Land Tittles & Deeds and Natural Resources and Environmental Law

Cases 1.) Collado vs. CA, GR No. 107754 10/4/02 2.) La Bugal-B'laan Tribal Ass'n. Inc vs. Ramos GR No. 127882, 1/22/04 3.) Bagunu vs. Aggabao, GR No. 186487, 8/15/11 4.) Sec. of Environment & Natural Resources vs. Yap, GR No. 167707, 10/8/08 5.) Rep. vs, Heirs of Fabio, GR No. 159589, 12/ 23/08 6.) Rep. vs, Vega, GR. No. 177790 1/12/11 7.) Damo steel Corp. vs. Cabatuando, 10 SCRA 704 (1964) 8.) Rep. Vs. CA, 131 SCRA 537 9.) MIAA vs. CA, GR No. 155650, 7/20/06 10.) Espiritu vs. Mun. Council of Pozorrubio 102 Phil 869 11.) Laurel vs. Garcia, GR. No. 92013, 7/25/90 12.) Chavez vs. NHA, 530 SCRA 235 (2007) EDNA COLLADO, BERNARDINA TAWAS, JORETO C. TORRES, JOSE AMO, SERGIO L. MONTEALEGRE, VICENTE C. TORRES, JOSEPH L. NUEZ, GLORIA SERRANO, DANILO FABREGAS, FERNANDO T. TORRES, LUZ G. TUBUNGBANUA, CARIDAD T. TUTANA, JOSE C. TORRES, JR., IMELDA CAYLALUAD, ROSALIE TUTANA, NORMA ASTORIAS, MYRNA M. LANCION, NORBERTO CAMILOTE, CECILIA MACARANAS, PEDRO BRIONES, REMEDIOS BANTIGUE, DANTE L. MONTEALEGRE, AIDA T. GADON, ARMANDO T. TORRES and FIDELITO ECO, petitioners, vs. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, thru the Director of Lands, respondents, BOCKASANJO ISF AWARDEES ASSOCIATION, INC., LITA MENDOZA, MORADO PREFIDIGNO, TERESITA CRUZ and CALOMA MOISES, respondents/intervernors. DECISION The Case This Petition1[1] seeks to set aside the Decision of the Court of Appeals, 2[2] dated June 22, 1992, in CA-G.R. SP No. 25597, which declared null and void the Decision 3[3] dated January 30, 1991 of the Regional Trial Court of Antipolo, Rizal, Branch 71, in LRC No. 269-A, LRC Rec. No. N-59179, confirming the imperfect title of petitioners over a parcel of land.

The Facts

On April 25, 1985, petitioner Edna T. Collado filed with the land registration court an application for registration of a parcel of land with an approximate area of 1,200,766 square meters or 120.0766 hectares (Lot for brevity). The Lot is situated in Barangay San Isidro (formerly known as Boso-boso), Antipolo, Rizal, and covered by Survey Plan Psu-162620. Attached to the application was the technical description of the Lot as Lot Psu-162620 signed by Robert C. Pangyarihan, Officer-in-Charge of the Survey Division, Bureau of Lands, which stated, [t]his survey is inside IN-12 Mariquina Watershed. On March 24, 1986, petitioner Edna T. Collado filed an Amended Application to include additional co-applicants. 4[4] Subsequently, more applicants joined (collectively referred to as petitioners for brevity). 5[5] The Republic of the Philippines, through the Solicitor General, and the Municipality of Antipolo, through its Municipal Attorney and the Provincial Fiscal of Rizal, filed oppositions to petitioners application. In due course, the land registration court issued an order of general default against the whole world with the exception of the oppositors. Petitioners alleged that they have occupied the Lot since time immemorial. Their possession has been open, public, notorious and in the concept of owners. The Lot was surveyed in the name of Sesinando Leyva, one of their predecessors-in-interest, as early as March 22, 1902. Petitioners declared the Lot for taxation purposes and paid all the corresponding real estate taxes. According to them, there are now twenty-five co-owners in pro-indiviso shares of five hectares each. During the hearings, petitioners submitted evidence to prove that there have been nine transfers of rights among them and their predecessors-in-interest, as follows: 1. SESINANDO LEYVA was the earliest known predecessor-in-interest of the Applicants who was in actual, open, notorious and continuous possession of the property in the concept of owner. He had the property surveyed in his name on 22 March 1902 (Exhibit W and W-1 testimonies of J. Torres on 16 December 1987 and Mariano Leyva on 29 December 1987). 2. DIOSDADO LEYVA, is the son of Sesinando Leyva, who inherited the property. He had the property resurveyed in his name on May 21-28, 1928 (Exhibit X and X-1; testimony of Mariano Leyva, a son of Diosdado Leyva). 3. GREGORIO CAMANTIQUE bought the property from Diosdado Leyva before the Japanese Occupation of the Philippines during World War II. He owned and possessed the property until 1958. He declared the property for tax purposes, the latest of which was under Tax Declaration No. 7182 issued on 3 February 1957 (Exhibit I and testimony of Mariano Leyva, supra). 4. ANGELINA REYNOSO, bought the property from Gregorio Camantique by virtue of a Deed of Sale on 3 February 1958 (Exhibit H). During the ownership of the property by Angelina Reynoso, Mariano Leyva the grandson of Sesinando Leyva, the previous owner, attended to the farm. (Testimony of Mariano Leyva, supra). Angelina Reynoso declared the property in her name under Tax Declaration No. 7189 in 4 February 1958, under Tax Declaration No. 8775 on 3 August 1965, under Tax Declaration No. 16945 on 15 December 1975, and under Tax Declaration No. 03-06145 on 25 June 1978. 5. MYRNA TORRES bought the property from Angelina Reynoso on 16 October 1982 through a Deed of Sale (Exhibit G). 6. EDNA COLLADO bought the property from Myrna Torres in a Deed of Sale dated 28 April 1984 (Exhibit P-1 to P-3).

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7. Additional owners BERNARDINA TAWAS, JORETO TORRES, JOSE AMO, VICENTE TORRES and SERGIO MONTEALEGRE who bought portions of the property from Edna Collado through a Deed of Sale on 6 November 1985 (Exhibit Q to Q-3). 8. And more additional Owners JOSEPH NUNEZ, DIOSDADO ARENOS, DANILO FABREGAS, FERNANDO TORRES, LUZ TUBUNGBANUA, CARIDAD TUTANA, JOSE TORRES JR., RODRIGO TUTANA, ROSALIE TUTANA, NORMA ASTORIAS, MYRNA LANCION, CHONA MARCIANO, CECILIA MACARANAS, PEDRO BRIONES, REMEDIOS BANTIQUE, DANTE MONTEALEGRE, ARMANDO TORRES, AIDA GADON and AMELIA M. MALAPAD bought portions of the property in a Deed of Sale on 12 May 1986 (Exhibit S to S-3). 9. Co-owners DIOSDADO ARENOS, RODRIGO TUTANA, CHONA MARCIANO and AMELIA MALAPAD jointly sold their shares to new OWNERS GLORIA R. SERRANO, IMELDA CAYLALUAD, NORBERTO CAMILOTE and FIDELITO ECO through a Deed of Sale dated 18 January 1987 (Exhibit T to T-9).6[6] During the hearing on January 9, 1991, only the assistant provincial prosecutor appeared without the Solicitor General. For failure of the oppositors to present their evidence, the land registration court issued an order considering the case submitted for decision based on the evidence of the petitioners. The court later set aside the order and reset the hearing to January 14, 1991 for the presentation of the evidence of the oppositors. On this date, counsel for oppositors failed to appear again despite due notice. Hence, the court again issued an order submitting the case for decision based on the evidence of the petitioners.

The Trial Courts Ruling

After appraisal of the evidence submitted by petitioners, the land registration court held that petitioners had adduced sufficient evidence to establish their registrable rights over the Lot. Accordingly, the court rendered a decision confirming the imperfect title of petitioners. We quote the pertinent portions of the courts decision, as follows: From the evidence presented, the Court finds that from the testimony of the witnesses presented by the Applicants, the property applied for is in actual, open, public and notorious possession by the applicants and their predecessor-in-interest since time immemorial and said possession had been testified to by witnesses Jimmy Torres, Mariano Leyva, Sergio Montealegre, Jose Amo and one Chona who were all cross-examined by Counsel for Oppositor Republic of the Philippines. Evidence was likewise presented that said property was declared for taxation purposes in the names of the previous owners and the corresponding taxes were paid by the Applicants and the previous owners and said property was planted to fruit bearing trees; portions to palay and portions used for grazing purposes. To the mind of the Court, Applicants have presented sufficient evidence to establish registrable title over said property applied for by them. On the claim that the property applied for is within the Marikina Watershed, the Court can only add that all Presidential Proclamations like the Proclamation setting aside the Marikina Watershed are subject to private rights. In the case of Municipality of Santiago vs. Court of Appeals, 120 SCRA 734, 1983 private rights is proof of acquisition through (sic) among means of acquisition of public lands. In the case of Director of Lands vs. Reyes, 68 SCRA 193-195, by private rights means that applicant should show clear and convincing evidence that the property in question was acquired by applicants or their ancestors either by composition title from the Spanish government or by Possessory Information title, or any other means for the acquisition of public lands xxx (underscoring supplied). The Court believes that from the evidence presented as above stated, Applicants have acquired private rights to which the Presidential Proclamation setting aside the Marikina Watershed should be subject to such private rights. At any rate, the Court notes that evidence was presented by the applicants that as per Certification issued by the Bureau of Forest Development dated March 18, 1980, the area applied for was verified to be within the area excluded from the operation of the Marikina Watershed Lands Executive Order No. 33 dated July 26, 1904 per Proclamation No. 1283 promulgated on June 21, 1974 which established the Boso-boso Town Site Reservation, amended by Proclamation No. 1637 dated April 18, 1977 known as the Lungsod Silangan Townsite Reservation. (Exhibit K).7[7] In a motion dated April 5, 1991, received by the Solicitor General on April 6, 1991, petitioners alleged that the decision dated January 30, 1991 confirming their title had become final after the Solicitor General received a copy of the decision on February 18, 1991. Petitioners prayed that the land registration court order the Land Registration Authority to issue the necessary decree in their favor over the Lot. On April 11, 1991, the Solicitor General inquired from the Provincial Prosecutor of Rizal whether the land registration court had already rendered a decision and if so, whether the Provincial Prosecutor would recommend an appeal. However, the Provincial Prosecutor failed to answer the query. According to the Solicitor General, he received on April 23, 1991 a copy of the land registration courts decision dated January 30, 1991, and not on February 18, 1991 as alleged by petitioners in their motion. In the meantime, on May 7, 1991, the land registration court issued an order directing the Land Regulation Authority to issue the corresponding decree of registration in favor of the petitioners. On August 6, 1991, the Solicitor General filed with the Court of Appeals a Petition for Annulment of Judgment pursuant to Section 9(2) of BP Blg. 129 on the ground that there had been no clear showing that the Lot had been previously classified as alienable and disposable making it subject to private appropriation. On November 29, 1991, Bockasanjo ISF Awardees Association, Inc., an association of holders of certificates of stewardship issued by the Department of Environment and Natural Resources (DENR for brevity) under its Integrated Social Forestry Program (ISF for brevity), filed with the Court of Appeals a Motion for Leave to Intervene and to Admit Petition-In-Intervention. They likewise opposed the registration and asserted that the Lot, which is situated inside the Marikina Watershed Reservation, is inalienable. They claimed that they are the actual occupants of the Lot pursuant to the certificates of stewardship issued by the DENR under the ISF for tree planting purposes. The Court of Appeals granted the motion to intervene verbally during the preliminary conference held on April 6, 1992. During the preliminary conference, all the parties as represented by their respective counsels agreed that the only issue for resolution was whether the Lot in question is part of the public domain. 8[8]

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The Court of Appeals Ruling

In a decision dated June 22, 1992, the Court of Appeals granted the petition and declared null and void the decision dated January 30, 1991 of the land registration court. The Court of Appeals explained thus: Under the Regalian Doctrine, which is enshrined in the 1935 (Art. XIII, Sec. 1), 1973 (Art. XIV, Sec. 8), and 1987 Constitution (Art. XII, Sec. 2), all lands of the public domain belong to the State. An applicant, like the private respondents herein, for registration of a parcel of land bears the burden of overcoming the presumption that the land sought to be registered forms part of the public domain (Director of Lands vs. Aquino, 192 SCRA 296). A positive Act of government is needed to declassify a public land and to convert it into alienable or disposable land for agricultural or other purposes (Republic vs. Bacas, 176 SCRA 376). In the case at bar, the private respondents failed to present any evidence whatsoever that the land applied for as described in Psu-162620 has been segregated from the bulk of the public domain and declared by competent authority to be alienable and disposable. Worse, the technical description of Psu-162620 signed by Robert C. Pangyarihan, Officer-in-Charge, Survey Division, Bureau of Lands, which was attached to the application of private respondents, categorically stated that "This survey is inside IN-12 Mariquina Watershed." That the land in question is within the Marikina Watershed Reservation is confirmed by the Administrator of the National Land Titles and Deeds in a Report, dated March 2, 1988, submitted to the respondent Court in LR Case No. 269-A. These documents readily and effectively negate the allegation in private respondent Collados application that said parcel of land known as Psu-162620 is not covered by any form of title, nor any public land application and are not within any government reservation (Par. 8, Application; Emphasis supplied). The respondent court could not have missed the import of these vital documents which are binding upon the courts inasmuch as it is the exclusive prerogative of the Executive Department to classify public lands. They should have forewarned the respondent judge from assuming jurisdiction over the case. x x x inasmuch as the said properties applied for by petitioners are part of the public domain, it is the Director of Lands who has jurisdiction in the disposition of the same (subject to the approval of the Secretary of Natural Resources and Environment), and not the courts. x x x Even assuming that petitioners did have the said properties surveyed even before the same was declared to be part of the Busol Forest Reservation, the fact remains that it was so converted into a forest reservation, thus it is with more reason that this action must fail. Forest lands are inalienable and possession thereof, no matter how long, cannot convert the same into private property. And courts are without jurisdiction to adjudicate lands within the forest zone. (Heirs of Gumangan vs. Court of Appeals. 172 SCRA 563; Emphasis supplied). Needless to say, a final judgment may be annulled on the ground of lack of jurisdiction, fraud or that it is contrary to law (Panlilio vs. Garcia, 119 SCRA 387, 391) and a decision rendered without jurisdiction is a total nullity and may be struck down at any time (Suarez vs. Court of Appeals, 186 SCRA 339). 9[9] Hence, the instant petition.

The Issues

The issues raised by petitioners are restated as follows: I WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN REVERSING THE DECISION OF THE TRIAL COURT GRANTING THE APPLICATION OF THE PETITIONERS FOR CONFIRMATION OF TITLE; II WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN GIVING DUE COURSE TO THE PETITION FOR ANNULMENT OF JUDGMENT FILED BY THE REPUBLIC LONG AFTER THE DECISION OF THE TRIAL COURT HAD BECOME FINAL; III WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN GIVING DUE COURSE TO THE INTERVENORS PETITION FOR INTERVENTION WHICH WAS FILED OUT OF TIME OR LONG AFTER THE DECISION OF THE TRIAL COURT HAD BECOME FINAL.

The Courts Ruling

The petition is bereft of merit. First Issue: whether petitioners have registrable title over the Lot. There is no dispute that Executive Order No. 33 (EO 33 for brevity) dated July 26, 1904 10[10] established the Marikina Watershed Reservation (MWR for brevity) situated in the Municipality of Antipolo, Rizal. Petitioners even concede that the Lot, described as Lot Psu-162620, is inside the technical, literal description of the MWR. However, the main thrust of petitioners claim over the Lot is that all Presidential proclamations like the proclamation setting aside the Marikina Watershed Reservation are subject to private rights. They point out that EO 33 contains a saving clause that the reservations are subject to existing private rights, if any there be. Petitioners contend that their claim of ownership goes all the way back to 1902, when their known predecessor-in-interest, Sesinando Leyva, laid claim and ownership over the Lot. They claim that the presumption of law then prevailing under the Philippine Bill of 1902 and Public Land Act No. 926 was that the land possessed and claimed by individuals as their own are agricultural lands and therefore alienable and disposable. They conclude that private rights were vested on Sesinando Leyva before the issuance of EO 33, thus excluding the Lot from the Marikina Watershed Reservation.

