in at least three public places in the
any kind of alienable land of the public domain, including government reclaimed locality where the property is to be sold. In the event that the public
lands. 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
The provision in PD No. 1085 stating that portions of the reclaimed lands could approved by the Commission."
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 It is only when the public auction fails that a negotiated sale is allowed, in which
constitutional ban. Otherwise, the provisions of PD No. 1085 would violate both case the Commission on Audit must approve the selling price. 90 The Commission
the 1973 and 1987 Constitutions. on Audit implements Section 79 of the Government Auditing Code through
Circular No. 89-29691 dated January 27, 1989. This circular emphasizes that
The requirement of public auction in the sale of reclaimed lands 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."
Assuming the reclaimed lands of PEA are classified as alienable or disposable
lands open to disposition, and further declared no longer needed for public At the public auction sale, only Philippine citizens are qualified to bid for PEA's
service, PEA would have to conduct a public bidding in selling or leasing these reclaimed foreshore and submerged alienable lands of the public domain.
lands. PEA must observe the provisions of Sections 63 and 67 of CA No. 141 Private corporations are barred from bidding at the auction sale of any kind of
requiring public auction, in the absence of a law exempting PEA from holding a alienable land of the public domain.
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 PEA originally scheduled a public bidding for the Freedom Islands on December
Commonwealth Act No. 141, as amended." This is an acknowledgment that the 10, 1991. PEA imposed a condition that the winning bidder should reclaim
provisions of CA No. 141 apply to the disposition of reclaimed alienable lands of another 250 hectares of submerged areas to regularize the shape of the
the public domain unless otherwise provided by law. Executive Order No. 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 "Section 302. Financing, Construction, Maintenance, Operation, and
23, 1994, the Government Corporate Counsel advised PEA it could sell the Management of Infrastructure Projects by the Private Sector. x x x
Freedom Islands through negotiation, without need of another public bidding,
because of the failure of the public bidding on December 10, 1991. 93 xxx

However, the original JVA dated April 25, 1995 covered not only the Freedom In case of land reclamation or construction of industrial estates, the
Islands and the additional 250 hectares still to be reclaimed, it also granted an repayment plan may consist of the grant of a portion or percentage of
option to AMARI to reclaim another 350 hectares. The original JVA, a negotiated the reclaimed land or the industrial estate constructed."
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 Although Section 302 of the Local Government Code does not contain a proviso
justification for a negotiated sale of 750 hectares, almost double the area similar to that of the BOT Law, the constitutional restrictions on land ownership
publicly auctioned. Besides, the failure of public bidding happened on December automatically apply even though not expressly mentioned in the Local
10, 1991, more than three years before the signing of the original JVA on April Government Code.
25, 1995. The economic situation in the country had greatly improved during
the intervening period.
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
Reclamation under the BOT Law and the Local Government Code of the reclaimed land. If the contractor or developer is an individual, portions of
the reclaimed land, not exceeding 12 hectares 96 of non-agricultural lands, may
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution be conveyed to him in ownership in view of the legislative authority allowing
is absolute and clear: "Private corporations or associations may not hold such such conveyance. This is the only way these provisions of the BOT Law and the
alienable lands of the public domain except by lease, x x x." Even Republic Act Local Government Code can avoid a direct collision with Section 3, Article XII of
No. 6957 ("BOT Law," for brevity), cited by PEA and AMARI as legislative the 1987 Constitution.
authority to sell reclaimed lands to private parties, recognizes the constitutional
ban. Section 6 of RA No. 6957 states – Registration of lands of the public domain

"Sec. 6. Repayment Scheme. - For the financing, construction, operation Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed
and maintenance of any infrastructure projects undertaken through the lands to public respondent PEA transformed such lands of the public domain to
build-operate-and-transfer arrangement or any of its variations private lands." This theory is echoed by AMARI which maintains that the
pursuant to the provisions of this Act, the project proponent x x x may "issuance of the special patent leading to the eventual issuance of title takes the
likewise be repaid in the form of a share in the revenue of the project or subject land away from the land of public domain and converts the property
other non-monetary payments, such as, but not limited to, the grant of a into patrimonial or private property." In short, PEA and AMARI contend that
portion or percentage of the reclaimed land, subject to the with the issuance of Special Patent No. 3517 and the corresponding certificates
constitutional requirements with respect to the ownership of the of titles, the 157.84 hectares comprising the Freedom Islands have become
land: x x x." (Emphasis supplied) private lands of PEA. In support of their theory, PEA and AMARI cite the
following rulings of the Court:
A private corporation, even one that undertakes the physical reclamation of a
government BOT project, cannot acquire reclaimed alienable lands of the public 1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –
domain in view of the constitutional ban.
"Once the patent was granted and the corresponding certificate of title
Section 302 of the Local Government Code, also mentioned by PEA and AMARI, was issued, the land ceased to be part of the public domain and became
authorizes local governments in land reclamation projects to pay the contractor private property over which the Director of Lands has neither control
or developer in kind consisting of a percentage of the reclaimed land, to wit: nor jurisdiction."

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

 "After the registration and issuance of the certificate and duplicate public land to serve as the site for the hospital buildings and other facilities of
certificate of title based on a public land patent, the land covered Mindanao Medical Center, which performed a public service. The Court affirmed
thereby automatically comes under the operation of Republic Act 496 the registration of the 12.8-hectare public land in the name of Mindanao Medical
subject to all the safeguards provided therein."3. Heirs of Gregorio Center under Section 122 of Act No. 496. This fifth case is an example of a public
Tengco v. Heirs of Jose Aliwalas,99 where the Court ruled - land being registered under Act No. 496 without the land losing its character as
a property of public dominion.
"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 In the instant case, the only patent and certificates of title issued are those in the
domain and continues to be under his exclusive control; but once the name of PEA, a wholly government owned corporation performing public as
patent is registered and a certificate of title is issued, the land ceases to well as proprietary functions. No patent or certificate of title has been issued to
be part of the public domain and becomes private property over which any private party. No one is asking the Director of Lands to cancel PEA's patent
the Director of Lands has neither control nor jurisdiction." 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
4. Manalo v. Intermediate Appellate Court,100 where the Court held – certificates, being alienable lands of the public domain, should not be sold to a
private corporation.
"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 Registration of land under Act No. 496 or PD No. 1529 does not vest in the
respondents, the said lots ceased to be part of the public domain and, registrant private or public ownership of the land. Registration is not a mode of
therefore, the Director of Lands lost jurisdiction over the same." acquiring ownership but is merely evidence of ownership previously conferred
by any of the recognized modes of acquiring ownership. Registration does not
5.Republic v. Court of Appeals,101 where the Court stated – 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
"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 Jurisprudence holding that upon the grant of the patent or issuance of the
sufficient for initial registration under the Land Registration Act. Such certificate of title the alienable land of the public domain automatically becomes
land grant is constitutive of a 'fee simple' title or absolute title in favor private land cannot apply to government units and entities like PEA. The
of petitioner Mindanao Medical Center. Thus, Section 122 of the Act, transfer of the Freedom Islands to PEA was made subject to the provisions of CA
which governs the registration of grants or patents involving public No. 141 as expressly stated in Special Patent No. 3517 issued by then President
lands, provides that 'Whenever public lands in the Philippine Islands Aquino, to wit:
belonging to the Government of the United States or to the Government
of the Philippines are alienated, granted or conveyed to persons or to "NOW, THEREFORE, KNOW YE, that by authority of the Constitution of
public or private corporations, the same shall be brought forthwith the Philippines and in conformity with the provisions of Presidential
under the operation of this Act (Land Registration Act, Act 496) and Decree No. 1084, supplemented by Commonwealth Act No. 141, as
shall become registered lands.'" amended, there are hereby granted and conveyed unto the Public
Estates Authority the aforesaid tracts of land containing a total area of
The first four cases cited involve petitions to cancel the land patents and the one million nine hundred fifteen thousand eight hundred ninety four
corresponding certificates of titles issued to private parties. These four cases (1,915,894) square meters; the technical description of which are
uniformly hold that the Director of Lands has no jurisdiction over private lands hereto attached and made an integral part hereof." (Emphasis supplied)
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 Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not
the Torrens System of a 12.8-hectare public land granted by the National covered by PD No. 1084. Section 60 of CA No. 141 prohibits, "except when
Government to Mindanao Medical Center, a government unit under the authorized by Congress," the sale of alienable lands of the public domain that
Department of Health. The National Government transferred the 12.8-hectare are transferred to government units or entities. Section 60 of CA No. 141
constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of
the registered land even if not annotated on the certificate of title. 104Alienable Whereas, Presidential Decree No. 1084 creates the Public Estates
lands of the public domain held by government entities under Section 60 of CA Authority as a government corporation to undertake reclamation of
No. 141 remain public lands because they cannot be alienated or encumbered lands and ensure their maximum utilization in promoting public
unless Congress passes a law authorizing their disposition. Congress, however, welfare and interests; and
cannot authorize the sale to private corporations of reclaimed alienable lands of
the public domain because of the constitutional ban. Only individuals can Whereas, Presidential Decree No. 1416 provides the President with
benefit from such law. continuing authority to reorganize the national government including
the transfer, abolition, or merger of functions and offices.
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 NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
domain into private or patrimonial lands. The alienable lands of the public Philippines, by virtue of the powers vested in me by the Constitution
domain must be transferred to qualified private parties, or to government and pursuant to Presidential Decree No. 1416, do hereby order and
entities not tasked to dispose of public lands, before these lands can become direct the following:
private or patrimonial lands. Otherwise, the constitutional ban will become
illusory if Congress can declare lands of the public domain as private or Section 1. The Public Estates Authority (PEA) shall be primarily
patrimonial lands in the hands of a government agency tasked to dispose of responsible for integrating, directing, and coordinating all
public lands. This will allow private corporations to acquire directly from reclamation projects for and on behalf of the National Government.
government agencies limitless areas of lands which, prior to such law, are All reclamation projects shall be approved by the President upon
concededly public lands. recommendation of the PEA, and shall be undertaken by the PEA or
through a proper contract executed by it with any person or entity;
Under EO No. 525, PEA became the central implementing agency of the Provided, that, reclamation projects of any national government agency
National Government to reclaim foreshore and submerged areas of the public or entity authorized under its charter shall be undertaken in
domain. Thus, EO No. 525 declares that – consultation with the PEA upon approval of the President.

"EXECUTIVE ORDER NO. 525 x x x ."

Designating the Public Estates Authority as the Agency Primarily As the central implementing agency tasked to undertake reclamation projects
Responsible for all 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
Whereas, there are several reclamation projects which are ongoing or public domain. The reclaimed lands being leased or sold by PEA are not private
being proposed to be undertaken in various parts of the country which lands, in the same manner that DENR, when it disposes of other alienable lands,
need to be evaluated for consistency with national programs; 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
Whereas, there is a need to give further institutional support to the lands. In the hands of the government agency tasked and authorized to
Government's declared policy to provide for a coordinated, economical dispose of alienable of disposable lands of the public domain, these lands
and efficient reclamation of lands; are still public, not private lands.

Whereas, Presidential Decree No. 3-A requires that all reclamation of Furthermore, PEA's charter expressly states that PEA "shall hold lands of the
areas shall be limited to the National Government or any person public domain" as well as "any and all kinds of lands." PEA can hold both lands
authorized by it under proper contract; 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
Whereas, a central authority is needed to act on behalf of the land patents or certificates of title in PEA's name does not automatically make
National Government which shall ensure a coordinated and such lands private.
integrated approach in the reclamation of lands;
To allow vast areas of reclaimed lands of the public domain to be transferred to shall be brought forthwith under the operation of this Decree."
PEA as private lands will sanction a gross violation of the constitutional ban on (Emphasis supplied)
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 Based on its legislative history, the phrase "conveyed to any person" in Section
Amended JVA, and transfer several hundreds of hectares of these reclaimed and 103 of PD No. 1529 includes conveyances of public lands to public corporations.
still to be reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the constitutional ban in Section Alienable lands of the public domain "granted, donated, or transferred to a
3, Article XII of the 1987 Constitution which was intended to diffuse equitably province, municipality, or branch or subdivision of the Government," as
the ownership of alienable lands of the public domain among Filipinos, now provided in Section 60 of CA No. 141, may be registered under the Torrens
numbering over 80 million strong. 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
This scheme, if allowed, can even be applied to alienable agricultural lands of "shall not be alienated, encumbered or otherwise disposed of in a manner
the public domain since PEA can "acquire x x x any and all kinds of lands." This affecting its title, except when authorized by Congress." This provision refers
will open the floodgates to corporations and even individuals acquiring to government reclaimed, foreshore and marshy lands of the public domain that
hundreds of hectares of alienable lands of the public domain under the guise have been titled but still cannot be alienated or encumbered unless expressly
that in the hands of PEA these lands are private lands. This will result in authorized by Congress. The need for legislative authority prevents the
corporations amassing huge landholdings never before seen in this country - registered land of the public domain from becoming private land that can be
creating the very evil that the constitutional ban was designed to prevent. This disposed of to qualified private parties.
will completely reverse the clear direction of constitutional development in this
country. The 1935 Constitution allowed private corporations to acquire not The Revised Administrative Code of 1987 also recognizes that lands of the
more than 1,024 hectares of public lands.105 The 1973 Constitution prohibited public domain may be registered under the Torrens System. Section 48, Chapter
private corporations from acquiring any kind of public land, and the 1987 12, Book I of the Code states –
Constitution has unequivocally reiterated this prohibition.
"Sec. 48. Official Authorized to Convey Real Property. Whenever real
The contention of PEA and AMARI that public lands, once registered under Act property of the Government is authorized by law to be conveyed, the
No. 496 or PD No. 1529, automatically become private lands is contrary to deed of conveyance shall be executed in behalf of the government by
existing laws. Several laws authorize lands of the public domain to be registered the following:
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.
(1) x x x
1529, respectively, provide as follows:

(2) For property belonging to the Republic of the Philippines, but

Act No. 496
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency or
"Sec. 122. Whenever public lands in the Philippine Islands belonging to instrumentality." (Emphasis supplied)
the x x x Government of the Philippine Islands are alienated, granted, or
conveyed to persons or the public or private corporations, the same
Thus, private property purchased by the National Government for expansion of
shall be brought forthwith under the operation of this Act and shall
a public wharf may be titled in the name of a government corporation regulating
become registered lands."
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
PD No. 1529 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
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the titled in the name of the municipality.106 All these properties become properties
Government alienated, granted or conveyed to any person, the same 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 lands, a transaction considered a sale or alienation under CA No. 141, 108 the
existing law for the de-registration of land from the Torrens System. Government Auditing Code,109 and Section 3, Article XII of the 1987 Constitution.

Private lands taken by the Government for public use under its power of The Regalian doctrine is deeply implanted in our legal system. Foreshore and
eminent domain become unquestionably part of the public domain. submerged areas form part of the public domain and are inalienable. Lands
Nevertheless, Section 85 of PD No. 1529 authorizes the Register of Deeds to reclaimed from foreshore and submerged areas also form part of the public
issue in the name of the National Government new certificates of title covering domain and are also inalienable, unless converted pursuant to law into alienable
such expropriated lands. Section 85 of PD No. 1529 states – 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
"Sec. 85. Land taken by eminent domain. Whenever any registered land, alienable public lands. Reclaimed lands retain their inherent potential as areas
or interest therein, is expropriated or taken by eminent domain, the for public use or public service. Alienable lands of the public domain,
National Government, province, city or municipality, or any other increasingly becoming scarce natural resources, are to be distributed equitably
agency or instrumentality exercising such right shall file for registration among our ever-growing population. To insure such equitable distribution, the
in the proper Registry a certified copy of the judgment which shall state 1973 and 1987 Constitutions have barred private corporations from acquiring
definitely by an adequate description, the particular property or any kind of alienable land of the public domain. Those who attempt to dispose
interest expropriated, the number of the certificate of title, and the of inalienable natural resources of the State, or seek to circumvent the
nature of the public use. A memorandum of the right or interest taken constitutional ban on alienation of lands of the public domain to private
shall be made on each certificate of title by the Register of Deeds, and corporations, do so at their own risk.
where the fee simple is taken, a new certificate shall be issued in
favor of the National Government, province, city, municipality, or We can now summarize our conclusions as follows:
any other agency or instrumentality exercising such right for the land
so taken. The legal expenses incident to the memorandum of 1. The 157.84 hectares of reclaimed lands comprising the Freedom
registration or issuance of a new certificate of title shall be for the Islands, now covered by certificates of title in the name of PEA,
account of the authority taking the land or interest therein." (Emphasis are alienable lands of the public domain. PEA may lease these lands to
supplied) private corporations but may not sell or transfer ownership of these
lands to private corporations. PEA may only sell these lands to
Consequently, lands registered under Act No. 496 or PD No. 1529 are not Philippine citizens, subject to the ownership limitations in the 1987
exclusively private or patrimonial lands. Lands of the public domain may also be Constitution and existing laws.
registered pursuant to existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the inalienable natural resources of the public domain until classified as
Freedom Islands or of the lands to be reclaimed from submerged areas of alienable or disposable lands open to disposition and declared no
Manila Bay. In the words of AMARI, the Amended JVA "is not a sale but a joint longer needed for public service. The government can make such
venture with a stipulation for reimbursement of the original cost incurred by classification and declaration only after PEA has reclaimed these
PEA for the earlier reclamation and construction works performed by the CDCP submerged areas. Only then can these lands qualify as agricultural
under its 1973 contract with the Republic." Whether the Amended JVA is a sale lands of the public domain, which are the only natural resources the
or a joint venture, the fact remains that the Amended JVA requires PEA to "cause government can alienate. In their present state, the 592.15 hectares of
the issuance and delivery of the certificates of title conveying AMARI's Land submerged areas are inalienable and outside the commerce of man.
Share in the name of AMARI."107
3. Since the Amended JVA seeks to transfer to AMARI, a private
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution corporation, ownership of 77.34 hectares110of the Freedom Islands,
which provides that private corporations "shall not hold such alienable lands of such transfer is void for being contrary to Section 3, Article XII of the
the public domain except by lease." The transfer of title and ownership to 1987 Constitution which prohibits private corporations from acquiring
AMARI clearly means that AMARI will "hold" the reclaimed lands other than by any kind of alienable land of the public domain.
lease. The transfer of title and ownership is a "disposition" of the reclaimed
 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.
G.R. No. L-48321 August 31, 1946 As the applicant failed to show title to the lot, the next question is whether he is entitled
to decree or registration of the lot, because he is alien disqualified from acquiring lands
OH CHO, applicant-appellee, of the public domain (sections 48, 49, C.A. No. 141).
vs.
THE DIRECTOR OF LANDS, oppositor-appellant. As the applicant failed to show the title to the lot, and has invoked the provisions of the
Public Land Act, it seems unnecessary to make pronouncement in this case on the nature
Office of the Solicitor General Roman Ozaeta and Assistant Solicitor General Rafael Amparo or classifications of the sought to be registered.
for appellant.
Vicente Constantino for appellee. It may be argued that under the provisions of the Public Land Act the applicant
Ferrier, Gomez and Sotelo and J. T. Chuidian as amici curiae. immediate predecessor in interest would have been entitled to a decree of registration of
the lot had they applied for its registration; and that he having purchased or acquired it,
PADILLA, J.: the right of his immediate predecessor in interest to a decree of registration must be
deemed also to have been acquired by him. The benefits provided in the Public Land Act
for applicant's immediate predecessors in interest should comply with the condition
This is an appeal from a judgment decreeing the registration of a residential lot located in precedent for the grant of such benefits. The condition precedent is to apply for the
the municipality of Guinayangan, Province of Tayabas in the name of the applicant. registration of the land of which they had been in possession at least since July 26, 1894.
This the applicant's immediate predecessors in interest failed to do. They did not have
The opposition of the Director of Lands is based on the applicant's lack of title to the lot, any vested right in the lot amounting to the title which was transmissible to the
and on his disqualification, as alien, from acquiring lands of the public domain. applicant. The only right, if it may thus be called, is their possession of the lot which,
tacked to that of their predecessors in interest, may be availed of by a qualified person to
The applicant, who is an alien, and his predecessors in interest have been in open, apply for its registration but not by a person as the applicant who is disqualified.
continuous, exclusive and notorious possession of the lot from 1880 to filing of the
application for registration on January 17, 1940. It is urged that the sale of the lot to the applicant should have been declared null and
void. In a suit between vendor and vendee for the annulment of the sale, such
The Solicitor General reiterates the second objection of the opponent and adds that the pronouncement would be necessary, if the court were of the opinion that it is void. It is
lower court, committed an error in not declaring null and void the sale of the lot to the not necessary in this case where the vendors do not even object to the application filed
applicant. by the vendee.