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Petitioners arguments find no basis in law. The Regalian Doctrine: An Overview Under the Regalian Doctrine, all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State. 11[11] The Spaniards first introduced the doctrine to the Philippines through the Laws of the Indies and the Royal Cedulas , specifically, Law 14, Title 12, Book 4 of the Novisima Recopilacion de Leyes de las Indias 12[12] which laid the foundation that all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain. 13[13] Upon the Spanish conquest of the Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish Crown. 14[14] The Laws of the Indies were followed by the Ley Hipotecaria or the Mortgage Law of 1893. The Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as possessory claims. The Royal Decree of 1894 or the Maura Law partly amended the Mortgage Law as well as the Law of the Indies. The Maura Law was the last Spanish land law promulgated in the Philippines. It required the adjustment or registration of all agricultural lands, otherwise the lands would revert to the state. 15[15] Four years later, Spain ceded to the government of the United States all rights, interests and claims over the national territory of the Philippine Islands through the Treaty of Paris of December 10, 1898. In 1903, the United States colonial government, through the Philippine Commission, passed Act No. 926, the first Public Land Act, which was described as follows: Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It prescribed rules and regulations for the homesteading, selling and leasing of portions of the public domain of the Philippine Islands, and prescribed the terms and conditions to enable persons to perfect their titles to public lands in the Islands. It also provided for the issuance of patents to certain native settlers upon public lands, for the establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for the cancellation or confirmation of Spanish concessions and grants in the Islands. In short, the Public Land Act operated on the assumption that title to public lands in the Philippine Islands remained in the government; and that the governments title to public land sprung from the Treaty of Paris and other subsequent treaties between Spain and the United States. The term public land referred to all lands of the public domain whose title still remained in the government and are thrown open to private appropriation and settlement, and excluded the patrimonial property of the government and the friar lands. 16[16] Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land Act No. 926, mere possession by private individuals of lands creates the legal presumption that the lands are alienable and disposable. Act 2874, the second Public Land Act, superseded Act No. 926 in 1919. After the passage of the 1935 Constitution, Commonwealth Act No. 141 (CA 141 for brevity) amended Act 2874 in 1936. CA 141, as amended, remains to this day as the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands.17[17] In the meantime, in order to establish a system of registration by which recorded title becomes absolute, indefeasible and imprescriptible, the legislature passed Act 496, otherwise known as the Land Registration Act, which took effect on February 1, 1903. Act 496 placed all registered lands in the Philippines under the Torrens system. 18[18] The Torrens system requires the government to issue a certificate of title stating that the person named in the title is the owner of the property described therein, subject to liens and encumbrances annotated on the title or reserved by law. The certificate of title is indefeasible and imprescriptible and all claims to the parcel of land are quieted upon issuance of the certificate. 19[19] PD 1529, known as the Property Registration Decree enacted on June 11, 1978, 20[20] amended and updated Act 496. The 1935, 1973, 1987 Philippine Constitutions The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the state, in lieu of the King, as the owner of all lands and waters of the public domain.21[21] Justice Reynato S. Puno, in his separate opinion in Cruz vs. Secretary of Environment and Natural Resources, 22[22] explained thus: One of the fixed and dominating objectives of the 1935 Constitutional Convention was the nationalization and conservation of the natural resources of the country. There was an overwhelming sentiment in the Convention in favor of the principle of state ownership of natural resources and the adoption of the Regalian doctrine. State ownership of natural resources was seen as a necessary starting point to secure recognition of the states power to control their disposition, exploitation, development, or utilization. The delegates to the Constitutional Convention very well knew that the concept of State ownership of land and natural resources was introduced by the Spaniards, however, they were not certain whether it was continued and applied by the Americans. To remove all doubts, the Convention approved the provision in the Constitution affirming the Regalian doctrine. Thus, Section 1, Article XIII23[23] of the 1935 Constitution, on Conservation and Utilization of Natural Resources barred the alienation of all natural resources except public agricultural lands, which were the only natural resources the State could alienate. The 1973 Constitution reiterated the Regalian doctrine in Section 8, Article XIV24[24] on the National Economy and the Patrimony of the Nation. The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article XII 25[25] on National Economy and Patrimony. Both the 1935 and 1973 Constitutions prohibited the alienation of all natural resources except agricultural lands of the public domain. The 1987 Constitution readopted this policy. Indeed, all lands of the public domain as well as all natural resources enumerated in the Philippine Constitution belong to the State.
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Watershed Reservation is a Natural Resource The term natural resource includes not only timber, gas, oil coal, minerals, lakes, and submerged lands, but also, features which supply a human need and contribute to the health, welfare, and benefit of a community, and are essential to the well-being thereof and proper enjoyment of property devoted to park and recreational purposes. 26[26] In Sta. Rosa Realty Development Corp. vs. Court of Appeals, et al .,27[27] the Court had occasion to discourse on watershed areas. The Court resolved the issue of whether the parcel of land which the Department of Environment and Natural Resources had assessed to be a watershed area is exempt from the coverage of RA No. 6657 or the Comprehensive Agrarian Reform Law (CARL for brevity). 28[28] The Court defined watershed as an area drained by a river and its tributaries and enclosed by a boundary or divide which separates it from adjacent watersheds. However, the Court also recognized that: The definition does not exactly depict the complexities of a watershed. The most important product of a watershed is water which is one of the most important human necessit(ies). The protection of watershed ensures an adequate supply of water for future generations and the control of flashfloods that not only damage property but also cause loss of lives. Protection of watersheds is an intergenerational responsibility that needs to be answered now. Article 67 of the Water Code of the Philippines (PD 1067) provides: Art. 67. Any watershed or any area of land adjacent to any surface water or overlying any ground water may be declared by the Department of Natural Resources as a protected area. Rules and Regulations may be promulgated by such Department to prohibit or control such activities by the owners or occupants thereof within the protected area which may damage or cause the deterioration of the surface water or ground water or interfere with the investigation, use, control, protection, management or administration of such waters. The Court in Sta. Rosa Realty also recognized the need to protect watershed areas and took note of the report of the Ecosystems Research and Development Bureau (ERDB), a research arm of the DENR, regarding the environmental assessment of the Casile and Kabanga-an river watersheds involved in that case. That report concluded as follows: The Casile barangay covered by CLOA in question is situated in the heartland of both watersheds. Considering the barangays proximity to the Matangtubig waterworks, the activities of the farmers which are in conflict with proper soil and water conservation practices jeopardize and endanger the vital waterworks. Degradation of the land would have double edge detrimental effects. On the Casile side this would mean direct siltation of the Mangumit river which drains to the water impounding reservoir below. On the Kabanga-an side, this would mean destruction of forest covers which acts as recharged areas of the Matangtubig springs. Considering that the people have little if no direct interest in the protection of the Matangtubig structures they couldnt care less even if it would be destroyed. The Casile and Kabanga-an watersheds can be considered a most vital life support system to thousands of inhabitants directly and indirectly affected by it. From these watersheds come the natural God-given precious resource water. x x x Clearing and tilling of the lands are totally inconsistent with sound watershed management. More so, the introduction of earth disturbing activities like road building and erection of permanent infrastructures. Unless the pernicious agricultural activities of the Casile farmers are immediately stopped, it would not be long before these watersheds would cease to be of value. The impact of watershed degradation threatens the livelihood of thousands of people dependent upon it. Toward this, we hope that an acceptable comprehensive watershed development policy and program be immediately formulated and implemented before the irreversible damage finally happens. The Court remanded the case to the Department of Agriculture and Adjudication Board or DARAB to re-evaluate and determine the nature of the parcels of land involved in order to resolve the issue of its coverage by the CARL. Sta. Rosa Realty gives us a glimpse of the dangers posed by the misuse of natural resources such as watershed reservations which are akin to forest zones. Population growth and industrialization have taken a heavy toll on the environment. Environmental degradation from unchecked human activities could wreak havoc on the lives of present and future generations. Hence, by constitutional fiat, natural resources remain to this day inalienable properties of the State. Viewed under this legal and factual backdrop, did petitioners acquire, as they vigorously argue, private rights over the parcel of land prior to the issuance of EO 33 segregating the same as a watershed reservation? The answer is in the negative. First. An applicant for confirmation of imperfect title bears the burden of proving that he meets the requirements of Section 48 of CA 141, as amended. He must overcome the presumption that the land he is applying for is part of the public domain and that he has an interest therein sufficient to warrant registration in his name arising from an imperfect title. An imperfect title may have been derived from old Spanish grants such as a titulo real or royal grant, a concession especial or special grant, a composicion con el estado or adjustment title, or a titulo de compra or title through purchase. 29[29] Or, that he has had continuous, open and notorious possession and occupation of agricultural lands of the public domain under a bona fide claim of ownership for at least thirty years preceding the filing of his application as provided by Section 48 (b) CA 141. Originally, Section 48(b) of CA 141 provided for possession and occupation of lands of the public domain since July 26, 1894. This was superseded by RA 1942 which provided for a simple thirty-year prescriptive period of occupation by an applicant for judicial confirmation of an imperfect title. The same, however, has already been amended by Presidential Decree No. 1073, approved on January 25, 1977, the law prevailing at the time petitioners application for registration was filed on April 25, 1985. 30[30] As amended, Section 48 (b) now reads: (b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title, except when prevented by wars or force majeure. Those shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. Interpreting Section 48 (b) of CA 141, the Court stated that the Public Land Act requires that the applicant must prove the following: (a) that the land is alienable public land and (b) that his open, continuous, exclusive and notorious possession and occupation of the same must either be since time immemorial or for the period prescribed in the Public Land Act. When the conditions set by law are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a government grant, without the necessity of a certificate of title being issued. 31[31]
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Petitioners do not claim to have documentary title over the Lot. Their right to register the Lot is predicated mainly upon continuous possession since 1902. Clearly, petitioners were unable to acquire a valid and enforceable right or title because of the failure to complete the required period of possession, whether under the original Section 48 (b) of CA 141 prior to the issuance of EO 33, or under the amendment by RA 1942 and PD 1073. There is no proof that prior to the issuance of EO 33 in 1904, petitioners had acquired ownership or title to the Lot either by deed or by any other mode of acquisition from the State, as for instance by acquisitive prescription. As of 1904, Sesinando Leyva had only been in possession for two years. Verily, petitioners have not possessed the parcel of land in the manner and for the number of years required by law for the confirmation of imperfect title. Second, assuming that the Lot was alienable and disposable land prior to the issuance of EO 33 in 1904, EO 33 reserved the Lot as a watershed. Since then, the Lot became non-disposable and inalienable public land. At the time petitioners filed their application on April 25, 1985, the Lot has been reserved as a watershed under EO 33 for 81 years prior to the filing of petitioners application. The period of occupancy after the issuance of EO 33 in 1904 could no longer be counted because as a watershed reservation, the Lot was no longer susceptible of occupancy, disposition, conveyance or alienation. Section 48 (b) of CA 141, as amended, applies exclusively to alienable and disposable public agricultural land. Forest lands, including watershed reservations, are excluded. It is axiomatic that the possession of forest lands or other inalienable public lands cannot ripen into private ownership. In Municipality of Santiago, Isabela vs. Court of Appeals,32[32] the Court declared that inalienable public lands x x x cannot be acquired by acquisitive prescription. Prescription, both acquisitive and extinctive, does not run against the State. The possession of public land, however long the period may have extended, never confers title thereto upon the possessor because the statute of limitations with regard to public land does not operate against the State, unless the occupant can prove possession and occupation of the same under claim of ownership for the required number of years to constitute a grant from the State. Third, Gordula vs. Court of Appeals33[33] is in point. In Gordula, petitioners did not contest the nature of the land. They admitted that the land lies in the heart of the CalirayaLumot River Forest Reserve, which Proclamation No. 573 classified as inalienable. The petitioners in Gordula contended, however, that Proclamation No. 573 itself recognizes private rights of landowners prior to the reservation. They claim to have established their private rights to the subject land. The Court ruled: We do not agree. No public land can be acquired by private persons without any grant, express or implied from the government; it is indispensable that there be a showing of a title from the state. The facts show that petitioner Gordula did not acquire title to the subject land prior to its reservation under Proclamation No. 573. He filed his application for free patent only in January, 1973, more than three (3) years after the issuance of Proclamation No. 573 in June, 1969. At that time, the land, as part of the Caliraya-Lumot River Forest Reserve, was no longer open to private ownership as it has been classified as public forest reserve for the public good. Nonetheless, petitioners insist that the term, private rights, in Proclamation No. 573, should not be interpreted as requiring a title. They opine that it suffices if the claimant had occupied and cultivated the property for so many number of years, declared the land for taxation purposes, [paid] the corresponding real estate taxes [which are] accepted by the government, and [his] occupancy and possession [is] continuous, open and unmolested and recognized by the government. Prescinding from this premise, petitioners urge that the 25-year possession by petitioner Gordula from 1944 to 1969, albeit five (5) years short of the 30-year possession required under Commonwealth Act (C.A.) No. 141, as amended, is enough to vest upon petitioner Gordula the private rights recognized and respected in Proclamation No. 573. The case law does not support this submission. In Director of Lands vs. Reyes, we held that a settler claiming the protection of private rights to exclude his land from a military or forest reservation must show x x x by clear and convincing evidence that the property in question was acquired by [any] x x x means for the acquisition of public lands. In fine, one claiming private rights must prove that he has complied with C.A. No. 141, as amended, otherwise known as the Public Land Act, which prescribes the substantive as well as the procedural requirements for acquisition of public lands. This law requires at least thirty (30) years of open, continuous, exclusive and notorious possession and possession of agricultural lands of the public domain, under a bona fide claim of acquisition, immediately preceding the filing of the application for free patent. The rationale for the 30-year period lies in the presumption that the land applied for pertains to the State, and that the occupants and/or possessors claim an interest therein only by virtue of their imperfect title or continuous, open and notorious possession. Next, petitioners argue that assuming no private rights had attached to the Lot prior to EO 33 in 1904, the President of the Philippines had subsequently segregated the Lot from the public domain and made the Lot alienable and disposable when he issued Proclamation No. 1283 on June 21, 1974. Petitioners contend that Proclamation No. 1283 expressly excluded an area of 3,780 hectares from the MWR and made the area part of the Boso-boso Townsite Reservation. Petitioners assert that Lot Psu-162620 is a small part of this excluded town site area. Petitioners further contend that town sites are considered alienable and disposable under CA 141. Proclamation No. 1283 reads thus: PROCLAMATION NO. 1283 EXCLUDING FROM THE OPERATION EXECUTIVE ORDER NO. 33, DATED JULY 26, 1904, AS AMENDED BY EXECUTIVE ORDERS NOS. 14 AND 16, BOTH SERIES OF 1915, WHICH ESTABLISHED THE WATERSHED RESERVATION SITUATED IN THE MUNICIPALITY OF ANTIPOLO, PROVINCE OF RIZAL, ISLAND OF LUZON, A CERTAIN PORTION OF THE LAND EMBRACED THEREIN AND RESERVING THE SAME, TOGETHER WITH THE ADJACENT PARCEL OF LAND OF THE PUBLIC DOMAIN, FOR TOWNSITE PURPOSES UNDER THE PROVISIONS OF CHAPTER XI OF THE PUBLIC LAND ACT. Upon recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the authority vested in me by law, I, FERDINAND E. MARCOS, President of the Philippines, do hereby, exclude from the operation of Executive Order No. 33 dated July 26, 1904, as amended by Executive Orders Nos. 14 and 16, both series of 1915, which established the Watershed Reservation situated in the Municipality of Antipolo, Province of Rizal, Island of Luzon, certain portions of land embraced therein and reserve the same, together with the adjacent parcel of land of the public domain, for townsite purposes under the provisions of Chapter XI of the Public Land Act, subject to private rights, if any there be, and to future subdivision survey in accordance with the development plan to be prepared and approved by the Department of Local Government and Community Development, which parcels are more particularly described as follows: Lot A (Part of Watershed Reservation) A parcel of land (Lot A of Proposed Poor Mans Baguio, being a portion of the Marikina Watershed, IN-2), situated in the municipality of Antipolo, Province of Rizal, Island of Luzon, beginning at a point marked 1 on sketch plan, being N-74-30 E, 8480.00 meters more or less, from BLLM 1, Antipolo, Rizal; thence N 33 28 W 1575.00 m. to point 2; thence N 40 26 W 1538.50 m. to point 3; thence N 30 50W 503.17 m. to point 4; thence N 75 02 W 704.33 m. to point 5; thence N 14 18 W 1399.39 m. to point 6; thence N 43 25 W 477.04 m. to point 7; thence N 71 38 W 458.36 m. to point 8; thence N 31 05 W 1025.00 m. to point 9; thence Due North 490.38 m. to point 10; thence Due North 1075.00 m. to point 11; thence Due East 1000.00 m. to point 12; thence Due East 1000.00 m. to point 13; thence Due East 1000.00 m. to point 14; thence Due East 1000.00 m. to point 15; thence Due East 1000.00 m. to point 16; thence Due East 1000.00 m. to point 17; thence Due East 1075.00 m. to point 18;
32 33

thence Due South 1000.00 m. to point 19; thence Due South 1000.00 m. to point 20; thence Due South 1000.00 m. to point 21; thence Due South 1000.00 m. to point 22; thence Due South 1000.00 m. to point 23; thence Due South 1000.00 m. to point 24; thence Due South 1075.00 m. to point 25; thence Due West 1000.00 m. to point 26; thence Due West 1000.00 m. to point 27; thence Due West 636.56 m. to point of beginning. Containing an area of three thousand seven hundred eighty (3,780) Hectares, more or less. Lot B (Alienable and Disposable Land) A parcel of land (Lot B of Proposed Poor Mans Baguio, being a portion of alienable and disposable portion of public domain) situated in the municipality of Antipolo, Province of Rizal, Island of Luzon. Beginning at a point marked 1 on sketch plan being N 74 30 E., 8430.00 m., more or less, from BLLM 1. Antipolo, Rizal; thence Due West 363.44 m. to point 2; thence Due West 1000.00 m. to point 3; thence Due West 100.00 m. to point 4; thence Due West 1000.00 m. to point 5; thence Due West 1075.00 m. to point 6; thence Due North 1000.00 m. to point 7; thence Due North 1000.00 m. to point 8; thence Due North 1000.00 m. to point 9; thence Due North 1000.00 m. to point 10; thence Due North 1000.00 m. to point 11; thence Due North 509.62 m. to point 12; thence S. 31 05 E 1025.00 m. to point 13; thence S 71 38 E 458.36 m. to point 14; thence S 43 25 E 477.04 m. to point 15; thence S 14 18 E 1399.39 m. to point 16; thence S 75 02 E 704.33 m. to point 17; thence S. 30 50 E 503.17 m. to point 18; thence S 40 26 E 1538.50 m. to point 19; thence s 33 23 e 1575.00 m to point of beginning. Containing an area of one thousand two hundred twenty five (1,225) Hectares, more or less. Note: All data are approximate and subject to change based on future survey. IN WITNESS WHEREOF, I Have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. Done in the City of Manila, this 21st day of June, in the year of Our Lord, nineteen hundred and seventy-four. (Sgd.) FERDINAND E. MARCOS President Republic of the Philippines Proclamation No. 1283 has since been amended by Proclamation No. 1637 issued on April 18, 1977. Proclamation No. 1637 revised the area and location of the proposed townsite. According to then DENR Secretary Victor O. Ramos, Proclamation No. 1637 excluded Lot A (of which the Lot claimed by petitioners is part) for townsite purposes and reverted it to MWR coverage.34[34] Proclamation No. 1637 reads: PROCLAMATION NO. 1637 AMENDING PROCLAMATION NO. 1283, DATED JUNE 21, 1974, WHICH ESTABLISHED THE TOWNSITE RESERVATION IN THE MUNICIPALITIES OF ANTIPOLO AND SAN MATEO, PROVINCE OF RIZAL, ISLAND OF LUZON BY INCREASING THE AREA AND REVISING THE TECHNICAL DESCRIPTION OF THE LAND EMBRACED THEREIN, AND REVOKING PROCLAMATION NO. 765 DATED OCTOBER 26, 1970 THAT RESERVED PORTIONS OF THE AREA AS RESETTLEMENT SITE. Upon recommendation of the Secretary of Natural Resources and pursuant to the authority vested in me by law, I, FERDINAND E. MARCOS, President of the Philippines, do hereby amend Proclamation No. 1283, dated June 21, 1974 which established the townsite reservation in the municipalities of Antipolo and San Mateo, Province of Rizal, Island of Luzon, by increasing the area and revising the technical descriptions of the land embraced therein, subject to private rights, if any there be, which parcel of land is more particularly described as follows: (Proposed Lungsod Silangan Townsite) A PARCEL OF LAND (Proposed Lungsod Silangan Townsite Reservation amending the area under SWO-41762 establishing the Bagong Silangan Townsite Reservation) situated in the Municipalities of Antipolo, San Mateo, and Montalban, Province of Rizal, Island of Luzon. Bounded on the E., along lines 1-2-3-4-5-6-7-8-9-1011-12-13-14-15-16-17-18-19-20-21-22-23 by the Marikina Watershed Reservation (IN-12); on the S., along lines 23-24-25 by the portion of Antipolo; on the W., along lines 25-26-27-28-29-30 by the Municipalities of Montalban, San Mateo; and on the N., along lines 30-31-32-33-34-35-36-37-38-39-40-41-42-43-44 by the Angat Watershed Reservation. Beginning at a point marked 1 on the Topographic Maps with the Scale of 1:50,000 which is the identical corner 38 IN-12, Marikina Watershed Reservation. xxx xxx xxx

NOTE: All data are approximate and subject to change based on future survey. Proclamation No. 765 dated October 26, 1970, which covered areas entirely within the herein Lungsod Silangan Townsite, is hereby revoked accordingly. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. Done in the City of Manila, this 18th day of April, in the year of Our Lord, nineteen hundred and seventy-seven. (Sgd.) FERDINAND E. MARCOS President of the Philippines A positive act (e.g., an official proclamation) of the Executive Department is needed to declassify land which had been earlier classified as a watershed reservation and to convert it into alienable or disposable land for agricultural or other purposes. 35[35] Unless and until the land classified as such is released in an official proclamation so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply. 36[36] The principal document presented by petitioners to prove the private character of the Lot is the Certification of the Bureau of Forest Development dated March 18, 1986 that the Lot is excluded from the Marikina Watershed (Exh. R). The Certification reads: Republic of the Philippines MAR 18 1986 VERIFICATION ON THE STATUS OF LAND: TO WHOM IT MAY CONCERN:
34 35 36

This is to certify that the tract of land situated in Barangay San Isidro, Antipolo, Rizal, containing an area of 1,269,766 square meters, as shown and described on the reverse side hereof, surveyed by Geodetic Engineer Telesforo Cabading for Angelina C. Reynoso, is verified to be within the area excluded from the operation of Marikina Watershed Reservation established under Executive Order No. 33 dated July 26, 1904 per Proclamation No. 1283, promulgated on June 21, 1974, which established the Boso-Boso Townsite Reservation, amended by proclamation No. 1637 dated April 18, 1977 known as Lungsod Silangan Townsite Reservation. Subject area also falls within the bounds of Bagong Lipunan Site under P.D. 1396 dated June 2, 1978 under the sole jurisdiction of the Ministry of Human Settlements, to the exclusion of any other government agencies. This verification is made upon the request of the Chief, Legal Staff, R-4 as contained in his internal memorandum dated March 18, 1986. Verified by: (Sgd) ROMEO C. PASCUBILLO Cartographer II Checked by: (Sgd) ARMENDO R. CRUZ Supervising Cartographer ATTESTED: (Sgd) LUIS G. DACANAY Chief, Forest Engineering & Infrastructure Section The above certification on which petitioners rely that a reclassification had occurred, and that the Lot is covered by the reclassification, is contradicted by several documents submitted by the Solicitor General before the land registration court. The Solicitor General submitted to the land registration court a Report 37[37] dated March 2, 1988, signed by Administrator Teodoro G. Bonifacio of the then National Land Titles and Deeds Registration Administration, confirming that the Lot described in Psu-162620 forms part of the MWR. He thus recommended the dismissal of the application for registration. The Report states: COMES NOW the Administrator of the National Land Titles and Deeds Registration Commission and to this Honorable Court respectfully reports that: 1. A parcel of land described in plan Psu-162620 situated in the Barrio of San Isidro, Municipality of Antipolo, Province of Rizal, is applied for registration of title in the case at bar. 2. After plotting plan Psu-162620 in our Municipal Index Map it was found that a portion of the SW, described as Lot 3 in plan Psu-173790 was previously the subject of registration in Land Reg. Case No. N-9578, LRC Record No. N-55948 and was issued Decree No. N-191242 on April 4, 1986 in the name of Apolonia Garcia, et al., pursuant to the Decision and Order for Issuance of the Decree dated February 8, 1984 and March 6, 1984, respectively, and the remaining portion of plan Psu162620 is inside IN-12, Marikina Watershed. x x x WHEREFORE, this matter is respectfully submitted to the Honorable Court for its information and guidance with the recommendation that the application in the instant proceedings be dismissed, after due hearing (Underlining supplied). Likewise, in a letter38[38] dated November 11, 1991, the Deputy Land Inspector, DENR, Region IV, Community Environment and Natural Resources Office, Antipolo, Rizal, similarly confirmed that the Lot is within the MWR. The letter states: That the land sought to be registered is situated at San Isidro (Boso-boso), Antipolo, Rizal, with an area of ONE HUNDRED TWENTY SIX POINT ZERO SEVEN SIXTY SIX (126.0766) hectares, more particularly described in Psu-162620, which is within the Marikina Watershed Reservation under Executive Order No. 33 dated July 2, 1904 which established the Marikina Watershed Reservation (IN-12) x x x. x x x

That the land sought to be registered is not a private property of the Registration Applicant but part of the public domain, not subjected to disposition and is covered by Proclamation No. 585 for Integrated Social Forestry Program hence, L.R.C. No. 269-A is recommended for rejection (Underlining supplied). Copy of the letter is attached herewith as Annex 3 and made an integral part hereof. Lastly, the Solicitor General pointed out that attached to petitioner Edna T. Collados [as original applicant] application is the technical description 39[39] of the Lot signed by Robert C. Pangyarihan, Officer-in-Charge of the Survey Division of the Bureau of Lands. This technical description categorically stated that the Lot is inside IN-12 Mariquina Watershed. The evidence of record thus appears unsatisfactory and insufficient to show clearly and positively that the Lot had been officially released from the Marikina Watershed Reservation to form part of the alienable and disposable lands of the public domain. We hold that once a parcel of land is included within a watershed reservation duly established by Executive Proclamation, as in the instant case, a presumption arises that the land continues to be part of such Reservation until clear and convincing evidence of subsequent declassification is shown. It is obvious, based on the facts on record that neither petitioners nor their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of the Lot for at least thirty years immediately preceding the filing of the application for confirmation of title. Even if they submitted sufficient proof that the Lot had been excluded from the MWR upon the issuance of Proclamation No. 1283 on June 21, 1974, petitioners possession as of the filing of their application on April 25, 1985 would have been only eleven years counted from the issuance of the proclamation in 1974. The result will not change even if we tack in the two years Sesinando Leyva allegedly possessed the Lot from 1902 until the issuance of EO 33 in 1904. Petitioners case falters even more because of the issuance of Proclamation No. 1637 on April 18, 1977. According to then DENR Secretary Victor Ramos, Proclamation No. 1637 reverted Lot A or the townsite reservation, where petitioners' Lot is supposedly situated, back to the MWR. Finally, it is of no moment if the areas of the MWR are now fairly populated and vibrant communities as claimed by petitioners. The following ruling may be applied to this case by analogy: A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest
37 38 39

cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. Forest lands do not have to be on mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa palms and other trees growing in brackish or sea water may also be classified as forest land. The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. Unless and until the land classified as forest is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.40[40]

Second Issue: Whether the petition for annulment of judgment should have been given due course.