The applicant invokes the Land Registration Act (Act No. 496), or should it not be Accordingly, judgment is reversed and the application for registration dismissed, without
applicable to the case, then he would apply for the benefits of the Public Land Act (C.A. costs.
No. 141).
Moran, C.J., Feria, Pablo, Hilado and Bengzon, JJ., concur.
The applicant failed to show that he has title to the lot that may be confirmed under the
Land Registration Act. He failed to show that he or any of his predecessors in interest had
acquired the lot from the Government, either by purchase or by grant, under the laws,
orders and decrease promulgated by the Spanish Government in the Philippines, or by
possessory information under the Mortgaged Law (section 19, Act 496). All lands that
Separate Opinions
were not acquired from the Government, either by purchase or by grant below to the
public domain. An exception to the rule would be any land that should have been in the
possession of an occupant and of his predecessors in interest since time immemorial, for PERFECTO, J., concurring:
such possession would justify the presumption that the land had never been part of the
public domain or that it had been a private property even before the Spanish conquest. Oh Cho, a citizen of the Republic of China, purchased in 1938 from Antonio, Luis and
(Cariñ o vs. Insular Government, 212 U.S., 449; 53 Law. Ed., 594.) The applicant does not Rafael Lagdameo a parcel of land located in the residential district of Guinayangan,
come under the exception, for the earliest possession of the lot by his first predecessors Tayabas, which has been in the continuous, public, and adverse possession of their
in interest begun in 1880. predecessors in interest as far back as 1880. on June 17, 1940, Oh Cho applied for the
registration of said parcel of land. The Director of Lands opposed the application
because, among other grounds, the Constitution prohibits aliens from acquiring public or This is the question squarely reversing to us for decision. The majority, although
private agricultural lands. reversing the lower court's decision and dismissing the application with we agree,
abstained from the declaring null and void the purchase made by Oh Cho in 1938 as
One of the witnesses for the applicant, on cross-examination, expressly admitted that the prayed for the appellant. We deem it necessary to state our opinion on the important
land in question is susceptible of cultivation and may be converted into an orchard or question raised, it must be squarely decided.
garden. Rodolfo Tiquia, inspector of the Bureau of Lands, testifying as a witness for the
government, stated that the land, notwithstanding the use to which it is actually devoted, The Solicitor General argued in his brief as follows:
is agricultural land in accordance with an opinion rendered in 1939 by the Secretary of
Justice. The pertinent part of said opinion, penned by Secretary Jose Abad Santos, later I. The lower court erred decreeing the registration of the lot in question in favor
Chief Justice of the Supreme Court, is as follows: of the applicant who, according to his own voluntary admission, is a citizen of the
Chinese Republic.
1. Whether or not the "public agricultural land" in section 1, Article XII, of the
Constitution may be interpreted to include residential, commercial or industrial (a) The phrase "agricultural land" as used in the Act of the Congress of July 1,
lots for purposes of their disposition. 1902, in the Public Land Act includes residential lots.

1. Section 1, Article XII of the Constitution classifies lands of the public domain In this jurisdiction lands of public domain suitable for residential purposes are
in the Philippines into agricultural, timber and mineral. This is the basic considered agricultural lands under the Public Land Law. The phrase
classification adopted since the enactment of the Act of Congress of July 1, 1902, "agricultural public lands" has well settled judicial definition. It was used for
known as the Philippine Bill. At the time of the adoption of the Constitution of the first time in the Act of Congress of July 1, 1902, known as the Philippine Bill.
the Philippines, the term "agricultural public lands" had, therefor, acquired a Its means those public lands acquired form Spain which are neither mineral nor
technical meaning in our public laws. The Supreme Court of the Philippines in timber lands (Mapa vs. Insular Government, 12 Phil., 572; Ibañ es de
the leading case of Mapa vs. Insular Government, 10 Phil., 175, held that the Aldecoa vs. Insular Government 13 Phil., 159; Ramos vs. Director of Lands, 39
phrase "agricultural public lands" means those public lands acquired from Phil., 175; Jocson vs. Director of Forestry, 39 Phil., 560; Ankron vs. Government
Spain which are neither timber nor mineral lands. This definition has been of the Philippine Islands, 40 Phil., 10). In the case of Mapa vs. Insular
followed by our Supreme Court in many subsequent cases. (Montano vs. Ins. Government, supra, the Supreme Court, in defining the meaning and scope of
Gov't 12 Phil., 572, 574; Santiago vs. Ins. Gov't., 12, Phil., 593; Ibañ es de that phrase from the context of the sections 13 and 15 of that Act, said:
Aldecoa vs. Ins. Gov't., 13 Phil., 159; Ins. Gov't., vs. Aldecoa & Co., 19 Phil., 505,
516 Mercado vs. Collector of Internal Revenue, 32 Phil., 271, 276; Molina 175,
181; Jocson vs. Director of Forestry, 39 Phil., 560, 564; and Ankron vs. The phrase "agricultural public lands" as defined by the Act of Congress of July
Government of the Philippines, 40 Phil., 10, 14.) 1, 1902, which phrase is also to be found in several sections of the Public Land
Act (No. 926) means those public lands acquired from Spain which are neither
mineral timber lands.
Residential, commercial or industrial lots forming part of the public domain
must have to be included in one or more of these classes. Clearly, they are
neither timber nor mineral, of necessity, therefore, they must be classified as xxx xxx xxx
agricultural.
"We hold that there is to be found in the act of Congress a definition of
Viewed from the another angle, it has been held that in determining whether the phrase "agricultural public lands," and after careful consideration
lands are agricultural or not, the character of the lands is the test of the question we are satisfied that only definition which exists in
(Odell vs. Durant 62 N. W., 524; Lerch vs. Missoula Brick & Tile Co., 123 p., 25). said Act is the definition adopted by the court below. Section 13 say
In other words, it is the susceptibility of the land to cultivation for agricultural that the Government shall "make and rules and regulations for the
or not (State vs. Stewart, 190, p.,129). lease, sale, or other dispositions of public lands other than timber or
mineral lands," To our minds that is only definition that can be said to
be given agricultural lands. In other words, that the phrase
Judge Pedro Magsalin, of the Court First Instance of Tayabas, rendered a decision on "agricultural lands" as used in Act No. 926 means those public lands
August 15, 1940, overruling the opposition without must explanation and decreeing the acquired from Spain which are not timber or mineral lands. . . ."
registration prayed for the applicant. The Director of Lands appealed from the decision, Mapa vs. Insular Government, 10 Phil., 175, 178, 182, emphasis
and the Solicitor General appearing for appellant, maintains that the applicant, not being added.)
a citizen of the Philippines, is disqualified to buy or acquire the parcel of land in question
and that the purchase made in question and that the purchase made in 1938 is null and
void.
"This phrase "agricultural public lands" was subsequently used in Act No. 926, agricultural lands, urbans lands and building lots being included in this
which is the first public land law of the Philippines. As therein used, the phrase classification for the purpose of distinguishing rural and urban estates
was expressly given by the Philippine Commission the same meaning intended from mineral and timber lands; the transformation they may have
for it by Congress as interpreted in the case of Mapa vs. Insular undergone is no obstacle to such classification as the possessors thereof
Government, supra. This is a self-evident from a reading of section 1, 10, 32, and may again convert them into rural estates." (Ibañ ez de
64 (subsection 6 of Act No. 926). Whenever the phrase "agricultural public Aldecoa vs. Insular Government 13 Phil., 161, 163 164, 165, 166;
lands" is used in any of said sections, it is invariably by the qualification "as emphasis added.).
defined by said Act of Congress of July first, nineteen hundred and two."
(b) Under the Constitution and Commonwealth Act No. 141
"More specially, in the case of Ibañez de Aldecoa vs. Insular Government, supra, (Public Land Act), the phrase (Public Land Act), the phrase
the Supreme Court held that a residential or building lot, forming part of the "public agricultural land" includes lands of the public domain
public domain, is agricultural land, irrespective of the fact that it is not actually suitable for residential purposes.
used for purposes of agriculture for the simple reason that it is susceptible of
cultivation and may be converted into a rural estate, and because when a land is "Section 1, Article XII of the Constitution, reads as follows:
not mineral or forestal in its nature it must necessarily be included within the
classification of a agricultural land. Because of the special applicability of the
doctrine laid down in said case, we quote at some length from the decision "All agricultural timber, and mineral lands of the public
therein rendered: 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 disposition, exploitation,
"The question set up in these proceedings by virtue of the appeal interposed by development, or utilization shall be limited to citizens of the
counsel for Juan Ibañ ez de Aldecoa, is whether or not a parcel of land that is Philippines, or to corporations or associations at least sixty per
susceptible of being cultivated, and ceasing to be agricultural land, was centum of the capital of which is owned by such citizens, subject to
converted into a building lot, is subject to the legal provisions in force regarding any existing right, grant lease, or concession at the time of the
Government public lands which may be alienated in favor of private individuals inauguration of the Government established under this Constitution.
or corporations. . . . Natural resources, with the exception of publicagricultural land, shall
not be alienated . . ." (Emphasis added.).
xxx xxx xxx
"Under the above-quote provision, the disposition exploitation, development or
"Hence, any parcel of land or building lot is susceptible of cultivation, utilization of the natural resources, including agricultural lands of the public
and may converted into a field, and planted with all kinds of domain is limited to citizens of the Philippines or to the corporations or
vegetation ; for this reason, where land is not mining or forestal in its associations therein mentioned. It also clearly appears from said provision
nature, it must necessarily be included within the classification of that natural resources, with the exception of public agricultural land, are not
agriculture land, not because it is actually used for the purposes of subject to alienation.
agriculture, but because it was originally agricultural and may again
become so under other circumstances; besides the Act of Congress (of "On November 7, 1936, or more than one year after the adoption of the
July 1, 1902) contains only three classifications, and makes no special Constitution, Commonwealth Act No. 141, known as the Public Land Act, was
provision with respect to building lots or urban land that have ceased approved. Under this Act the lands of the public have been classified into three
to be agricultural land. . . . divisions: (a) alienable or disposable, (b) timber, and (c) mineral lands. The
lands designated alienable or disposable correspond to lands designated in the
xxx xxx xxx Constitution as public agricultural lands, because under section 1, Article XII,
public agricultural lands are the only natural resources of the country which
"From the language of the foregoing provisions of the law, it is are the only natural resources of the country which are subject to alienation or
deduced that, with the exception of those comprised within the deposition.
mineral and timber zone, all lands owned by State or by the sovereign
nation are public in character, and per se alienable and, provided they "Section 9 of Commonwealth Act No. 141 provide that the alienable or
are not destine to the use of public in general or reserved by the disposable public lands shall be classified, according to use or purposes to
Government in accordance with law, they may be acquired by any which they are destined, into a agricultural, residential, commercial, industrial,
private or juridical person; and considering their origin and primitive etc., lands. At first blush it would seem that under this classification residential
state and the general uses to which they are accorded, they are called land is different from agricultural land. The difference however, is more
apparent than real. 'Public agricultural land ' as that phrase is used in the "(c) Judicial interpretation of doubtful clause or phrase use in the law,
Constitution means alienable lands of the public domain and therefore this controlling.
phrase is equivalent to the lands classified by the Commonwealth Act No. 141
as alienable or disposable. The classification provided in section 9 is only for "The judicial interpretation given to the phrase "public agricultural land" is a
purposes administration and disposition, according to the purposes to which sufficient authority for giving the same interpretation to the phrase as used in
said lands are especially adopted. But notwithstanding this of all said lands are subsequent legislation, and this is especially so in view of the length of time
essentially agricultural public lands because only agricultural public lands are during which this interpretation has been maintained by the courts. On this
subject to alienation or disposition under section 1, Article XII of the point Sutherland has the following to say:
Constitution. A contrary view would necessarily create a conflict between
Commonwealth Act No. 141 and section 1 of Article XII of the Constitution, and
such conflict should be avoided , if possible, and said Act construed in the light "When a judicial interpretation has once been put upon a clause,
of the fundamental provisions of the Constitution and in entire harmony expressed in a vague manner by the legislature, and difficult to be
therewith. understood, that ought of itself to be sufficient authority for adopting
the same construction. Buller J., said: "We find solemn determination
of these doubtful expressions in the statute, and as that now put
"Another universal principles applied in considering constitutional another construction has since prevailed, there is no reason why we
question is, that an Act will be so construed, if possible, as to avoid should now put another construction of the act on account of any
conflict with the Constitution, although such a construction may not suppose change of convenience." This rule of construction will hold
be the most obvious or natural one. "The Court may resort to an good even if the court be opinion that the practical erroneous; so that
implication to sustain a statute, but not to destroy it." But the courts if the matter were res integra the court would adopt a different
cannot go beyond the province of legitimate construction, in order to construction. Lord Cairns said: "I think that with regard to statutes ... it
save a statute; and where the meaning is plain, words cannot to be is desirable not so much that the principle of the decision should be
read into it or out of it for that purpose." ( 1 Sutherland, Statutory capable at all times of justification, as that the law should be settled,
Construction, pp. 135, 136.) and should, when once settled, be maintained without any danger of
vacillation or uncertainty. "Judicial usage and practice will have
"In view of the fact that more than one than one year after the adoption of the weight, and when continued for a long time will be sustained though
Constitution the National Assembly revised the Public Land Law and passed carried beyond the pair purport of the statute."(II Lewis' Sutherland
Commonwealth Act No. 141, which a compilation of the laws relative to the Statutory Construction, pp. 892, 893.) .
lands of the public domain and the amendments thereto, form to the
Constitution. "An important consideration affecting the weight of contemporary
judicial construction is the length of time it has continued. It is
"Where the legislature has revised a statute after a Constitution has adopted, and derives great force from being adopted, soon after the
been adopted, such a revision is to be regarded as a legislative enactment of the law. It may be, and is presumed, that the legislative
construction that the statute so revised conforms to the Constitution." sense of its policy, and of its true scope and meaning, permeates the
(59 C.J., 1102; emphasis added.) judiciary and controls its exposition. Having received at that time a
construction which is for the time settled, accepted, and thereafter
"By the way of illustration, let us supposed that a piece or tract of public land followed or acted upon, it has the sanction of the of the authority
has been classified pursuant to section 9 of Commonwealth Act No. 141 as appointed to expound the law, just and correct conclusions, when
residential land. If, by reason of this classification, it is maintained that said land reached, they are, moreover, within the strongest reasons on which
has ceased to be agricultural public land, it will no longer be subject to founded the maxim of stare decisis. Such a construction is public given,
alienation or disposition by reason of the constitutional provision that only and the subsequent silence of the legislature is strong evidence of
agricultural lands are alienable; and yet such residential lot is alienable under acquiescence, though not conclusive. . . . (II Lewis Sutherland
section 58, 59, and 60 of Commonwealth Act No. 141 to citizens of the Statutory Construction, pp. 894, 895.)
Philippines or to corporations or associations mentioned in section 1, Article
XII of the Constitution. Therefore, the classification of public agricultural lands "Furthermore, when the phrase "public agricultural land" was used in section 1
into various subdivisions is only for purposes of administration, alienation or of Article XII of the Constitution, it is presumed that it was so used with the
disposition, but it does not destroy the inherent nature of all such lands as a same judicial meaning therefor given to it and therefor the meaning of the
public agricultural lands. phrase, as used in the Constitution, includes residential lands and another lands
of the public domain, but excludes mineral and timber lands.
 "Adoption of provisions previously construed — ad. Previous "In view of the well settled judicial meaning of the phrase public agricultural
construction by Courts. — Where a statute that has been construed by land,' as hereinbefore demonstrated, the phrase 'private agricultural land,' as
the courts of the last resort has been reenacted in same, or used in the above quoted provision, can only mean land of private ownership,
substantially the same, terms, the legislature is presumed to have whether agricultural, residential, commercial or industrial. And this necessarily
been familiar with its construction, and to have adopted it is part of so, because the phrase 'agricultural land used in the Constitution and in the
the law, unless a contrary intent clearly appears, or a different Public Land Law must be given the same uniform meaning to wit, any land of
construction is expressly provided for; and the same rule applies in the public domain or any land of private ownership, which is neither mineral or
the construction of a statute enacted after a similar or cognate statute forestal.
has been judicially construed. So where words or phrases employed in
a new statute have been construed by the court to have been used in a "A word or phrase repeated in a statute will bear the same meaning
particular sense in a previous statute on the same subject, or one throughout the statute, unless a different intention appears. ... Where
analogous to it, they are presumed, in the a absence of clearly words have being long used in a technical sense and have been
expressed intent to the contrary, to be used in the same sense in the judicially construed to have a certain meaning, and have been adopted
statute as in the previous statute." (59 C.J., 1061-1063.). by the legislature as having a certain meaning prior to a particular
statute in which they are used, the rule of construction requires that
"Legislative adoption of judicial construction. — In the adoption of the the words used in such statute should be construed according to the
code, the legislature is presumed to have known the judicial sense may vary from the strict literal meaning of the words." (II
construction which have been placed on the former statutes; and Sutherland, Statutory Construction., p. 758.) .
therefore the reenactment in the code or general revision of
provisions substantially the same as those contained in the former "This interpretation is in harmony with the nationalistic policy, spirit and
statutes is a legislative adoption of their known judicial constructions, purpose of our Constitution and laws, to wit, `to conserve and develop the
unless a contrary intent is clearly manifest. So the fact that the patrimony of the nation,' as solemnly enunciated in the preamble to the
revisers eliminated statutory language after it had been judicially Constitution.
construed shows that they had such construction in view." (59 C. J.,
1102.)
"A narrow and literal interpretation of the phrase 'private agriculture land'
would impair and defeat the nationalistic aim and general policy of our laws
"II. The lower court erred in not declaring null and void the sale of said land to and would allow a gradual, steady, and unlimited accumulation in alien hands
the appellant (appellee). of a substantial portion of our patrimonial estates, to the detriment of our
national solidarity, stability, and independence. Nothing could prevent the
"Granting that the land in question has ceased to be a part of the lands of the acquisition of a great portion or the whole of a city by subjects of a foreign
public domain by reason of the long continuous,, public adverse possession of power. And yet a city or urban area is more strategical than a farm or rural
the applicant's predecessors in interest, and that the latter had performed all land.
the conditions essential to a Government grant and were entitled to a certificate
of title under section 48, subsection (b), of Commonwealth Act No. 141, still the "The mere literal construction of section in a statute ought not to
sale of said land of December 8, 1938, to the applicant as evidenced by Exhibits prevail if it is opposed to the intention of the legislature apparent by
B and C, was null and void for being contrary to section 5, Article XII of the the statute; and if the words are sufficiently flexible to admit of some
Constitution, which reads as follows: other construction it is to be adopted to effectuate that intention. The
intent prevails over the letter, and the letter will, if possible be so read
"Save in cases of hereditary succession, no private agricultural land as to conform to the spirit of the act. While the intention of the
shall be transferred or assignedexcept to individuals, corporations, or legislature must be ascertained from the words used to express it, the
associations qualified to acquire or hold lands of the public domain of manifest reason and the obvious purpose of the law should not be
the Philippines." sacrificed to a liberal interpretation of such words." (II Sutherland,
Stat. Construction, pp. 721, 722.)
"The applicant, being a Chinese citizen, is disqualified to acquire or hold lands
of the public domain (section 1, Article XII of the Constitution; section 12, 22, "We conclude, therefore, that the residential lot which the applicant seeks to
23, 33, 44, 48, Commonwealth Act No. 141 ), and consequently also disqualified register in his name falls within the meaning of private agricultural land as this
to buy and acquire private agriculture land. phrase is used in our Constitution and, consequently, is not subject to
acquisition by foreigners except by hereditary succession."
The argument hold water. It expresses a correct interpretation of the Constitution and It was primarily for these reasons that the Convention approved readily the
the real intent of the Constitutional Convention. proposed principle of prohibiting aliens to acquire, exploit, develop, or utilize
agricultural, timber, and mineral lands of the public domain, waters minerals,
One of our fellow members therein, Delegate Montilla, said: coal, petroleum, and other mineral oils, all forces of potential energy, and other
natural resources of the Philippines. For the same reasons the Convention
approved equally readily the proposed principle of prohibiting the transfer of
The constitutional precepts that I believe will ultimately lead us to our desired assignment to aliens of private agricultural land, save in the case of hereditary
goal are; (1) the complete nationalization of our lands and natural resources; succession. (2 Aruego, Framing of the Philippine Constitution, pp. 604, 605,
(2) the nationalization of our commerce and industry compatible with good 606.).
international practices. With the complete nationalization of our lands and
natural resources it is to be understood that our God-given birthright should be
one hundred per cent in Filipino hands. ... Lands and natural resources are All the foregoing show why we, having been a member of the Constitutional Convention,
immovable and as such can be compared to the vital organs of a person's body, agree with Solicitor General's position and concur in the result in this case, although we
the lack of possession of which may cause instant death or the shortening of would go as far as the outright pronouncement that the purchase made by appelle is null
life. If we do not completely nationalize these two of our most important and void.
belongings, I am afraid that the time will come when we shall be sorry for the
time we were born. Our independence will be just a mockery, for what kind of BRIONES, M., con quien estan conformes PARAS y TUASON, MM., disidente:
independence are we going to have if a part of our country is not in our hands
but in those of foreigner? (2 Aruego, The Framing of the Philippine El solicitante en este expediente pide el registro del solar de que se trata como terreno de
Constitution, p. 592.). propiedad privada, y tan solo con caracter supletorio invoca las disposiciones del capitulo
8.º de la Ley No. 2874 sobre terrenos publicos (Pieza de Excepciones, pag. 3.)
From the same book of Delegate Aruego, we quote:
Por su parte el Director de Terrenos se opone a la solicitud en virtud de tres
The nationalization of the natural resources of the country was intended (1) to fundamentos, a saber: (1) porque ni el solicitante ni sus predecesores en interes pueden
insure their conservation for Filipino posterity; (2) to serve as an instrument of demonstrar titulo suficiente sobre dicha parcela de terreno, no habiendose adquirido la
national defense, helping prevent the extension into the country of foreign misma ni por titulo de composicion con el Estado bajo la soberania de Españ a, ni por
control through peaceful economic penetration; and (3) to prevent making the titulo de informacion posesoria bajo el Real Decreto de 13 de Febrero de 1894; (2)
Philippines a source of international conflict with the consequent danger to its porque el citado solar es una porcion de los terrenos de dominio publico pertenecientes
internal security and independence. al Commonwealth de Filipinas; (3) porque siendo el solicitante un ciudadano chino, no
esta capacitado bajo las disposiciones de la Constitucion de Filipinas para adquirir
xxx xxx xxx terrenos de caracter publico o privado (idem, pags. 5 y 6).

. . . In the preface to its report, the committee on nationalization and Tanto el solicitante como el Director de Terrenos practicaron sus pruebas ante un arbitro
preservation of lands and other natural resources said; nombrado por el Juzgado de Primera Instancia de Tayabas. Con vista de tales pruebas, el
Juez Magsalin, del referido Juzgado, dicto sentencia a favor del solicitante, de la cual
transcribimos las siguientes porciones pertinentes:
"International complications have often resulted from the existence of alien
ownership of land and natural resources in a weak country. Because of this
danger, it is best that aliens should be restricted in the acquisition of land and La representacion del opositor Director de Terrenos trata de probar por medio
other natural resources. An example is afforded by the case of Texas. This state del testimonio del Inspector del Buro de Terrenos que, el terreno objeto de la
was originally province of Mexico. In order to secure its rapid settlements and solicitud es parte del dominio publico y ademas el solicitante es ciudadano
development, the Mexican government offered free land to settlers in Texas. chino, pero dicho testigo afirmo que el terreno objeto de la presente solicitud es
Americans responded more rapidly than the Mexicans, and soon they organized un solar situado dentro de la poblacion del municipio de Guinayanga, Tayabas,
a revolt against Mexican rule, and then secured annexation to the United States. y en el mismo existe una casa de materiales fuertes y careciendo de merito esta
A new increase of alien landholding in Mexico has brought about the desire a oposicion debe desestimarse la misma.
prevent a repetition of the Texas affair. Accordingly the Mexican constitution of
1917 contains serious limitation on the right of aliens to hold lands and mines Por tanto, previa desestimacion de la oposicion del Director de Terrenos, se
in Mexico. The Filipinos should profit from this example." adjudica con sus mejoras la parcela de terreno objeto de la presente solicitud
descrito en el plano Psu-109117, a favor del solicitante Oh Cho, ciudadano
xxx xxx xxx
 chino, mayor de edad, casado con Yee Shi, y residente en el municipio de I. De lo expuesto resulta evidente que el Director de Terrenos se ha opuesto al registro
Guinayanga, Tayabas, Islas Filipinas. (Decision, pag. 8, Record on Appeal.) solicitado, entre otros fundamentos, porque el terreno es publico; que el tribunal inferior
ha desestimado este fundamento por "carecer de merito," fallando que el terreno
De lo transcrito se infiere de una manera forzosa lo siguiente: (a) que el tribunal inferior es privado; que el Director de Terrenos, en su apelacion ante nosotros, no cuestiona esta
desestimo de plano la oposicion del Director de Terrenos fundada en el supuesto de que conclusion del Juez a quo, sino que dando por admitido que el terreno es de propiedad
el solar cuestionado es parte del dominio publico; (b) que el mismo tribunal rechazo el privada, arguye, sin embargo, que bajo la seccion 5, Articulo XII de la Constitucion de
otro fundamento de la oposicion, esto es, que siendo el solicitante ciudadano chino esta Filipinas el solicitante, por ser extranjero, no puede adquirir terreno agricula privado,
incapacitado bajo nuestra Constitucion para adquirir terreno, ya publico, ya privado, estando incluido en este concepto un solar urbano como el de que se trata en este
aunque sea un solar de caracter urbano; (c) que, segun el fallo del Juez a quo, no siendo expediente. Planteado el asunto en tales terminos ¿puede esta Corte considerar y
publico el terreno cuestionado, es necesariamente terreno privado. resolver un punto no contendido entre las partes — un punto que esta firme y
definitivamente resuelto y no es objeto de apelacion? Dicho de otra manera: ¿puede esta
Corte, como hace la mayoria en su opinion, revocar una conclusion del tribunal-inferior
El Director de Terrenos, no estando conforme con la sentencia, apelo de ella para ante el que no esta discutida en el alegato del apelante? ¿Podemos, en buena ley procesal,
Tribunal de Apelacion y hace en su alegato dos señ alamientos de error, ninguno de los declarar publico el terreno en cuestion por nuestra propia iniciativa, cuando el mismo
cuales pone en tela de juicio la calidad de privado del terreno cuestionado. El apelante no Procurador General, que representa al Estado, admite en su alegato el caracter privado
plantea ninguna cuestion de hecho; plantea solo una cuestion de derecho. Por eso que en del solar, y solo suscita una cuestion, de derecho, a saber: que bajo nuestra Constitucion
la reconstitucion de este expediente — el original se quemo durante la guerra — no ha ningun acto traslativo de dominio a favor de un extranjero es valido, asi se trata de
habido necesidad de incluir las notas taquigraficas ni las pruebas documentales, y de predio urbano, porque la frase "terreno agricola privado" qe se contiene en la
hecho hemos considerado y decidido este asunto sin dichas notas y pruebas. El abogado Constitucion abarca no solo las fincas rusticas sino tambien las urbanas? Y, sobre todo,
Constantino, del apelado, en la audiencia para la reconstitucion de los autos, hizo esta ¿podemos, en equidad y justicia, considerar y revisar un punto que no solo no esta
manifestacion; "In view also of the fact that the questions involved here are only discutido por las partes, pues lo dan por admitido y establecido, sino que es de derecho y
questions of law, this representation waives the right to present the evidence presented dehecho al propio tiempo? ¿Que base tenemos para hacerlo cuando no tenemos delante
in the trial court . . . ." Por su parte, el Procurador General, al explanar el caso en las pruebas tanto testificales como documentales? Nuestra contestacion es, en absoluto,
representacion del apelante Director de Terrenos, principia su alegato con la siguiente negativo.
declaracion:
La competencia de esta Corte para revisar las sentencias de los tribunales inferiores, de
This appeal is a test case. There are now several cases of exactly the same las cuales se ha interpuesto apelacion, se basa en el principio de que dicha competencia,
nature pending in the trial courts. en su ejercicio, tiene que limitarse a las cuestiones controvertidas, y esto se determina
mediante el señ alamiento de errores que el apelante hace en su alegato. El articulo 19 del
Whether or not an alien can acquire a residential lot and register it in his name antiguo reglamento de los procedimientos en este Tribunal Supremo decia en su primer
is the only question raised in this appeal from a decision of the Court of First parrafo lo siguiente:
Instance of Tayabas which sustained the affirmance and decreed the
registration of the said property in favor of the applicant who, by his own Anexo al alegato del apelante y en pliego separado, se acompañ ara una relacion
voluntary admission, is a citizen of the Chinese Republic. This question is raised de los errores de derecho que han de discutirse. La especificacion de cada uno
in connection with the constitutional provision that no private agricultural land de estos errores se hara por parrafos separados, con toda claridad, de una
shall be transferred or assigned to foreigners except in cases of hereditary manera concisa, y sin incurrir en repeticiones, y seran numerados por orden
succession. (Pags. 1, 2, alegato del apelante.) correlativo.

Habiendose apelado de la sentencia para ante el Tribunal de Apelacion ¿por que se elevo El articulo 20 del mismo reglamento preceptuaba:
este asunto al Tribunal Supremo, ante el cual ya estaba pendiente aun antes de la guerra,
y sin resolverse durante la ocupacion japonesa? La razon no consta especificamente en
autos, pero como no se trata de una alzada del Tribunal de Apelacaion a la Corte Ningun error de derecho fuera del relativo a competencia sobre la materia de
Suprema, la unica explicacion que cabe es que aquel, la percatarse de que en la apelacion un litigio, sera tomado en consideracion como no se halle puntualizado en la
no se planteaba mas que una cuestion de derecho, ordeno, como era de rigor, el traslado relacion de los errores y presentado como uno de los fundamentos en el
del asunto a esta Corte por ser de su jurisdiccion y competencia. alegato.

Hemos estimado necesario sentar las anteriores premisas porque las mismas sirven de Interpretando estas disposiciones reglamentarias, la Corte hizo en el asunto de
base a la argumentacion que a seguida vamos a desenvolver para fundamentar esta Santiago contra Felix (24 Jur. Fil., 391), los siguientes pronunciamientos doctrinales:
disidencia.
 1. APELACION; EFECTO DE DEJAR DE PRESENTAR RELACION DE ERRORES; conclusion, habiendose interpretado esta reserva en el sentido de que solo se puede
REGLA FIRMEMENTE ESTABLECIDA. — Es regla establecida por la tomar "conocimiento judicial del error palpable con vista de los autos y procedimientos";
jurisprudencia de los Tribunales de estas Islas, en virtud de repetidas y (b) aun admitiendo por un momento, a los efectos de la argumentacion, que Su Señ oria el
uniformes sentencias de esta Corte, la de que si en una apelacione el recurrente Juez padecio error palpable al sentar dicha conclusion, como quiera que el Procurador
dejare de hacer señ alamiento de los errores en que haya incurrido el Tribunal General no suscita la cuestion en su alegato debe entenderse que ha renunciado a su
inferior, y se limitare a discutir cuestiones de hecho en general, no es posible derecho de hacerlo, optando por fundamentar su caso en otros motivos y razones; por
que este Tribunal pueda considerar ni revisar la resolucion adversa a la parte tanto, no estamos facultados para considerar motu proprio el supuesto error, pues
apelante, por el motivo de haberse dictado contra la ley y el peso de las evidentemente no se trata de un descuido u oversight del representante del Estado, sino
pruebas, sino que es necesario que se señ ale y se especifique el error o errores de una renuncia deliberada, y la jurisprudencia sobre el particular nos dice que "el
que determinaron la decision apelada que el apelante califica de ilegal e injusta. proposito subyacente, fundamental de la reserva en la regla es el de prevenir el extravio
de la justicia en virtud de un descuido." He aqui algunas autoridades pertinentes:
2. Id.; Id.; Regla Igual a la Adoptada por los Tribunales de los Estados Unidos. —
Igual doctrina legal se halla en observancia en los Tribunales de los Estados Purpose of exception as to plain errors. — The proviso in the rule requiring
Unidos de America del Norte, toda vez que una manifestacion general de que el assignments of error, permitting the court, at its option, to notice a plain error
Juzgado erro en dictar sentencia a favor de una de las partes, no es suficiente not assigned, "was and in intended, in the interest of justice, to reserve to the
como base para que la Corte pueda revisar la sentencia apelada, pues que a no appellate court the right, resting in public duty, to take cognizance of palpable
ser que la apreciacion hecha por un Juez de los hechos alegados y probados en error on the face of the record and proceedings, especially such as clearly
juicio sea manifestamente contraria al resultado y peso de las pruebas, el demonstrate that the suitor has no cause of action." Santaella vs. Otto F. Lange
Tribunal de alzada suela aceptar el juicio y criterio del Juez sobre las cuestiones Co. (155 Fed., 719, 724; 84 C. C. A., 145).
de hecho, y no procede revocar sin motivo fundado la sentencia apelada.
(Enriquez contraEnriquez, 8 Jur. Fil., 574; Capellania de The rules does not intend that we are to sift the record and deal with questions
Tambobong contra Antonio, 8 Jur. Fil., 693; Paterno contra la Ciudad de Manila, which are of small importance, but only to notice errors which are obvious
17 Jur. Fil., 26)" (Santiago contra Felix, 24 Jur. Fil., 391.) upon inspection and of a controlling character. The underlying purpose of this
reservation in the rule is to prevent the miscarriage of justice from oversight.
Esta doctrina se reitero posteriormente en los siguientes asuntos: Tan Me Mast vs. Superior Drill Co. (154 Fed., 45, 51; 83 C. C. A. 157).
Nio contra Administrador de Aduanas, 34 Jur. Fil., 995, 996;
Hernaez contra Montelibano, 34 Jur. Fil., 1011. II. Hasta aqui hemos desarrollado nuestra argumentacion bajo el supuesto de que la
calidad de privado del terreno litigioso no es controversia justiciable en esta instancia por
La regla 53, seccion 6, del actual reglamento de los tribunales, dispone lo siguiente: no estar suscitada la cuestion en el alegato del Procurador General ni ser materia de
disputa entre las partes en la apelacion pendiente ante nosotros; por lo que,
SEC. 5. Questions that may be decided. — No error which does not affect the consiguientemente, no estamos facultados para revisar, mucho menos revocar motu
jurisdiction over the subject matter will be considered unless stated in the proprio la conclusion del tribunal a quo sobre el particular. Ahora vamos a laborar bajo
assignment of errors and properly argued in the brief, save as the court, at its otro supuesto — el de que el Procurador General haya hecho el correspondiente
option, may notice plain errors not specified, and also clerical errors. señ alamiento de error y la cuestion este, por tanto, propiamente planteada ante esta
Corte Suprema para los efectos de la revision. La pregunta naturalmente en orden es la
siguiente: ¿cometio error el Juez a quo al declarar y conceptuar como privado el terreno
No se dira que la cuestion de si el terreno cuestionado es publico o privado, considerada en cuestion, o es, por el contrario, acertada su conclusion a este respecto? Somos de
y resuelta por la mayoria en su decision sin previo señalamiento de error ni apropiada opinion que el Juez no cometio error, que el terreno de que se trata reune las condiciones
argumentacion en el alegato del Procurador General, esta comprendida entre las juridicas necesarias para calificarlo como privado y diferenciarlo de una propiedad de
salvedades de que habla la regla arriba transcrita porque ni afecta a la jurisdiccion sobre dominio publico, y que, por tanto, el solicitante tiene sobre la propiedad un titulo
la materia del litigio, ni es un "plain error," o "clerical error." confirmable bajo las disposiciones de la Ley de Registro de Terrenos No. 496.

Se notara que en el antiguo reglamento no habia eso de "plain errors not specified" Afirmase en la decision de la mayoria que el solicitante no ha podido demostrar que el o
(errores patentes o manifiestos no especificados en el alegato). Pero ¿cabe invocar esta cualquiera de sus causantes en derecho adquirio el lote del Estado mediante compra o
reserva en el caso que nos ocupa Indudablemente que no, por las siguientes razones: (a) concesion bajo las leyes, ordenanzas y decretos promulgados por el Gobierno Españ ol en
los autos no demuestran que el Juez a quo cometio un error patente y manifiesto al Filipinas, o en virtud de los tramites relativos a informacion posesoria bajo la ley
declarar en su sentencia que el terreno no es publico sino privado; no tenemos mas hipotecaria en tiempo de Españ a. De esto la mayoria saca la conclusion de que el terreno
remedio que aceptar en su faz la conclusion del Juez sentenciador sobre este respecto cuestionado no es privado porque, segun su criterio, "todos los terrenos que no fueron
por la sencilla razon de que no tenemos ante nosotros las pruebas ni testificales ni adquiridos del Gobierno (Gobierno Españ ol, se quiere decir), ya mediante compra, ya por
documentales, y, por tanto, no hay base para revisar, mucho menos para revocar dicha
concesion, pertenecen al dominio publico"; y citando como autoridad el asunto clasico de treaty of Paris, to which the United States succeeded, it is not to be assumed
Cariñ o contra el Gobierno Insular la ponencia no admite mas excepcion a la regla que el without argument that the plaintiff's case is at an end. It is true that Spain, in its
caso en que un terreno ha estado en la posesion del ocupante y de sus predecesores en earlier decrees,"embodied the universal feudal theory that all lands were held
interes desde tiempo inmemorial, pues semejante posesion justificaria la presuncion de from the Crown, and perhaps the general attitude of conquering nations toward
que el terreno nunca habia sido parte del dominio publico, o que habia sido propiedad people not recognized as entitled to the treatment accorded to those in the
privada aun antes de la conquista españ ola." same zone of civilization with themselves. It is true, also that, in legal theory,
sovereignty is absolute, and that, as against foreign nations, the United States
Lo que, en primer lugar, no parece correcto es la seguridad con que en la ponencia se may assert, as Spain asserted, absolute power. But it does not follow that, as
afirma que el terreno no se adquirio bajo la soberania españ ola en virtud de cualquiera against the inhabitants of the Philippines, the United States asserts that Spain
de los modos conocidos en la legislacion de entonces, pues como no tenemos delante las had such power. When theory is left on one side, sovereignty is a question of
pruebas, no hay naturalmente manera de comprobar la certeza de la proposicion. Si se strength, and may vary in degree. How far a new sovereign shall insist upon the
tiene en cuenta que el Director deTerrenos se opuso a la solicitud de registro por el theoretical relation of the subjects to the head in the past, and how far it shall
fundamento de que el terreno es de dominio publico, y que el tribunal inferior desestimo recognize actual facts, are matters for it to decide. (U. S. Supreme Court Reports,
este fundamento, la presuncion es que la calidad de privado del terreno se probo Vol. 212, p. 596.)
satisfactoriamente, presuncion que queda robustecida si se considera que el Procurador
General, al sostener la apelacion del Gobierno, no discute ni cuestiona en su alegato la Mas adelante se dice lo siguiente en la citada sentencia de la Corte Suprema Federal:
conclusion de que el referido terreno es de propiedad particular.
It is true that, by section 14, the Government of the Philippines is empowered to
Por otro lado, la mayoria parece dar un caracter demasiado absoluto y rigido a la enact rules and prescribe terms for perfecting titles to public lands were some,
proposicion de que "todos los terrenos que no fueron adquiridos del Gobierno (en but not all, spanish conditions has been fulfilled, and to issue patents to natives
tiempo de Españ a), mediante compra o por concesion, pertenecen al dominio publico." for not more than 16 hectares of public lands actually occupied by the native or
Interpretando estrictamente la ley, esta Corte Suprema denego el registro solicitado en el his ancestors before August 13, 1898. But this section perhaps might be
celebre asunto de Cariñ o contra el Gobierno Insular que cita la mayoria en su opinion, satisfied if confined to cases where the occupation was of land admitted to be
por eso mismo que se acentua en la ponencia — por el fundamento de que Cariñ o no public land, and had not continued for such a length of time and under such
pudo demostrar titulo de compra, concesion o informacion posesoria expedido por el circumstances as to give rise to the understanding that the occupants were
Gobierno en tiempo de Españ a, siendo por consiguiente el terreno parte del dominio owners at that date. We hesitate to suppose that it was intended to declare every
publico. Pero al elevarse el asunto en grado de apelacion a la Corte Suprema de los native who had not a paper title a trespasser, and to set the claims of all the
Estados Unidos, la misma revoco la sentencia de esta Corte, declarando el terreno como wilder tribes afloat.
propiedad privada y decretando su registro a nombre del solicitante. En la luminosa
ponencia del Magistrado Holmes se sientan conclusiones que proclama el espiritu liberal xxx xxx xxx
de aquel gran jurista y reafirman con vigor democratico los derechos de propiedad de los
nativos de estas Islas sobre sus predios en contra del concepto y teoria feudales de que la
Corona de Españ a era la dueñ a absoluta hasta del ultimo palmo de tierra y de que ningun If the applicant's case is to be tried by the law of Spain, we do not discover such
habitante podia ser dueñ o de nada, a menos que tuviese en sus manos un titulo clear proof that it was bas by that law as to satisfy us that he does not own the
o papel expedido por aquel Gobierno. He aqui lo que dice el Magistrado Holmes: land. To begin with, the older decrees and laws cited by the counsel for the
plaintiff in error seem to indicate pretty clearly that the natives were
recognized as owning some lands, irrespective of any royal grant. In other
We come, then, to the question on which the case was decided below — namely, words, Spain did not assume to convert all the native inhabitants of the
whether the plaintiff owns the land. The position of government, shortly stated, Philippines into trespassers or even into tenants at will. For instance, Book 4,
is that Spain assumed, asserted, and had title to all the land in the Philippines title 12, Law 14 of the Recopilacion de Leyes de las Indias, cited for a contrary
except so far it saw fit to permit private titles to be acquired; that there was no conclusion in Valenton vs. Murciano (3 Phil., 537), while it commands viceroys
prescripcion against the Crown, and that, if there was, a decree of June 25, and others, when it seems proper, to call for the exhibition of grants, directs
1880, required registration within a limited time to make the title good; that them to confirm those who hold by good grants or justa prescripcion. It is true
the plaintiff's land was not registered, and therefore became, if it was not that it begins by the characteristic assertion of feudal overlordship and the
always, public land; that the United States succeeded to the title of Spain, and so origin of all titles in the King or his predecessors. That was theory and
that the plaintiff has no rights that the Philippine Government is bound to discourse. The fact was that titles were admitted to exist that owed nothing to
respect. the powers of Spain beyond this recognition in their books.