Petitioners fault the Court of Appeals for giving due course to the Republics petition for annulment of judgment which was filed long after the decision of the land registration court had allegedly become final and executory. The land registration court rendered its decision on January 30, 1991 and the Solicitor General received a copy of the decision on April 23, 1991.41[41] Petitioners point out that the Solicitor General filed with the Court of Appeals the petition for annulment of judgment invoking Section 9(2) of BP Blg. 129 42[42] only on August 6, 1991, after the decision had supposedly become final and executory. Moreover, petitioners further point out that the Solicitor General filed the petition for annulment after the land registration court issued its order of May 6, 1991 directing the Land Registration Authority to issue the corresponding decree of registration. The Solicitor General sought the annulment of the decision on the ground that the land registration court had no jurisdiction over the case, specifically, over the Lot which was not alienable and disposable. The Solicitor General maintained that the decision was null and void. Petitioners argue that the remedy of annulment of judgment is no longer available because it is barred by the principle of res judicata. They insist that the land registration court had jurisdiction over the case which involves private land. They also argue that the Republic is estopped from questioning the land registration courts jurisdiction considering that the Republic participated in the proceedings before the court. It is now established that the Lot, being a watershed reservation, is not alienable and disposable public land. The evidence of the petitioners do not clearly and convincingly show that the Lot, described as Lot Psu-162620, ceased to be a portion of the area classified as a watershed reservation of the public domain. Any title to the Lot is void ab initio. In view of this, the alleged procedural infirmities attending the filing of the petition for annulment of judgment are immaterial since the land registration court never acquired jurisdiction over the Lot. All proceedings of the land registration court involving the Lot are therefore null and void. We apply our ruling in Martinez vs. Court of Appeals, 43[43] as follows: The Land Registration Court has no jurisdiction over non-registrable properties, such as public navigable rivers which are parts of the public domain, and cannot validly adjudge the registration of title in favor of private applicant. Hence, the judgment of the Court of First Instance of Pampanga as regards the Lot No. 2 of certificate of Title No. 15856 in the name of petitioners may be attacked at any time, either directly or collaterally, by the State which is not bound by any prescriptive period provided for by the Statute of Limitations. We also hold that environmental consequences in this case override concerns over technicalities and rules of procedure. In Republic vs. De los Angeles,44[44] which involved the registration of public lands, specifically parts of the sea, the Court rejected the principle of res judicata and estoppel to silence the Republics claim over public lands. The Court said: It should be noted further that the doctrine of estoppel or laches does not apply when the Government sues as a sovereign or asserts governmental rights, nor does estoppel or laches validate an act that contravenes law or public policy, and that res judicata is to be disregarded if its application would involve the sacrifice of justice to technicality. The Court further held that the right of reversion or reconveyance to the State of the public properties registered and which are not capable of private appropriation or private acquisition does not prescribe. Third issue: Whether the petition-in-intervention is proper. The Bockasanjo ISF Awardees Association, Inc., an association of holders of certificates of stewardship issued by the DENR under its Integrated Social Forestry Program, filed with the Court of Appeals on November 29, 1991 a Motion for Leave to Intervene and to Admit Petition-In-Intervention. According to intervenors, they are the actual occupants of the Lot which petitioners sought to register. Aware that the parcels of land which their forefathers had occupied, developed and tilled belong to the Government, they filed a petition with then President Corazon C. Aquino and then DENR Secretary Fulgencio S. Factoran, to award the parcels of land to them. Secretary Factoran directed the Director of Forest Management Bureau to take steps for the segregation of the aforementioned area from the MWR for development under the DENRs ISF Programs. Subsequently, then President Aquino issued Proclamation No. 585 dated June 5, 1990 excluding 1,430 hectares from the operation of EO 33 and placed the same under the DENRs Integrated Social Forestry Program. Proclamation No. 585 reads: PROCLAMATION NO. 585 AMENDING FURTHER EXECUTIVE ORDER NO. 33, DATED JULY 26, 1904 WHICH ESTABLISHED THE MARIKINA WATERSHED RESERVATION (IN-12) AS AMENDED, BY EXCLUDING CERTAIN PORTIONS OF LANDS EMBRACED THEREIN SITUATED AT SITIOS BOSOBOSO, KILINGAN, VETERANS, BARANGAYS SAN JOSEPH AND PAENAAN, MUNICIPALITY OF ANTIPOLO, PROVINCE OF RIZAL, ISLAND OF LUZON. Upon recommendation of the Secretary of Environment and Natural Resources and pursuant to the authority vested in me by law, I, CORAZON C. AQUINO, President of the Philippines, do hereby exclude from the operation of Executive Order No. 33, which established the Marikina Watershed Reservation, certain parcel of land of the public domain embraced therein situated in Sitios Bosoboso, Veterans, Kilingan and Barangay San Joseph and Paenaan, Municipality of Antipolo, Province of Rizal and place the same under the Integrated Social Forestry Program of the Department of Environment and Natural Resources in accordance with existing laws, rules and regulations, which parcel of land is more particularly described as follows:
40 41 42 43 44

A PARCEL OF LAND, within the Marikina Watershed Reservation situated in the Municipality of Antipolo, Province of Rizal, beginning at point 1 on plan, being identical to corner 1 of Marikina Watershed Reservation; thence xxx xxx xxx

Containing an area of One Thousand Four Hundred Thirty (1,430) Hectares. All other lands covered and embraced under Executive Order No. 33 as amended, not otherwise affected by this Proclamation, shall remain in force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. Done in the City of Manila, this 5th day of June, in the year of Our Lord, nineteen hundred and ninety. (Sgd.) CORAZON C. AQUINO President of the Philippines Pursuant to Proclamation No. 585, the chief of the ISF Unit, acting through the Regional Executive Director of the DENR (Region IV), issued sometime between the years 1989 to 1991 certificates of stewardship contracts to bona fide residents of the barangays mentioned in the proclamation as qualified recipients of the ISF programs. Among those awarded were intervenors. The certificates of stewardship are actually contracts of lease granted by the DENR to actual occupants of parcels of land under its ISF programs for a period of twenty-five (25) years, renewable for another twenty-five (25) years. 45[45] The DENR awarded contracts of stewardship to ISF participants in Barangay San Isidro (or Boso-boso) and the other barangays based on the Inventory of Forest Occupants the DENR had conducted. 46[46] According to intervenors, they learned only on July 31, 1991 about the pendency of LRC Case No. 269-A before the Regional Trial Court of Antipolo, Rizal. On August 8, 1991, they filed a Motion for Leave to Intervene and to Admit Opposition in Intervention before the land registration court to assert their rights and to protect their interests. However, shortly after the filing of their opposition, intervenors learned that the land registration court had already rendered a decision on January 30, 1991 confirming petitioners imperfect title. Intervenors counsel received a copy of the decision on August 9, 1991. On August 14, 1991, intervenors filed a motion to vacate judgment and for new trial before the land registration court. According to intervenors, the land registration court could not act on its motions due to the restraining order issued by the Court of Appeals on August 8, 1991, enjoining the land registration court from executing its decision, as prayed for by the Solicitor General in its petition for annulment of judgment. The intervenors were thus constrained to file a petition for intervention before the Court of Appeals which allowed the same. Rule 19 of the 1997 Rules of Civil Procedure47[47] provides in pertinent parts: Section 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court, or an officer thereof may, with leave of court, be allowed to intervene in the action. The Court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the inertvenors rights may be fully protected in a separate proceeding. Sec. 2. Time to intervene. The motion to intervene may be filed at any time before rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties. As a rule, intervention is allowed before rendition of judgment by the trial court, as Section 2, Rule 19 expressly provides. However, the Court has recognized exceptions to this rule in the interest of substantial justice. Mago vs. Court of Appeals48[48] reiterated the ruling in Director of Lands vs. Court of Appeals, where the Court allowed the motions for intervention even when the case had already reached this Court. Thus, in Mago the Court held that: It is quite clear and patent that the motions for intervention filed by the movants at this stage of the proceedings where trial had already been concluded x x x and on appeal x x x the same affirmed by the Court of Appeals and the instant petition for certiorari to review said judgment is already submitted for decision by the Supreme Court, are obviously and, manifestly late, beyond the period prescribed under x x x Section 2, Rule 12 of the rules of Court. But Rule 12 of the Rules of Court, like all other Rules therein promulgated, is simply a rule of procedure, the whole purpose and object of which is to make the powers of the Court fully and completely available for justice. The purpose of procedure is not to thwart justice. Its proper aim is to facilitate the application of justice to the rival claims of contending parties. It was created not to hinder and delay but to facilitate and promote the administration of justice. It does not constitute the thing itself which courts are always striving to secure to litigants. It is designed as the means best adopted to obtain that thing. In other words, it is a means to an end. To be sure, the Court of Appeals did not pass upon the actual status of intervenors in relation to the Lot as this was not in issue. Neither was the validity of the certificates of stewardship contracts which intervenors allegedly possessed inquired into considering this too was not in issue. In fact, intervenors did not specifically seek any relief apart from a declaration that the Lot in question remains inalienable land of the public domain. We cannot fault the Court of Appeals for allowing the intervention, if only to provide the rival groups a peaceful venue for ventilating their sides. This case has already claimed at least five lives due to the raging dispute between the rival camps of the petitioners on one side and those of the DENR awardees on the other. It also spawned a number of criminal cases between the two rival groups including malicious mischief, robbery and arson. A strict application of the rules would blur this bigger, far more important picture. WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated June 22, 1992 declaring null and void the Decision dated January 30, 1991 of Branch 71, Regional Trial Court of Antipolo, Rizal, in LRC No. 269-A, LRC Rec. No. N-59179 is AFFIRMED. SO ORDERED. Vitug, and Ynares-Santiago, JJ., concur. Davide, Jr., C.J., (Chairman), on official leave.

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

45 46 47 48

EDNA COLLADO, BERNARDINA TAWAS, JORETO C. TORRES, JOSE AMO, SERGIO L. MONTEALEGRE, VICENTE C. TORRES, JOSEPH L. NUEZ, GLORIA SERRANO, DANILO FABREGAS, FERNANDO T. TORRES, LUZ G. TUBUNGBANUA, CARIDAD T. TUTANA, JOSE C. TORRES, JR., IMELDA CAYLALUAD, ROSALIE TUTANA, NORMA ASTORIAS, MYRNA M. LANCION, NORBERTO CAMILOTE, CECILIA MACARANAS, PEDRO BRIONES, REMEDIOS BANTIGUE, DANTE L. MONTEALEGRE, AIDA T. GADON, ARMANDO T. TORRES and FIDELITO ECO, petitioners, vs. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, thru the Director of Lands, respondents, BOCKASANJO ISF AWARDEES ASSOCIATION, INC., LITA MENDOZA, MORADO PREFIDIGNO, TERESITA CRUZ and CALOMA MOISES, respondents/intervernors. DECISION CARPIO, J.:

The Case

This Petition49[1] seeks to set aside the Decision of the Court of Appeals, 50[2] dated June 22, 1992, in CA-G.R. SP No. 25597, which declared null and void the Decision 51[3] dated January 30, 1991 of the Regional Trial Court of Antipolo, Rizal, Branch 71, in LRC No. 269-A, LRC Rec. No. N-59179, confirming the imperfect title of petitioners over a parcel of land.

The Facts

On April 25, 1985, petitioner Edna T. Collado filed with the land registration court an application for registration of a parcel of land with an approximate area of 1,200,766 square meters or 120.0766 hectares (Lot for brevity). The Lot is situated in Barangay San Isidro (formerly known as Boso-boso), Antipolo, Rizal, and covered by Survey Plan Psu-162620. Attached to the application was the technical description of the Lot as Lot Psu-162620 signed by Robert C. Pangyarihan, Officer-in-Charge of the Survey Division, Bureau of Lands, which stated, [t]his survey is inside IN-12 Mariquina Watershed. On March 24, 1986, petitioner Edna T. Collado filed an Amended Application to include additional co-applicants. 52[4] Subsequently, more applicants joined (collectively referred to as petitioners for brevity). 53[5] The Republic of the Philippines, through the Solicitor General, and the Municipality of Antipolo, through its Municipal Attorney and the Provincial Fiscal of Rizal, filed oppositions to petitioners application. In due course, the land registration court issued an order of general default against the whole world with the exception of the oppositors. Petitioners alleged that they have occupied the Lot since time immemorial. Their possession has been open, public, notorious and in the concept of owners. The Lot was surveyed in the name of Sesinando Leyva, one of their predecessors-in-interest, as early as March 22, 1902. Petitioners declared the Lot for taxation purposes and paid all the corresponding real estate taxes. According to them, there are now twenty-five co-owners in pro-indiviso shares of five hectares each. During the hearings, petitioners submitted evidence to prove that there have been nine transfers of rights among them and their predecessors-in-interest, as follows: 1. SESINANDO LEYVA was the earliest known predecessor-in-interest of the Applicants who was in actual, open, notorious and continuous possession of the property in the concept of owner. He had the property surveyed in his name on 22 March 1902 (Exhibit W and W-1 testimonies of J. Torres on 16 December 1987 and Mariano Leyva on 29 December 1987). 2. DIOSDADO LEYVA, is the son of Sesinando Leyva, who inherited the property. He had the property resurveyed in his name on May 21-28, 1928 (Exhibit X and X-1; testimony of Mariano Leyva, a son of Diosdado Leyva). 3. GREGORIO CAMANTIQUE bought the property from Diosdado Leyva before the Japanese Occupation of the Philippines during World War II. He owned and possessed the property until 1958. He declared the property for tax purposes, the latest of which was under Tax Declaration No. 7182 issued on 3 February 1957 (Exhibit I and testimony of Mariano Leyva, supra). 4. ANGELINA REYNOSO, bought the property from Gregorio Camantique by virtue of a Deed of Sale on 3 February 1958 (Exhibit H). During the ownership of the property by Angelina Reynoso, Mariano Leyva the grandson of Sesinando Leyva, the previous owner, attended to the farm. (Testimony of Mariano Leyva, supra). Angelina Reynoso declared the property in her name under Tax Declaration No. 7189 in 4 February 1958, under Tax Declaration No. 8775 on 3 August 1965, under Tax Declaration No. 16945 on 15 December 1975, and under Tax Declaration No. 03-06145 on 25 June 1978. 5. MYRNA TORRES bought the property from Angelina Reynoso on 16 October 1982 through a Deed of Sale (Exhibit G). 6. EDNA COLLADO bought the property from Myrna Torres in a Deed of Sale dated 28 April 1984 (Exhibit P-1 to P-3). 7. Additional owners BERNARDINA TAWAS, JORETO TORRES, JOSE AMO, VICENTE TORRES and SERGIO MONTEALEGRE who bought portions of the property from Edna Collado through a Deed of Sale on 6 November 1985 (Exhibit Q to Q-3). 8. And more additional Owners JOSEPH NUNEZ, DIOSDADO ARENOS, DANILO FABREGAS, FERNANDO TORRES, LUZ TUBUNGBANUA, CARIDAD TUTANA, JOSE TORRES JR., RODRIGO TUTANA, ROSALIE TUTANA, NORMA ASTORIAS, MYRNA LANCION, CHONA MARCIANO, CECILIA MACARANAS, PEDRO BRIONES, REMEDIOS BANTIQUE, DANTE MONTEALEGRE, ARMANDO TORRES, AIDA GADON and AMELIA M. MALAPAD bought portions of the property in a Deed of Sale on 12 May 1986 (Exhibit S to S-3). 9. Co-owners DIOSDADO ARENOS, RODRIGO TUTANA, CHONA MARCIANO and AMELIA MALAPAD jointly sold their shares to new OWNERS GLORIA R. SERRANO, IMELDA CAYLALUAD, NORBERTO CAMILOTE and FIDELITO ECO through a Deed of Sale dated 18 January 1987 (Exhibit T to T-9).54[6]
49 50 51 52 53 54

During the hearing on January 9, 1991, only the assistant provincial prosecutor appeared without the Solicitor General. For failure of the oppositors to present their evidence, the land registration court issued an order considering the case submitted for decision based on the evidence of the petitioners. The court later set aside the order and reset the hearing to January 14, 1991 for the presentation of the evidence of the oppositors. On this date, counsel for oppositors failed to appear again despite due notice. Hence, the court again issued an order submitting the case for decision based on the evidence of the petitioners.

The Trial Courts Ruling

After appraisal of the evidence submitted by petitioners, the land registration court held that petitioners had adduced sufficient evidence to establish their registrable rights over the Lot. Accordingly, the court rendered a decision confirming the imperfect title of petitioners. We quote the pertinent portions of the courts decision, as follows: From the evidence presented, the Court finds that from the testimony of the witnesses presented by the Applicants, the property applied for is in actual, open, public and notorious possession by the applicants and their predecessor-in-interest since time immemorial and said possession had been testified to by witnesses Jimmy Torres, Mariano Leyva, Sergio Montealegre, Jose Amo and one Chona who were all cross-examined by Counsel for Oppositor Republic of the Philippines. Evidence was likewise presented that said property was declared for taxation purposes in the names of the previous owners and the corresponding taxes were paid by the Applicants and the previous owners and said property was planted to fruit bearing trees; portions to palay and portions used for grazing purposes. To the mind of the Court, Applicants have presented sufficient evidence to establish registrable title over said property applied for by them. On the claim that the property applied for is within the Marikina Watershed, the Court can only add that all Presidential Proclamations like the Proclamation setting aside the Marikina Watershed are subject to private rights. In the case of Municipality of Santiago vs. Court of Appeals, 120 SCRA 734, 1983 private rights is proof of acquisition through (sic) among means of acquisition of public lands. In the case of Director of Lands vs. Reyes, 68 SCRA 193-195, by private rights means that applicant should show clear and convincing evidence that the property in question was acquired by applicants or their ancestors either by composition title from the Spanish government or by Possessory Information title, or any other means for the acquisition of public lands xxx (underscoring supplied). The Court believes that from the evidence presented as above stated, Applicants have acquired private rights to which the Presidential Proclamation setting aside the Marikina Watershed should be subject to such private rights. At any rate, the Court notes that evidence was presented by the applicants that as per Certification issued by the Bureau of Forest Development dated March 18, 1980, the area applied for was verified to be within the area excluded from the operation of the Marikina Watershed Lands Executive Order No. 33 dated July 26, 1904 per Proclamation No. 1283 promulgated on June 21, 1974 which established the Boso-boso Town Site Reservation, amended by Proclamation No. 1637 dated April 18, 1977 known as the Lungsod Silangan Townsite Reservation. (Exhibit K).55[7] In a motion dated April 5, 1991, received by the Solicitor General on April 6, 1991, petitioners alleged that the decision dated January 30, 1991 confirming their title had become final after the Solicitor General received a copy of the decision on February 18, 1991. Petitioners prayed that the land registration court order the Land Registration Authority to issue the necessary decree in their favor over the Lot. On April 11, 1991, the Solicitor General inquired from the Provincial Prosecutor of Rizal whether the land registration court had already rendered a decision and if so, whether the Provincial Prosecutor would recommend an appeal. However, the Provincial Prosecutor failed to answer the query. According to the Solicitor General, he received on April 23, 1991 a copy of the land registration courts decision dated January 30, 1991, and not on February 18, 1991 as alleged by petitioners in their motion. In the meantime, on May 7, 1991, the land registration court issued an order directing the Land Regulation Authority to issue the corresponding decree of registration in favor of the petitioners. On August 6, 1991, the Solicitor General filed with the Court of Appeals a Petition for Annulment of Judgment pursuant to Section 9(2) of BP Blg. 129 on the ground that there had been no clear showing that the Lot had been previously classified as alienable and disposable making it subject to private appropriation. On November 29, 1991, Bockasanjo ISF Awardees Association, Inc., an association of holders of certificates of stewardship issued by the Department of Environment and Natural Resources (DENR for brevity) under its Integrated Social Forestry Program (ISF for brevity), filed with the Court of Appeals a Motion for Leave to Intervene and to Admit Petition-In-Intervention. They likewise opposed the registration and asserted that the Lot, which is situated inside the Marikina Watershed Reservation, is inalienable. They claimed that they are the actual occupants of the Lot pursuant to the certificates of stewardship issued by the DENR under the ISF for tree planting purposes. The Court of Appeals granted the motion to intervene verbally during the preliminary conference held on April 6, 1992. During the preliminary conference, all the parties as represented by their respective counsels agreed that the only issue for resolution was whether the Lot in question is part of the public domain. 56[8]

The Court of Appeals Ruling

In a decision dated June 22, 1992, the Court of Appeals granted the petition and declared null and void the decision dated January 30, 1991 of the land registration court. The Court of Appeals explained thus: Under the Regalian Doctrine, which is enshrined in the 1935 (Art. XIII, Sec. 1), 1973 (Art. XIV, Sec. 8), and 1987 Constitution (Art. XII, Sec. 2), all lands of the public domain belong to the State. An applicant, like the private respondents herein, for registration of a parcel of land bears the burden of overcoming the presumption that the land sought to be registered forms part of the public domain (Director of Lands vs. Aquino, 192 SCRA 296). A positive Act of government is needed to declassify a public land and to convert it into alienable or disposable land for agricultural or other purposes (Republic vs.
55 56

Bacas, 176 SCRA 376). In the case at bar, the private respondents failed to present any evidence whatsoever that the land applied for as described in Psu-162620 has been segregated from the bulk of the public domain and declared by competent authority to be alienable and disposable. Worse, the technical description of Psu-162620 signed by Robert C. Pangyarihan, Officer-in-Charge, Survey Division, Bureau of Lands, which was attached to the application of private respondents, categorically stated that "This survey is inside IN-12 Mariquina Watershed." That the land in question is within the Marikina Watershed Reservation is confirmed by the Administrator of the National Land Titles and Deeds in a Report, dated March 2, 1988, submitted to the respondent Court in LR Case No. 269-A. These documents readily and effectively negate the allegation in private respondent Collados application that said parcel of land known as Psu-162620 is not covered by any form of title, nor any public land application and are not within any government reservation (Par. 8, Application; Emphasis supplied). The respondent court could not have missed the import of these vital documents which are binding upon the courts inasmuch as it is the exclusive prerogative of the Executive Department to classify public lands. They should have forewarned the respondent judge from assuming jurisdiction over the case. x x x inasmuch as the said properties applied for by petitioners are part of the public domain, it is the Director of Lands who has jurisdiction in the disposition of the same (subject to the approval of the Secretary of Natural Resources and Environment), and not the courts. x x x Even assuming that petitioners did have the said properties surveyed even before the same was declared to be part of the Busol Forest Reservation, the fact remains that it was so converted into a forest reservation, thus it is with more reason that this action must fail. Forest lands are inalienable and possession thereof, no matter how long, cannot convert the same into private property. And courts are without jurisdiction to adjudicate lands within the forest zone. (Heirs of Gumangan vs. Court of Appeals. 172 SCRA 563; Emphasis supplied). Needless to say, a final judgment may be annulled on the ground of lack of jurisdiction, fraud or that it is contrary to law (Panlilio vs. Garcia, 119 SCRA 387, 391) and a decision rendered without jurisdiction is a total nullity and may be struck down at any time (Suarez vs. Court of Appeals, 186 SCRA 339). 57[9] Hence, the instant petition.

The Issues

The issues raised by petitioners are restated as follows: I WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN REVERSING THE DECISION OF THE TRIAL COURT GRANTING THE APPLICATION OF THE PETITIONERS FOR CONFIRMATION OF TITLE; II WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN GIVING DUE COURSE TO THE PETITION FOR ANNULMENT OF JUDGMENT FILED BY THE REPUBLIC LONG AFTER THE DECISION OF THE TRIAL COURT HAD BECOME FINAL; III WHETHER THE COURT OF APPEALS ERRED OR GRAVELY ABUSED ITS DISCRETION IN GIVING DUE COURSE TO THE INTERVENORS PETITION FOR INTERVENTION WHICH WAS FILED OUT OF TIME OR LONG AFTER THE DECISION OF THE TRIAL COURT HAD BECOME FINAL.

The Courts Ruling

The petition is bereft of merit. First Issue: whether petitioners have registrable title over the Lot. There is no dispute that Executive Order No. 33 (EO 33 for brevity) dated July 26, 1904 58[10] established the Marikina Watershed Reservation (MWR for brevity) situated in the Municipality of Antipolo, Rizal. Petitioners even concede that the Lot, described as Lot Psu-162620, is inside the technical, literal description of the MWR. However, the main thrust of petitioners claim over the Lot is that all Presidential proclamations like the proclamation setting aside the Marikina Watershed Reservation are subject to private rights. They point out that EO 33 contains a saving clause that the reservations are subject to existing private rights, if any there be. Petitioners contend that their claim of ownership goes all the way back to 1902, when their known predecessor-in-interest, Sesinando Leyva, laid claim and ownership over the Lot. They claim that the presumption of law then prevailing under the Philippine Bill of 1902 and Public Land Act No. 926 was that the land possessed and claimed by individuals as their own are agricultural lands and therefore alienable and disposable. They conclude that private rights were vested on Sesinando Leyva before the issuance of EO 33, thus excluding the Lot from the Marikina Watershed Reservation. Petitioners arguments find no basis in law. The Regalian Doctrine: An Overview Under the Regalian Doctrine, all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State. 59[11] The Spaniards first introduced the doctrine to the Philippines through the Laws of the Indies and the Royal Cedulas , specifically, Law 14, Title 12, Book 4 of the Novisima Recopilacion de Leyes de las Indias 60[12] which laid the foundation that all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain. 61[13] Upon the Spanish conquest of the
57 58 59 60 61

Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish Crown. 62[14] The Laws of the Indies were followed by the Ley Hipotecaria or the Mortgage Law of 1893. The Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as possessory claims. The Royal Decree of 1894 or the Maura Law partly amended the Mortgage Law as well as the Law of the Indies. The Maura Law was the last Spanish land law promulgated in the Philippines. It required the adjustment or registration of all agricultural lands, otherwise the lands would revert to the state. 63[15] Four years later, Spain ceded to the government of the United States all rights, interests and claims over the national territory of the Philippine Islands through the Treaty of Paris of December 10, 1898. In 1903, the United States colonial government, through the Philippine Commission, passed Act No. 926, the first Public Land Act, which was described as follows: Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It prescribed rules and regulations for the homesteading, selling and leasing of portions of the public domain of the Philippine Islands, and prescribed the terms and conditions to enable persons to perfect their titles to public lands in the Islands. It also provided for the issuance of patents to certain native settlers upon public lands, for the establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for the cancellation or confirmation of Spanish concessions and grants in the Islands. In short, the Public Land Act operated on the assumption that title to public lands in the Philippine Islands remained in the government; and that the governments title to public land sprung from the Treaty of Paris and other subsequent treaties between Spain and the United States. The term public land referred to all lands of the public domain whose title still remained in the government and are thrown open to private appropriation and settlement, and excluded the patrimonial property of the government and the friar lands. 64[16] Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land Act No. 926, mere possession by private individuals of lands creates the legal presumption that the lands are alienable and disposable. Act 2874, the second Public Land Act, superseded Act No. 926 in 1919. After the passage of the 1935 Constitution, Commonwealth Act No. 141 (CA 141 for brevity) amended Act 2874 in 1936. CA 141, as amended, remains to this day as the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands.65[17] In the meantime, in order to establish a system of registration by which recorded title becomes absolute, indefeasible and imprescriptible, the legislature passed Act 496, otherwise known as the Land Registration Act, which took effect on February 1, 1903. Act 496 placed all registered lands in the Philippines under the Torrens system. 66[18] The Torrens system requires the government to issue a certificate of title stating that the person named in the title is the owner of the property described therein, subject to liens and encumbrances annotated on the title or reserved by law. The certificate of title is indefeasible and imprescriptible and all claims to the parcel of land are quieted upon issuance of the certificate. 67[19] PD 1529, known as the Property Registration Decree enacted on June 11, 1978, 68[20] amended and updated Act 496. The 1935, 1973, 1987 Philippine Constitutions The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the state, in lieu of the King, as the owner of all lands and waters of the public domain.69[21] Justice Reynato S. Puno, in his separate opinion in Cruz vs. Secretary of Environment and Natural Resources, 70[22] explained thus: One of the fixed and dominating objectives of the 1935 Constitutional Convention was the nationalization and conservation of the natural resources of the country. There was an overwhelming sentiment in the Convention in favor of the principle of state ownership of natural resources and the adoption of the Regalian doctrine. State ownership of natural resources was seen as a necessary starting point to secure recognition of the states power to control their disposition, exploitation, development, or utilization. The delegates to the Constitutional Convention very well knew that the concept of State ownership of land and natural resources was introduced by the Spaniards, however, they were not certain whether it was continued and applied by the Americans. To remove all doubts, the Convention approved the provision in the Constitution affirming the Regalian doctrine. Thus, Section 1, Article XIII71[23] of the 1935 Constitution, on Conservation and Utilization of Natural Resources barred the alienation of all natural resources except public agricultural lands, which were the only natural resources the State could alienate. The 1973 Constitution reiterated the Regalian doctrine in Section 8, Article XIV72[24] on the National Economy and the Patrimony of the Nation. The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article XII 73[25] on National Economy and Patrimony. Both the 1935 and 1973 Constitutions prohibited the alienation of all natural resources except agricultural lands of the public domain. The 1987 Constitution readopted this policy. Indeed, all lands of the public domain as well as all natural resources enumerated in the Philippine Constitution belong to the State. Watershed Reservation is a Natural Resource The term natural resource includes not only timber, gas, oil coal, minerals, lakes, and submerged lands, but also, features which supply a human need and contribute to the health, welfare, and benefit of a community, and are essential to the well-being thereof and proper enjoyment of property devoted to park and recreational purposes. 74[26] In Sta. Rosa Realty Development Corp. vs. Court of Appeals, et al .,75[27] the Court had occasion to discourse on watershed areas. The Court resolved the issue of whether the parcel of land which the Department of Environment and Natural Resources had assessed to be a watershed area is exempt from the coverage of RA No. 6657 or the Comprehensive

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Agrarian Reform Law (CARL for brevity). 76[28] The Court defined watershed as an area drained by a river and its tributaries and enclosed by a boundary or divide which separates it from adjacent watersheds. However, the Court also recognized that: The definition does not exactly depict the complexities of a watershed. The most important product of a watershed is water which is one of the most important human necessit(ies). The protection of watershed ensures an adequate supply of water for future generations and the control of flashfloods that not only damage property but also cause loss of lives. Protection of watersheds is an intergenerational responsibility that needs to be answered now. Article 67 of the Water Code of the Philippines (PD 1067) provides: Art. 67. Any watershed or any area of land adjacent to any surface water or overlying any ground water may be declared by the Department of Natural Resources as a protected area. Rules and Regulations may be promulgated by such Department to prohibit or control such activities by the owners or occupants thereof within the protected area which may damage or cause the deterioration of the surface water or ground water or interfere with the investigation, use, control, protection, management or administration of such waters. The Court in Sta. Rosa Realty also recognized the need to protect watershed areas and took note of the report of the Ecosystems Research and Development Bureau (ERDB), a research arm of the DENR, regarding the environmental assessment of the Casile and Kabanga-an river watersheds involved in that case. That report concluded as follows: The Casile barangay covered by CLOA in question is situated in the heartland of both watersheds. Considering the barangays proximity to the Matangtubig waterworks, the activities of the farmers which are in conflict with proper soil and water conservation practices jeopardize and endanger the vital waterworks. Degradation of the land would have double edge detrimental effects. On the Casile side this would mean direct siltation of the Mangumit river which drains to the water impounding reservoir below. On the Kabanga-an side, this would mean destruction of forest covers which acts as recharged areas of the Matangtubig springs. Considering that the people have little if no direct interest in the protection of the Matangtubig structures they couldnt care less even if it would be destroyed. The Casile and Kabanga-an watersheds can be considered a most vital life support system to thousands of inhabitants directly and indirectly affected by it. From these watersheds come the natural God-given precious resource water. x x x Clearing and tilling of the lands are totally inconsistent with sound watershed management. More so, the introduction of earth disturbing activities like road building and erection of permanent infrastructures. Unless the pernicious agricultural activities of the Casile farmers are immediately stopped, it would not be long before these watersheds would cease to be of value. The impact of watershed degradation threatens the livelihood of thousands of people dependent upon it. Toward this, we hope that an acceptable comprehensive watershed development policy and program be immediately formulated and implemented before the irreversible damage finally happens. The Court remanded the case to the Department of Agriculture and Adjudication Board or DARAB to re-evaluate and determine the nature of the parcels of land involved in order to resolve the issue of its coverage by the CARL. Sta. Rosa Realty gives us a glimpse of the dangers posed by the misuse of natural resources such as watershed reservations which are akin to forest zones. Population growth and industrialization have taken a heavy toll on the environment. Environmental degradation from unchecked human activities could wreak havoc on the lives of present and future generations. Hence, by constitutional fiat, natural resources remain to this day inalienable properties of the State. Viewed under this legal and factual backdrop, did petitioners acquire, as they vigorously argue, private rights over the parcel of land prior to the issuance of EO 33 segregating the same as a watershed reservation? The answer is in the negative. First. An applicant for confirmation of imperfect title bears the burden of proving that he meets the requirements of Section 48 of CA 141, as amended. He must overcome the presumption that the land he is applying for is part of the public domain and that he has an interest therein sufficient to warrant registration in his name arising from an imperfect title. An imperfect title may have been derived from old Spanish grants such as a titulo real or royal grant, a concession especial or special grant, a composicion con el estado or adjustment title, or a titulo de compra or title through purchase. 77[29] Or, that he has had continuous, open and notorious possession and occupation of agricultural lands of the public domain under a bona fide claim of ownership for at least thirty years preceding the filing of his application as provided by Section 48 (b) CA 141. Originally, Section 48(b) of CA 141 provided for possession and occupation of lands of the public domain since July 26, 1894. This was superseded by RA 1942 which provided for a simple thirty-year prescriptive period of occupation by an applicant for judicial confirmation of an imperfect title. The same, however, has already been amended by Presidential Decree No. 1073, approved on January 25, 1977, the law prevailing at the time petitioners application for registration was filed on April 25, 1985. 78[30] As amended, Section 48 (b) now reads: (b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately preceding the filing of the application for confirmation of title, except when prevented by wars or force majeure. Those shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. Interpreting Section 48 (b) of CA 141, the Court stated that the Public Land Act requires that the applicant must prove the following: (a) that the land is alienable public land and (b) that his open, continuous, exclusive and notorious possession and occupation of the same must either be since time immemorial or for the period prescribed in the Public Land Act. When the conditions set by law are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a government grant, without the necessity of a certificate of title being issued. 79[31] Petitioners do not claim to have documentary title over the Lot. Their right to register the Lot is predicated mainly upon continuous possession since 1902. Clearly, petitioners were unable to acquire a valid and enforceable right or title because of the failure to complete the required period of possession, whether under the original Section 48 (b) of CA 141 prior to the issuance of EO 33, or under the amendment by RA 1942 and PD 1073. There is no proof that prior to the issuance of EO 33 in 1904, petitioners had acquired ownership or title to the Lot either by deed or by any other mode of acquisition from the State, as for instance by acquisitive prescription. As of 1904, Sesinando Leyva had only been in possession for two years. Verily, petitioners have not possessed the parcel of land in the manner and for the number of years required by law for the confirmation of imperfect title.

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Second, assuming that the Lot was alienable and disposable land prior to the issuance of EO 33 in 1904, EO 33 reserved the Lot as a watershed. Since then, the Lot became non-disposable and inalienable public land. At the time petitioners filed their application on April 25, 1985, the Lot has been reserved as a watershed under EO 33 for 81 years prior to the filing of petitioners application. The period of occupancy after the issuance of EO 33 in 1904 could no longer be counted because as a watershed reservation, the Lot was no longer susceptible of occupancy, disposition, conveyance or alienation. Section 48 (b) of CA 141, as amended, applies exclusively to alienable and disposable public agricultural land. Forest lands, including watershed reservations, are excluded. It is axiomatic that the possession of forest lands or other inalienable public lands cannot ripen into private ownership. In Municipality of Santiago, Isabela vs. Court of Appeals,80[32] the Court declared that inalienable public lands x x x cannot be acquired by acquisitive prescription. Prescription, both acquisitive and extinctive, does not run against the State. The possession of public land, however long the period may have extended, never confers title thereto upon the possessor because the statute of limitations with regard to public land does not operate against the State, unless the occupant can prove possession and occupation of the same under claim of ownership for the required number of years to constitute a grant from the State. Third, Gordula vs. Court of Appeals81[33] is in point. In Gordula, petitioners did not contest the nature of the land. They admitted that the land lies in the heart of the CalirayaLumot River Forest Reserve, which Proclamation No. 573 classified as inalienable. The petitioners in Gordula contended, however, that Proclamation No. 573 itself recognizes private rights of landowners prior to the reservation. They claim to have established their private rights to the subject land. The Court ruled: We do not agree. No public land can be acquired by private persons without any grant, express or implied from the government; it is indispensable that there be a showing of a title from the state. The facts show that petitioner Gordula did not acquire title to the subject land prior to its reservation under Proclamation No. 573. He filed his application for free patent only in January, 1973, more than three (3) years after the issuance of Proclamation No. 573 in June, 1969. At that time, the land, as part of the Caliraya-Lumot River Forest Reserve, was no longer open to private ownership as it has been classified as public forest reserve for the public good. Nonetheless, petitioners insist that the term, private rights, in Proclamation No. 573, should not be interpreted as requiring a title. They opine that it suffices if the claimant had occupied and cultivated the property for so many number of years, declared the land for taxation purposes, [paid] the corresponding real estate taxes [which are] accepted by the government, and [his] occupancy and possession [is] continuous, open and unmolested and recognized by the government. Prescinding from this premise, petitioners urge that the 25-year possession by petitioner Gordula from 1944 to 1969, albeit five (5) years short of the 30-year possession required under Commonwealth Act (C.A.) No. 141, as amended, is enough to vest upon petitioner Gordula the private rights recognized and respected in Proclamation No. 573. The case law does not support this submission. In Director of Lands vs. Reyes, we held that a settler claiming the protection of private rights to exclude his land from a military or forest reservation must show x x x by clear and convincing evidence that the property in question was acquired by [any] x x x means for the acquisition of public lands. In fine, one claiming private rights must prove that he has complied with C.A. No. 141, as amended, otherwise known as the Public Land Act, which prescribes the substantive as well as the procedural requirements for acquisition of public lands. This law requires at least thirty (30) years of open, continuous, exclusive and notorious possession and possession of agricultural lands of the public domain, under a bona fide claim of acquisition, immediately preceding the filing of the application for free patent. The rationale for the 30-year period lies in the presumption that the land applied for pertains to the State, and that the occupants and/or possessors claim an interest therein only by virtue of their imperfect title or continuous, open and notorious possession. Next, petitioners argue that assuming no private rights had attached to the Lot prior to EO 33 in 1904, the President of the Philippines had subsequently segregated the Lot from the public domain and made the Lot alienable and disposable when he issued Proclamation No. 1283 on June 21, 1974. Petitioners contend that Proclamation No. 1283 expressly excluded an area of 3,780 hectares from the MWR and made the area part of the Boso-boso Townsite Reservation. Petitioners assert that Lot Psu-162620 is a small part of this excluded town site area. Petitioners further contend that town sites are considered alienable and disposable under CA 141. Proclamation No. 1283 reads thus: PROCLAMATION NO. 1283 EXCLUDING FROM THE OPERATION EXECUTIVE ORDER NO. 33, DATED JULY 26, 1904, AS AMENDED BY EXECUTIVE ORDERS NOS. 14 AND 16, BOTH SERIES OF 1915, WHICH ESTABLISHED THE WATERSHED RESERVATION SITUATED IN THE MUNICIPALITY OF ANTIPOLO, PROVINCE OF RIZAL, ISLAND OF LUZON, A CERTAIN PORTION OF THE LAND EMBRACED THEREIN AND RESERVING THE SAME, TOGETHER WITH THE ADJACENT PARCEL OF LAND OF THE PUBLIC DOMAIN, FOR TOWNSITE PURPOSES UNDER THE PROVISIONS OF CHAPTER XI OF THE PUBLIC LAND ACT. Upon recommendation of the Secretary of Agriculture and Natural Resources and pursuant to the authority vested in me by law, I, FERDINAND E. MARCOS, President of the Philippines, do hereby, exclude from the operation of Executive Order No. 33 dated July 26, 1904, as amended by Executive Orders Nos. 14 and 16, both series of 1915, which established the Watershed Reservation situated in the Municipality of Antipolo, Province of Rizal, Island of Luzon, certain portions of land embraced therein and reserve the same, together with the adjacent parcel of land of the public domain, for townsite purposes under the provisions of Chapter XI of the Public Land Act, subject to private rights, if any there be, and to future subdivision survey in accordance with the development plan to be prepared and approved by the Department of Local Government and Community Development, which parcels are more particularly described as follows: Lot A (Part of Watershed Reservation) A parcel of land (Lot A of Proposed Poor Mans Baguio, being a portion of the Marikina Watershed, IN-2), situated in the municipality of Antipolo, Province of Rizal, Island of Luzon, beginning at a point marked 1 on sketch plan, being N-74-30 E, 8480.00 meters more or less, from BLLM 1, Antipolo, Rizal; thence N 33 28 W 1575.00 m. to point 2; thence N 40 26 W 1538.50 m. to point 3; thence N 30 50W 503.17 m. to point 4; thence N 75 02 W 704.33 m. to point 5; thence N 14 18 W 1399.39 m. to point 6; thence N 43 25 W 477.04 m. to point 7; thence N 71 38 W 458.36 m. to point 8; thence N 31 05 W 1025.00 m. to point 9; thence Due North 490.38 m. to point 10; thence Due North 1075.00 m. to point 11; thence Due East 1000.00 m. to point 12; thence Due East 1000.00 m. to point 13; thence Due East 1000.00 m. to point 14; thence Due East 1000.00 m. to point 15; thence Due East 1000.00 m. to point 16; thence Due East 1000.00 m. to point 17; thence Due East 1075.00 m. to point 18; thence Due South 1000.00 m. to point 19; thence Due South 1000.00 m. to point 20; thence Due South 1000.00 m. to point 21; thence Due South 1000.00 m. to point 22; thence Due South 1000.00 m. to point 23; thence Due South 1000.00 m. to point 24; thence Due South 1075.00 m. to point 25; thence Due West 1000.00 m. to point 26; thence Due West 1000.00 m. to point 27; thence Due West 636.56 m. to point of beginning. Containing an area of three thousand seven hundred eighty (3,780) Hectares, more or less. Lot B (Alienable and Disposable Land) A parcel of land (Lot B of Proposed Poor Mans Baguio, being a portion of alienable and disposable portion of public domain) situated in the municipality of Antipolo, Province of Rizal, Island of Luzon. Beginning at a point marked 1 on sketch plan being N 74 30 E., 8430.00 m., more or less, from BLLM 1. Antipolo, Rizal; thence Due
80 81

West 363.44 m. to point 2; thence Due West 1000.00 m. to point 3; thence Due West 100.00 m. to point 4; thence Due West 1000.00 m. to point 5; thence Due West 1075.00 m. to point 6; thence Due North 1000.00 m. to point 7; thence Due North 1000.00 m. to point 8; thence Due North 1000.00 m. to point 9; thence Due North 1000.00 m. to point 10; thence Due North 1000.00 m. to point 11; thence Due North 509.62 m. to point 12; thence S. 31 05 E 1025.00 m. to point 13; thence S 71 38 E 458.36 m. to point 14; thence S 43 25 E 477.04 m. to point 15; thence S 14 18 E 1399.39 m. to point 16; thence S 75 02 E 704.33 m. to point 17; thence S. 30 50 E 503.17 m. to point 18; thence S 40 26 E 1538.50 m. to point 19; thence s 33 23 e 1575.00 m to point of beginning. Containing an area of one thousand two hundred twenty five (1,225) Hectares, more or less. Note: All data are approximate and subject to change based on future survey. IN WITNESS WHEREOF, I Have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. Done in the City of Manila, this 21st day of June, in the year of Our Lord, nineteen hundred and seventy-four. (Sgd.) FERDINAND E. MARCOS President Republic of the Philippines Proclamation No. 1283 has since been amended by Proclamation No. 1637 issued on April 18, 1977. Proclamation No. 1637 revised the area and location of the proposed townsite. According to then DENR Secretary Victor O. Ramos, Proclamation No. 1637 excluded Lot A (of which the Lot claimed by petitioners is part) for townsite purposes and reverted it to MWR coverage.82[34] Proclamation No. 1637 reads: PROCLAMATION NO. 1637 AMENDING PROCLAMATION NO. 1283, DATED JUNE 21, 1974, WHICH ESTABLISHED THE TOWNSITE RESERVATION IN THE MUNICIPALITIES OF ANTIPOLO AND SAN MATEO, PROVINCE OF RIZAL, ISLAND OF LUZON BY INCREASING THE AREA AND REVISING THE TECHNICAL DESCRIPTION OF THE LAND EMBRACED THEREIN, AND REVOKING PROCLAMATION NO. 765 DATED OCTOBER 26, 1970 THAT RESERVED PORTIONS OF THE AREA AS RESETTLEMENT SITE. Upon recommendation of the Secretary of Natural Resources and pursuant to the authority vested in me by law, I, FERDINAND E. MARCOS, President of the Philippines, do hereby amend Proclamation No. 1283, dated June 21, 1974 which established the townsite reservation in the municipalities of Antipolo and San Mateo, Province of Rizal, Island of Luzon, by increasing the area and revising the technical descriptions of the land embraced therein, subject to private rights, if any there be, which parcel of land is more particularly described as follows: (Proposed Lungsod Silangan Townsite) A PARCEL OF LAND (Proposed Lungsod Silangan Townsite Reservation amending the area under SWO-41762 establishing the Bagong Silangan Townsite Reservation) situated in the Municipalities of Antipolo, San Mateo, and Montalban, Province of Rizal, Island of Luzon. Bounded on the E., along lines 1-2-3-4-5-6-7-8-9-1011-12-13-14-15-16-17-18-19-20-21-22-23 by the Marikina Watershed Reservation (IN-12); on the S., along lines 23-24-25 by the portion of Antipolo; on the W., along lines 25-26-27-28-29-30 by the Municipalities of Montalban, San Mateo; and on the N., along lines 30-31-32-33-34-35-36-37-38-39-40-41-42-43-44 by the Angat Watershed Reservation. Beginning at a point marked 1 on the Topographic Maps with the Scale of 1:50,000 which is the identical corner 38 IN-12, Marikina Watershed Reservation. xxx xxx xxx

NOTE: All data are approximate and subject to change based on future survey. Proclamation No. 765 dated October 26, 1970, which covered areas entirely within the herein Lungsod Silangan Townsite, is hereby revoked accordingly. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. Done in the City of Manila, this 18th day of April, in the year of Our Lord, nineteen hundred and seventy-seven. (Sgd.) FERDINAND E. MARCOS President of the Philippines A positive act (e.g., an official proclamation) of the Executive Department is needed to declassify land which had been earlier classified as a watershed reservation and to convert it into alienable or disposable land for agricultural or other purposes. 83[35] Unless and until the land classified as such is released in an official proclamation so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply. 84[36] The principal document presented by petitioners to prove the private character of the Lot is the Certification of the Bureau of Forest Development dated March 18, 1986 that the Lot is excluded from the Marikina Watershed (Exh. R). The Certification reads: Republic of the Philippines Ministry of Natural Resources BUREAU OF FOREST DEVELOPMENT REGION IV EL AL Building 100 Quezon Avenue, Quezon City MAR 18 1986 VERIFICATION ON THE STATUS OF LAND: TO WHOM IT MAY CONCERN: This is to certify that the tract of land situated in Barangay San Isidro, Antipolo, Rizal, containing an area of 1,269,766 square meters, as shown and described on the reverse side hereof, surveyed by Geodetic Engineer Telesforo Cabading for Angelina C. Reynoso, is verified to be within the area excluded from the operation of Marikina Watershed Reservation established under Executive Order No. 33 dated July 26, 1904 per Proclamation No. 1283, promulgated on June 21, 1974, which
82 83 84

established the Boso-Boso Townsite Reservation, amended by proclamation No. 1637 dated April 18, 1977 known as Lungsod Silangan Townsite Reservation. Subject area also falls within the bounds of Bagong Lipunan Site under P.D. 1396 dated June 2, 1978 under the sole jurisdiction of the Ministry of Human Settlements, to the exclusion of any other government agencies. This verification is made upon the request of the Chief, Legal Staff, R-4 as contained in his internal memorandum dated March 18, 1986. Verified by: (Sgd) ROMEO C. PASCUBILLO Cartographer II Checked by: (Sgd) ARMENDO R. CRUZ Supervising Cartographer ATTESTED: (Sgd) LUIS G. DACANAY Chief, Forest Engineering & Infrastructure Section The above certification on which petitioners rely that a reclassification had occurred, and that the Lot is covered by the reclassification, is contradicted by several documents submitted by the Solicitor General before the land registration court. The Solicitor General submitted to the land registration court a Report 85[37] dated March 2, 1988, signed by Administrator Teodoro G. Bonifacio of the then National Land Titles and Deeds Registration Administration, confirming that the Lot described in Psu-162620 forms part of the MWR. He thus recommended the dismissal of the application for registration. The Report states: COMES NOW the Administrator of the National Land Titles and Deeds Registration Commission and to this Honorable Court respectfully reports that: 1. A parcel of land described in plan Psu-162620 situated in the Barrio of San Isidro, Municipality of Antipolo, Province of Rizal, is applied for registration of title in the case at bar. 2. After plotting plan Psu-162620 in our Municipal Index Map it was found that a portion of the SW, described as Lot 3 in plan Psu-173790 was previously the subject of registration in Land Reg. Case No. N-9578, LRC Record No. N-55948 and was issued Decree No. N-191242 on April 4, 1986 in the name of Apolonia Garcia, et al., pursuant to the Decision and Order for Issuance of the Decree dated February 8, 1984 and March 6, 1984, respectively, and the remaining portion of plan Psu162620 is inside IN-12, Marikina Watershed. x x x WHEREFORE, this matter is respectfully submitted to the Honorable Court for its information and guidance with the recommendation that the application in the instant proceedings be dismissed, after due hearing (Underlining supplied). Likewise, in a letter86[38] dated November 11, 1991, the Deputy Land Inspector, DENR, Region IV, Community Environment and Natural Resources Office, Antipolo, Rizal, similarly confirmed that the Lot is within the MWR. The letter states: That the land sought to be registered is situated at San Isidro (Boso-boso), Antipolo, Rizal, with an area of ONE HUNDRED TWENTY SIX POINT ZERO SEVEN SIXTY SIX (126.0766) hectares, more particularly described in Psu-162620, which is within the Marikina Watershed Reservation under Executive Order No. 33 dated July 2, 1904 which established the Marikina Watershed Reservation (IN-12) x x x. x x x