If we suppose for the moment that the government's contention is so far correct Prescription is mentioned again in the royal cedula of October 15, 1754, cited in
that the Crown of Spain in form asserted a title to this land at the date of the (3 Phil., 546): "Where such possessors shall not be able to produce title deeds, it
 shall be sufficient if they shall show that ancient possession, as a valid title by arcaicas en el nuevo estado de cosas, e incompatibles con el espiritu del nuevo regimen.
prescription." It may be that this means possession from before 1700; but, at all No habia ninguna razon para que este cambio no produjese tambien sus saludables
events, the principle is admitted. As prescription, even against Crown lands, efectos en las normas juridicas del regimen de la propiedad sobre la tierra.
was recognized by the laws of Spain, we see no sufficient reason for hesitating Parafraseando otra vez al Magistrado Holmes, y aplicando la doctrina al presente caso,
to admit that it was recognized in the Philippines in regard to lands over which no hay razon por que, medinate "una refinada interpretacion de una casi olvidada ley de
Spain had only a paper sovereignty. Españ a," se considere como terreno publico lo que evidentemente, bajo todos los
conceptos y normas, es un terreno privado.
It is true that the language of articles 4 and 5 attributes title to those "who may
prove" possession for the necessary time, and we do not overlook the argument La jurisprudencia sentada en el asunto de Cariñ o contra el Gobierno Insular ha venido a
that this means may prove in registration proceedings. It may be that an establecer la norma, la autoridad basica en los asuntos de registro ante nuestros
English conveyancer would have recommended an application under the tribunales. Al socaire de su sentido y tendencia genuinamente liberal se han registrado
foregoing decree, but certainly it was not calculated to convey to the mind of an bajo el sistema Torrens infinidad de terrenos privados. En casos mucho menos
Igorot chief the notion that ancient family possessions were in danger, if he had meritorios que el que nos ocupa se ha reconocido por nuestros tribunales el caracter o
read every word of it. The words "may prove" (acrediten), as well, or better, in condicion de propiedad privada de los terrenos sobre que versaban las solicitudes,
view of the other provisions, might be taken to mean when called upon to do so aplicandose no las habilitadoras y supletorias clausulas de las leyes sobre terrenos
in any litigation. There are indications that registration was expected from all, publicos — primeramente la Ley No. 926, despues la No. 2874, y finalmente la No. 141
but none sufficient to show that, for want of it, ownership actually gained would del Commonwealth — sino las disposiciones mas estrictas de la Ley No. 496 sobre
be lost. The effect of the proof, wherever made, as not to confer title, but simply registro de terrenos privados, bajo el sistema Torrens. No existe motivo para que esa
to establish it, as already conferred by the decree, if not by earlier law. The tendencia liberal y progresiva sufra una desviacion en el presente caso.
royal decree of February 13, 1894, declaring forfeited titles that were capable
of adjustment under the decree of 1880, for which adjustment had not been Pero aun bajo la legislacion españ ola interpretada estrictamente, creemos que el terreno
sought, should not be construed as a confiscation, but as the withdrawal of a en cuestion es tan privado como el terreno en el asunto de Cariñ o, si no mas. Segun la
privilege. As a matter of fact, the applicant never was disturbed. This same sentencia del inferior — el unido dato para este examen, pues ya se ha dicho repetidas
decree is quoted by the court of land registration for another recognition of the veces que no tenemos delante las pruebas — "el terreno objeto de la presente solicitud
common-law prescription of thirty years as still running against alienable era primitivamente de Capitana Gina y que esta estuvo en posesion desde el añ o 1880,
Crown land. despues paso a ser de Francisco Reformado hasta el añ o 1885, mas tarde o sea en 1886
fue de Claro Lagdameo, a la muerte de este le sucedio en la posesion su viuda Fortunata
xxx xxx xxx Olega de Lagdameo, esta en 1929 lo vendio a sus tres hijos Antonio, Luis y Rafael
appellidados Lagdameo, segun los Exhibitos F y G, y estos ultimos a su vez lo vendieron
. . . Upon a consideration of the whole case we are of opinion that law and en 1938 al solicitante Oh Cho, segun los Exhibitos B 1-y C-1." " ... Este terreno es un solar
justice require that the applicant should be granted what he seeks, and should residencial dentro de la poblacion del municipio de Guinayangan, Tayabas, y en el mismo
not be deprived of what, by the practice and belief of those among whom he existe una casa de materiales fuertes que ocupa casi todo el terreno ..." (Pieza de
lived, was his property, through a refined interpretation of an almost forgotten Excepciones, pag. 8).
law of Spain. (U. S. Supreme Court Reports, Vol. 212, pp. 597-599.)
Como se ve, por lo menos desde 1880 habia un conocido propietario y poseedor del
Resulta evidente de la jurisprudencia sentada en el citado asunto de Cariñ o contra el terreno — la Capitana Gina. Ahora bien, coincide que el 25 de Junio de aquel añ o que
Gobierno Insular que cualquiera que fuese la teoria acerca del superdominio feudal que precisamente cuando se expidio el Decreto "para el ajuste y adjudicacion de los terrenos
la Corona de Españ a asumia sobre todos los terrenos en Filipinas, en la practica y en la realengos ocupados indebidamente por individuos particulares en las Islas Filipinas." Si
realidad se reconocia que el mero lapso de tiempo en la posesion (20 o 30 añ os, segun el bien es cierto que el objeto del Decreto o ley era el ordenar que se cumpliesen y
caso) podia establecer y de hecho establecia derechos privados de propiedad practicasen los procedimientos de ajuste y registro descritos en el mismo, y en tal
por justaprescripcion, y el titulo presuntivo asi adquirido era para todos los efectos sentido el requirir que cada cual obtuviese un documento de titulo o, en su defecto,
equivalente a una concesion expresa o un titulo escrito expedido por el Gobierno. Pero perder su propiedad. Tambien es cierto que en el Decreto se expresaban ciertas
de todas maneras — parafraseando lo dicho por el Magistrado Holmes — aun salvedades que paracian denotar que estos tramites formanes no eran de rigurosa
suponiendo que Españ a tenia semejante soberania o superdominio feudal sobre todas las aplicacion a todo el mundo. Una de dicha salvedades, por ejemplo, proveia (articulo 5)
tierras en este archipielago, y que contra otras naciones los Estados Unidos, al suceder a que, para todos los efectos legales, "todos aquellos que han estado en posesion por ciento
Españ a, afirmaria dicha suberania, de ello no se sigue que contra los habitantes de periodo de tiempo serian considerados como dueñ os — para terreno cultivado, 20 20
Filipinas el Gobierno americano (ahora la Republica filipina) tomaria la posicion de que añ os sin interrupcion, es suficiente, y para terreno no cultivado, 30 añ os." Y el articulo 6
Españ a tenia tal poder absoluto. Historicamente se sabe que el cambio de soberania tuvo dispone que "las partes interesadas no incluidas en los dos articulos anteriores (los
el efecto de liquidar muchas instituciones y leyes españ olas que vinieron a ser obsoletas, articulos que reconocen la prescripcion de 20 y 30 añ os) podran legalizar su posesion, y
consiguientemente adquirir pleno dominio sobre dichos terrenos, mediante
procedimientos de ajuste y adjudicacion tramitados de la siguiente manera." Esta ultima luces libera y progresiva (23 de Enero de 1909) estabamos tan solo a escasamente 10
disposicion parece indicar, por sus terminos, que no es aplicable a aquellos que ya han añ os desde la caida de la soberania españ ola en Filipinas mientras que ahora que se
sido declarados dueñ os en virtud del simple transcurso de cierto lapso de tiempo intenta una radical desviacion del surco trazado por la solida reja de dicha sentencia
(Vease Cariñ o contra Gobierno Insular, supra, 598). estamos ya casi a medio siglo de distancia, con pleno dominio republicano sobre el
territorio nacional. Esto no debiera preocuparnos si no fuese porque esta decision de
No consta en la sentencia del inferior que Capitana Gina se haya acogido a las ahora puede ser interpretada como una abrogacion de tantos precedentes moldeados en
disposiciones del referido Decreto de 25 de Junio de 1880, obteniendo un documento de la turquesa de la doctrina holmesiana, y al propio tiempo como la demarcacion del punto
titulo para legalizar su posesion, pero tampoco consta positivamente lo contrario, pues de partida de una nueva ruta en nuestra jurisprudencia sobre registro de terrenos.
no tenemos ante nosotros las pruebas. Pero aun suponiendo que no se hayan cumplido
los tramites formales prescritos en el Decreto, de ello no se sigue que el terreno no era ya Sin embargo, en la opinion de la mayoria se dice que el solicitante no puede alegar con
privado entonces, pues la presuncion es que no hubo menester de semejante formalidad exito que su lote es terreno privado porque la posesion de su primer predecessor
porque la Capitana Gina o sus causantes en derecho ya habian sido declarados dueñ os (Capitana Gina) comenzo solo en 1880, mientras que en el asunto de Cariñ o contra El
del predio por el mero transcurso de un lapso de tiempo, a tenor de las salvedades de gobierno Insular, es exige como requisito la posesion desde tiempo inmemorial, posesion
que se ha hecho mencion. Esta presuncion es tanto mas logica cuanto que el articulo 8 del que, segun la mayoria. "justificaria la presuncion de que el terreno nunca habia sido
Decreto proveia para el caso de partes que no solicitaban dentro del plazo de un añ o el parte del dominio publico, o que habia sido propiedad privada aun antes de la conquista
ajuste y adjudicacion de terrenos de cuya posesion disfrutaban indebidamente, y españ ola." No parece sino que se quiere señ alar una fecha, un añ o, como norma para
conminaba que el Tesoro "reasumira el dominio del Estado sobre los terrenos" y vendera determinar la inmemorialidad del comienzo posesorio. Pero ¿que fecha, que añ o seria
en subasta la parte que no se reserva para si; y no solo no consta en autos que la este? ¿1870, '60, '50? ¿No seria suficiente v. gr. 1875, '65, o '55? En el asunto de Cariñ o la
posesion de Capitata Gina o de sus causahabientes en derecho se haya considerado jamas fecha conocida y recordada de la posesion inicial podia fijarse alrededor de la mitad del
como ilegal o que el Estao y sus agentes hayan adoptado y practicado contra ellos las siglo pasado, o sea 1849, pues segun las pruebas, Cariñ o y sus antecesores habian
diligencias y procedimientos de que trata el cittado articulo 8 del Decreto, sino que, por poseido el terreno algo mas de 50 añ os hasta el tratado de Paris — Abril 11, 1899. En el
el contrario, consta en la sentencia que desde Capitana Gina en 1880 hubo sucesivas presente caso, desde Capitana Gina hasta que el solicitante presento su solicitud de
transmisiones de derechos primeramente a Francisco Reformado en 1885 y despues a registro el 17 de Enero, 1940, habian transcurrido 60 años; de suerte que en cuanto al
Claro Lagdameo en 1886, y a la muerte de este ultimo a su viuda Fortunata Olega de tiempo de la posesion ambos casos son identicos. Con una ventaja a favor del presente
Lagdameo, de quien pase el titulo en virtud de compraventa a sus hijos Antonio, Luis y caso, a saber: mientras en el asunto de Cariñ o las tierras objeto de la solicitud eran pasto,
Rafael apellidados Lagdameo, y la ultima transaccion sobre el solar tuvo lugar en fecha en gran parte, y solo cultivadas unas cuantas porciones, en el que nos ocupa el lote es
bastante reciente, en 1938, cuando los ultimamente nombrados lo vendieron a Oh Cho el urbano, sino en uno de los pueblos mas antiguos de Filipinas, con una casa de materiales
solicitante en el presente expediente de registro. De todo lo cual se deduce que el solar fuertes enclavada en el. Es innegabl que la posesion de un solar urbano es mas concreta,
en cuestion fue considerado siempre como propiedad privada — por lomenos alli donde mas terminante y mas adversa a todo el mundo, sin excluir el Estado.
la memoria alcanza — desde 1880 hasta que fenecio la soberania americana en Filipinas,
y que ni el Estado ni sus agentes se entrometieron jamas en el hecho de su posesion Pero aun limitandonos a la posesion bajo la soberania españ ola para los efectos de la
exclusiva, continua y publica a titulo de dueñ o por diferentes personas no solo bajo el calificacion del terreno como propiedad privada, todavia se puede sosener que el
Decreto de 25 de Junio de 1880 tantas veces mencionado, sino aun bajo el Decreto de 13 presente caso es tan bueno si no mejor que el de Cariñ o. En el asunto de Cariñ o el punto
de Febrero de 1894 (informacion posesoria) que fue practicamente el ultimo decreto de partida conocido es alrededor de 1849; en el nuestro, 1880, en que comenzo la
expedido en las postrimerias de la soberania españ ola en relacion con el ajuste y posesion de Capitana Gina, segun la sentencia apelada. Pero esto no quiere decir que
adjudicacion de terrenos realengos o publicos. Y no se diga que ello habria sido por antes de Capitana Gina el solar no fuese ya finca urbana, habida por algun otro como
inadvertencia de las autoridades, particularmente del Fisco, porque tratandose de un propiedad particular. Hay que tener en cuenta que se trata de un solar ubicado en la
solar situado en la misma poblacion de Guinayangan, uno de los pueblos mas antiguos de poblacion de Guinayangan, uno de los mas antiguos en Tayabas. No tenemos delante la
la provincia de Tayabas, es indudable que si no reuniera las condiciones y requisitos para fecha exacta de la fundacion de dicho pueblo, y no tenemos tiempo ahora para hacer
ser conceptuado como propiedad privada y la posesion de sus ocupantes sucesivos fuese investigacion historica. Pero afortunadamente hemos logrado salvar de la devastacion
indebida e ilegal, ya los agentes del Fisco y Tesoro lo hubiesen prestamente confiscado a causada por la reciente guerra una parte sustancial de nuestra biblioteca privada, y uno
tenor del articulo 8 ya citado del Decreto de 25 de Junio de 1880 de los libros salvados es el celebrado Diccionario Geografico, Estadistico e Historico de
(Vease Cariñ o contra Gobierno Insular, ut supra598.) El que nada de esto haya acontecido las Islas Filipinas publicado en Madrid por Fr. Manuel Buzeta y Fr. Felipe Bravo en 1950,
es la mejor prueba de que en tiempo de Españ a los diferentes y sucesivos ocupantes de segun el pie de imprenta, de dos volumenes. En el 2.º tomo, pp. 70 y 71, se da una
este solar ya tenian titulo dominical perfecto, y es sencillamente absurdo, ridiculo que descripcion del pueblo de Guinayanga, con buena copia de datos historicos, geograficos,
ahora, al cabo de 66 añ os, se declare publico el terreno; y todo ¿por que y para que — sociales y economicos. Comienza la descripcion de esta manera: "Pueblo con cura y
para rendir sometimiento, repitiendo de nuevo la sutil ironia del Magistrado Homles, a la gobernadorcillo, en la Isla de Luzon, provincia de Tayabas, dioc, de Nueva caceres"; . .
"refinada interpretacion de una casi olvidada ley de Espana." Y resulta mas la futilidad de "tiene como unas 1,500 casas, en general de sencilla construccion, distinguiendose como
este tardio tributo a un anacronismo, a una momia juridica de un pasado cada vez mas de mejor fabrica la casa parroquial y la llamada tribunal de justicia, donde esta la
remoto, si se considera que cuando el Magistrado Homes pronuncio su sentencia a todas carcel. ." Considerando que podemos tomas conocimiento judicial de que en tiempo de
Españ a el municipio y la parroquia eran la culminacion de un lento y largo proceso de
civilizacion y cristianizacion, podemos, por tanto, presumir que mucho antes de 1850 —
50, 70 o 100 añ os — el pueblo de Guinayangan ya era una unidad geografiva, civil y
espiritual, en toda regla, y con caracteres definitivos de viabilidad urbana. Tambien cabe
perfectamente presumir que sus habitantes poseian sus respectivos solares a titulo de
dueñ os, al igual que lo que ocurria en otros municipios debidamente organizados. No
cabe presumir que el Estado les permitiera ocupar indebidamente sus solares, sin que
tomase contra ellos la accion de que habla el articulo 8 del referido Decreto de 25 de
Junio de 1880; y ya hemos visto que no consta en autos que el solar en cuestion haya sido
jamas confiscado por los agentes del Fisco o Tesoro, o declarada ilegal la posesion sobre
el mismo, a tenor de lo ordenado en el mencionado Decreto. Asi que desde cualquier
angulo que se vea el presente asunto, cae perfectamente bajo las normas de posesion
inmemorial establecidas en el asunto de Cariñ o.

III. Demostrado ya que el terreno en cuestion es privado, resulta forzosa la conclusion de

que el solicitante tiene derecho a que se confirme su titulo bajo las disposiciones de la
Ley de Registro de Terrenos No. 496, de acuerdo con el sistema Torrens. Es doctrina
firmemente establecida en esta jurisdiccion que un extranjero tiene perfecto derecho a
que se registre a su nombre un terreno privado, bajo el sistema Torrens, y que las
disposiciones de la ley de terrenos publicos son inaplicables a terrenos privados
(veanse Agari contra Gobierno de las Islas Filipinas, 42 Jur. Fil., 150; Tan
Yungquip contra Director de Terrenos, 42 Jur. Fil., 134; Central Capiz contra Ramirez, 40
Jur. Fil., 926). En el primer asunto citado el solicitante era un japones llamado Ichisuke
Agari y la solicitud se estimo por tratarse de un terreno privado, adquirido en tiempo de
Españ a mediant composicion con el estado. En el segundo asunto el solicitante era un
chino y se estimo la solicitud por la misma razon, habiendose probado una posesion
conocida y recordada de 30 a 40 añ os con anteriorida a la presentacion de la solicitud, es
decir, un tiempo mas corto que el del presente caso. Lo propio sucedio en el tercer
asunto citado, siendo españ oles los dueñ os de la finca. Confirmese, por tanto, la sentencia
apelada.
G.R. No. 181502 February 2, 2010 land was situated inside a military reservation, the CA concluded that she did not validly
acquire title thereto.
FLORENCIA G. DIAZ, Petitioner,
vs. During the pendency of the case in the CA, Garcia passed away and was substituted by
REPUBLIC of the PHILIPPINES, Respondent. her heirs, one of whom was petitioner Florencia G. Diaz. 81avvphi1

RESOLUTION Petitioner filed a motion for reconsideration of the Mendoza decision. While the motion
was pending in the CA, petitioner also filed a motion for recall of the records from the
CORONA, J.: former CFI. Without acting on the motion for reconsideration, the appellate court, with
Justice Mendoza as ponente, issued a resolution9 upholding petitioner’s right to recall the
records of the case.
This is a letter-motion praying for reconsideration (for the third time) of the June 16,
2008 resolution of this Court denying the petition for review filed by petitioner Florencia
G. Diaz. Subsequently, however, the CA encouraged the parties to reach an amicable settlement
on the matter and even gave the parties sufficient time to draft and finalize the same.
Petitioner’s late mother, Flora Garcia (Garcia), filed an application for registration of a
vast tract of land1 located in Laur, Nueva Ecija and Palayan City in the then Court of First The parties ultimately entered into a compromise agreement with the Republic
Instance (CFI), Branch 1, Nueva Ecija on August 12, 1976.2 She alleged that she possessed withdrawing its claim on the more or less 4,689 hectares supposedly outside the FMMR.
the land as owner and worked, developed and harvested the agricultural products and For her part, petitioner withdrew her application for the portion of the property inside
benefits of the same continuously, publicly and adversely for more or less 26 years. the military reservation. They filed a motion for approval of the amicable settlement in
the CA.10
The Republic of the Philippines, represented by the Office of the Solicitor General (OSG),
opposed the application because the land in question was within the Fort Magsaysay On June 30, 1999, the appellate court approved the compromise agreement. 11 On January
Military Reservation (FMMR), established by virtue of Proclamation No. 237 12, 2000, it directed the Land Registration Administration to issue the corresponding
(Proclamation 237)3 in 1955. Thus, it was inalienable as it formed part of the public decree of registration in petitioner’s favor. 12
domain.
However, acting on a letter written by a certain Atty. Restituto S. Lazaro, the OSG filed a
Significantly, on November 28, 1975, this Court already ruled in Director of Lands v. motion for reconsideration of the CA resolution ordering the issuance of the decree of
Reyes4 that the property subject of Garcia’s application was inalienable as it formed part registration. The OSG informed the appellate court that the tract of land subject of the
of a military reservation. Moreover, the existence of Possessory Information Title No. amicable settlement was still within the military reservation.
216 (allegedly registered in the name of a certain Melecio Padilla on March 5, 1895), on
which therein respondent Parañ aque Investment and Development Corporation On April 16, 2007, the CA issued an amended resolution (amended
anchored its claim on the land, was not proven. Accordingly, the decree of registration resolution)13 annulling the compromise agreement entered into between the parties. The
issued in its favor was declared null and void. relevant part of the dispositive portion of the resolution read:

Reyes notwithstanding, the CFI ruled in Garcia’s favor in a decision 5 dated July 1, 1981. ACCORDINGLY, the Court resolves to:

The Republic eventually appealed the decision of the CFI to the Court of Appeals (CA). In (1) x x x x x x
its decision6 dated February 26, 1992, penned by Justice Vicente V. Mendoza (Mendoza
decision),7 the appellate court reversed and set aside the decision of the CFI. The CA (2) x x x x x x
found that Reyes was applicable to petitioner’s case as it involved the same property.
(3) x x x x x x
The CA observed that Garcia also traced her ownership of the land in question to
Possessory Information Title No. 216. As Garcia’s right to the property was largely
dependent on the existence and validity of the possessory information title the probative (4) x x x x x x
value of which had already been passed upon by this Court in Reyes, and inasmuch as the
(5) x x x x x x
 (6) REVERSE the Resolution dated June 30, 1999 of this Court approving the further pleadings would be entertained and that entry of judgment be made in due
Amicable Settlement dated May 18, 1999 executed between the Office of the course.
Solicitor General and Florencia Garcia Diaz[;]
Not one to be easily deterred, petitioner wrote identical letters, first addressed to Justice
(7) ANNUL and SET ASIDE the Amicable Settlement dated May 18, 1999 Leonardo A. Quisumbing (then Acting Chief Justice) and then to Chief Justice Reynato S.
executed between the Office of the Solicitor General and Florencia Garcia Diaz; Puno himself.23 The body of the letter, undoubtedly in the nature of a third motion for
the said Amicable Settlement is hereby DECLARED to be without force and reconsideration, is hereby reproduced in its entirety:
effect;
This is in response to your call for "Moral Forces" in order to "redirect the destiny of our
(8) GRANT the Motion for Reconsideration filed by the Office of the Solicitor country which is suffering from moral decadence," that to your mind, is the problem
General and, consequently, SET ASIDE the Resolution dated January 12, 2000 which confronts us. (Inquirer, January 15, 2009, page 1)[.]
which ordered, among other matters, that a certificate of title be issued in the
name of plaintiff-appellee Florencia Garcia Diaz over the portion of the subject I recently lost my case with the Supreme Court, G.R. N[o]. 181502, and my lawyer has
property in consonance with the Amicable Settlement dated May 18, 1999 done all that is humanly possible to convince the court to take a second look at the
approved by the Court in its Resolution dated June 30, 1999; miscarriage of justice that will result from the implementation of the DISMISSAL in a
MINUTE RESOLUTION of our Petition for Review.
(9) SET ASIDE the Resolution dated June 30, 1999 approving the May 18, 1999
Amicable Settlement and the Resolution dated September 20, 1999 amending Pending before your Division (First Division) is a last plea for justice so that the
the aforesaid June 30, 1999 Resolution; and case may be elevated to the Supreme Court en banc. I hope the Court exercises
utmost prudence in resolving the last plea. For ready reference, a copy of the
(10) REINSTATE the Decision dated February 26, 1992 dismissing Motion is hereto attached as Annex "A".
applicant-appellee Diaz’ registration herein.
The issue that was brought before the Honorable Supreme Court involves the Decision of
SO ORDERED. then Justice Vicente Mendoza of the Court of Appeals, which is NULL and VOID, ab initio.
(Emphasis supplied)
It is null and void because destiny placed Hon. Justice Vicente Mendoza in a position in
Petitioner moved for reconsideration. For the first time, she assailed the validity of the which it became possible for him to discharge the minimum requirement of due process,
Mendoza decision – the February 26, 1992 decision adverted to in the CA’s amended [i.e.] the ability of the court to render "impartial justice," because Mr. Justice Mendoza
resolution. She alleged that Justice Mendoza was the assistant solicitor general during became the ponente of the Court of Appeals Decision, reversing the findings of the trial
the initial stages of the land registration proceedings in the trial court and therefore court, notwithstanding the fact that he, as Assistant Solicitor General, was the very
should have inhibited himself when the case reached the CA. His failure to do so, she person who appeared on behalf of the Republic, as the oppositor in the very same land
laments, worked an injustice against her constitutional right to due process. Thus, the registration proceedings in which he lost.
Mendoza decision should be declared null and void. The motion was denied. 14
In other words, he discharged the duties of prosecutor and judge in the very same case.
Thereafter, petitioner filed a petition for review on certiorari 15 in this Court. It was
denied for raising factual issues.16She moved for reconsideration.17 This motion was In the case of the "Alabang Boys[,]" the public was outraged by the actions of Atty.
denied with finality on the ground that there was no substantial argument warranting a Verano who admitted having prepared a simple resolution to be signed by the Secretary
modification of the Court’s resolution. The Court then ordered that no further pleadings of Justice.
would be entertained. Accordingly, we ordered entry of judgment to be made in due
course.18
In my case, the act complained of is the worst kind of violation of my constitutional right.
It is simply immoral, illegal and unconstitutional, for the prosecutor to eventually act as
Petitioner, however, insisted on filing a motion to lift entry of judgment and motion for the judge, and reverse the very decision in which he had lost.
leave to file a second motion for reconsideration and to refer the case to the Supreme
Court en banc.19 The Court denied20 it considering that a second motion for
reconsideration is a prohibited pleading. 21 Furthermore, the motion to refer the case to If leaked to the tri-media[,] my case will certainly evoke even greater spite from the
the bancwas likewise denied as the banc is not an appellate court to which decisions or public, and put the Supreme Court in bad light. I must confess that I was tempted to
resolutions of the divisions may be appealed. 22 We reiterated our directive that no pursue such course of action. I however believe that such an action will do more harm
than good, and even destroy the good name of Hon. Justice Mendoza.
I fully support your call for "moral force" that will slowly and eventually lead our country The facts obtaining in this case closely resemble those in Aquino v. Director of Lands.26 In
to redirect its destiny and escape from this moral decadence, in which we all find that case, Quintin Tañ edo endeavored to secure title to a considerable tract of land by
ourselves. virtue of his possession thereof under CA 141. When the case eventually reached this
Court, we affirmed the trial court’s decision to dismiss the proceedings as the property in
I am content with the fact that at least, the Chief Justice continues to fight the dark forces question was part of the public domain. Quintin’s successor-in-interest, Florencia
that surround us everyday. Tañ edo, who despite knowledge of the proceedings did not participate therein,
thereafter sold the same property to Benigno S. Aquino. The latter sought to have it
registered in his name. The question in that case, as well as in this one, was whether our
I only ask that the Supreme Court endeavor to ensure that cases such as mine do not decision in the case in which another person was the applicant constituted res judicata as
happen again, so that the next person who seeks justice will not experience the pain and against his successors-in-interest.
frustration that I suffered under our judicial system.
We ruled there, and we so rule now, that in registration cases filed under the provisions
Thank you, and more power to you, SIR. (Emphasis in the original). of the Public Land Act for the judicial confirmation of an incomplete and imperfect title,
an order dismissing an application for registration and declaring the land as part of the
The language of petitioner’s letter/motion is unmistakable. It is a thinly veiled threat public domain constitutes res judicata, not only against the adverse claimant, but also
precisely worded and calculated to intimidate this Court into giving in to her demands to against all persons.27
honor an otherwise legally infirm compromise agreement, at the risk of being vilified in
the media and by the public. We also declared in Aquino that:

This Court will not be cowed into submission. We deny petitioner’s letter/third motion From another point of view, the decision in the first action has become the "law of the
for reconsideration. case" or at least falls within the rule of stare decisis. That adjudication should be followed
unless manifestly erroneous. It was taken and should be taken as the authoritative view
APPLICABILITY OF REYES of the highest tribunal in the Philippines. It is indispensable to the due administration of
justice especially by a court of last resort that a question once deliberately examined and
The Court agrees with the Republic’s position that Reyes is applicable to this case. decided should be considered as settled and closed to further argument. x x x 28

To constitute res judicata, the following elements must concur: Be that as it may, the fact is that, even before the CFI came out with its decision in favor
of petitioner on July 1, 1981, this Court, in Reyes, already made an earlier ruling on
November 28, 1975 that the disputed realty was inalienable as it formed part of a
(1) the former judgment or order must be final; military reservation. Thus, petitioner’s argument that the findings of fact of the trial
court on her registrable title are binding on us – on the principle that findings of fact of
(2) the judgment or order must be on the merits; lower courts are accorded great respect and bind even this Court – is untenable. Rather,
it was incumbent upon the court a quo to respect this Court’s ruling in Reyes, and not the
(3) it must have been rendered by a court having jurisdiction over the subject other way around.
matter and parties; and
However, despite having been apprised of the Court's findings in Reyes (which should
(4) there must be between the first and second actions, identity of parties, of have been a matter of judicial notice in the first place), the trial court still insisted on its
subject matter, and of causes of action. 24 divergent finding and disregarded the Court's decision in Reyes, declaring the subject
land as forming part of a military reservation, and thus outside the commerce of man.
The first three requisites have undoubtedly been complied with. However, petitioner
takes exception to the fourth requisite, particularly on the issue of identity of parties. In By not applying our ruling in Reyes, the trial judge virtually nullified the decision of this
her petition for review filed in this Court, she contends that since the applicants in the Court and therefore acted with grave abuse of discretion. 29 Notably, a judgment rendered
two cases are different, the merits of the two cases should, accordingly, be determined with grave abuse of discretion is void and does not exist in legal contemplation. 30
independently of each other.25
All lower courts, especially the trial court concerned in this case, ought to be reminded
This contention is erroneous. that it is their duty to obey the decisions of the Supreme Court. A conduct becoming of
inferior courts demands a conscious awareness of the position they occupy in the
interrelation and operation of our judicial system. As eloquently declared by Justice J.B. L.
Reyes, "There is only one Supreme Court from whose decision all other courts should Before the military reservation was established, the evidence is inconclusive as to
take their bearings."31 possession, for it is shown by the evidence that the land involved is largely mountainous
and forested. As a matter of fact, at the time of the hearing, it was conceded that
ACQUISITION OF PRIVATE RIGHTS approximately 13,957 hectares of said land consist of public forest. x x x

Petitioner, however, argues that Proclamation 237 itself recognizes that its effectivity is Therefore, even if possession was for more than 30 years, it could never ripen to
"subject to private rights, if any there be." ownership.

By way of a background, we recognized in Reyes that the property where the military But even assuming that the land in question was alienable land before it was established
reservation is situated is forest land. Thus: as a military reservation, there was nevertheless still a dearth of evidence with respect to
its occupation by petitioner and her predecessors-in-interest for more than 30 years.
In Reyes, we noted:
Before the military reservation was established, the evidence is inconclusive as to
possession, for it is shown by the evidence that the land involved is largely mountainous
and forested. As a matter of fact, at the time of the hearing, it was conceded Evidently, Melecio Padilla, having died on February 9, 1900, barely five (5) years after
that approximately 13,957 hectares of said land consist of public forest. x x x the inscription of the informacion possessoria, could not have converted the same into a
(Emphasis supplied)32 record of ownership twenty (20) years after such inscription, pursuant to Article 393 of
the Spanish Mortgage Law.
Concomitantly, we stated therein, and we remind petitioner now, that forest lands are
not registrable under CA 141. xxx

[E]ven more important, Section 48[b] of CA No. 141, as amended, applies exclusively to During the lifetime of Melecio Padilla, only a small portion thereof was cleared and
public agricultural land. Forest lands or area covered with forest are excluded. It is well- cultivated under the ‘kaingin’ system, while some portions were used as grazing land.
settled that forest land is incapable of registration; and its inclusion in a title, After his death, his daughter, Maria Padilla, caused the planting of vegetables and had
whether such title be one issued using the Spanish sovereignty or under the about forty (40) tenants for the purpose. During the Japanese occupation, Maria Padilla
present Torrens system of registration, nullifies the title. (Emphasis supplied).33 died. x x x

However, it is true that forest lands may be registered when they have been reclassified xxx
as alienable by the President in a clear and categorical manner (upon the
recommendation of the proper department head who has the authority to classify the A mere casual cultivation of portions of the land by the claimant, and the raising thereon
lands of the public domain into alienable or disposable, timber and mineral of cattle, do not constitute possession under claim of ownership. In that sense,
lands)34 coupled with possession by the claimant as well as that of her predecessors-in- possession is not exclusive and notorious as to give rise to a presumptive grant from the
interest. Unfortunately for petitioner, she was not able to produce such evidence. State. While grazing livestock over land is of course to be considered with other acts of
Accordingly, her occupation thereof, and that of her predecessors-in-interest, could not dominion to show possession, the mere occupancy of land by grazing livestock upon it,
have ripened into ownership of the subject land. This is because prior to the conversion without substantial inclosures, or other permanent improvements, is not sufficient to
of forest land as alienable land, any occupation or possession thereof cannot be counted support a claim of title thru acquisitive prescription. The possession of public land,
in reckoning compliance with the thirty-year possession requirement under however long the period may have extended, never confers title thereto upon the
Commonwealth Act 141 (CA 141) or the Public Land Act. 35 This was our ruling in Almeda possessor because the statute of limitations with regard to public land does not operate
v. CA.36 The rules on the confirmation of imperfect titles do not apply unless and until the against the State unless the occupant can prove possession and occupation of the same
land classified as forest land is released through an official proclamation to that effect. under claim of ownership for the required number of years to constitute a grant from the
Then and only then will it form part of the disposable agricultural lands of the public State.38
domain.37
xxx
Coming now to petitioner’s contention that her "private rights" to the property, meaning
her and her predecessors’ possession thereof prior to the establishment of the FMMR, Furthermore, the fact that the possessory information title on which petitioner also
must be respected, the same is untenable. As earlier stated, we had already recognized bases her claim of ownership was found to be inexistent in Reyes,39 thus rendering its
the same land to be public forest even before the FMMR was established. To reiterate: probative value suspect, further militates against granting her application for
registration.
NULLITY OF COMPROMISE AGREEMENT All services which are not contrary to law, morals, good customs, public order or public
policy may likewise be the object of a contract. (Emphasis supplied)
On the compromise agreement between the parties, we agree with the CA that the same
was null and void. Finally, the Court finds the cause or consideration of the obligation contrary to law and
against public policy. The agreement provided that, in consideration of petitioner’s
An amicable settlement or a compromise agreement is in the nature of a contract and withdrawal of her application for registration of title from that portion of the property
must necessarily comply with the provisions of Article 1318 of the New Civil Code which located within the military reservation, respondent was withdrawing its claim on that
provides: part of the land situated outside said reservation. The Republic could not validly enter
into such undertaking as the subject matter of the agreement was outside the commerce
of man.
Art. 1318. There is no contract unless the following requisites concur:
PETITIONER’S CONTEMPT OF COURT
(1) Consent of the contracting parties;
This Court, being the very institution that dispenses justice, cannot reasonably be
(2) Object certain which is the subject matter of the contract; expected to just sit by and do nothing when it comes under attack.

(3) Cause of the obligation which is established. That petitioner’s letter-motion constitutes an attack against the integrity of this Court
cannot be denied. Petitioner started her letter innocently enough by stating:
Petitioner was not able to provide any proof that the consent of the Republic, through the
appropriate government agencies, i.e. the Department of Environment and Natural This is in response to your call for "Moral Forces" in order to "redirect the destiny of our
Resources, Land Management Bureau, Land Registration Authority, and the Office of the country which is suffering from moral decadence," that to your mind, is the problem
President, was secured by the OSG when it executed the agreement with her. 40 The lack which confronts us. (Inquirer, January 15, 2009, page 1)[.]
of authority on the part of the OSG rendered the compromise agreement between the
parties null and void because although it is the duty of the OSG to represent the State in
cases involving land registration proceedings, it must do so only within the scope of the It, however, quickly progressed into a barely concealed resentment for what she
authority granted to it by its principal, the Republic of the Philippines. 41 perceived as this Court’s failure to exercise "utmost prudence" in rendering "impartial
justice" in deciding her case. Petitioner recounted:
In this case, although the OSG was authorized to appear as counsel for respondent, it was
never given the specific or special authority to enter into a compromise agreement with I recently lost my case with the Supreme Court, G.R. N[o]. 181502, and my lawyer has
petitioner. This is in violation of the provisions of Rule 138 Section 23, of the Rules of done all that is humanly possible to convince the court to take a second look at
Court which requires "special authority" for attorneys to bind their clients. the miscarriage of justice that will result from the implementation of the
DISMISSAL in a MINUTE RESOLUTION of our Petition for Review.
Section 23. Authority of attorneys to bind clients. – Attorneys have authority to bind their
clients in any case by any agreement in relation thereto made in writing, and in taking Pending before your Division (First Division) is a last plea for justice so that the
appeals, and in all matters of ordinary judicial procedure. But they cannot, without case may be elevated to the Supreme Court en banc. I hope the Court exercises
special authority, compromise their client’s litigation, or receive anything in utmost prudence in resolving the last plea. For ready reference, a copy of the
discharge of a client’s claim but the full amount in cash. (Emphasis supplied). Motion is hereto attached as Annex "A".

Moreover, the land in question could not have been a valid subject matter of a contract The issue that was brought before the Honorable Supreme Court involves the Decision of
because, being forest land, it was inalienable. Article 1347 of the Civil Code provides: then Justice Vicente Mendoza of the Court of Appeals, which is NULL and VOID, ab initio.

Art. 1347. All things which are not outside the commerce of men, including future It is null and void because destiny placed Hon. Justice Vicente Mendoza in a position in
things, may be the object of a contract. All rights which are not intransmissible may which it became possible for him to discharge the minimum requirement of due process,
also be the object of contracts. [i.e.] the ability of the court to render "impartial justice," because Mr. Justice Mendoza
became the ponente of the Court of Appeals Decision, reversing the findings of the trial
court, notwithstanding the fact that he, as Assistant Solicitor General, was the very
No contract may be entered into upon future inheritance except in cases expressly person who appeared on behalf of the Republic, as the oppositor in the very same land
authorized by law. registration proceedings in which he lost. (Emphasis supplied).
Petitioner then indirectly hints that, when push comes to shove, she has no choice but to The Court now puts an end to petitioner’s irresponsible insinuations and threats of
expose the irregularity concerning the Mendoza decision to the media. This is evident in "going public" with this case. We are not blind to petitioner’s clever and foxy interplay of
her arrogant declaration that: threats alternating with false concern for the reputation of this Court.

If leaked to the tri-media[,] my case will certainly evoke even greater spite from the It is well to remind petitioner that the Court has consistently rendered justice with
public, and put the Supreme Court in bad light. neither fear nor favor. The disposition in this case was arrived at after a careful and
thorough deliberation of the facts of this case and all the matters pertaining thereto. The
But she hastens to add in the same breath that: records of the case, in fact, show that all the pertinent issues raised by petitioner were
passed upon and sufficiently addressed by the appellate court and this Court in their
respective resolutions.
I must confess that I was tempted to pursue such course of action. I however believe that
such an action will do more harm than good, and even destroy the good name of Hon.
Justice Mendoza. As to petitioner’s complaint regarding this Court’s denial of her petition through a mere
minute resolution (which allegedly deprived her of due process as the Court did not issue
a full-blown decision stating the facts and applicable jurisprudence), suffice it to say that
Petitioner ends her letter by taking this Court to task: the Court is not duty-bound to issue decisions or resolutions signed by the justices all the
time. It has ample discretion to formulate ponencias, extended resolutions or even
. . . endeavor to ensure that cases such as mine do not happen again, so that the next minute resolutions issued by or upon its authority, depending on its evaluation of a case,
person who seeks justice will not experience the pain and frustration that I suffered as long as a legal basis exists. When a minute resolution (signed by the Clerk of Court
under our judicial system. upon orders of the Court) denies or dismisses a petition or motion for reconsideration
for lack of merit, it is understood that the assailed decision or order, together with all its
When required to show cause why she should not be cited for contempt for her baseless findings of fact and legal conclusions, are deemed sustained. 42
charges and veiled threats, petitioner answered:
Furthermore, petitioner has doggedly pursued her case in this Court by filing three
xxx successive motions for reconsideration, including the letter-motion subject of this
resolution. This, despite our repeated warnings that "no further pleadings shall be
entertained in this case." Her unreasonable persistence constitutes utter defiance of this
The Letter of January 26, 2009 is not a "veiled threat[.] It was written in response to the Court’s orders and an abuse of the rules of procedure. This, alongside her thinly veiled
call of the Chief Justice for a moral revolution. Juxtaposed against the factual backdrop of threats to leak her case to the media to gain public sympathy – although the tone of
the "Alabang Boys" case and the Meralco [c]ase, involving Mr. Justice Jose L. Sabio which petitioner’s compliance with our show-cause resolution was decidedly subdued
also enjoyed wide publicity over the tri-media, petitioner felt that the facts of the said compared to her earlier letters – constitutes contempt of court.
cases pale in comparison to the facts of her case where the lawyer of her opponent
eventually became justice of the appellate court and ended up reversing the very
decision in which he lost, in clear violation of her [c]onstitutional [r]ight to fundamental In Republic v. Unimex,43 we held:
fair play – for no contestant in any litigation can ever serve as a judge without
transgression of the due process clause. This is basic. A statement of this Court that no further pleadings would be entertained is a declaration
that the Court has already considered all issues presented by the parties and that it has
Petitioner confesses that she may have been emotional in the delivery of her piece, adjudicated the case with finality. It is a directive to the parties to desist from filing any
because correctly or incorrectly[,] she believes they are irrefutable. If in the course of further pleadings or motions. Like all orders of this Court, it must be strictly observed by
that emotional delivery, she has offended your honors’ sensibilities, she is ready for the the parties. It should not be circumvented by filing motions ill-disguised as requests for
punishment, and only prays that his Court temper its strike with compassion – as her clarification.
letter to the Chief Justice was never written with a view of threatening the Court.
A FEW OBSERVATIONS
xxx
If petitioner was, as she adamantly insists, only guarding her constitutional right to due
Petitioner wrote the Chief Justice in order to obtain redress and correction of the process, then why did she question the validity of the Mendoza decision late in the
inequity bestowed upon her by destiny. It was never meant as a threat. proceedings, that is, only after her motion for reconsideration in the CA (for its
subsequent annulment of the compromise agreement) was denied? It is obvious that it
was only when her case became hopeless that her present counsel frantically searched
for some ground, any ground to resuscitate his client’s lost cause, subsequently raising
the issue. This is evident from a statement in her petition to this Court that:

It is this fresh discovery by the undersigned counsel of the nullity of the

proceedings of the Court of Appeals that places in doubt the entire proceedings it
previously conducted, which led to the rendition of the February 26, 1992 Decision, a
fact that escaped the scrutiny of applicant for registration Flora L. Garcia, as well
as her lawyer, Atty. Cayetano Dante Diaz, who died in 1993, and the late Justice
Fernando A. Santiago, who stood as counsel for Flora L. Garcia’s successor-in-
interest, herein petitioner, Florencia G. Garcia.44(Emphasis supplied).