That the land sought to be registered is not a private property of the Registration Applicant but part of the public domain, not subjected to disposition and is covered by Proclamation No. 585 for Integrated Social Forestry Program hence, L.R.C. No. 269-A is recommended for rejection (Underlining supplied). Copy of the letter is attached herewith as Annex 3 and made an integral part hereof. Lastly, the Solicitor General pointed out that attached to petitioner Edna T. Collados [as original applicant] application is the technical description 87[39] of the Lot signed by Robert C. Pangyarihan, Officer-in-Charge of the Survey Division of the Bureau of Lands. This technical description categorically stated that the Lot is inside IN-12 Mariquina Watershed. The evidence of record thus appears unsatisfactory and insufficient to show clearly and positively that the Lot had been officially released from the Marikina Watershed Reservation to form part of the alienable and disposable lands of the public domain. We hold that once a parcel of land is included within a watershed reservation duly established by Executive Proclamation, as in the instant case, a presumption arises that the land continues to be part of such Reservation until clear and convincing evidence of subsequent declassification is shown. It is obvious, based on the facts on record that neither petitioners nor their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of the Lot for at least thirty years immediately preceding the filing of the application for confirmation of title. Even if they submitted sufficient proof that the Lot had been excluded from the MWR upon the issuance of Proclamation No. 1283 on June 21, 1974, petitioners possession as of the filing of their application on April 25, 1985 would have been only eleven years counted from the issuance of the proclamation in 1974. The result will not change even if we tack in the two years Sesinando Leyva allegedly possessed the Lot from 1902 until the issuance of EO 33 in 1904. Petitioners case falters even more because of the issuance of Proclamation No. 1637 on April 18, 1977. According to then DENR Secretary Victor Ramos, Proclamation No. 1637 reverted Lot A or the townsite reservation, where petitioners' Lot is supposedly situated, back to the MWR. Finally, it is of no moment if the areas of the MWR are now fairly populated and vibrant communities as claimed by petitioners. The following ruling may be applied to this case by analogy: A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. Forest lands do not have to be on mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa palms and other trees growing in brackish or sea water may also be classified as forest land. The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like. Unless and
85 86 87

until the land classified as forest is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.88[40]

Second Issue: Whether the petition for annulment of judgment should have been given due course.

Petitioners fault the Court of Appeals for giving due course to the Republics petition for annulment of judgment which was filed long after the decision of the land registration court had allegedly become final and executory. The land registration court rendered its decision on January 30, 1991 and the Solicitor General received a copy of the decision on April 23, 1991.89[41] Petitioners point out that the Solicitor General filed with the Court of Appeals the petition for annulment of judgment invoking Section 9(2) of BP Blg. 129 90[42] only on August 6, 1991, after the decision had supposedly become final and executory. Moreover, petitioners further point out that the Solicitor General filed the petition for annulment after the land registration court issued its order of May 6, 1991 directing the Land Registration Authority to issue the corresponding decree of registration. The Solicitor General sought the annulment of the decision on the ground that the land registration court had no jurisdiction over the case, specifically, over the Lot which was not alienable and disposable. The Solicitor General maintained that the decision was null and void. Petitioners argue that the remedy of annulment of judgment is no longer available because it is barred by the principle of res judicata. They insist that the land registration court had jurisdiction over the case which involves private land. They also argue that the Republic is estopped from questioning the land registration courts jurisdiction considering that the Republic participated in the proceedings before the court. It is now established that the Lot, being a watershed reservation, is not alienable and disposable public land. The evidence of the petitioners do not clearly and convincingly show that the Lot, described as Lot Psu-162620, ceased to be a portion of the area classified as a watershed reservation of the public domain. Any title to the Lot is void ab initio. In view of this, the alleged procedural infirmities attending the filing of the petition for annulment of judgment are immaterial since the land registration court never acquired jurisdiction over the Lot. All proceedings of the land registration court involving the Lot are therefore null and void. We apply our ruling in Martinez vs. Court of Appeals, 91[43] as follows: The Land Registration Court has no jurisdiction over non-registrable properties, such as public navigable rivers which are parts of the public domain, and cannot validly adjudge the registration of title in favor of private applicant. Hence, the judgment of the Court of First Instance of Pampanga as regards the Lot No. 2 of certificate of Title No. 15856 in the name of petitioners may be attacked at any time, either directly or collaterally, by the State which is not bound by any prescriptive period provided for by the Statute of Limitations. We also hold that environmental consequences in this case override concerns over technicalities and rules of procedure. In Republic vs. De los Angeles,92[44] which involved the registration of public lands, specifically parts of the sea, the Court rejected the principle of res judicata and estoppel to silence the Republics claim over public lands. The Court said: It should be noted further that the doctrine of estoppel or laches does not apply when the Government sues as a sovereign or asserts governmental rights, nor does estoppel or laches validate an act that contravenes law or public policy, and that res judicata is to be disregarded if its application would involve the sacrifice of justice to technicality. The Court further held that the right of reversion or reconveyance to the State of the public properties registered and which are not capable of private appropriation or private acquisition does not prescribe. Third issue: Whether the petition-in-intervention is proper. The Bockasanjo ISF Awardees Association, Inc., an association of holders of certificates of stewardship issued by the DENR under its Integrated Social Forestry Program, filed with the Court of Appeals on November 29, 1991 a Motion for Leave to Intervene and to Admit Petition-In-Intervention. According to intervenors, they are the actual occupants of the Lot which petitioners sought to register. Aware that the parcels of land which their forefathers had occupied, developed and tilled belong to the Government, they filed a petition with then President Corazon C. Aquino and then DENR Secretary Fulgencio S. Factoran, to award the parcels of land to them. Secretary Factoran directed the Director of Forest Management Bureau to take steps for the segregation of the aforementioned area from the MWR for development under the DENRs ISF Programs. Subsequently, then President Aquino issued Proclamation No. 585 dated June 5, 1990 excluding 1,430 hectares from the operation of EO 33 and placed the same under the DENRs Integrated Social Forestry Program. Proclamation No. 585 reads: PROCLAMATION NO. 585 AMENDING FURTHER EXECUTIVE ORDER NO. 33, DATED JULY 26, 1904 WHICH ESTABLISHED THE MARIKINA WATERSHED RESERVATION (IN-12) AS AMENDED, BY EXCLUDING CERTAIN PORTIONS OF LANDS EMBRACED THEREIN SITUATED AT SITIOS BOSOBOSO, KILINGAN, VETERANS, BARANGAYS SAN JOSEPH AND PAENAAN, MUNICIPALITY OF ANTIPOLO, PROVINCE OF RIZAL, ISLAND OF LUZON. Upon recommendation of the Secretary of Environment and Natural Resources and pursuant to the authority vested in me by law, I, CORAZON C. AQUINO, President of the Philippines, do hereby exclude from the operation of Executive Order No. 33, which established the Marikina Watershed Reservation, certain parcel of land of the public domain embraced therein situated in Sitios Bosoboso, Veterans, Kilingan and Barangay San Joseph and Paenaan, Municipality of Antipolo, Province of Rizal and place the same under the Integrated Social Forestry Program of the Department of Environment and Natural Resources in accordance with existing laws, rules and regulations, which parcel of land is more particularly described as follows: A PARCEL OF LAND, within the Marikina Watershed Reservation situated in the Municipality of Antipolo, Province of Rizal, beginning at point 1 on plan, being identical to corner 1 of Marikina Watershed Reservation; thence
88 89 90 91 92

xxx

xxx

xxx

Containing an area of One Thousand Four Hundred Thirty (1,430) Hectares. All other lands covered and embraced under Executive Order No. 33 as amended, not otherwise affected by this Proclamation, shall remain in force and effect. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. Done in the City of Manila, this 5th day of June, in the year of Our Lord, nineteen hundred and ninety. (Sgd.) CORAZON C. AQUINO President of the Philippines Pursuant to Proclamation No. 585, the chief of the ISF Unit, acting through the Regional Executive Director of the DENR (Region IV), issued sometime between the years 1989 to 1991 certificates of stewardship contracts to bona fide residents of the barangays mentioned in the proclamation as qualified recipients of the ISF programs. Among those awarded were intervenors. The certificates of stewardship are actually contracts of lease granted by the DENR to actual occupants of parcels of land under its ISF programs for a period of twenty-five (25) years, renewable for another twenty-five (25) years. 93[45] The DENR awarded contracts of stewardship to ISF participants in Barangay San Isidro (or Boso-boso) and the other barangays based on the Inventory of Forest Occupants the DENR had conducted. 94[46] According to intervenors, they learned only on July 31, 1991 about the pendency of LRC Case No. 269-A before the Regional Trial Court of Antipolo, Rizal. On August 8, 1991, they filed a Motion for Leave to Intervene and to Admit Opposition in Intervention before the land registration court to assert their rights and to protect their interests. However, shortly after the filing of their opposition, intervenors learned that the land registration court had already rendered a decision on January 30, 1991 confirming petitioners imperfect title. Intervenors counsel received a copy of the decision on August 9, 1991. On August 14, 1991, intervenors filed a motion to vacate judgment and for new trial before the land registration court. According to intervenors, the land registration court could not act on its motions due to the restraining order issued by the Court of Appeals on August 8, 1991, enjoining the land registration court from executing its decision, as prayed for by the Solicitor General in its petition for annulment of judgment. The intervenors were thus constrained to file a petition for intervention before the Court of Appeals which allowed the same. Rule 19 of the 1997 Rules of Civil Procedure95[47] provides in pertinent parts: Section 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court, or an officer thereof may, with leave of court, be allowed to intervene in the action. The Court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the inertvenors rights may be fully protected in a separate proceeding. Sec. 2. Time to intervene. The motion to intervene may be filed at any time before rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties. As a rule, intervention is allowed before rendition of judgment by the trial court, as Section 2, Rule 19 expressly provides. However, the Court has recognized exceptions to this rule in the interest of substantial justice. Mago vs. Court of Appeals96[48] reiterated the ruling in Director of Lands vs. Court of Appeals, where the Court allowed the motions for intervention even when the case had already reached this Court. Thus, in Mago the Court held that: It is quite clear and patent that the motions for intervention filed by the movants at this stage of the proceedings where trial had already been concluded x x x and on appeal x x x the same affirmed by the Court of Appeals and the instant petition for certiorari to review said judgment is already submitted for decision by the Supreme Court, are obviously and, manifestly late, beyond the period prescribed under x x x Section 2, Rule 12 of the rules of Court. But Rule 12 of the Rules of Court, like all other Rules therein promulgated, is simply a rule of procedure, the whole purpose and object of which is to make the powers of the Court fully and completely available for justice. The purpose of procedure is not to thwart justice. Its proper aim is to facilitate the application of justice to the rival claims of contending parties. It was created not to hinder and delay but to facilitate and promote the administration of justice. It does not constitute the thing itself which courts are always striving to secure to litigants. It is designed as the means best adopted to obtain that thing. In other words, it is a means to an end. To be sure, the Court of Appeals did not pass upon the actual status of intervenors in relation to the Lot as this was not in issue. Neither was the validity of the certificates of stewardship contracts which intervenors allegedly possessed inquired into considering this too was not in issue. In fact, intervenors did not specifically seek any relief apart from a declaration that the Lot in question remains inalienable land of the public domain. We cannot fault the Court of Appeals for allowing the intervention, if only to provide the rival groups a peaceful venue for ventilating their sides. This case has already claimed at least five lives due to the raging dispute between the rival camps of the petitioners on one side and those of the DENR awardees on the other. It also spawned a number of criminal cases between the two rival groups including malicious mischief, robbery and arson. A strict application of the rules would blur this bigger, far more important picture. WHEREFORE, the Petition is DENIED. The Decision of the Court of Appeals dated June 22, 1992 declaring null and void the Decision dated January 30, 1991 of Branch 71, Regional Trial Court of Antipolo, Rizal, in LRC No. 269-A, LRC Rec. No. N-59179 is AFFIRMED. SO ORDERED. Vitug, and Ynares-Santiago, JJ., concur. Davide, Jr., C.J., (Chairman), on official leave. Republic of the Philippines Supreme Court Manila SECOND DIVISION

93 94 95 96

ROSITO BAGUNU, Petitioner,

G.R. No. 186487 Present: CARPIO, J., Chairperson, BRION, PERALTA,* BERSAMIN,** and SERENO, JJ. Promulgated: August 15, 2011

- versus -

SPOUSES FRANCISCO AGGABAO & ROSENDA ACERIT, Respondents.

x----------------------------------------------------------------------------------------- x

RESOLUTION BRION, J.:

We resolve the motion for reconsideration97[1] filed by Rosito Bagunu (petitioner) to reverse our April 13, 2009 Resolution 98[2] which denied his petition for review on certiorari for lack of merit. FACTUAL ANTECEDENTS R.L.O. Claim No. 937/DENR Case No. 5177 The present controversy stemmed from a protest filed by the spouses Francisco Aggabao and Rosenda Acerit ( respondents) against the petitioners free patent application over a parcel of unregistered land located in Caniogan, Sto. Tomas, Isabela ( subject land), pending before the Department of Environment and Natural Resources, Region II, Tuguegarao City, Cagayan (DENR Regional Office). The subject land was previously owned by Marcos Binag, who later sold it ( first sale) to Felicisimo Bautista ( Bautista). In 1959, Bautista, in turn, sold the subject land ( second sale) to Atty. Samson Binag. On December 12, 1961, Atty. Binag applied for a free patent 99[3] over the subject land with the Bureau of Lands (now Lands Management Bureau). 100[4] On November 24, 1987, Atty. Binag sold the subject land ( third sale) to the petitioner,101[5] who substituted for Atty. Binag as the free patent applicant. The parties deed of sale states that the land sold to the petitioner is the same lot subject of Atty. Binags pending free patent application. 102[6] The deeds evidencing the successive sale of the subject land, the Bureau of Lands survey, 103[7] and the free patent applications uniformly identified the subject land as Lot 322. The deeds covering the second and

* * 97 98 99 100 101 102 103

third sale also uniformly identified the boundaries of the subject land. 104[8] On December 28, 1992, the respondents filed a protest against the petitioners free patent application. The respondents asserted ownership over Lot 322 based on the Deeds of Extrajudicial Settlement with Sale, dated June 23, 1971 and April 15, 1979, executed in their favor by the heirs of one Rafael Bautista. 105[9] The Office of the Regional Executive Director of the DENR conducted an ocular inspection and formal investigation. The DENR Regional Office found out that the petitioner actually occupies and cultivates the area in dispute including the area purchased by [the respondents]. 106[10] On July 10, 1998, the DENR Regional Office ruled that the petitioner wrongfully included Lot 322 in his free patent application since this lot belongs to the respondents. The DENR Regional Office ordered: 1. 2. 3. [The respondents to] file their appropriate public land application covering Lot No. 322, Pls-541-D xxx; [The petitioners free patent application] be amended by excluding Lot No. 322, Pls-541-D, as included in Lot No. 258; [A] relocation survey xxx to determine the exact area as indicated in [the parties] respective technical description of x x x Lot Nos. 258 and 322, Pls-541D.107[11]

The petitioner moved for reconsideration. The DENR Regional Office

104 105 106 107

denied the motion ruling that in determining the identity of a lot, the boundaries and not the lot number assigned to it - are controlling. Since the boundaries indicated in the deed of sale in the petitioners favor correspond to the boundaries of Lot 258, what the petitioner acquired was Lot 258, notwithstanding the erroneous description of the lot sold as Lot 322.108[12] On appeal, the DENR Secretary affirmed 109[13] the ruling of the DENR Regional Office. After noting the differences in the boundaries stated in the parties respective Deeds of Sale, the DENR Secretary concluded that the land claimed by the petitioner is, in fact, distinct from that claimed by the respondents. The DENR Secretary ruled that based on the parties respective deeds of sale, the Subdivision Plan of the lot sold to the petitioner and Atty. Binags affidavit - claiming that the designation of Lot 322 in the Deed of Sale in the petitioners favor is erroneous - what the petitioner really acquired was Lot 258 and not Lot 322. 110[14] The petitioner appealed to the Court of Appeals (CA). COURT OF APPEALS RULING The CA affirmed the ruling of the DENR Secretary. Applying the doctrine of primary jurisdiction, the CA ruled that since questions on the identity of a land require a technical determination by the appropriate administrative body, the findings of fact of the DENR Regional Office, as affirmed by the DENR Secretary, are entitled to great respect, if not finality. 111[15] The petitioner assails this ruling before the Court.

Civil Case No. 751 In the meantime, on November 22, 1994 (or during the pendency of the respondents protest), Atty. Binag filed a complaint for reformation of instruments, covering the second and third sale, against Bautista and the petitioner ( the civil case) with the Cabagan, Isabela Regional Trial Court ( RTC). Atty. Binag alleged that while the deeds evidencing the successive sale of the subject land correctly identified the boundaries of the land sold, the deeds, nevertheless, erroneously identified the subject land as Lot 322, instead of Lot 258.112[16] On December 9, 1994, the petitioner and Bautista filed a motion to dismiss with the RTC, citing the pendency of the land protest before the Bureau of Lands. The RTC held in abeyance its resolution on the motion to dismiss.113[17] After obtaining a favorable ruling from the DENR Regional Office, the respondents joined Atty. Binag in the civil case by filing a complaint-in-intervention against the petitioner. The complaint-in-intervention captioned the respondents causes of action as one for Quieting of Title, Reivindicacion and Damages. 114[18] The respondents alleged that the petitioners claim over Lot 322 is a cloud on their title and ownership of Lot 322. The respondents also alleged that they were in peaceful, continuous, public and adverse possession of Lot 322 from the time they fully acquired it in 1979 until sometime in August of 1992, when the petitioner, through stealth and strategy, ejected them from Lot 322 after transferring his possession from Lot 258.115[19] The respondents asked the RTC to declare them as owners of Lot 322. After the CA affirmed the DENR Secretarys favorable resolution on the respondents protest, the respondents asked the RTC to suspend the civil case or, alternatively, to adopt the DENR Secretarys ruling. 116[20] In their prayer, the respondents asked the RTC to: 1. 2. 3. [Adopt] the findings of the DENR as affirmed by the Court of Appeals xxx thus, the cause of action xxx for reformation of contracts be granted; [Order the petitioner] to vacate Lot 322 xxx and his [Free Patent Application] be amended to exclude Lot 322 xxx. [Set the case] for hearing to receive evidence on the claim of the [respondents] for damages[.] THE PETITION The petitioner argues that the CA erred in affirming the DENR Secretarys jurisdiction to resolve the parties conflicting claims of ownership over Lot 322, notwithstanding that the same issue is pending with the RTC. By ruling that the petitioner bought Lot 258 (and not Lot 322) from Atty. Binag and for adjudicating Lot 322 to the respondents, the DENR effectively reformed contracts and determined claims of ownership over a real property matters beyond the DENRs competence to determine. The petitioner faults the CA for applying the doctrine of primary jurisdiction since the issue of who has a better right over Lot 322 does not involve the specialized technical expertise of the DENR. On the contrary, the issue involves interpretation of contracts, appreciation of evidence and the application of the pertinent Civil Code provisions, which are matters within the competence of the courts. The petitioner claims that the DENR Secretarys factual finding, as affirmed by the CA , is contrary to the evidence. The petitioner asserts that the Deed of Sale in his favor clearly identified the property sold as Lot 322, which was the same land Atty. Binag identified in his free patent application; that the area of Lot 322, as previously determined in a survey caused by the vendor himself (Atty. Binag), tallies with the area stated in the deed in his favor; that he has been in possession of Lot 322 since 1987, when it was sold to him; and that his present possession and cultivation of Lot 322 were confirmed by the DENR Regional Office during its ocular investigation. The petitioner also invites our attention to the incredulity of the respondents claim of ownership over Lot 322, based on Atty. Binags testimony during the hearing on the respondents protest. According to the petitioner, the respondents could not have expressed interest in buying Lot 322 from Atty. Binag had they already acquired Lot 322 from the heirs of one Rafael Bautista. The petitioner adds that as early as 1979, the respondents were already aware of Atty. Binags free patent application over Lot 322. Yet, they filed their protest to the free patent application only in 1992 when the petitioner had already substituted Atty. Binag. The petitioner claims that the respondents inaction is inconsistent with their claim of ownership.
108 109 110 111 112 113 114 115 116