The above cited statement does not help petitioner’s cause at all. If anything, it only
proves how desperate the case has become for petitioner and her counsel.

WHEREFORE, the letter-motion dated January 26, 2009 of petitioner is NOTED and is
hereby treated as a third motion for reconsideration. The motion is DENIED considering
that a third motion for reconsideration is a prohibited pleading and the plea utterly lacks
merit.

Petitioner is found GUILTY of contempt of court. Accordingly, a FINE of Five Thousand

Pesos is hereby imposed on her, payable within ten days from receipt of this resolution.
She is hereby WARNED that any repetition hereof shall be dealt with more severely.

Treble costs against petitioner.

SO ORDERED.
Carino v. Insular Government, 212 U.S. 449 (1909) Every presumption of ownership is in favor of one actually occupying land for many
years, and against the government which seeks to deprive him of it, for failure to comply
Carino v. Insular Government of the Philippine Islands with provisions of a subsequently enacted registration act.

No. 72 Title by prescription against the crown existed under Spanish law in force in the
Philippine Islands prior to their acquisition by the United States, and one occupying land
in the Province of Benguet for more than fifty years before the Treaty of Paris is entitled
Argued January 13, 1909 to the continued possession thereof.

Decided February 23, 1909 7 Phil. 132 reversed.

212 U.S. 449 The facts are stated in the opinion.

ERROR TO THE SUPREME COURT Page 212 U. S. 455

OF THE PHILIPPINE ISLANDS MR. JUSTICE HOLMES delivered the opinion of the Court.

Syllabus This was an application to the Philippine Court of Land Registration for the registration
of certain land. The application was granted by the court on March 4, 1904. An appeal
Writ of error is the general, and appeal the exceptional, method of bringing Cases to this was taken to the Court of First Instance of the Province of Benguet on behalf of the
Court. The latter method is in the main confined to equity cases, and the former is proper government of the Philippines, and also on behalf of the United States, those
to bring up a judgment of the Supreme Court of the Philippine Islands affirming a governments having taken possession of the property for public and military purposes.
judgment of the Court of Land Registration dismissing an application for registration of The Court of First Instance found the facts and dismissed the application upon grounds
land. of law. This judgment was affirmed by the supreme court, 7 Phil. 132, and the case then
was brought here by writ of error.
Although a province may be excepted from the operation of Act No. 926 of 1903 of the
Philippine Commission which provides for the registration and perfecting of new titles, The material facts found are very few. The applicant and plaintiff in error is an Igorot of
one who actually owns property in such province is entitled to registration under Act No. the Province of Benguet, where the land lies. For more than fifty years before the Treaty
496 of 1902, which applies to the whole archipelago. of

While, in legal theory and as against foreign nations, sovereignty is absolute, practically it Page 212 U. S. 456
is a question of strength and of varying degree, and it is for a new sovereign to decide
how far it will insist upon theoretical relations of the subject to the former sovereign and Paris, April 11, 1899, as far back as the findings go, the plaintiff and his ancestors had
how far it will recognize actual facts. held the land as owners. His grandfather had lived upon it, and had maintained fences
sufficient for the holding of cattle, according to the custom of the country, some of the
Page 212 U. S. 450 fences, it seems, having been of much earlier date. His father had cultivated parts and had
used parts for pasturing cattle, and he had used it for pasture in his turn. They all had
The acquisition of the Philippines was not for the purpose of acquiring the lands been recognized as owners by the Igorots, and he had inherited or received the land from
occupied by the inhabitants, and under the Organic Act of July 1, 1902, c. 1369, 32 Stat. his father in accordance with Igorot custom. No document of title, however, had issued
691, providing that property rights are to be administered for the benefit of the from the Spanish Crown, and although, in 1893-1894 and again in 1896-1897, he made
inhabitants, one who actually owned land for many years cannot be deprived of it for application for one under the royal decrees then in force, nothing seems to have come of
failure to comply with certain ceremonies prescribed either by the acts of the Philippine it, unless, perhaps, information that lands in Benguet could not be conceded until those
Commission or by Spanish law. to be occupied for a sanatorium, etc., had been designated -- a purpose that has been
carried out by the Philippine government and the United States. In 1901, the plaintiff
filed a petition, alleging ownership, under the mortgage law, and the lands were
The Organic Act of the Philippines made a bill of rights embodying safeguards of the registered to him, that process, however, establishing only a possessory title, it is said.
Constitution, and, like the Constitution, extends those safeguards to all.
Before we deal with the merits, we must dispose of a technical point. The government as Spain asserted, absolute power. But it does not follow that, as against the inhabitants
has spent some energy in maintaining that this case should have been brought up by of the Philippines, the United States asserts that Spain had such power. When theory is
appeal, and not by writ of error. We are of opinion, however, that the mode adopted was left on one side, sovereignty is a question of strength, and may vary in degree. How far a
right. The proceeding for registration is likened to bills in equity to quiet title, but it is new sovereign shall insist upon the theoretical relation of the subjects to the head in the
different in principle. It is a proceeding in rem under a statute of the type of the Torrens past, and how far it shall recognize actual facts, are matters for it to decide.
Act, such as was discussed in Tyler v. Court of Registration, 175 Mass. 71. It is nearer to
law than to equity, and is an assertion of legal title; but we think it unnecessary to put it The Province of Benguet was inhabited by a tribe that the Solicitor General, in his
into either pigeon hole. A writ of error is the general method of bringing cases to this argument, characterized as a savage tribe that never was brought under the civil or
Court, an appeal the exception, confined to equity in the main. There is no reason for not military government of the Spanish Crown. It seems probable, if not certain, that the
applying the general rule to this case. Ormsby v. Webb, 134 U. S. 47, 134 U. S. Spanish officials would not have granted to anyone in that province the registration to
65; Campbell v. Porter, 162 U. S. 478; Metropolitan R. Co. v. District of Columbia, 195 U. S. which formerly the plaintiff was entitled by the Spanish laws, and which would have
322. made his title beyond question good. Whatever may have been the technical position of
Spain, it does not follow that, in the view of the United States, he had lost all rights and
Page 212 U. S. 457 was a mere trespasser when the present government seized his land. The argument to
that effect seems to amount to a denial of native titles throughout an important part of
Another preliminary matter may as well be disposed of here. It is suggested that, even if the island of Luzon, at least, for the want of ceremonies which the Spaniards would not
the applicant have title, he cannot have it registered, because the Philippine have permitted and had not the power to enforce.
Commission's Act No. 926, of 1903, excepts the Province of Benguet among others from
its operation. But that act deals with the acquisition of new titles by homestead entries, The acquisition of the Philippines was not like the settlement of the white race in the
purchase, etc., and the perfecting of titles begun under the Spanish law. The applicant's United States. Whatever consideration may have been shown to the North American
claim is that he now owns the land, and is entitled to registration under the Philippine Indians, the dominant purpose of the whites in America was to occupy the land. It is
Commission's Act No. 496, of 1902, which established a court for that purpose with obvious that, however stated, the reason for our taking over the Philippines was
jurisdiction "throughout the Philippine Archipelago," § 2, and authorized in general different. No one, we suppose, would deny that, so far as consistent with paramount
terms applications to be made by persons claiming to own the legal estate in fee simple, necessities, our first object in the internal administration of the islands is to do justice to
as the applicant does. He is entitled to registration if his claim of ownership can be the natives, not to exploit their country for private gain. By the Organic Act of July 1,
maintained. 1902, c. 1369, § 12, 32 Stat. 691, all the property and rights acquired there by the

We come, then, to the question on which the case was decided below -- namely, whether Page 212 U. S. 459
the plaintiff owns the land. The position of the government, shortly stated, is that Spain
assumed, asserted, and had title to all the land in the Philippines except so far as it saw fit United States are to be administered "for the benefit of the inhabitants thereof." It is
to permit private titles to be acquired; that there was no prescription against the Crown, reasonable to suppose that the attitude thus assumed by the United States with regard to
and that, if there was, a decree of June 25, 1880, required registration within a limited what was unquestionably its own is also its attitude in deciding what it will claim for its
time to make the title good; that the plaintiff's land was not registered, and therefore own. The same statute made a bill of rights, embodying the safeguards of the
became, if it was not always, public land; that the United States succeeded to the title of Constitution, and, like the Constitution, extends those safeguards to all. It provides that
Spain, and so that the plaintiff has no rights that the Philippine government is bound to
respect.
"no law shall be enacted in said islands which shall deprive any person of life, liberty, or
property without due process of law, or deny to any person therein the equal protection
If we suppose for the moment that the government's contention is so far correct that the of the laws."
Crown of Spain in form asserted a title to this land at the date of the Treaty of Paris, to
which the United States succeeded, it is not to be assumed without argument that the
plaintiff's case is at an end. It is true that Spain, in its earlier decrees, embodied the § 5. In the light of the declaration that we have quoted from § 12, it is hard to believe that
universal feudal theory that all lands were held from the Crown, and perhaps the general the United States was ready to declare in the next breath that "any person" did not
attitude of conquering nations toward people not recognized as entitled to the treatment embrace the inhabitants of Benguet, or that it meant by "property" only that which had
accorded to those become such by ceremonies of which presumably a large part of the inhabitants never
had heard, and that it proposed to treat as public land what they, by native custom and
by long association -- one of the profoundest factors in human thought -- regarded as
Page 212 U. S. 458 their own.

in the same zone of civilization with themselves. It is true also that, in legal theory,
sovereignty is absolute, and that, as against foreign nations, the United States may assert,
It is true that, by § 14, the government of the Philippines is empowered to enact rules were admitted to exist that owed nothing to the powers of Spain beyond this recognition
and prescribe terms for perfecting titles to public lands where some, but not all, Spanish in their books.
conditions had been fulfilled, and to issue patents to natives for not more than sixteen
hectares of public lands actually occupied by the native or his ancestors before August Prescription is mentioned again in the royal cedula of October 15, 1754, cited in 3 Phil.
13, 1898. But this section perhaps might be satisfied if confined to cases where the 546:
occupation was of land admitted to be public land, and had not continued for such a
length of time and under such circumstances as to give rise to the understanding that the
occupants were owners at that date. We hesitate to suppose that it was intended to "Where such possessors shall not be able to produce title deeds, it shall be sufficient if
declare every native who had not a paper title a trespasser, and to set the claims of all the they shall show that ancient possession, as a valid title by prescription."
wilder tribes afloat. It is true again that there is excepted from the provision that we have
quoted as to the administration of the property and rights acquired by the United States It may be that this means possession from before 1700; but, at all events, the principle is
such land and property as shall be designated by the President for military or other admitted. As prescription, even against Crown lands, was recognized by the laws of
reservations, Spain, we see no sufficient reason for hesitating to admit that it was recognized in the
Philippines in regard to lands over which Spain had only a paper sovereignty.
Page 212 U. S. 460
The question comes, however, on the decree of June 25, 1880, for the adjustment of royal
as this land since has been. But there still remains the question what property and rights lands wrongfully occupied by private individuals in the Philippine Islands. This begins
the United States asserted itself to have acquired. with the usual theoretic assertion that, for private ownership, there must have been a
grant by competent authority; but instantly descends to fact by providing that, for all
legal effects, those who have been in possession for certain times shall be deemed
Whatever the law upon these points may be, and we mean to go no further than the owners. For cultivated land, twenty years, uninterrupted, is enough. For uncultivated,
necessities of decision demand, every presumption is and ought to be against the thirty. Art. 5. So that, when this decree went into effect, the applicant's father was owner
government in a case like the present. It might, perhaps, be proper and sufficient to say of the land by the very terms of the decree. But, it is said, the object of this law was to
that when, as far back as testimony or memory goes, the land has been held by require the adjustment or registration proceedings that it described, and in that way to
individuals under a claim of private ownership, it will be presumed to have been held in require everyone to get a document of title or lose his land. That purpose may have been
the same way from before the Spanish conquest, and never to have been public land. entertained, but it does not appear clearly to have been applicable to all. The regulations
Certainly, in a case like this, if there is doubt or ambiguity in the Spanish law, we ought to purport to have been made "for the adjustment of royal lands wrongfully occupied by
give the applicant the benefit of the doubt. Whether justice to the natives and the import private individuals." (We follow the translation in the government's brief.) It does not
of the organic act ought not to carry us beyond a subtle examination of ancient texts, or appear that this land ever was royal land or wrongfully occupied. In Article 6, it is
perhaps even beyond the attitude of Spanish law, humane though it was, it is provided that
unnecessary to decide. If, in a tacit way, it was assumed that the wild tribes of the
Philippines were to be dealt with as the power and inclination of the conqueror might
dictate, Congress has not yet sanctioned the same course as the proper one "for the "interested parties not included within the two preceding
benefit of the inhabitants thereof."
Page 212 U. S. 462
If the applicant's case is to be tried by the law of Spain, we do not discover such clear
proof that it was bad by that law as to satisfy us that he does not own the land. To begin articles [the articles recognizing prescription of twenty and thirty years] may legalize
with, the older decrees and laws cited by the counsel for the plaintiff in error seem to their possession, and thereby acquire the full ownership of the said lands, by means of
indicate pretty clearly that the natives were recognized as owning some lands, adjustment proceedings, to be conducted in the following manner."
irrespective of any royal grant. In other words, Spain did not assume to convert all the
native inhabitants of the Philippines into trespassers, or even into tenants at will. For This seems, by its very terms, not to apply to those declared already to be owners by
instance, Book 4, Title 12, Law 14 of the Recopilacion de Leyes de las Indias, cited for a lapse of time. Article 8 provides for the case of parties not asking an adjustment of the
contrary conclusion in Valenton v. Murciano, 3 Phil. 537, while it commands viceroys and lands of which they are unlawfully enjoying the possession, within one year, and
others, when it seems proper, to call for the exhibition of grants, directs them to confirm threatens that the treasury "will reassert the ownership of the state over the lands," and
those who hold by good grants or justa prescripcion. It is true that it will sell at auction such part as it does not reserve. The applicant's possession was not
unlawful, and no attempt at any such proceedings against him or his father ever was
Page 212 U. S. 461 made. Finally, it should be noted that the natural construction of the decree is confirmed
by the report of the council of state. That report puts forward as a reason for the
begins by the characteristic assertion of feudal overlordship and the origin of all titles in regulations that, in view of the condition of almost all property in the Philippines, it is
the King or his predecessors. That was theory and discourse. The fact was that titles important to fix its status by general rules on the principle that the lapse of a fixed period
legalizes completely all possession, recommends in two articles twenty and thirty years,
as adopted in the decree, and then suggests that interested parties not included in those
articles may legalize their possession and acquire ownership by adjustment at a certain
price.

It is true that the language of Articles 4 and 5 attributes title to those "who may prove"
possession for the necessary time, and we do not overlook the argument that this means
may prove in registration proceedings. It may be that an English conveyancer would
have recommended an application under the foregoing decree, but certainly it was not
calculated to convey to the mind of an Igorot chief the notion that ancient family
possessions were in danger, if he had read every word of it. The words "may prove"
(acrediten), as well, or better, in view of the other provisions, might be taken to mean
when called upon to do so in any litigation. 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.

Page 212 U. S. 463

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. The royal decree of February 13,
1894, declaring forfeited titles that were capable of adjustment under the decree of 1880,
for which adjustment had not been sought, should not be construed as a confiscation, but
as the withdrawal of a privilege. As a matter of fact, the applicant never was disturbed.
This same decree is quoted by the Court of Land Registration for another recognition of
the common law prescription of thirty years as still running against alienable Crown
land.

It will be perceived that the rights of the applicant under the Spanish law present a
problem not without difficulties for courts of a different legal tradition. We have deemed
it proper on that account to notice the possible effect of the change of sovereignty and
the act of Congress establishing the fundamental principles now to be observed. Upon a
consideration of the whole case, we are of opinion that law and justice require that the
applicant should be granted what he seeks, and should not be deprived of what, by the
practice and belief of those among whom he lived, was his property, through a refined
interpretation of an almost forgotten law of Spain.

Judgment reversed.
 SECOND DIVISION In their petition, private respondents basically claimed that the lands where their
residential houses stand are their ancestral lands which they have been occupying and
[G.R. NO. 180206 : February 4, 2009] possessing openly and continuously since time immemorial; that their ownership thereof
have been expressly recognized in Proclamation No. 15 dated April 27, 1922 and
recommended by the Department of Environment and Natural Resources (DENR) for
THE CITY GOVERNMENT OF BAGUIO CITY, represented by REINALDO BAUTISTA, exclusion from the coverage of the Busol Forest Reserve. They, thus, contended that the
JR., City Mayor; THE ANTI-SQUATTING COMMITTEE, represented by ATTY. demolition of their residential houses is a violation of their right of possession and
MELCHOR CARLOS R. RAGANES, CITY BUILDINGS and ARCHITECTURE office, ownership of ancestral lands accorded by the Constitution and the law, perforce, must be
represented by OSCAR FLORES; and PUBLIC ORDER and SAFETY OFFICE, restrained.
Represented by EMMANUEL REYES,Petitioners. v. ATTY. BRAIN MASWENG, Regional
Officer-National Commission on Indigenous People-CAR, ELVIN GUMANGAN,
NARCISO BASATAN and LAZARO BAWAS, Respondents. On October 16 and 19, 2006, Regional Hearing Officer Atty. Brain S. Masweng of the NCIP
issued the two (2) assailed temporary restraining orders (TRO) directing the petitioners
and all persons acting for and in their behalf to refrain from enforcing Demolition Advice
DECISION dated September 18, 2006; Demolition Order dated September 19, 2006; Demolition
Order No. 25, Series of 2004; Demolition Order No. 33, Series of 2005; and Demolition
TINGA, J.: Order No. 28, Series of 2004, for a total period of twenty (20) days.

Petitioners, the City Government of Baguio City, represented by its Mayor, Reinaldo Subsequently, the NCIP issued the other assailed Resolution dated November 10, 2006
Bautista, Jr., the Anti-Squatting Committee, represented by Atty. Melchor Carlos R. granting the private respondents' application for preliminary injunction subject to the
Rabanes; the City Buildings and Architecture Office, represented by Oscar Flores; and the posting of an injunctive bond each in the amount of P10,000.00.3
Public Order and Safety Office, represented by Emmanuel Reyes and later substituted by
Gregorio Deligero, assail the Decision1 of the Court of Appeals in CA G.R. SP No. 96895, Acting on the petition for certiorari filed by petitioners,4 the Court of Appeals upheld the
dated April 16, 2007, and its Resolution 2 dated September 11, 2007, which affirmed the jurisdiction of the NCIP over the action filed by private respondents and affirmed the
injunctive writ issued by the National Commission on Indigenous Peoples (NCIP) against temporary restraining orders dated October 16 5 and 19, 2006,6 and the Resolution dated
the demolition orders of petitioners. November 10, 2006,7 granting the application for a writ of preliminary injunction, issued
by the NCIP. The appellate court also ruled that Baguio City is not exempt from the
The following undisputed facts are culled from the assailed Decision: coverage of Republic Act No. 8371, otherwise known as the Indigenous Peoples Rights
Act of 1997 (IPRA).
The case stemmed from the three (3) Demolition Orders issued by the City Mayor of
Baguio City, Braulio D. Yaranon, ordering the demolition of the illegal structures Petitioners assert that the NCIP has no jurisdiction to hear and decide main actions for
constructed by Lazaro Bawas, Alexander Ampaguey, Sr. and a certain Mr. Basatan on a injunction such as the one filed by private respondents. They claim that the NCIP has the
portion of the Busol Watershed Reservation located at Aurora Hill, Baguio City, without authority to issue temporary restraining orders and writs of preliminary injunction only
the required building permits and in violation of Section 69 of Presidential Decree No. as auxiliary remedies to cases pending before it.
705, as amended, Presidential Decree No. 1096 and Republic Act No. 7279.
Further, the IPRA provides that Baguio City shall be governed by its Charter. Thus,
Pursuant thereto, the corresponding demolition advices dated September 19, 2006 were private respondents cannot claim their alleged ancestral lands under the provisions of
issued informing the occupants thereon of the intended demolition of the erected the IPRA.
structures on October 17 to 20, 2006. Consequently, Elvin Gumangan, Narciso Basatan
and Lazaro Bawas (hereinafter private respondents) filed a petition for injunction with Petitioners contend that private respondents are not entitled to the protection of an
prayer for the issuance of a temporary restraining order and/or writ of preliminary injunctive writ because they encroached upon the Busol Forest Reservation and built
injunction against the Office of the City Mayor of Baguio City through its Acting City structures thereon without the requisite permit. Moreover, this Court, in Heirs of
Mayor, Reynaldo Bautista, the City Building and Architecture Office, the Anti-Squatting Gumangan v. Court of Appeals,8 had already declared that the Busol Forest Reservation is
Task Force, and the Public Order and Safety Division, among others, (collectively called inalienable and possession thereof, no matter how long, cannot convert the same into
petitioners) before the National Commission on Indigenous Peoples, Cordillera private property. Even assuming that private respondents have a pending application for
Administrative Region (NCIP-CAR), Regional Hearing Office, La Trinidad, Benguet, ancestral land claim, their right is at best contingent and cannot come under the
docketed as Case No. 31-CAR-06. protective mantle of injunction.
Petitioners also claim that the Busol Forest Reservation is exempt from ancestral claims In addition, NCIP Administrative Circular No. 1-03 dated April 9, 2003, known as the
as it is needed for public welfare. It is allegedly one of the few remaining forests in Rules on Pleadings, Practice and Procedure Before the NCIP, reiterates the jurisdiction of
Baguio City and is the city's main watershed. the NCIP over claims and disputes involving ancestral lands and enumerates the actions
that may be brought before the commission. Sec. 5, Rule III thereof provides:
Finally, petitioners contend that the demolition orders were issued pursuant to the
police power of the local government.ςηαñ rοblεš νιr†υαl lαω lιbrαrÿ Sec. 5. Jurisdiction of the NCIP. The NCIP through its Regional Hearing Offices shall
exercise jurisdiction over all claims and disputes involving rights of ICCs/IPs and all
In their Comment9 dated March 1, 2007, private respondents defend the jurisdiction of cases pertaining to the implementation, enforcement, and interpretation of R.A. 8371,
the NCIP to take cognizance of and decide main actions for injunction arguing that the including but not limited to the following:
IPRA does not state that the NCIP may only issue such writs of injunction as auxiliary
remedies. Private respondents also contend that the IPRA does not exempt Baguio City (1) Original and Exclusive Jurisdiction of the Regional Hearing Office (RHO):
from its coverage nor does it state that there are no ancestral lands in Baguio City.
A. Cases involving disputes and controversies over ancestral lands/domains of ICCs/IPs;
As members of the Ibaloi Indigenous Community native to Baguio City, private
respondents are treated as squatters despite the fact that they hold native title to their b. Cases involving violations of the requirement of free and prior and informed consent
ancestral land. The IPRA allegedly now recognizes ancestral lands held by native title as of ICCs/IPs;
never to have been public lands.
c. Actions for enforcement of decisions of ICCs/IPs involving violations of customary laws
Private respondents aver that the Busol Forest Reservation is subject to ancestral land or desecration of ceremonial sites, sacred places, or rituals;
claims. In fact, Proclamation No. 1510 dated April 27, 1922, which declared the area a
forest reserve, allegedly did not nullify the vested rights of private respondents over
their ancestral lands and even identified the claimants of the particular portions within d. Actions for redemption/reconveyance under Section 8(b) of R.A. 8371; and
the forest reserve. This claim of ownership is an exception to the government's
contention that the whole area is a forest reservation. e. Such other cases analogous to the foregoing.

Lastly, private respondents assert that the power of the city mayor to order the (2) Original Jurisdiction of the Regional Hearing Officer:
demolition of certain structures is not absolute. Regard should be taken of the fact that
private respondents cannot be issued building permits precisely because they do not A. Cases affecting property rights, claims of ownership, hereditary succession, and
have paper titles over their ancestral lands, a requirement for the issuance of a building settlement of land disputes, between and among ICCs/IPs that have not been settled
permit under the National Building Code. under customary laws; andcralawlibrary

Petitioners' Reply to Comment11 dated June 11, 2008 merely reiterates their previous b. Actions for damages arising out of any violation of Republic Act No. 8371.
arguments.
(3) Exclusive and Original Jurisdiction of the Commission:
We shall first dispose of the elemental issue of the NCIP's jurisdiction.
A. Petition for cancellation of Certificate of Ancestral Domain Titles/Certificate of
The NCIP is the primary government agency responsible for the formulation and Ancestral Land Titles (CADTs/CALTs) alleged to have been fraudulently acquired by, and
implementation of policies, plans and programs to protect and promote the rights and issued to, any person or community as provided for under Section 54 of R.A. 8371.
well-being of indigenous cultural communities/indigenous peoples (ICCs/IPs) and the Provided that such action is filed within one (1) year from the date of registration.
recognition of their ancestral domains as well as their rights thereto. 12 In order to fully
effectuate its mandate, the NCIP is vested with jurisdiction over all claims and disputes
involving the rights of ICCs/IPs. The only condition precedent to the NCIP's assumption In order to determine whether the NCIP has jurisdiction over the dispute in accordance
of jurisdiction over such disputes is that the parties thereto shall have exhausted all with the foregoing provisions, it is necessary to resolve, on the basis of the allegations in
remedies provided under their customary laws and have obtained a certification from their petition, whether private respondents are members of ICCs/IPs. In their
the Council of Elders/Leaders who participated in the attempt to settle the dispute that petition14 filed before the NCIP, private respondents, members of the Ibaloi tribe who
the same has not been resolved.13 first settled in Baguio City, were asserting ownership of portions of the Busol Forest
Reservation which they claim to be their ancestral lands. Correctly denominated as a
petition for injunction as it sought to prevent the enforcement of the demolition orders
issued by the City Mayor, the petition traced private respondents' ancestry to Molintas the writ when the main action is for injunction. The power to issue temporary
and Gumangan and asserted their possession, occupation and utilization of their restraining orders or writs of injunction allows parties to a dispute over which the NCIP
ancestral lands. The petition also alleged that private respondents' claim over these has jurisdiction to seek relief against any action which may cause them grave or
lands had been recognized by Proclamation No. 15 which mentions the names of irreparable damage or injury. In this case, the Regional Hearing Officer issued the
Molintas and Gumangan as having claims over portions of the Busol Forest Reservation. 15 injunctive writ because its jurisdiction was called upon to protect and preserve the rights
of private respondents who are undoubtedly members of ICCs/IPs.
Clearly then, the allegations in the petition, which axiomatically determine the nature of
the action and the jurisdiction of a particular tribunal, 16 squarely qualify it as a Parenthetically, in order to reinforce the powers of the NCIP, the IPRA even provides that
"dispute(s) or controversy(s) over ancestral lands/domains of ICCs/IPs" within the no restraining order or preliminary injunction may be issued by any inferior court
original and exclusive jurisdiction of the NCIP-RHO.ςηαñ rοblεš νιr†υαl lαω lιbrαrÿ against the NCIP in any case, dispute or controversy arising from or necessary to the

The IPRA, furthermore, endows the NCIP with the power to issue temporary restraining interpretation of the IPRA and other laws relating to ICCs/IPs and ancestral domains. 17
orders and writs of injunction. Sec. 69 thereof states:
Petitioners argue that Baguio City is exempt from the provisions of the IPRA, and
Sec. 69. Quasi-Judicial Powers of the NCIP. The NCIP shall have the power and authority: necessarily the jurisdiction of the NCIP, by virtue of Sec. 78 thereof, which states:

a) To promulgate rules and regulations governing the hearing and disposition of cases SEC. 78. Special Provision. The City of Baguio shall remain to be governed by its Charter
filed before it as well as those pertaining to its internal functions and such rules and and all lands proclaimed as part of its townsite reservation shall remain as such until
regulations as may be necessary to carry out the purposes of this Act; otherwise reclassified by appropriate legislation: Provided, That prior land rights and
titles recognized and/or acquired through any judicial, administrative or other processes
b) To administer oaths, summon the parties to a controversy, issue subpoenas requiring before the effectivity of this Act shall remain valid: Provided, further, That this provision
the attendance and testimony of witnesses or the production of such books, papers, shall not apply to any territory which becomes part of the City of Baguio after the
contracts, records, agreements, and other document of similar nature as may be material effectivity of this Act.ςηαñ rοblεš νιr†υαl lαω lιbrαrÿ
to a just determination of the matter under investigation or hearing conducted in
pursuance of this Act; [Emphasis supplied]

c) To hold any person in contempt, directly or indirectly, and impose appropriate The foregoing provision indeed states that Baguio City is governed by its own charter. Its
penalties therefor; andcralawlibrary exemption from the IPRA, however, cannot ipso facto be deduced because the law
concedes the validity of prior land rights recognized or acquired through any process
d) To enjoin any or all acts involving or arising from any case pending before it which, if before its effectivity. The IPRA demands that the city's charter respect the validity of
not restrained forthwith, may cause grave or irreparable damage to any of the parties to these recognized land rights and titles.
the case or seriously affect social or economic activity. [Emphasis supplied]
The crucial question to be asked then is whether private respondents' ancestral land
NCIP Administrative Circular No. 1-03 echoes the above-quoted provision in Sec. 82, Rule claim was indeed recognized by Proclamation No. 15, in which case, their right thereto
XV, which provides: may be protected by an injunctive writ. After all, before a writ of preliminary injunction
may be issued, petitioners must show that there exists a right to be protected and that
the acts against which injunction is directed are violative of said right. 18
Sec. 82. Preliminary Injunction and Temporary Restraining Order. A writ of preliminary
injunction or restraining order may be granted by the Commission pursuant to the
provisions of Sections 59 and 69 of R.A. [No.] 8371 when it is established, on the basis of Proclamation No. 15, however, does not appear to be a definitive recognition of private
sworn allegations in a petition, that the acts complained of involving or arising from any respondents' ancestral land claim. The proclamation merely identifies the Molintas and
case, if not restrained forthwith, may cause grave or irreparable damage or injury to any Gumangan families, the predecessors-in-interest of private respondents, as claimants of
of the parties, or seriously affect social or economic activity. This power may also be a portion of the Busol Forest Reservation but does not acknowledge vested rights over
exercised by RHOs in cases pending before them in order to preserve the rights of the the same. In fact, Proclamation No. 15 explicitly withdraws the Busol Forest Reservation
parties. from sale or settlement. It provides:

As can be gleaned from the foregoing provisions, the NCIP may issue temporary Pursuant to the provisions of section eighteen hundred and twenty-six of Act Numbered
restraining orders and writs of injunction without any prohibition against the issuance of Twenty-seven Hundred and eleven[,] I hereby establish the Busol Forest Reservation to
be administered by the Bureau of Forestry for the purpose of conserving and protecting
water and timber, the protection of the water supply being of primary importance and all
other uses of the forest are to be subordinated to that purpose. I therefore withdraw
from sale or settlement the following described parcels of the public domain situated in
the Township of La Trinidad, City of Baguio, Mountain Province, Island of Luzon, to wit:

The fact remains, too, that the Busol Forest Reservation was declared by the Court as
inalienable in Heirs of Gumangan v. Court of Appeals. 19 The declaration of the Busol
Forest Reservation as such precludes its conversion into private property. Relatedly, the
courts are not endowed with jurisdictional competence to adjudicate forest lands.

All told, although the NCIP has the authority to issue temporary restraining orders and
writs of injunction, we are not convinced that private respondents are entitled to the
relief granted by the Commission.

WHEREFORE, the instant petition is GRANTED. The Decision of the Court of Appeals in
CA G.R. SP No. 96895 dated April 16, 2007 and its Resolution dated September 11, 2007
are REVERSED and SET ASIDE. Case No. 31-CAR-06 entitled, Elvin Gumangan, Narciso
Basatan and Lazaro Bawas v. Office of the City Mayor of Baguio City, et al. is DISMISSED.
No pronouncement as to costs.

SO ORDERED.
 Republic of the Philippines The motion was, however, denied. A motion for reconsideration and second urgent
SUPREME COURT motion for reconsideration were subsequently filed by respondent, but both were denied
Manila by the RTC.

THIRD DIVISION Thereafter, petitioner completed her presentation of evidence and filed a formal offer
which was admitted by the RTC.
G.R. No. 202414 June 4, 2014
On June 10, 2003, during the pendency of the case, respondent managed to register the
JOSEPHINE WEE, Petitioner, land in her name under Original Certificate of Title (OCT) No. OP-1840. Petitioner filed a
vs. Notice of Lis Pendens with the Registry of Deeds of Cavite on May 10, 2005 which was
FELICIDAD MARDO, Respondent. annotated on the title. A "Motion for Leave to File Supplemental Pleading and to Admit
Attached Supplemental Complaint for Reconveyance" was filed by petitioner which was
denied by the RTC on the ground that a motion for reconveyance was different from an
DECISION application for registration of title.

MENDOZA, J.: Consequently, respondent presented her own evidence, through the testimony of her
counsel, who testified that the parcel of land subject of the application for registration
This is a petition for review on certiorari under Rule 45 assailing the June 26, 2012 was the property she bought ten (10) years ago. Respondent, however, did not state from
Decision of the Court of Appeals (CA), which reversed and set aside the September 4, whom she bought it. As proof of her alleged ownership, she presented copies of tax
2009 Decision of the Regional Trial Court, Branch XVIII, Tagaytay City, Cavite (RTC), declarations in the absence of any deed of sale in her favor.
granting petitioner's "Application for Registration of Title."
On September 4, 2009, the RTC rendered a Decision2 granting the application of
Factual and Procedural Antecedents: petitioner. The dispositive portion of said decision reads:

Respondent Felicidad Gonzales, married to Leopoldo Mardo, was granted a registered WHEREFORE, judgment is hereby rendered granting the applicant, Josephine Wee, as
Free Patent No. (IV-2) 15284, dated April 26, 1979, covering Lot No. 8348, situated in qualified to register the subject land in her name, and the Administrator of LRA is hereby
Puting Kahoy, Silang, Cavite. directed to issue the corresponding decree in her name based on the plan and technical
description of said land as submitted by the applicant and the Register of Deeds of the
On February 1, 1993, respondent allegedly conveyed to petitioner, Josephine Wee, Province of Cavite to issue title in her name.
through a Deed of Absolute Sale,1 a portion of Lot No. 8348 known as Lot No. 8348-B, for
a consideration of ₱250,000.00 which was fully paid. Respondent, however, refused to SO ORDERED.
vacate and turn over the subject property claiming that the alleged sale was falsified.
A motion for reconsideration was filed by respondent which was denied by the RTC.
On December 22, 1994, petitioner filed an Application for Original Registration of a Hence, respondent appealed the decision before the CA, which case was docketed as CA-
parcel of land located at Barangay Putting Kahoy, Silang, Cavite, known as Lot No. 8349. G.R. CV No. 96934.
Said application was amended on September 19, 1996, this time covering a parcel of land
known as Lot 8348-B situated in Barangay Puting Kahoy, Silang, Cavite. Petitioner On June 26, 2012, the CA handed down a Judgment 3 reversing and setting aside the RTC
claimed that she is the owner of the said unregistered land by virtue of a deed of absolute decision. The decretal portion of the CA decision reads:
sale.
WHEREFORE, the appeal is GRANTED. The Decision, dated September 4, 2009, of the
On September 19, 1997, respondent filed her Opposition to the Amended Application Regional Trial Court (Branch XVIII) of Tagaytay City, Cavite, in LRC No. TG-647 is SET
alleging 1] that she is the true and lawful owner of the parcel of land which is the subject ASIDE.
of the amended application; and 2] that petitioner’s deed of absolute sale is surreptitious.
Accordingly, applicant-appellee’s Application for Original Registration of a parcel of land
On October 28, 2000, respondent filed a Motion to Dismiss the Application alleging that located at Barangay Putting Kahoy, Silang Cavite, known as Lot No. 8349, Cad. Lot
the land described in the application was different from the land being claimed for titling. 042118-011719-D of Silang Cadastre, is hereby DENIED.
SO ORDERED. In view of the fact that the validity of the sale of the subject parcel of land to petitioner in
1993 was duly established before the trial court and affirmed by the Court of Appeals
The CA held, among others, that petitioner was not able to comply with the requirement and considering further that the registration of the said land under respondents name
of possession and occupation under Sec. 14 (1) of P.D. No. 1529. Her admission that the was fraudulently secured, in order to avoid multiplicity of suits and to put an end to the
subject lot was not physically turned over to her due to some objections and oppositions long pending dispute between the parties, the Court of Appeals should have ordered the
to her title suggested that she was not exercising any acts of dominion over the subject reconveyance of the subject parcel of land to the petitioner as its rightful owner.
property, an essential element in the requirement of possession and occupation
contemplated under Sec. 14 (1) of P.D. No. 1529. Petitioner presents the theory that she must be deemed to have been in possession and
occupation of the subject property through respondent, her predecessor-in-interest, who
A copy of the decision was received by petitioner on July 2, 2012. On August 15, 2012, after the sale in 1993 and despite demands from her, unexpectedly and unjustifiably
petitioner filed this subject petition for review challenging the CA decision. continued to occupy the property and refused to turn over physical possession to her.
Petitioner argues that it is not necessary that the person in possession should himself be
the occupant as the occupancy can be held by another in his name.
Hence, this petition.
Moreover, petitioner also seeks reconveyance of the subject property arguing that by
In advocacy of her petition, petitioner assigns the following virtue of its fraudulent registration, respondent became a trustee of an implied trust for
her benefit, as its real owner, having validly acquired the same from respondent through
ERRORS: an absolute deed of sale.