Lastly, the petitioner contests the adjudication of Lot 322 in the respondents favor by claiming that the respondents presented no sufficient evidence to prove their (or their predecessor-in-interests) title. In our April 13, 2009 Resolution, we denied the petition for failure to sufficiently show any reversible error in the assailed CA Decision and for raising substantially factual issues. The petitioner moved for reconsideration, confining his arguments to the issue of jurisdiction and the consequent applicability of the primary jurisdiction doctrine. THE RULING We deny the motion for reconsideration . Questions of fact generally barred under Rule 45 The main thrust of the petitioners arguments refers to the alleged error of the DENR and the CA in identifying the parcel of land that the petitioner bought an error that adversely affected his right to apply for a free patent over the subject land. In his motion for reconsideration, the petitioner apparently took a cue from our April 13, 2009 Resolution, denying his petition, since his present motion limitedly argues against the DENRs jurisdiction and the CAs application of the doctrine of primary jurisdiction. The petitioner correctly recognized the settled rule that questions of fact are generally barred under a Rule 45 petition. In the present case, the identity of Lots 258 and 322 is a central factual issue. The determination of the identity of these lots involves the task of delineating their actual boundaries in accordance with the parties respective deeds of sale and survey plan, among others. While there are instances where the Court departs from the general rule on the reviewable issues under Rule 45, the petitioner did not even attempt to show that his case falls within the recognized exceptions. 117[21] On top of this legal reality, the findings and decision of the Director of Lands 118[22] on questions of fact, when approved by the DENR Secretary, are generally conclusive on the courts, 119[23] and even on this Court, when these factual findings are affirmed by the appellate court. We shall consequently confine our discussions to the petitioners twin legal issues. The determination of the identity of a public land is within the DENRs exclusive jurisdiction to manage and dispose of lands of the public domain The petitioner insists that under the law 120[24] actions incapable of pecuniary estimation, to which a suit for reformation of contracts belong, and those involving ownership of real property fall within the exclusive jurisdiction of the Regional Trial Court. Since these actions are already pending before the RTC, the DENR Secretary overstepped his authority in excluding Lot 322 from the petitioners free patent application and ordering the respondents to apply for a free patent over the same lot. In an action for reformation of contract, the court determines whether the parties written agreement reflects their true intention. 121[25] In the present case, this intention refers to the identity of the land covered by the second and third sale. On the other hand, in a reivindicatory action, the court resolves the issue of ownership of real property and the plaintiffs entitlement to recover its full possession. In this action, the plaintiff is required to prove not only his ownership, but also the identity of the real property he seeks to recover.122[26] While these actions ordinarily fall within the exclusive jurisdiction of the RTC, the courts jurisdiction to resolve controversies involving ownership of real property extends only to private lands. In the present case, neither party has asserted private ownership over Lot 322. The respondents acknowledged the public character of Lot 322 by mainly relying on the administrative findings of the DENR in their complaint-in-intervention, instead of asserting their own private ownership of the property. For his part, the petitioners act of applying for a free patent with the Bureau of Lands is an acknowledgment that the land covered by his application is a public land 123[27] whose management and disposition belong to the DENR Secretary, with the assistance of the Bureau of Lands. Section 4, Chapter 1, Title XIV of Executive Order No. 292 124[28] reads: Section 4. Powers and Functions. - The Department [of Environment and Natural Resources] shall: xxx (4) Exercise supervision and control over forest lands, alienable and disposable public lands, mineral resources and, in the process of exercising such control, impose appropriate taxes, fees, charges, rentals and any such form of levy and collect such revenues for the exploration, development, utilization or gathering of such resources; xxx (15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain and serve as the sole agency responsible for classification, sub-classification, surveying and titling of lands in consultation with appropriate agencies[.] (Underscoring supplied.) Under Section 14(f) of Executive Order No. 192, 125[29] the Director of the Lands Management Bureau has the duty, among others, to assist the DENR Secretary in carrying out the provisions of Commonwealth Act No. 141 (C.A. No. 141)126[30] by having direct executive control of the survey, classification, lease, sale or any other forms of concession or disposition and management of the lands of the public domain.
117 118 119 120 121 122 123 124 125 126

As the CA correctly pointed out, the present case stemmed from the protest filed by the respondents against the petitioners free patent application. In resolving this protest, the DENR, through the Bureau of Lands, had to resolve the issue of identity of the lot claimed by both parties. This issue of identity of the land requires a technical determination by the Bureau of Lands, as the administrative agency with direct control over the disposition and management of lands of the public domain. The DENR, on the other hand, in the exercise of its jurisdiction to manage and dispose of public lands, must likewise determine the applicants entitlement (or lack of it) to a free patent. (Incidentally, the DENR Regional Office still has to determine the respondents entitlement to the issuance of a free patent 127[31] in their favor since it merely ordered the exclusion of Lot 322 from the petitioners own application.) Thus, it is the DENR which determines the respective rights of rival claimants to alienable and disposable public lands; courts have no jurisdiction to intrude on matters properly falling within the powers of the DENR Secretary and the Director of Lands, 128[32] unless grave abuse of discretion exists. After the DENR assumed jurisdiction over Lot 322, pursuant to its mandate, the RTC must defer the exercise of its jurisdiction on related issues on the same matter properly within its jurisdiction,129[33] such as the distinct cause of action for reformation of contracts involving the same property. Note that the contracts refer to the same property, identified as Lot 322, - which the DENR Regional Office, DENR Secretary and the CA found to actually pertain to Lot 258. When an administrative agency or body is conferred quasi-judicial functions, all controversies relating to the subject matter pertaining to its specialization are deemed to be included within its jurisdiction since the law does not sanction a split of jurisdiction 130[34] The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise. 131
[35]

The DENR has primary jurisdiction to resolve conflicting claims of title over public lands The petitioner argues that the CA erred in applying the doctrine of primary jurisdiction, claiming that the issue (of who has a better right over Lot 322) does not require the specialized technical expertise of the DENR. He posits that the issue, in fact, involves interpretation of contracts, appreciation of evidence and application of the pertinent Civil Code provisions, which are all within the competence of regular courts. We disagree. Under the doctrine of primary jurisdiction, courts must refrain from determining a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to its resolution by the latter, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact 132[36] In recent years, it has been the jurisprudential trend to apply [the doctrine of primary jurisdiction] to cases involving matters that demand the special competence of administrative agencies[. It may occur that the Court has jurisdiction to take cognizance of a particular case, which means that the matter involved is also judicial in character. However, if the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court. This is the doctrine of primary jurisdiction.] It applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body , in such case the judicial process is suspended pending referral of such issues to the administrative body for its view.133[37] The application of the doctrine of primary jurisdiction, however, does not call for the dismissal of the case below. It need only be suspended until after the matters within the competence of [the Lands Management Bureau] are threshed out and determined. Thereby, the principal purpose behind the doctrine of primary jurisdiction is salutarily served.134[38] (Emphases added.) The resolution of conflicting claims of ownership over real property is within the regular courts area of competence and, concededly, this issue is judicial in character. However, regular courts would have no power to conclusively resolve this issue of ownership given the public character of the land, since under C.A. No. 141, in relation to Executive Order No. 192,135[39] the disposition and management of public lands fall within the exclusive jurisdiction of the Director of Lands, subject to review by the DENR Secretary. 136[40] While the powers given to the DENR, through the Bureau of Lands, to alienate and dispose of public land do not divest regular courts of jurisdiction over possessory actions instituted by occupants or applicants (to protect their respective possessions and occupations), 137[41] the respondents complaint-in-intervention does not simply raise the issue of possession whether de jure or de facto but likewise raised the issue of ownership as basis to recover possession. Particularly, the respondents prayed for declaration of ownership of Lot 322. Ineluctably, the RTC would have to defer its ruling on the respondents reivindicatory action pending final determination by the DENR, through the Lands Management Bureau, of the respondents entitlement to a free patent, following the doctrine of primary jurisdiction. Undoubtedly, the DENR Secretarys exclusion of Lot 322 from the petitioners free patent application and his consequent directive for the respondents to apply for the same lot are within the DENR Secretarys exercise of sound administrative discretion. In the oft-cited case of Vicente Villaflor, etc. v. CA, et al,138[42] which involves the decisions of the Director
127 128 129 130 131 132 133 134 135 136 137 138

of Lands and the then Minister of Natural Resources, we stressed that the rationale underlying the doctrine of primary jurisdiction applies to questions on the identity of the disputed public land since this matter requires a technical determination by the Bureau of Lands. Since this issue precludes prior judicial determination, the courts must stand aside even when they apparently have statutory power to proceed, in recognition of the primary jurisdiction of the administrative agency. WHEREFORE, we hereby DENY the motion for reconsideration. No costs. SO ORDERED. Republic of the Philippines Supreme Court Manila EN BANC THE SECRETARY OF THE G.R. No. 167707 DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, THE REGIONAL EXECUTIVE Present: DIRECTOR, DENR-REGION VI, REGIONAL TECHNICAL PUNO, C.J., DIRECTOR FOR LANDS, QUISUMBING, LANDS MANAGEMENT BUREAU, YNARES-SANTIAGO, REGION VI PROVINCIAL CARPIO, ENVIRONMENT AND NATURAL AUSTRIA-MARTINEZ, RESOURCES OFFICER OF KALIBO, CORONA,* AKLAN, REGISTER OF DEEDS, CARPIO MORALES, DIRECTOR OF LAND AZCUNA, REGISTRATION AUTHORITY, TINGA, DEPARTMENT OF TOURISM CHICO-NAZARIO, SECRETARY, DIRECTOR OF VELASCO, JR., PHILIPPINE TOURISM NACHURA,** AUTHORITY, REYES, Petitioners, LEONARDO-DE CASTRO, and BRION, JJ. - versus MAYOR JOSE S. YAP, LIBERTAD TALAPIAN, MILA Y. SUMNDAD, and ANICETO YAP, in their behalf and Promulgated: in behalf of all those similarly situated, Respondents. x--------------------------------------------------x DR. ORLANDO SACAY and WILFREDO GELITO, joined by THE LANDOWNERS OF BORACAY SIMILARLY SITUATED NAMED IN A LIST, ANNEX A OF THIS PETITION, Petitioners, - versus THE SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, THE REGIONAL TECHNICAL DIRECTOR FOR LANDS, LANDS MANAGEMENT BUREAU, REGION VI, PROVINCIAL ENVIRONMENT AND NATURAL RESOURCES OFFICER, KALIBO, AKLAN, Respondents. x--------------------------------------------------x DECISION G.R. No. 173775

October 8, 2008

* *

REYES, R.T., J.: AT stake in these consolidated cases is the right of the present occupants of Boracay Island to secure titles over their occupied lands. There are two consolidated petitions. The first is G.R. No. 167707, a petition for review on certiorari of the Decision139[1] of the Court of Appeals (CA) affirming that140[2] of the 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 Boracay for titling purposes. The second is G.R. No. 173775, a petition for prohibition, mandamus, and nullification of Proclamation No. 1064 141[3] issued by President Gloria Macapagal-Arroyo classifying Boracay into reserved forest and agricultural land. The Antecedents G.R. No. 167707 Boracay Island in the Municipality of Malay, Aklan, with its powdery white sand beaches and warm crystalline waters, is reputedly a premier Philippine tourist destination. The island is also home to 12,003 inhabitants 142[4] who live in the bone-shaped islands three barangays.143[5] On April 14, 1976, the Department of Environment and Natural Resources (DENR) approved the National Reservation Survey of Boracay Island,144[6] which identified several lots as being occupied or claimed by named persons. 145[7] On November 10, 1978, then President Ferdinand Marcos issued Proclamation No. 1801146[8] declaring Boracay Island, among other islands, caves and peninsulas in the Philippines, as tourist zones and marine reserves under the administration of the Philippine Tourism Authority (PTA). President Marcos later approved the issuance of PTA Circular 382147[9] dated September 3, 1982, to implement Proclamation No. 1801. 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 titling purposes, respondents-claimants

139 140 141 142 143 144 145 146 147

Mayor Jose S. Yap, Jr., Libertad Talapian, Mila Y. Sumndad, and Aniceto Yap filed a petition for declaratory relief with the RTC in Kalibo, Aklan. In their petition, respondents-claimants alleged that Proclamation No. 1801 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 been in open, continuous, exclusive, and notorious possession and occupation in Boracay since June 12, 1945, or earlier since time immemorial. They declared their lands for tax purposes and paid realty taxes on them. 148[10] Respondents-claimants posited that Proclamation No. 1801 and its implementing Circular did not place Boracay beyond the commerce of man. Since the Island was classified as a tourist zone, it was susceptible of private ownership. Under Section 48(b) of Commonwealth Act (CA) No. 141, otherwise known as the Public Land Act, they had the right to have the lots registered in their names through judicial confirmation of imperfect titles. The Republic, through the Office of the Solicitor General (OSG), opposed the petition for declaratory relief. The OSG countered that Boracay Island was 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 Presidential Decree (PD) No. 705 or the Revised Forestry Code,149[11] as amended. The OSG maintained that respondents-claimants reliance on PD No. 1801 and PTA Circular No. 3-82 was misplaced. Their right to judicial confirmation of title was governed by CA No. 141 and PD No. 705. Since Boracay Island had not been classified as alienable and disposable, whatever possession they had cannot ripen into ownership. During pre-trial, respondents-claimants and the OSG stipulated on the following facts: (1) respondents-claimants were presently in possession of parcels of land in Boracay Island; (2) these parcels of land were planted with coconut trees and 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-claimants declared the land they were occupying for tax purposes. 150[12] The parties also agreed that the principal issue for resolution was purely legal: whether Proclamation No. 1801 posed any legal hindrance or impediment to the titling of the lands in Boracay. They decided to forego with the trial and to submit the case for resolution upon submission of their respective memoranda. 151[13] The RTC took judicial notice 152[14] that certain parcels of land in Boracay Island, more particularly Lots 1 and 30, Plan PSU-5344, were covered by Original Certificate of Title No. 19502 (RO 2222) in the name of the Heirs of Ciriaco S. Tirol. These lots were involved in Civil Case Nos. 5222 and 5262 filed before the RTC of Kalibo, Aklan. 153[15] The titles were issued on August 7, 1933.154[16] RTC and CA Dispositions On July 14, 1999, the RTC rendered a decision in favor of respondents-claimants, with a fallo reading: WHEREFORE, in view of the foregoing, the Court declares 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 and approved by respondent Regional Technical Director of Lands as the approved survey does not in itself constitute a title to the land. SO ORDERED.155[17] The RTC upheld respondents-claimants right to have their occupied lands titled in their name. It ruled that neither Proclamation No. 1801 nor PTA Circular No. 3-82 mentioned that lands in Boracay were inalienable or could not be the subject of disposition. 156[18] The Circular itself recognized private ownership of lands. 157[19] The trial court cited Sections 87158[20] and 53159[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 declared as part of the forest reserve.160[22] The OSG moved for reconsideration but its motion was denied. 161[23] The Republic then appealed to the CA. On December 9, 2004, the appellate court affirmed in toto the RTC decision, disposing as follows: WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us DENYING the appeal filed in this case and AFFIRMING the decision of the lower court.162[24] 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 reserve.
148 149 150 151 152 153 154 155 156 157 158 159 160 161 162

Again, the OSG sought reconsideration but it was similarly denied. 163[25] Hence, the present petition under Rule 45. G.R. No. 173775 On May 22, 2006, during the pendency of G.R. No. 167707, President Gloria Macapagal-Arroyo issued Proclamation No. 1064 164[26] classifying Boracay Island into four hundred (400) hectares of reserved forest land (protection purposes) and six hundred twenty-eight and 96/100 (628.96) hectares of agricultural land (alienable and disposable). The Proclamation likewise provided for a fifteen-meter buffer zone on each side of the centerline of roads and trails, reserved for right-of-way and which shall form part of the area reserved for forest land protection purposes. On August 10, 2006, petitioners-claimants Dr. Orlando Sacay, 165[27] Wilfredo Gelito,166[28] and other landowners167[29] in Boracay filed with this Court an original petition for prohibition, mandamus, and nullification of Proclamation No. 1064. 168[30] They allege that the Proclamation infringed on their prior vested rights over portions of Boracay. They 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 building internationally renowned first class resorts on their lots.169[31] Petitioners-claimants contended that there is no need for a proclamation reclassifying Boracay into agricultural land. Being classified as neither mineral nor timber land, the island is deemed agricultural pursuant to the Philippine Bill of 1902 and Act No. 926, known as the first Public Land Act. 170[32] Thus, their possession in the concept of owner for the required period entitled them to judicial confirmation of imperfect title. Opposing the petition, the OSG argued that petitioners-claimants do not have a vested right over their occupied portions in the island. Boracay is an unclassified public forest land pursuant to Section 3(a) of PD No. 705. Being public forest, the claimed portions of the island are inalienable and cannot be the subject of judicial confirmation of imperfect title. It is only the executive department, not the courts, which has authority to reclassify lands of the public domain into alienable and disposable lands. There is a need for a positive government act in order to release the lots for disposition. On November 21, 2006, this Court ordered the consolidation of the two petitions as they principally involve the same issues on the land classification of Boracay Island. 171[33] Issues G.R. No. 167707 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 situated, to acquire title to their occupied lands in Boracay Island.172[34]

G.R. No. 173775 Petitioners-claimants hoist five (5) issues, namely: I. AT THE TIME OF THE ESTABLISHED POSSESSION OF PETITIONERS IN CONCEPT OF OWNER OVER THEIR RESPECTIVE AREAS IN BORACAY, SINCE TIME IMMEMORIAL OR AT THE LATEST SINCE 30 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 FOREST AS DEFINED BY SEC. 3a, PD 705? II. HAVE PETITIONERS OCCUPANTS ACQUIRED PRIOR VESTED RIGHT OF PRIVATE OWNERSHIP OVER THEIR OCCUPIED PORTIONS OF BORACAY LAND, DESPITE THE FACT THAT THEY HAVE NOT APPLIED YET FOR JUDICIAL CONFIRMATION OF IMPERFECT TITLE? III. IS THE EXECUTIVE DECLARATION OF THEIR AREAS AS ALIENABLE AND DISPOSABLE UNDER SEC 6, CA 141 [AN] INDISPENSABLE PRE-REQUISITE FOR PETITIONERS TO OBTAIN TITLE UNDER THE TORRENS SYSTEM? IV. IS THE ISSUANCE OF PROCLAMATION 1064 ON MAY 22, 2006, VIOLATIVE OF THE PRIOR VESTED RIGHTS TO PRIVATE OWNERSHIP 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 RA 6657. V. 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? 173[35] (Underscoring supplied)
163 164 165 166 167 168 169 170 171 172 173

In capsule, the main issue is whether private claimants (respondents-claimants 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. Our Ruling Regalian Doctrine and power of the executive to reclassify lands of the public domain Private claimants rely on three (3) laws and executive acts in their bid for judicial confirmation of imperfect title, namely: (a) Philippine Bill of 1902 174[36] in relation to Act No. 926, later amended and/or superseded by Act No. 2874 and CA No. 141; 175[37] (b) Proclamation No. 1801176[38] issued by then President Marcos; and (c) Proclamation No. 1064 177[39] issued by President Gloria Macapagal-Arroyo. We shall proceed to determine their rights to apply for judicial confirmation of imperfect title under these laws and executive acts. But first, a peek at the Regalian principle and the power of the executive to reclassify lands of the public domain. The 1935 Constitution classified lands of the public domain into agricultural, forest or timber. 178[40] Meanwhile, the 1973 Constitution provided the following divisions: agricultural, industrial or commercial, residential, resettlement, mineral, timber or forest and grazing lands, and such other classes as may be provided by law, 179[41] giving the government great leeway for classification. 180[42] Then the 1987 Constitution reverted to the 1935 Constitution classification with one addition: national parks. 181[43] Of these, only agricultural lands may be alienated.182[44] Prior to Proclamation No. 1064 of May 22, 2006, Boracay Island had never been expressly and administratively classified under any of these grand divisions. Boracay was an unclassified land of the public domain. The Regalian Doctrine dictates that all lands of the public domain belong to the State, that the State is the source of any asserted right to ownership of land and charged with the conservation of such patrimony. 183[45] The doctrine has been consistently adopted under the 1935, 1973, and 1987 Constitutions. 184[46] All lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State. 185[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 public domain. 186[48] Necessarily, it is up to the State to determine if lands of the public domain will be disposed of for private ownership. The government, as the agent of the state, is possessed of the plenary power as the persona in law to determine who shall be the favored recipients of public lands, as well as under what terms they may be granted such privilege, not excluding the placing of obstacles in the way of their exercise of what otherwise would be ordinary acts of ownership. 187[49] Our present land law traces its roots to the Regalian Doctrine. Upon the Spanish conquest of the Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish Crown. 188[50] The Regalian doctrine was first introduced in the Philippines through the Laws of the Indies and the Royal Cedulas , which laid the foundation that all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain. 189[51] The Laws of the Indies was followed by the Ley Hipotecaria or the Mortgage Law of 1893 . The Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as possessory claims.190[52] The Royal Decree of 1894 or the Maura Law 191[53] partly amended the Spanish 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 were set forth in said decree. 192[54] Under Section 393 of the Maura Law, an informacion posesoria or possessory information title,193[55] when duly inscribed in the Registry of Property, is converted into a title of ownership only after the lapse of twenty (20) years of uninterrupted possession which must be actual, public, and adverse, 194[56] from the date of its inscription. 195[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 would revert to the State. 196[58]
174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196

In sum, private ownership of land under the Spanish regime could only be founded on royal concessions which took various forms, namely: (1) titulo real or royal grant; (2) concesion especial or special grant; (3) composicion con el estado or adjustment title; (4) titulo de compra or title by purchase; and (5) informacion posesoria or possessory information title.197[59] The first law governing the disposition of public lands in the Philippines under American rule was embodied in the Philippine Bill of 1902.198[60] By this law, lands of the public domain in the Philippine Islands were classified into three (3) grand divisions, to wit: agricultural, mineral, and timber or forest lands. 199[61] The act provided for, among others, the disposal of mineral lands by means of absolute grant (freehold system) and by lease (leasehold system). 200[62] It also provided the definition by exclusion of agricultural public lands. 201[63] Interpreting the meaning of agricultural lands under the Philippine Bill of 1902, the Court declared in Mapa v. Insular Government:202[64] 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 x203[65] (Emphasis Ours) On February 1, 1903, the Philippine Legislature passed Act No. 496, otherwise known as the Land Registration Act. The act established a system of registration by which recorded title becomes absolute, indefeasible, and imprescriptible. This is known as the Torrens system. 204[66] Concurrently, on October 7, 1903, the Philippine Commission passed Act No. 926, which was the first Public Land Act. The Act introduced the homestead system and made provisions for judicial and administrative confirmation of imperfect titles and 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 public domain. 205[67] Under the Act, open, continuous, exclusive, and notorious possession and occupation of agricultural lands for the next ten (10) years preceding July 26, 1904 was sufficient for judicial confirmation of imperfect title. 206[68] 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 limited the exploitation of agricultural lands to Filipinos and Americans and citizens of other countries which gave Filipinos the same privileges. For judicial confirmation of title, possession and occupation en concepto dueo since time immemorial, or since July 26, 1894, was required.207[69] After the passage of the 1935 Constitution, CA No. 141 amended Act No. 2874 on December 1, 1936. To this day, CA No. 141, as amended, remains as the existing general law governing the classification and disposition of lands of the public domain other than timber and mineral lands, 208[70] and privately owned lands which reverted to the State. 209[71] Section 48(b) of CA No. 141 retained the requirement under Act No. 2874 of 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. 1942, 210[72] which provided for a simple thirty-year prescriptive period for judicial confirmation of imperfect title. The provision was last amended by PD No. 1073,211[73] which now provides for possession and occupation of the land applied for since June 12, 1945, or earlier.212[74] The issuance of PD No. 892213[75] on February 16, 1976 discontinued the use of Spanish titles as evidence in land registration proceedings. 214[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, 1976. Thereafter, the recording of all unregistered lands215[77] shall be governed by Section 194 of the Revised Administrative Code, as amended by Act No. 3344. On June 11, 1978, Act No. 496 was amended and updated by PD No. 1529, known as the Property Registration Decree. It was enacted to codify the various laws relative to registration of property.216[78] It governs registration of lands under the Torrens system as well as unregistered lands, including chattel mortgages. 217[79]