I. The Court’s Ruling

The Court of Appeals gravely erred and ruled contrary to law in not finding that The petition deserves no merit.
petitioner is entitled to register the subject land under her name. Under the peculiar
circumstances of this case, wherein petitioner’s predecessor-in-interest unexpectedly P.D. 1529, otherwise known as Property Registration Decree, governs the original
and unjustifiably continued to be in physical possession of the subject property after the registration proceedings of unregistered land. The subject application for original
sale thereof to petitioner, the latter must be deemed to be in possession and occupation registration was filed pursuant to Sec. 14(1) of PD 1529, which provides the condition
thereof through her predecessor-in-interest. Under the Public Land Act and Presidential necessary for registration. Thus:
Decree No. 1529, the period of possession of an applicant’s predecessor-in-interest
benefits and is credited in favor of the applicant.
SEC 14. Who may apply.—The following persons may file in the proper Court of First
Instance an application for registration of title to land, whether personally or through
II. their duly authorized representatives:

Moreover, petitioner was denied actual possession of the subject land by circumstances (1) Those who by themselves or through their predecessors-in-interest have been in
amounting to a fortuitous event. By express provision of Sec. 48(b) of the Public Land open, continuous, exclusive and notorious possession and occupation of alienable and
Act, such fortuitous event does not affect her vested right to register the property under disposable lands of the public domain under a bona fide claim of ownership since June
her name. 12, 1945, or earlier.(Emphasis supplied)

III. Based on these legal parameters, applicants for registration of title under Section 14(1)
must sufficiently establish: (1) that the subject land forms part of the disposable and
The Court of Appeals likewise seriously erred and ruled contrary to the law and to the alienable lands of the public domain; (2) that the applicant and his predecessors-in-
evidence in not finding that petitioner’s predecessor-in-interest, respondent Felicidad interest have been in open, continuous, exclusive and notorious possession and
Mardo, had possession and occupation of the subject parcel of land under a bona fide occupation of the same; and (3) that it is under a bona fide claim of ownership since June
claim of ownership since June 12, 1945, or earlier. 12, 1945 or earlier.4

IV. The CA denied the application on the issue of open, continuous, exclusive, and notorious
possession and occupation of the subject land. It was of the view that she could not have
complied with the requirement of possession and occupation under Sec. 14 (1) of P.D.
No. 1529 considering that she had admitted that it was not physically turned over to her.
As she was not in actual and physical possession, she could not have exercised any acts of already sold a portion thereof to her (petitioner). By virtue of the deed of sale, petitioner
dominion over the subject property which was essential to the requirement of insists that she is considered to be the real owner of the subject parcel of land.
possession and occupation contemplated under Sec. 14 (1) of P.D. No. 1529.
The Court finds no merit in petitioner’s argument. It is settled in this jurisdiction that the
A more important consideration, however, is that the subject land is already registered issue of the validity of title can only be assailed in an action expressly instituted for such
under OCT No. OP-1840 (Patent No. 042118-03-6111) of the Registry of Deeds of Cavite, purpose.9 A certificate of title cannot be attacked collaterally. This rule is provided under
under the name of respondent Felicidad Gonzales. Section 48 of PD 1529 which states that:

In the case of Republic vs. Umali,5 this Court ruled that once a patent is registered and the SEC. 48. Certificate not subject to collateral attack. ― A certificate of title shall not be
corresponding certificate of title is issued, the land ceases to be part of public domain subject to collateral attack. It cannot be altered, modified, or canceled except in a direct
and becomes private property over which the Director of Lands has neither control nor proceeding in accordance with law. (Emphasis supplied)
jurisdiction. A public land patent, when registered in the corresponding Register of
Deeds, is a veritable Torrens title, and becomes as indefeasible upon the expiration of In Lagrosa v. Court of Appeals,10 it was stated that it is a well-known doctrine that the
one (1) year from the date of issuance thereof. Said title, like one issued pursuant to a issue as to whether title was procured by falsification or fraud as advanced by petitioner
judicial decree, is subject to review within one (1) year from the date of the issuance of can only be raised in an action expressly instituted for the purpose. A Torrens title can be
the patent. This rule is embodied in Section 103 of PD 1529, which provides that: attacked only for fraud, within one year after the date of the issuance of the decree of
registration. Such attack must be direct, and not by a collateral proceeding. The title
Section 103. Certificates of title pursuant to patents. – Whenever public land is by the represented by the certificate cannot be changed, altered, modified, enlarged, or
Government alienated, granted or conveyed to any person, the same shall be brought diminished in a collateral proceeding.
forthwith under the operation of this Decree. x x x After due registration and issuance of
the certificate of title, such land shall be deemed to be registered land to all intents and In this case, the petitioner is contesting the indefeasibility of title on the ground of fraud
purposes under this Decree. (Emphasis supplied) and misrepresentation. Applying the abovementioned doctrine, even assuming that the
petitioner’s allegations are true, the same are considered as collateral attacks, and such
Accordingly, respondent’s registered patent in the corresponding Registry of Deeds is a must be raised in an action expressly instituted for such purpose and in a proper
veritable Torrens title and becomes as indefeasible as a Torrens title upon the expiration proceeding.
of one (1) year from the date of its issuance.6
Thus, in Carvajal v. Court of Appeals,11 it was ruled that an application for registration of
For said reason, the order of the RTC directing the Administrator of LRA to issue a an already titled land constitutes a collateral attack on the existing title. The title may be
corresponding decree in petitioner’s name is null and void. A land registration court has challenged only in a proceeding for that purpose, not in an application for registration of
no jurisdiction to order the registration of land already decreed in the name of another in a land already registered in the name of another person. After one year from its
an earlier land registration case. A second decree for the same land would be null and registration, the title is incontrovertible and is no longer open to review.
void, since the principle behind the original registration is to register a parcel of land
only once.7 Remedy of the petitioner is to file a separate proceeding such as an action for specific
performance or for reconveyance
Verily, once a title is registered, as a consequence either of judicial or administrative
proceedings, the owner may rest secure, without the necessity of waiting in the portals of Petitioner further argues that considering the registration of the said land under
the court sitting in the mirador de su casa to avoid the possibility of losing his land. 8 The respondent’s name was fraudulently secured, in order to avoid multiplicity of suits and
certificate of title cannot be defeated by adverse, open and notorious possession. Neither to put an end to the long pending dispute between the parties, the courts below should
can it be defeated by prescription. As provided under Sec. 47 of PD 1529, no title to have ordered the reconveyance of the subject land to her as its rightful owner.
registered land in derogation of the title of the registered owner shall be acquired by
prescription or adverse possession.
Petitioner advances the theory that by virtue of the fraudulent registration of a subject
property, respondent is a trustee of an implied trust for her benefit, being the real owner
A Certificate of Title Not of the subject property, as she had validly acquired the same from respondent through
Subject to Collateral Attack an absolute deed of sale.

Petitioner argued that the rule on indefeasibility of title does not attach to titles secured Petitioner’s argument fails to persuade. The issue of fraudulent alienation raised in the
by fraud and misrepresentation. In this case, she alleged that the respondent second application for registration of the subject property is collateral attack which
fraudulently registered the subject property under her name after she (respondent) had should be directly raised in a separate proceeding filed for such purpose. It cannot be
entertained in this proceeding. In several cases, the Court has ruled that an attack is SO ORDERED.
indirect or collateral when, in an action to obtain a different relief, an attack on the
judgment or proceeding is nevertheless made as an incident thereof. 12

The RTC was, thus, correct in denying petitioner’s "Motion for Leave to File
Supplemental Pleading and to Admit Attached Supplemental Complaint For
Reconveyance." Allowing it would not have been permissible because the application for
original registration of title over a parcel of land already registered is a collateral attack
itself. It is settled that an application for registration of a parcel of land already covered
by a Torrens title is actually a collateral attack, not permitted under the principle of
indefeasibility of a Torrens title. 13

Registration, however, does not deprive an aggrieved party of a remedy in law. What
cannot be collaterally attacked is the certificate of title and not the title or ownership
which is represented by such certificate. Ownership is different from a certificate of title.
The fact that a person was able to secure a title in his name did not operate to vest
ownership upon him of the subject land. Registration of a piece of land under the Torrens
System does not create or vest title, because it is not a mode of acquiring ownership.

A certificate of title is merely an evidence of ownership or title over the particular

property described therein.1âwphi1 It cannot be used to protect a usurper from the true
owner; nor can it be used as a shield for the commission of fraud: neither does it permit
one to enrich himself at the expense of others. Its issuance in favor of a particular person
does not foreclose the possibility that the real prope1iy may be co-owned with persons
not named in the certificate, or that it may be held in trust for another person by the
registered owner.14

The remedy of the petitioner is to file a separate proceeding or action to protect her
alleged interest. As she claimed that she bought the subject property for value from the
respondent as evidenced by a deed of sale, she can file an action for specific performance
to compel the respondent to comply with her obligation in the alleged deed of sale
and/or an action for reconveyance of the property. She can also file an action for
rescission. Needless to state, petitioner must prove her entitlement because the
respondent claims that the sale was falsified.

Reconveyance is based on Section 55 of Act No. 496, as amended by Act No. 3322, which
states that in all cases of registration procured by fraud the owner may pursue all his
legal and equitable remedies against the parties to such fraud, without prejudice,
however, to the rights of any innocent holder for value of a certificate of title. 15 It is an
action in personam available to a person whose property has been wrongfully registered
under the Torrens system in another's name.16 It does not seek to set aside the decree
but, respecting it as incontrovertible and no longer open to review, seeks to transfer or
reconvey the land from the registered owner to the rightful owner. 17 Reconveyance is
always available as long as the property has not passed to an innocent third person for
value.18

WHEREFORE, the petition is hereby DENIED, without prejudice to any remedial action
by the petitioner to protect her claimed interest.
G.R. No. 178411 June 23, 2010 On March 30, 1999, the Office of the Sangguniang Barangay of Vitalez passed Resolution
No. 08, series of 199910seeking assistance from the City Government of Parañ aque for the
OFFICE OF THE CITY MAYOR OF PARAÑAQUE CITY, OFFICE OF THE CITY construction of an access road along Cut-cut Creek located in the said barangay. The
ADMINISTRATOR OF PARAÑAQUE CITY, OFFICE OF THE CITY ENGINEER OF proposed road, projected to be eight (8) meters wide and sixty (60) meters long, will run
PARAÑAQUE CITY, OFFICE OF THE CITY PLANNING AND DEVELOPMENT from Urma Drive to the main road of Vitalez Compound 11 traversing the lot occupied by
COORDINATOR, OFFICE OF THE BARANGAY CAPTAIN AND SANGGUNIANG the respondents. When the city government advised all the affected residents to vacate
PAMBARANGAY OF BARANGAY VITALEZ, PARAÑAQUE CITY, TERESITA A. the said area, respondents immediately registered their opposition thereto. As a result,
GATCHALIAN, ENRICO R. ESGUERRA, ERNESTO T. PRACALE, JR., MANUEL M. the road project was temporarily suspended.12
ARGOTE, CONRADO M. CANLAS, JOSEPHINE S. DAUIGOY, ALLAN L. GONZALES,
ESTER C. ASEHAN, MANUEL A. FUENTES, and MYRNA P. ROSALES, Petitioners, In January 2003, however, respondents were surprised when several officials from the
vs. barangay and the city planning office proceeded to cut eight (8) coconut trees planted on
MARIO D. EBIO AND HIS CHILDREN/HEIRS namely, ARTURO V. EBIO, EDUARDO V. the said lot. Respondents filed letter-complaints before the Regional Director of the
EBIO, RENATO V. EBIO, LOURDES E. MAGTANGOB, MILA V. EBIO, and ARNEL V. Bureau of Lands, the Department of Interior and Local Government and the Office of the
EBIO, Respondents. Vice Mayor.13 On June 29, 2003, the Sangguniang Barangay of Vitalez held a meeting to
discuss the construction of the proposed road. In the said meeting, respondents asserted
DECISION their opposition to the proposed project and their claim of ownership over the affected
property.14 On November 14, 2003, respondents attended another meeting with officials
from the city government, but no definite agreement was reached by and among the
VILLARAMA, JR., J.: parties.15

Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil On March 28, 2005, City Administrator Noli Aldip sent a letter to the respondents
Procedure, as amended, assailing the January 31, 2007 Decision 1 and June 8, 2007 ordering them to vacate the area within the next thirty (30) days, or be physically evicted
Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 91350 allegedly for being from the said property.16 Respondents sent a letter to the Office of the City Administrator
contrary to law and jurisprudence. The CA had reversed the Order 3 of the Regional Trial asserting, in sum, their claim over the subject property and expressing intent for a
Court (RTC) of Parañ aque City, Branch 196, issued on April 29, 2005 in Civil Case No. 05- further dialogue.17 The request remained unheeded.1avvphi1
0155.
Threatened of being evicted, respondents went to the RTC of Parañ aque City on April 21,
Below are the facts. 2005 and applied for a writ of preliminary injunction against petitioners. 18 In the course
of the proceedings, respondents admitted before the trial court that they have a pending
Respondents claim that they are the absolute owners of a parcel of land consisting of 406 application for the issuance of a sales patent before the Department of Environment and
square meters, more or less, located at 9781 Vitalez Compound in Barangay Vitalez, Natural Resources (DENR).19
Parañ aque City and covered by Tax Declaration Nos. 01027 and 01472 in the name of
respondent Mario D. Ebio. Said land was an accretion of Cut-cut creek. Respondents On April 29, 2005, the RTC issued an Order20 denying the petition for lack of merit. The
assert that the original occupant and possessor of the said parcel of land was their great trial court reasoned that respondents were not able to prove successfully that they have
grandfather, Jose Vitalez. Sometime in 1930, Jose gave the land to his son, Pedro Vitalez. an established right to the property since they have not instituted an action for
From then on, Pedro continuously and exclusively occupied and possessed the said lot. In confirmation of title and their application for sales patent has not yet been granted.
1966, after executing an affidavit declaring possession and occupancy, 4 Pedro was able to Additionally, they failed to implead the Republic of the Philippines, which is an
obtain a tax declaration over the said property in his name. 5 Since then, respondents indispensable party.
have been religiously paying real property taxes for the said property. 6
Respondents moved for reconsideration, but the same was denied. 21
Meanwhile, in 1961, respondent Mario Ebio married Pedro’s daughter, Zenaida. Upon
Pedro’s advice, the couple established their home on the said lot. In April 1964 and in
October 1971, Mario Ebio secured building permits from the Parañ aque municipal office Aggrieved, respondents elevated the matter to the Court of Appeals. On January 31, 2007,
for the construction of their house within the said compound. 7 On April 21, 1987, Pedro the Court of Appeals issued its Decision in favor of the respondents. According to the
executed a notarized Transfer of Rights 8 ceding his claim over the entire parcel of land in Court of Appeals--
favor of Mario Ebio. Subsequently, the tax declarations under Pedro’s name were
cancelled and new ones were issued in Mario Ebio’s name. 9
The issue ultimately boils down to the question of ownership of the lands adjoining xxxx
Cutcut Creek particularly Road Lot No. 8 (hereinafter RL 8) and the accreted portion
beside RL 8. In sum, We are fully convinced and so hold that the Appellants [have] amply proven their
right over the property in question.
The evidentiary records of the instant case, shows that RL 8 containing an area of 291
square meters is owned by Guaranteed Homes, Inc. covered by TCT No. S-62176. The WHEREFORE, premises considered, the instant appeal is hereby GRANTED. The
same RL 8 appears to have been donated by the Guaranteed Homes to the City challenged Order of the court a quo is REVERSED and SET ASIDE.
Government of Parañ aque on 22 March 1966 and which was accepted by the then Mayor
FLORENCIO BERNABE on 5 April 1966. There is no evidence however, when RL 8 has
been intended as a road lot. SO ORDERED.22

On the other hand, the evidentiary records reveal that PEDRO VITALEZ possessed the On June 8, 2007, the appellate court denied petitioners’ motion for reconsideration.
accreted property since 1930 per his Affidavit dated 21 March 1966 for the purpose of Hence, this petition raising the following assignment of errors:
declaring the said property for taxation purposes. The property then became the subject
of Tax Declaration No. 20134 beginning the year 1967 and the real property taxes I. WHETHER OR NOT THE DECISION AND RESOLUTION OF THE HONORABLE COURT OF
therefor had been paid for the years 1966, 1967, 1968, 1969, 1970, 1972, 1973, 1974, APPEALS THAT RESPONDENTS HAVE A RIGHT IN ESSE IS IN ACCORD WITH THE LAW
1978, 1980, 1995, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, and 2004. Sometime AND ESTABLISHED JURISPRUDENCE[;]
in 1964 and 1971, construction permits were issued in favor of Appellant MARIO EBIO
for the subject property. On 21 April 1987, PEDRO VITALEZ transferred his rights in the II. WHETHER OR NOT THE DECISION AND RESOLUTION OF THE HONORABLE COURT
accreted property to MARIO EBIO and his successors-in-interest. OF APPEALS THAT THE SUBJECT LOT IS AVAILABLE FOR ACQUISITIVE PRESCRIPTION
IS IN ACCORD WITH THE LAW AND ESTABLISHED JURISPRUDENCE[;] AND
Applying [Article 457 of the Civil Code considering] the foregoing documentary evidence,
it could be concluded that Guaranteed Homes is the owner of the accreted property III. WHETHER OR NOT THE STATE IS AN INDISPENSABLE PARTY TO THE COMPLAINT
considering its ownership of the adjoining RL 8 to which the accretion attached. … FILED BY RESPONDENTS IN THE LOWER COURT.23
However, this is without the application of the provisions of the Civil Code on acquisitive
prescription which is likewise applicable in the instant case.
The issues may be narrowed down into two (2): procedurally, whether the State is an
indispensable party to respondents’ action for prohibitory injunction; and substantively,
xxxx whether the character of respondents’ possession and occupation of the subject property
entitles them to avail of the relief of prohibitory injunction.
The subject of acquisitive prescription in the instant case is the accreted portion which
[was] duly proven by the Appellants. It is clear that since 1930, Appellants together with The petition is without merit.
their predecessor-in-interest, PEDRO VITALEZ[,] have been in exclusive possession of
the subject property and starting 1964 had introduced improvements thereon as
evidenced by their construction permits. Thus, even by extraordinary acquisitive An action for injunction is brought specifically to restrain or command the performance
prescription[,] Appellants have acquired ownership of the property in question since of an act.24 It is distinct from the ancillary remedy of preliminary injunction, which
1930 even if the adjoining RL 8 was subsequently registered in the name of Guaranteed cannot exist except only as part or as an incident to an independent action or proceeding.
Homes. x x x. Moreover, in an action for injunction, the auxiliary remedy of a preliminary prohibitory
or mandatory injunction may issue.25
xxxx
In the case at bar, respondents filed an action for injunction to prevent the local
government of Parañ aque City from proceeding with the construction of an access road
Further, it was only in 1978 that Guaranteed Homes was able to have RL 8 registered in that will traverse through a parcel of land which they claim is owned by them by virtue of
its name, which is almost fifty years from the time PEDRO VITALEZ occupied the acquisitive prescription.
adjoining accreted property in 1930. x x x.
Petitioners, however, argue that since the creek, being a tributary of the river, is
xxxx classified as part of the public domain, any land that may have formed along its banks
through time should also be considered as part of the public domain. And respondents
We likewise note the continuous payment of real property taxes of Appellants which should have included the State as it is an indispensable party to the action.
bolster their right over the subject property. x x x.
We do not agree. We also find that the character of possession and ownership by the respondents over the
contested land entitles them to the avails of the action.
It is an uncontested fact that the subject land was formed from the alluvial deposits that
have gradually settled along the banks of Cut-cut creek. This being the case, the law that A right in esse means a clear and unmistakable right. 34 A party seeking to avail of an
governs ownership over the accreted portion is Article 84 of the Spanish Law of Waters injunctive relief must prove that he or she possesses a right in esse or one that is actual
of 1866, which remains in effect,26 in relation to Article 457 of the Civil Code. or existing.35 It should not be contingent, abstract, or future rights, or one which may
never arise.36
Article 84 of the Spanish Law of Waters of 1866 specifically covers ownership over
alluvial deposits along the banks of a creek. It reads: In the case at bar, respondents assert that their predecessor-in-interest, Pedro Vitalez,
had occupied and possessed the subject lot as early as 1930. In 1964, respondent Mario
ART. 84. Accretions deposited gradually upon lands contiguous to creeks, streams, rivers, Ebio secured a permit from the local government of Parañ aque for the construction of
and lakes, by accessions or sediments from the waters thereof, belong to the owners of their family dwelling on the said lot. In 1966, Pedro executed an affidavit of possession
such lands.27 and occupancy allowing him to declare the property in his name for taxation purposes.
Curiously, it was also in 1966 when Guaranteed Homes, Inc., the registered owner of
Road Lot No. 8 (RL 8) which adjoins the land occupied by the respondents, donated RL 8
Interestingly, Article 457 of the Civil Code states: to the local government of Parañ aque.

Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion which From these findings of fact by both the trial court and the Court of Appeals, only one
they gradually receive from the effects of the current of the waters. conclusion can be made: that for more than thirty (30) years, neither Guaranteed Homes,
Inc. nor the local government of Parañ aque in its corporate or private capacity sought to
It is therefore explicit from the foregoing provisions that alluvial deposits along the register the accreted portion. Undoubtedly, respondents are deemed to have acquired
banks of a creek do not form part of the public domain as the alluvial property ownership over the subject property through prescription. Respondents can assert such
automatically belongs to the owner of the estate to which it may have been added. The right despite the fact that they have yet to register their title over the said lot. It must be
only restriction provided for by law is that the owner of the adjoining property must remembered that the purpose of land registration is not the acquisition of lands, but only
register the same under the Torrens system; otherwise, the alluvial property may be the registration of title which the applicant already possessed over the land. Registration
subject to acquisition through prescription by third persons. 28 was never intended as a means of acquiring ownership. 37 A decree of registration merely
confirms, but does not confer, ownership. 38
In contrast, properties of public dominion cannot be acquired by prescription. No matter
how long the possession of the properties has been, there can be no prescription against Did the filing of a sales patent application by the respondents, which remains pending
the State regarding property of public domain.29 Even a city or municipality cannot before the DENR, estop them from filing an injunction suit?
acquire them by prescription as against the State. 30
We answer in the negative.
Hence, while it is true that a creek is a property of public dominion, 31 the land which is
formed by the gradual and imperceptible accumulation of sediments along its banks does Confirmation of an imperfect title over a parcel of land may be done either through
not form part of the public domain by clear provision of law. judicial proceedings or through administrative process. In the instant case, respondents
admitted that they opted to confirm their title over the property administratively by
Moreover, an indispensable party is one whose interest in the controversy is such that a filing an application for sales patent.
final decree would necessarily affect his/her right, so that the court cannot proceed
without their presence.32 In contrast, a necessary party is one whose presence in the Respondents’ application for sales patent, however, should not be used to prejudice or
proceedings is necessary to adjudicate the whole controversy but whose interest is derogate what may be deemed as their vested right over the subject property. The sales
separable such that a final decree can be made in their absence without affecting them. 33 patent application should instead be considered as a mere superfluity particularly since
ownership over the land, which they seek to buy from the State, is already vested upon
In the instant case, the action for prohibition seeks to enjoin the city government of them by virtue of acquisitive prescription. Moreover, the State does not have any
Parañ aque from proceeding with its implementation of the road construction project. authority to convey a property through the issuance of a grant or a patent if the land is
The State is neither a necessary nor an indispensable party to an action where no no longer a public land.39
positive act shall be required from it or where no obligation shall be imposed upon it,
such as in the case at bar. Neither would it be an indispensable party if none of its Nemo dat quod dat non habet. No one can give what he does not have. Such principle is
properties shall be divested nor any of its rights infringed. equally applicable even against a sovereign entity that is the State.
WHEREFORE, the petition is DENIED for lack of merit. The January 31, 2007 Decision, as
well as the July 8, 2007 Resolution, of the Court of Appeals in CA-G.R. SP No. 91350 are
hereby AFFIRMED.

With costs against petitioners.

SO ORDERED.