197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217

A positive act declaring land as alienable and disposable is required . In keeping with the presumption of State ownership, the Court has time and again emphasized that there must be a positive act of the government , such as an official proclamation, 218[80] declassifying inalienable public land into disposable land for agricultural or other purposes. 219 [81] In fact, Section 8 of CA No. 141 limits alienable or disposable lands only to those lands which have been officially delimited and classified. 220[82] The burden of proof in overcoming the presumption of State ownership of the lands of the public domain is on the person applying for registration (or claiming ownership), who must prove that the land subject of the application is alienable or disposable. 221[83] To overcome this presumption, incontrovertible evidence must be established that the land subject of the application (or claim) is alienable or disposable. 222[84] There must still be a positive act declaring land of the public domain as alienable and disposable. To prove that the land subject of an application for registration is alienable, the applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. 223[85] The applicant may also secure a certification from the government that the land claimed to have been possessed for the required number of years is alienable and disposable. 224[86] In the case at bar, no such proclamation, executive order, administrative action, report, statute, or certification was presented to the Court. The records are bereft of 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 disposable. Absent such wellnigh incontrovertible evidence, the Court cannot accept the submission that lands occupied by private claimants were already open to disposition before 2006. Matters of land classification or reclassification cannot be assumed. They call for proof. 225[87] Ankron and De Aldecoa did not make the whole of Boracay Island, or portions of it, agricultural lands . Private claimants posit that Boracay was already an agricultural land pursuant to the old cases Ankron v. Government of the Philippine Islands (1919) 226[88] and De Aldecoa v. The Insular Government (1909) .227[89] These cases were decided under the provisions of the Philippine Bill of 1902 and Act No. 926. There is a statement in these old cases that in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown. 228[90] Private claimants reliance on Ankron and De Aldecoa is misplaced. These cases did not have the effect of converting the whole of Boracay Island or portions of it into agricultural lands. It should be stressed that the Philippine Bill of 1902 and Act No. 926 merely provided the manner through which land registration courts would classify lands of the public domain. Whether the land would be classified as timber, mineral, or agricultural depended on proof presented in each case. Ankron and De Aldecoa were decided at a time when the President of the Philippines had no power to classify lands of the public domain into mineral, timber, and agricultural. At that time, the courts 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.229[91] This was the Courts ruling in Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols Vda. De Palanca v. Republic ,230[92] in which it stated, through Justice Adolfo Azcuna, viz.: x x x Petitioners furthermore insist that a particular land need not be formally released by an act of the Executive before it can be deemed open to private ownership, citing the cases of Ramos v. Director of Lands and Ankron v. Government of the Philippine Islands. xxxx Petitioners reliance upon Ramos v. Director of Lands and Ankron v. Government is misplaced. These cases were decided under the Philippine Bill of 1902 and the first Public Land Act No. 926 enacted by the Philippine Commission on October 7, 1926, under which there was no legal provision vesting in the Chief Executive or President of the Philippines the power to classify lands of the public domain into mineral, timber and agricultural so that the 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. 231
[93]

To aid the courts in resolving land registration cases under Act No. 926, it was then necessary to devise a presumption on land classification. Thus evolved the dictum in Ankron that the courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown. 232[94]

But We cannot unduly expand the presumption in Ankron and De Aldecoa to an argument that all lands of the public domain had been automatically reclassified as disposable and alienable agricultural lands. By no stretch of imagination did the presumption convert all lands of the public domain into agricultural lands. If We accept the position of private claimants, the Philippine Bill of 1902 and Act No. 926 would have automatically made all lands in the Philippines, except those already classified as timber or mineral land, alienable and disposable lands. That would take these lands out of State ownership and worse, would be utterly inconsistent with and totally repugnant to the long-entrenched Regalian doctrine. The presumption in Ankron and De Aldecoa attaches only to land registration cases brought under the provisions of Act No. 926, or more specifically those cases dealing with judicial and administrative confirmation of imperfect titles. The presumption applies to an applicant for judicial or administrative conformation of imperfect title under Act No. 926. It
218 219 220 221 222 223 224 225 226 227 228 229 230 231 232

certainly cannot apply to landowners, such as private claimants or their predecessors-in-interest, who failed to avail themselves of the benefits of Act No. 926. As to them, their land remained unclassified and, by virtue of the Regalian doctrine, continued to be owned by the State. 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 better suited for non-agricultural uses, the courts could adjudge it as a mineral or timber land despite the presumption. In Ankron, this Court stated: In the case of Jocson vs. Director of Forestry (supra), the Attorney-General admitted in effect that whether the particular land in question belongs to one class or another is a question of fact. The mere fact that a tract of land has trees upon it or has mineral within it is not of itself sufficient to declare that one is forestry land and the other, mineral land. There must be some proof of the extent and present or future value of the forestry and of the minerals. While, as we have just said, many definitions have been given for agriculture, forestry, and mineral lands, and that in each case it is a question of fact, we think it is safe to say that in order to be forestry or mineral land the proof must show that it is more valuable for the forestry or the mineral which it contains than it is for agricultural purposes. (Sec. 7, Act No. 1148.) It is not sufficient to show that there exists some trees upon the land or that it bears some mineral. Land may be classified as forestry or mineral today, and, by reason of the exhaustion of the timber or mineral, be classified as agricultural land tomorrow. And vice-versa, by reason of the rapid growth of timber or the discovery of valuable minerals, lands classified as agricultural today may be differently classified tomorrow. Each case must be decided upon the proof in that particular case , having regard for its present or future value for one or the other purposes . We believe, however, considering the fact that it is a matter of public knowledge that a majority of the lands in the Philippine Islands are agricultural lands that the courts have a right to presume, in the absence of evidence to the contrary, that in each case the lands are agricultural lands until the contrary is shown. Whatever the land involved in a particular land registration case is forestry or mineral land must, therefore, be a matter of proof. Its superior value for one purpose or the other is a question of fact to be settled by the proof in each particular case . The fact that the land is a manglar [mangrove swamp] is not sufficient for the courts to decide whether it is agricultural, forestry, or mineral land. It may perchance belong to one or the other of said classes of land. The Government, in the first instance, under the provisions of Act No. 1148, may, by reservation, decide for itself what portions of public land shall be considered forestry land, unless private interests have intervened before such reservation is made. In the latter case, whether the land is agricultural, forestry, or mineral, is a question of proof. Until private interests have intervened, the Government, by virtue of the terms of said Act (No. 1148), may decide for itself what portions of the public domain shall be set aside and reserved as forestry or mineral land. ( Ramos vs. Director of Lands, 39 Phil. 175; Jocson vs. Director of Forestry, supra)233[95] (Emphasis ours) Since 1919, courts were no longer free to determine the classification of lands from the facts of each case, except those that have already became private lands. 234[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 reclassify public lands into alienable or disposable, mineral or forest. 96-a Since then, courts no longer had the authority, whether express or implied, to determine the classification of lands of the public domain.235[97] Here, private claimants, unlike the Heirs of Ciriaco Tirol who were issued their title in 1933, 236[98] did not present a justiciable case for determination by the land registration court of the propertys land classification. Simply put, there was no opportunity for the courts then to resolve if the land the Boracay occupants are now claiming were agricultural lands. When Act No. 926 was supplanted by Act No. 2874 in 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. We note that the RTC decision 237[99] in G.R. No. 167707 mentioned Krivenko v. Register of Deeds of Manila,238[100] which was decided in 1947 when CA No. 141, vesting the Executive with the sole power to classify lands of the public domain was already in effect. Krivenko cited the old cases Mapa v. Insular Government ,239[101] De Aldecoa v. The Insular Government,240[102] and Ankron v. Government of the Philippine Islands.241[103] Krivenko, however, is not controlling here because it involved a totally different issue. The pertinent issue in Krivenko was whether residential lots were included in the general classification of agricultural lands; and if so, whether an alien could acquire a residential lot. This Court ruled that as an alien, Krivenko was prohibited by the 1935 Constitution242[104] from acquiring agricultural land, which included residential lots. Here, the issue is whether unclassified lands of the public domain are automatically deemed agricultural. Notably, the definition of agricultural public lands mentioned in Krivenko relied on the old cases decided prior to the enactment of Act No. 2874, including Ankron and De Aldecoa.243[105] As We have already stated, those cases cannot apply here, since they were decided when the Executive did not have the authority to classify lands as agricultural, timber, or mineral. Private claimants continued possession under Act No. 926 does not create a presumption that the land is alienable . Private claimants also contend that their continued possession of portions of Boracay Island for the requisite period of ten (10) years under Act No. 926 244[106] ipso facto converted the island into private ownership. Hence, they may apply for a title in their name. A similar argument was squarely rejected by the Court in Collado v. Court of Appeals. 245[107] Collado, citing the separate opinion of now Chief Justice Reynato S. Puno in Cruz v. Secretary of Environment and Natural Resources ,107-a ruled:
233 234 9 235 236 237 238 239 240 241 242 243 244 245 1

Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the Philippine Bill of 1902. The law governed the disposition of lands of the public domain. It prescribed rules and regulations for the homesteading, selling and leasing of portions of the public domain of the Philippine Islands, and prescribed the terms and conditions to enable persons to perfect their titles to public lands in the Islands. It also provided for the issuance of patents to certain native settlers upon public lands, for the establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for the cancellation or confirmation of Spanish concessions and grants in the Islands. In short, the Public Land Act operated on the assumption that title to public lands in the Philippine Islands remained in the government; and that the governments title to public land sprung from the Treaty of Paris and other subsequent treaties between Spain and the United States . The term public land referred to all lands of the public domain whose title still remained in the government and are thrown open to private appropriation and settlement, and excluded the patrimonial property of the government and the friar lands. Thus, it is plain error for petitioners to argue that under the Philippine Bill of 1902 and Public Land Act No. 926, mere possession by private individuals of lands creates the legal presumption that the lands are alienable and disposable .246[108] (Emphasis Ours) Except for lands already covered by existing titles, Boracay was an unclassified land of the public domain prior to Proclamation No. 1064. Such unclassified lands are considered public forest under PD No. 705 . The DENR247[109] and the National Mapping and Resource Information Authority 248[110] certify that Boracay Island is an unclassified land of the public domain. PD No. 705 issued by President Marcos categorized all unclassified lands of the 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 of classification for the determination of which lands are needed for forest purpose and which are not. Applying PD No. 705, all unclassified lands, including those in Boracay Island, are ipso facto considered public forests. PD No. 705, however, respects titles already existing prior to its effectivity. The Court notes that the classification of Boracay as a forest land under PD No. 705 may seem to be out of touch with the present realities in the island. Boracay, no doubt, has been partly stripped of its forest cover to pave the way for commercial developments. As a premier tourist destination for local and foreign tourists, Boracay appears more of a commercial island resort, rather than a forest land. Nevertheless, that the occupants of Boracay have built multi-million peso beach resorts on the island; 249[111] that the island has already been stripped of its forest cover; or that the implementation of Proclamation No. 1064 will destroy the islands tourism industry, do not negate its character as public forest. Forests, in the context of both the Public Land Act and the Constitution 250[112] classifying lands of the public domain into agricultural, forest or timber, mineral lands, and national parks, do not necessarily refer to large tracts of wooded land or expanses covered by dense growths of trees and underbrushes. 251[113] The discussion in Heirs of Amunategui v. Director of Forestry252[114] is particularly instructive: A forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted to crops by kaingin cultivators or other farmers. Forest lands do not have to be on mountains or in out of the way places. Swampy areas covered by mangrove trees, nipa palms, and other trees growing in brackish or sea water may also be classified as forest land. The classification is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like . Unless and until the land classified as forest is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply. 253[115] (Emphasis supplied) There is a big difference between forest as defined in a dictionary and forest or timber land as a classification of lands of the public domain as appearing in our statutes. One is descriptive of what appears on the land while the other is a legal status, a classification for legal purposes. 254[116] At any rate, the Court is tasked to determine the legal status 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 not been automatically converted from public forest to alienable agricultural land. Private claimants cannot rely on Proclamation No. 1801 as basis for judicial confirmation of imperfect title. The proclamation did not convert Boracay 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 imperfect title. The Proclamation classified Boracay, among other islands, as a tourist zone. Private claimants assert that, as a tourist spot, the island is susceptible of private ownership. Proclamation No. 1801 or PTA Circular No. 3-82 did not convert the whole of Boracay into an agricultural land. There is nothing in the law or the Circular which made Boracay Island an agricultural land. The reference in Circular No. 3-82 to private lands 255[117] and areas declared as alienable and disposable 256[118] does not by itself classify the entire island as agricultural. Notably, Circular No. 3-82 makes reference not only to private lands and areas but also to public forested lands. Rule VIII, Section 3 provides: No trees in forested private lands may be cut without prior authority from the PTA. All forested areas in public lands are declared forest reserves . (Emphasis supplied) Clearly, the reference in the Circular to both private and public lands merely 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 Forest Developments authority to declare areas in the island as alienable and disposable when it provides:
246 247 248 249 250 251 252 253 254 255 256

Subsistence farming, in areas declared as alienable and disposable by the Bureau of Forest Development. Therefore, Proclamation No. 1801 cannot be deemed the positive act needed to 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 the specific limits of each, as President Arroyo did in Proclamation No. 1064. This was not done in Proclamation No. 1801. The Whereas clauses of Proclamation No. 1801 also explain the rationale behind the declaration of Boracay Island, together with other islands, caves and peninsulas in the Philippines, as a tourist zone and marine reserve to be administered by 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 marine environment. Simply put, the proclamation is aimed at administering the islands for tourism and ecological purposes. It does not address the areas alienability.257[119] More importantly, Proclamation No. 1801 covers not only Boracay Island, but sixty-four (64) other islands, coves, and peninsulas in the Philippines, such as Fortune 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 of Proclamation No. 1801, all the other areas mentioned would likewise be declared wide open for private disposition. That could not have been, and is clearly beyond, the intent of the proclamation. It was Proclamation No. 1064 of 2006 which positively declared part of Boracay as alienable and opened the same to private ownership . Sections 6 and 7 of CA No. 141258[120] provide that it is only the President, upon the recommendation of the proper department head, who has the authority to classify the lands of the public domain into alienable or disposable, timber and mineral lands.259[121] In issuing Proclamation No. 1064, President Gloria Macapagal-Arroyo merely exercised the authority granted to her to classify lands of the public domain, presumably subject to existing vested rights. Classification of public lands is the exclusive prerogative of the Executive Department, through the Office of the President. Courts have no authority to do so. 260 [122] Absent such classification, the land remains unclassified until released and rendered open to disposition. 261[123] Proclamation No. 1064 classifies Boracay into 400 hectares of reserved forest land and 628.96 hectares of agricultural land. The Proclamation likewise provides for a 15meter 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 protection purposes. Contrary to private claimants argument, there was nothing invalid or irregular, much less unconstitutional, about the classification of Boracay Island made by the President through Proclamation No. 1064. It was within her authority to make such classification, subject to existing vested rights. Proclamation No. 1064 does not violate the Comprehensive Agrarian Reform Law . Private claimants further assert that Proclamation No. 1064 violates the provision of the Comprehensive Agrarian Reform Law (CARL) or RA No. 6657 barring conversion of public forests into agricultural lands. They claim that since Boracay is a public forest under PD No. 705, President Arroyo can no longer convert it into an agricultural land without running afoul of Section 4(a) of RA No. 6657, thus: SEC. 4. Scope. The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture. More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program: (a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain.

That Boracay Island was classified as a public forest under PD No. 705 did not bar the Executive from later converting it into agricultural land. Boracay Island still remained an unclassified land of the public domain despite PD No. 705. In Heirs of the Late Spouses Pedro S. Palanca and Soterranea Rafols v. Republic,262[124] the Court stated that unclassified lands are public forests. While it is true that the land classification map does not categorically state that the islands are public forests, the fact that they were unclassified lands leads to the same result. In the absence of the classification as mineral or timber land, the land remains unclassified land until released and rendered open to disposition.263[125] (Emphasis supplied) 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 be no prohibited reclassification under the agrarian law. We agree with the opinion of the Department of Justice 264[126] on this point: Indeed, the key word to the correct application of the prohibition in Section 4(a) is the word reclassification. Where there has been no previous classification of public forest [referring, we repeat, 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 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 the meaning of Section 4(a) . Thus, obviously, the prohibition in Section 4(a) of the CARL against the reclassification of forest lands to agricultural lands without a prior law delimiting the limits of the public domain, does not, and cannot, apply to those lands of the public domain, denominated as public forest under the Revised

257 258 259 260 261 262 263 264

Forestry Code, which have not been previously determined, or classified, as needed for forest purposes in accordance with the provisions of the Revised Forestry Code.265[127] Private claimants are not entitled to apply for judicial confirmation of imperfect title under CA No. 141. Neither do they have vested rights over the occupied lands under the said law. There are two requisites for judicial confirmation of imperfect or incomplete title under CA No. 141, namely: (1) open, continuous, exclusive, and notorious possession and occupation of the subject land by himself or through his 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 of the public domain. 266[128] As discussed, the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801 did not convert portions of Boracay Island into an agricultural land. The island remained an unclassified land of the public domain and, applying the Regalian doctrine, is considered State property. Private claimants bid for judicial confirmation of imperfect title, relying on the Philippine Bill of 1902, Act No. 926, and Proclamation No. 1801, must fail because of the 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 possessed and applied for is already alienable and disposable. This is clear from the wording of the law itself. 267[129] Where the land is not alienable and disposable, possession of the land, no matter how long, cannot confer ownership or possessory rights.268[130] Neither may private claimants apply for judicial confirmation of imperfect title under Proclamation No. 1064, with respect to those lands which were classified as agricultural lands. Private claimants failed to prove the first element of open, continuous, exclusive, and notorious possession of their lands in Boracay since June 12, 1945. We cannot sustain the CA and RTC conclusion in the petition for declaratory relief that private claimants complied with the requisite period of possession. The tax declarations in the name of private claimants are insufficient to prove the first element of possession. We note that the earliest of the tax declarations in the name of private claimants were issued in 1993. Being of recent dates, the tax declarations are not sufficient to convince this Court that the period of possession and occupation commenced on June 12, 1945. Private claimants insist that they have a vested right in Boracay, having been in 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 investments give them a vested right which cannot be unilaterally rescinded by Proclamation No. 1064. The continued possession and considerable investment of private claimants do not automatically give them a vested right in Boracay. Nor do these give them a right to apply for a title to the land they are presently occupying. This Court is constitutionally bound to decide cases based on the evidence presented and the laws applicable. As the law and jurisprudence stand, private claimants are ineligible to apply for a judicial confirmation of title over their occupied portions in Boracay even with their continued possession and considerable investment in the island. One Last Note The Court is aware that millions of pesos have been invested for the development of Boracay Island, making it a by-word in the local and international 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 plight, We are bound to apply the law strictly and judiciously. This is the law and it should prevail. Ito ang batas at ito ang dapat umiral. All is not lost, however, for private claimants. While they may not be eligible to apply for judicial confirmation of imperfect title under Section 48(b) of CA No. 141, as amended, this does not denote their automatic ouster from the residential, commercial, and other areas they possess now classified as agricultural. Neither will this mean the loss of their substantial investments on their occupied alienable lands. Lack of title does not necessarily mean lack of right to possess. For one thing, those with lawful possession may claim good faith as builders of improvements. They can take steps to preserve or protect their possession. For another, they may look into other modes of applying for original registration of title, such as by homestead 269[131] or sales patent,270[132] subject to the conditions imposed by law. More realistically, Congress may enact a law to entitle private claimants to acquire title to their occupied lots or to exempt them from certain requirements under the present land laws. There is one such bill271[133] now pending in the House of Representatives. Whether that bill or a similar bill will become a law is for Congress to decide. 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 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 vision to protect its remaining forest cover and to strike a healthy balance between progress and ecology. Ecological conservation is as important as economic progress. To be sure, forest lands are fundamental to our nations survival. Their promotion and protection are not just fancy rhetoric for politicians and activists. These 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 of Forestry v. Munoz:272
[134]

The view this Court takes of the cases at bar is but in adherence to public policy that should be followed with respect to forest lands. Many have written much, and many more have spoken, and quite often, about the pressing need for forest preservation, conservation, protection, development and reforestation. Not without justification. For, forests constitute a vital segment of any country's natural resources. It is of common knowledge by now that absence of the necessary green cover on our lands produces a number of adverse or ill effects of serious proportions. Without the trees, watersheds dry up; rivers and lakes which they supply are emptied of their contents. The fish disappear. Denuded areas become dust bowls. As waterfalls cease to function, so will hydroelectric plants. With the rains, the fertile topsoil is washed away; geological erosion results. With erosion come the dreaded floods that wreak havoc and

265 266 267 268 269 270 271 272

destruction to property crops, livestock, houses, and highways not to mention precious human lives. Indeed, the foregoing observations should be written down in a lumbermans decalogue. 273[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. FIRST DIVISION REPUBLIC OF THE PHILIPPINES, Petitioner, - versus HEIRS OF JUAN FABIO, namely: DOMINGA C. FABIO, SOCORRO D. FABIO, LYDIA D. FABIO, ROLANDO D. FABIO, NORMA D. FABIO, NORMA L. FABIO, ANGELITA FABIO, ROSALIE FABIO, DANILO FABIO, RENATO FABIO, LEVITA FABIO, IRENE FABIO, TERESITA MOLERA, ROSEMARIE C. PAKAY, LIGAYA C. MASANGKAY, ALFREDO F. CASTILLO, MELINDA F. CASTILLO, MERCEDITA F. CASTILLO, ESTELA DE JESUS AQUINO, FELECITO FABIO, and ALEXANDER FABIO, represented herein by ANGELITA F. ESTEIBAR as their Attorney-in-Fact, Respondents. PUNO, C.J., Chairperson, CARPIO, CHICO-NAZARIO,* VELASCO, JR.,** and LEONARDO-DE CASTRO, JJ. G.R. No. 159589 Present:

Promulgated: December 23, 2008 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x D E C I S I O N CARPIO, J.: The Case Before the Court is a petition for review on certiorari 274[1] assailing the Decision275[2] dated 29 August 2003 of the Court of Appeals in CA-G.R. CV No. 66522, which affirmed the judgment of the Regional Trial Court of Naic, Cavite, Branch 15, in LRC Case No. NC-96-782 granting respondents application for registration of title to Lot No. 233 (Lot), Cad-617-D, Ternate Cadastre.

The Facts

On 21 November 1996, respondents, who are the heirs of Juan Fabio, represented by Angelita F. Esteibar (Esteibar) as their Attorney-in-Fact, filed with the Regional Trial Court of Naic, Cavite, Branch 15, an application for registration of title 276[3] to the Lot with an approximate area of 1,096,866 square meters or 109.6 hectares. The Lot is situated in Barangay Sapang, Ternate, Cavite. The respondents sought the registration of title under the provisions of Act No. 496 or the Land Registration Act, as amended by Presidential Decree No. 1529 (PD 1529).277[4] In the application, respondents alleged that they are the owners of the Lot, including all the improvements, having acquired the same through a bona fide claim of ownership. They declared that they and their predecessors-in-interest were in open, continuous, exclusive and notorious possession of the Lot in the concept of an owner for more than 100 years. 278
[5]

Together with the application for registration, respondents submitted the following documents:
273 * * 274 275 276 277 278

1. 2. 3. 4. 5. 6. 7. 8. 9.

Certificate of Death proving the fact of death of Juan Fabio;279[6] Special Power of Attorney showing that the heirs authorized Esteibar to file the application; 280[7] Order dated 25 November 1994 of Sydicious F. Panoy, Regional Technical Director, Regional Office No. IV-A, Department of Environment and Natural Resources (DENR), giving authority to survey the Lot, which survey was numbered SWO-042121-003369-D;281[8] Surveyors Certificate and Transmittal of Survey Returns signed by Geodetic Engineer Susipatro Mancha proving that the Lot was surveyed; 282[9] Sepia copies of the survey plan establishing that the land area is more or less 109 hectares and that the Lot was already surveyed and the boundaries determined; 283[10] Letter of Authority dated 30 June 1997 authorizing Engineer Roberto C. Pangyarihan (Pangyarihan) to represent the Land Management Sector, DENR-Region IV, and to testify on plan SWO-042121-003369-D covering the Lot;284[11] Technical Description signed by Pangyarihan proving the boundaries of the Lot as surveyed; 285[12] Letter dated 22 April 1991 of Arnaldo Conlu (Conlu), Land Management Inspector, DENR-Region IV establishing that the Lot is alienable and disposable; 286[13] First Indorsement dated 22 April 1991 of Rufo F. Lorenzo, Community Environment and Natural Resources Officer, forwarding to the Regional Technical Director, Land Management Division, through the Chief, Surveys Division, DENR-Region IV the investigation report of Land Management Inspector, Conlu; 287[14] Certifications dated 4 July 1995 and 23 November 1995 of Conrado C. Lindo, Municipal Mayor, and Flordeliza C. Soberano, Municipal Assessor of Ternate, Cavite, respectively, establishing that Juan Fabio was the declared owner of the Lot under Tax Declaration No. 1385 having an area of 200 hectares and situated in Calumpang and Caybangat, Zapang, Ternate, Cavite;288[15] Tax Declarations corresponding to different years showing that the Lot has been declared under the name of Juan Fabio for tax purposes: Tax Declaration No. 428 for the year 1947, Tax Declaration No. 302 for the year 1961; Tax Declaration No. 227 for the year 1969, Tax Declaration No. 210 for the year 1974, Tax Declaration No. 173 for the year 1980, Tax Declaration No. 1543 for the year 1985, and Tax Declaration No. 1385 for the year 1994; 289[16] and Certifications of the Assistant Municipal Treasurer of Ternate, Cavite stating that the real estate taxes for the years 1994 to 1997 were paid. 290[17]

10. 11. 12.

After the presentation of exhibits establishing the jurisdictional facts, the trial prosecutor assigned to the case interposed no objection. Thus, the trial court ordered a general default against the public except the government. On 1 July 1997, respondents presented their evidence consisting of documentary exhibits and the testimonies of witnesses Esteibar, Pangyarihan, Dominga Fabio Lozano, Mariano Huerto, and Raymundo Pakay. Esteibar, the duly appointed representative of the heirs of Juan Fabio, testified that her grandfather, Juan, died in 1959 when she was only 13 years old. She attested that she was born on the Lot and knows that her grandfather owned, possessed and occupied the Lot until his death. Esteibar claimed that they and their predecessors-in-interest have possessed and occupied the Lot openly, publicly, continuously, peacefully, without interruption in the concept of an owner and adverse to the public since time immemorial up to the present or for more than 100 years. They had paid real estate taxes; planted trees, vegetables, rice, and banana plants; and raised animals on the Lot. Further, she stated that the Lot is neither mortgaged nor encumbered and that no other person other than her and her co-heirs are in possession of the Lot. The next witness, Pangyarihan of the Land Management Sector, DENR-Region IV, testified that he had been connected with DENR-Region IV since 1956. He was formerly the Chief of the Survey Division of DENR-Region IV from 1991 until his designation as Special Assistant to the Regional Director in 1995. Pangyarihan affirmed that the Lot is 1,096,866 square meters or 109.6 hectares and that he recommended the approval of the survey plan, SWO-042121-003369-D, which includes the Lot, on the basis of submission of certain requirements like tax declarations, report of investigation by the land investigator and survey returns prepared by the geodetic engineer. He verified that the survey plan and the technical descriptions matched with each other and stated that there is no overlap or encroachment on other surrounding claims on adjacent or adjoining lots. Further, he confirmed that there is a notation at the left hand footnote of the approved survey plan which reads this survey falls within the Calumpang Point Naval Reservation and disposition hereof shall be subject to the final delimitation thereof as per Proc. No. 1582-A dated September 6, 1976.

Dominga Fabio Lozano, the only living and youngest child of Juan Fabio and who was then 63 years of age, testified that she was born in 1934 in Calumpang, Ternate, Cavite. She alleged that she was born and has lived on the Lot, owned by her father Juan Fabio, who in turn inherited the land from his father Ignacio Fabio. She narrated that her father was born in 1887 and died in 1959 at the age of 72 as evidenced by his death certificate. She stated further that no one has ever questioned their ownership or disturbed their peaceful possession and occupation of the Lot. As a result, their possession of the Lot covers more than 100 years of continuous, uninterrupted, public, open and peaceful possession.

279 280 281 282 283 284 285 286 287 288 289 290

Mariano Huerto, a helper of the late Juan Fabio, testified that since 1935, when he was only 12 years old, he had helped cultivate the Lot until he left the place in 1955. He stated that at the time he served as helper, Juan Fabio and his family were the ones who possessed and occupied the Lot. He helped plant vegetables, banana plants, papaya trees and upland rice and was familiar with the boundaries of the Lot.

Raymundo Pakay, 70 years of age at the time and a resident of Ternate, Cavite, testified that he knew Juan Fabio as the owner of the Lot, which has an area of 200 hectares, more or less. He stated that Juan built a house there and could not recall of anyone else who claimed ownership of the Lot.

On 7 August 1997, the Assistant City Prosecutor of Tagaytay City filed his Manifestation and Comment dated 28 July 1997: COMES NOW the government, through the undersigned Assistant City Prosecutor of Tagaytay City, assisting the Office of the Provincial Prosecutor of the Province of Cavite, by way of comment to petitioners formal offer of evidence dated July 3, 1997 hereby manifest that the government interposes no objection to Exhibit A up to PP together with its sub markings, the same being material and relevant to the instant petition. The government further manifests that considering the fact that it has no controverting evidence in its possession to refute the material allegations of the herein petitioner, the government is submitting the instant case for the immediate resolution of this Honorable Court on the basis of the evidence adduced by the petitioner and the cross examination propounded by the Trial Prosecutor. 291[18]

On 29 September 1997, the trial court rendered a Decision ordering the registration of the Lot in the name of Juan Fabio. The dispositive portion states: WHEREFORE, PREMISES CONSIDERED, finding the application for registration and grant of title under Act 496, as amended by Presidential Decree No. 1529 to be meritorious and fully substantiated by evidence sufficient and requisite under the law, this Court, confirming its previous Order of general default as against the general public, hereby decrees and adjudges and hereby orders the registration of the parcel of land as hereinabove described, identified, and bounded and now the subject matter of the present application for registration of title in the above-entitled case, in favor of, and in the name of JUAN FABIO, of Barangay Sapang, Municipality of Ternate, Province of Cavite. FURTHER, upon the finality of this DECISION, the Administrator, Land Registration Authority, is hereby ordered to issue the corresponding decree of registration and the Original Certificate of Title in favor of, and in the name of JUAN FABIO, of Barangay Sapang, Municipality of Ternate, Province of Cavite, over the parcel of land described, identified and bounded as hereinabove-mentioned and subject matter of this Decision which decreed and adjudged the registration of its title in his name. SO ORDERED.292[19] The Republic of the Philippines (petitioner), through the Office of the Solicitor General, filed an appeal with the Court of Appeals. Petitioner claimed that the trial court erred in ruling that respondents have acquired a vested right over the Lot which falls within the Calumpang Point Naval Reservation. Petitioner asserted that the trial court disregarded the testimony of Pangyarihan who recommended the approval of the survey plan with the following notation: This survey falls within the Calumpang Point Naval Reservation and disposition hereof shall be subject to the final delimitation thereof as per Proc. No. 1582-A dated September 6, 1976. x x x In essence, petitioner argued that the trial courts grant of registration is contrary to the provisions of Section 88 of Commonwealth Act No. 141 293[20] and Proclamation No.

1582-A.

294[21]

The Ruling of the Court of Appeals On 29 August 2003, the Court of Appeals affirmed the ruling of the trial court. 295[22] The appellate court ruled that the mode of appeal filed by petitioner was wrong. Since the lone question involved was one of law, petitioner should have filed a petition for review with this Court under Rule 45 of the 1997 Rules of Civil Procedure instead of filing an appeal under Rule 41. Nevertheless, the appellate court looked into the merits of the case and sustained the findings of the trial court: On the merits of the case, it may be true that the General Order 56 of the United States War Department dated 25 March 1904 reserved the subject property as a military reservation, however, President Ferdinand Marcos issued Proclamation 307 on 20 November 1967 which provides x x x. In other words, Presidential Proclamation 307 provides for an exception those properties subject to private rights or those on which private individuals can prove ownership by any mode acceptable under our laws and Torrens system. Proclamation 1582-A issued by President Marcos on 6 September 1976 again provided the following x x x. Without doubt, this complements and recognizes the rights acquired by private individuals under Proclamation 307, over the portion of the properties reserved under General Order 56 of the United States War Department dated 25 March 1904.

291 292 293 294 295

Considering that the annotation appearing in the survey plan merely provides that the controversial portion shall be subject to final delimitation as per Proclamation 1582-A, the same is consistent with the provisions of Proclamation 307. For wrong remedy and for lack of merit, the Court holds and so rules that the trial court erred not in granting petitioners application for registration of title. WHEREFORE, premises considered, the appeal is DISMISSED and the challenged 29 September 1997 Decision of the court a quo is hereby AFFIRMED in toto. No costs. SO ORDERED.296[23]

Hence, the instant petition.

The Issues

The issues for our resolution are (1) whether petitioner correctly appealed the ruling of the trial court to the Court of Appeals, and (2) whether the respondents have acquired a right over the Lot.

The Courts Ruling

The petition has merit.

First Issue: Mode of Appeal Petitioner contends that the jurisdiction of the Court of Appeals over the appeal is determined on the basis of the averments in the notice of appeal. Since the appeal involves questions of fact and law, petitioner correctly appealed the ruling of the trial court to the Court of Appeals and not directly to this Court. Respondents, on the other hand, maintain that the remedy resorted to by petitioner before the Court of Appeals was not correct. Respondents contend that the issues actually raised in the appellants brief determine the appropriate mode of appeal, not the averments in the notice of appeal. Since the appellate court found that petitioner only raised questions of law, the appeal is dismissible under the Rules. Section 2, Rule 41 of the 1997 Rules of Civil Procedure, as amended, which governs appeals from judgments and final orders of the Regional Trial Court to the Court of Appeals, provides: Section 2. Modes of appeal. (a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party. No record on appeal shall be required except in special proceedings and other cases of multiple or separate appeals where the law or these Rules so require. In such cases, the record on appeal shall be filed and served in like manner. (b) Petition for review. The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its appellate jurisdiction shall be by petition for review in accordance with Rule 42. (c) Appeal by certiorari. In all cases where only questions of law are raised or involved, the appeal shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45. (Emphasis supplied) A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For questions to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. 297[24] In its appellants brief filed with the Court of Appeals, petitioner interposed a lone assignment of error: The trial court erred in ruling that appellees have acquired a vested right over the subject property despite the fact that it falls within the Calumpang Point Naval Reservation.298[25] Clearly, the issue stated by petitioner provides no confusion with regard to the truth or falsity of the given facts pertaining to the Lot and its location as established during the trial. It had been duly established that the Lot falls within the Calumpang Point Naval Reservation as shown in the survey conducted and attested to by the DENR. Here, the only issue

296 297 298

involved is the interpretation of a relevant order and proclamations denominating the Lot as part of a military reservation subject to the limitation that private rights should be respected. Undoubtedly, this is a pure question of law. Thus, petitioners appeal under Rule 41 having been improperly brought before the Court of Appeals, it should have been dismissed by the appellate court pursuant to Section 2, Rule 50 of the 1997 Rules of Civil Procedure, as amended, which provides: Sec. 2. Dismissal of improper appeal to the Court of Appeals . An appeal under Rule 41 taken from the Regional Trial Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely of law not being reviewable by the said court. x x x (Emphasis supplied)

Nonetheless, the appellate court in resolving that petitioners appeal constituted a wrong remedy, looked into the merits of the case and found that the laws involved recognize the rights of respondents. As such, equity considerations require that we take a similar course of action in order to put a rest to this case.

Second Issue: Validity of Respondents Title Petitioner asserts that both the trial and appellate courts failed to recognize the import of the notation in the survey plan stating that the Lot falls within the Calumpang Point Naval Reservation. At the time the application for registration of title was filed, the Lot was no longer open to private ownership as it had been classified as a military reservation for public service. Thus, respondents are not entitled to have the Lot registered under the Torrens system.

Respondents, on the other hand, maintain that they have acquired a vested right over the Lot. The Presidential Proclamations, which declared the Lot part of a naval reservation, provided for an exception that private rights shall be respected, taking the portion covered by private rights out of the reservation. Thus, respondents claim they are entitled to have the Lot registered under their names.

The three proclamations cited reserving the Calumpang Point Naval Reservation for the exclusive use of the military are the following: (1) U.S. War Department Order No. 56 issued on 25 March 1904, (2) Proclamation No. 307299[26] issued on 20 November 1967, and (3) Proclamation No. 1582-A issued on 6 September 1976. Such proclamations state: U.S. War Department General Order No. 56300[27] U.S. War Department General Order No. 56 Washington, March 25, 1904. For the knowledge and governance of all interested parties, the following is hereby announced: The President of the United States, by the Order dated March 14, 1904, which provides that the reservations made by Executive Order of April 11, 1902 (General Order No. 38, Army Headquarters, Office of the Adjutant General, April 17, 1902), at the entrance of Manila Bay, Luzon, Philippine Islands, are arranged in such a way that will include only these lands as later described, whose lands were reserved by the Order of March 14, 1904 for military purposes, by virtue of Article 12 of the Act of Congress approved on July 1, 1902, entitled Act providing for the Temporary Administration of Civil Affairs of the Government of the Philippine Islands and for Other Purposes (32 Stat. L., 691); namely: 1. In the northern side of the entrance to Manila Bay, in the province of Bataan, Luzon (Mariveles Reservation), all public lands within the limits that are described as follows: Starting from the mouth of the Mariveles River in the eastern border and from here straight North to a distance of 5,280 feet; from this point straight to the East to intercept a line, in a straight direction to the South from a stone monument marked U.S. (Station 4); from there straight from the North until the aforementioned Station 4; from here straight to the East to a distance of 6,600 feet until a stone monument marked U.S. (Station 5); from here straight South to a distance of 6,600 feet until a stone monument marked U.S. (Station 6); from here straight to the East to a distance of 8,910 feet until a stone monument marked U.S. (Station 7); from here straight to the South to a distance of 7,730 feet until a stone monument marked U.S. (Station 8), situated at the northwest corner of the second creek to the east of Lasisi Point, 30 feet North of the high-tide mark; from there in the same direction until the high-tide mark; from here towards the East following the shoreline up to the starting point. 2. In the southern side of the Manila Bay entrance, in the province of Cavite, Luzon (Calumpan Point Reservation), all public lands within the limits that are described as follows: Starting from a stone monument marked U.S. (Station 1) situated in the cliff on the Eastern side of Asubig Point, 20 feet above the high-tide mark and about 50 feet from the edge of the cliff and continuing from there to the South 28 10 West, a distance of up to 22,000 feet until a stone monument marked U.S. (Station 2); from here to North 54 10' West at a distance of 5,146 feet until a stone monument marked U.S. (Station 3); from here towards South 85 35 ' 30 West, at a distance of 2,455 feet until a stone monument marked U.S. (Station 4), situated on the beach near the Northeast corner of Limbones Bay, about 50 feet from the high-tide mark and following in the same direction until the high-tide mark; from here towards North and East following the shoreline until North 28 10 ' East from the starting point and from there encompassing more or less 5,200 acres. The markers are exact. 3. The islands of Corregidor, Pulo Caballo, La Monja, El Fraile, and Carabao, and all other islands and detached rocks lying between Mariveles Reservation on the north side of the entrance to Manila Bay and Calumpan Point Reservation on the south side of said entrance. 4. The jurisdiction of the military authorities in the case of reservations in the northern and southern beaches of the entrance to Manila Bay and all the islands referred to in paragraph 3, are extended from the high-tide marker towards the sea until a distance of 1,000 yards.
299 300

By Order of the Secretary of War: GEORGE L. GILLESPIE, General Commander, Chief of Internal General Staff, Official copy. W.P. HALL, Internal Adjutant General. (Emphasis supplied) Proclamation No. 307 x x x do hereby withdraw from sale or settlement and reserve for military purposes under the administration of the Chief of Staff, Armed Forces of the Philippines, subject to private rights, if any there be, a certain parcel of land of the public domain situated in the municipality of Ternate, province of Cavite, Island of Luzon, more particularly described as follows: Proposed Naval Reservation Calumpang Point A parcel of land (the proposed Calumpang Point Naval Reservation), situated in the municipality of Ternate, province of Cavite. Bounded on the NW., N. and E., by Manila Bay; on the SE. and S., by municipality of Ternate; and on the W., by Manila Bay. Beginning at a point marked 1 on the attached Sketch Plan traced from Coastal Hydrography of Limbones Island. thence N. 54 deg. 30 E., 750.00 m. to point 2; thence N. 89 deg. 15E., 1780.00 m. to point 3; thence N. 15 deg. 10 E., 6860.00 m. to point 4; thence N. 12 deg. 40 W., 930.00 m. to point 5; thence S. 77 deg. 20 W., 2336.00 m. to point 6; thence S. 49 deg. 30 W., 4450.00 m. to point 7; thence S. 12 deg. 40 E., 2875.00 m. to point 8; thence S. 30 deg. 30 E., 2075.00 m. to the point of beginning; containing an approximate area of twenty eight million nine hundred seventy three thousand one hundred twelve (28, 973,112) square meters. NOTE: All data are approximate and subject to change based on future surveys. Proclamation No. 1582-A WHEREAS, Proclamation No. 307 dated November 20, 1967 and U.S. War Department Order No. 56 dated March 25, 1904 reserved for military purposes, and withdrew from sale or settlement, a parcel of land of the public domain situated in the Municipality of Ternate, Province of Cavite , more particularly described as follows: x x x WHEREAS, the Philippine Navy and the Philippine Marines now need that portion of this area reserved under Proclamation No. 307, particularly, Cayladme Cove, Caynipa Cove, Calumpang Cove and Sinalam Cove, for their use as official station, not only to guard and protect the mouth of Manila Bay and the shorelines of the Province of Cavite, Batangas and Bataan, but also to maintain peace and order in the Corregidor area, which is now one of the leading tourist attractions in the country; x x x x x x containing an approximate area of EIGHT MILLION EIGHTY NINE THOUSAND NINE HUNDRED NINETY (8,089,990) SQUARE METERS, more or less. The portion that remains after the segregation which are occupied shall be released to bona fide occupants pursuant to existing laws/policies regarding the disposition of lands of the public domain and the unoccupied portions shall be considered as alienable or disposable lands. (Emphasis supplied) The proclamations established that as early as 1904 a certain parcel of land was placed under the exclusive use of the government for military purposes by the then colonial American government. In 1904, the U.S. War Department segregated the area, including the Lot, for military purposes through General Order No. 56. Subsequently, after the Philippines regained its independence in 1946, the American government transferred all control and sovereignty to the Philippine government, including all the lands appropriated for a public purpose. Twenty years later, two other presidential proclamations followed, both issued by former President Ferdinand E. Marcos, restating that the same property is a naval reservation for the use of the Republic. There is no question that the Lot is situated within a military reservation. The only issue to be resolved is whether the respondents are entitled to have the Lot registered under the Torrens systems based on the limitation clause cited in the proclamations: (1) subject to private rights, if any there be in Proclamation No. 307, and (2) the portion that remains after the segregation which are occupied shall be released to bona fide occupants pursuant to existing laws/policies regarding the disposition of lands of the public domain and the unoccupied portions shall be considered as alienable or disposable lands in Proclamation No. 1582-A. This proviso means that persons claiming rights over the reserved land are not precluded from proving their claims. In effect, the State gives respect and recognizes the rights of private persons who may have acquired any vested interest to the Lot before the issuance of the General Order or proclamations. Commonwealth Act No. 141 (CA 141), also known as the Public Land Act, remains to this day the existing general law governing the classification and disposition of lands of the public domain, other than timber and mineral lands. 301[28] Under the Regalian doctrine embodied in our Constitution, land that has not been acquired from the government, either by purchase, grant or any other mode recognized by law, belongs to the State as part of the public domain. 302[29] No public land can be acquired by private persons through any other means, and it is indispensable that the person claiming title to public land should show that his title was acquired through purchase or grant from the State, or through any other mode of acquisition recognized by law.303[30] Section 48(b) of CA 141, as amended by Presidential Decree No. 1073 (PD 1073), 304[31] provides:
301 302 303

Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such land or an interest therein, but whose titles have not been perfected or completed, may apply to the Court of First Instance of the province where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration Act, to wit: xxx (b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title, except when prevented by war or force majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. 305[32] Similarly, Section 14 of PD 1529 or the Property Registration Decree, governing original registration through registration proceedings, provides: SECTION 14. Who may apply. - The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives: (1) xxx To put it simply, Section 14(1) of PD 1529 states that there are three requisites for the filing of an application for registration of title: (1) that the property in question is alienable and disposable land of the public domain; (2) that the applicants by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation; and (3) that such possession is under a bona fide claim of ownership since 12 June 1945 or earlier. To prove that the Lot is alienable and disposable land of the public domain, respondents presented in evidence a letter 306[33] dated 22 April 1991 of Conlu, a Land Management Inspector of the DENR-Region IV. The relevant portion of the letter states: In examination [of] the above-noted subject, please be [informed] that I have examined the land x x x and the following findings [were] ascertained; That the land covers a portion of 3 (three) barangays, namely: Calumpang, Cabangat and Zapang, all within the municipality of Ternate, Cavite; That the land is within alienable and disposable zone under Project No. 22-B, L.C. Map No. 3091; That the land was declared for taxation purposes since 1945, the latest of which is Tax Declaration No. 1543 with a market value of P1,250,000.00 in favor of Juan Fabio x x x (Emphasis supplied) This letter-certification is insufficient. Conlu is merely a land investigator of the DENR. It is not enough that he alone should certify that the Lot is within the alienable and disposable zone. Under Section 6 of the Public Land Act, the prerogative of classifying or reclassifying lands of the public domain belongs to the President. 307[34] The President, through a presidential proclamation or executive order, can classify or reclassify a land to be included or excluded from the public domain. The DENR Secretary is the only other public official empowered by law to approve a land classification and declare such land as alienable and disposable. 308[35] From the records, this letter was the only evidence presented by respondents to prove that the Lot is alienable and disposable. In fact, not even the Community Environment and Natural Resources Office (CENRO) certified as correct the investigation report of the Land Management Inspector. The most that the CENRO officer did was to indorse the report to the Regional Technical Director of the DENR. 309[36] In Republic v. T.A.N. Properties, Inc. ,310[37] we ruled that it is not enough for the Provincial Environment and Natural Resources Office (PENRO) or CENRO to certify that a land is alienable and disposable. The applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO. In addition, the applicant must present a copy of the original classification of the land into alienable and disposable, as declared by the DENR Secretary, or as proclaimed by the President. Such copy of the DENR Secretarys declaration or the Presidents proclamation must be certified as a true copy by the legal custodian of such official record. These facts must be established to prove that the land is alienable and disposable. Respondents have failed to present any of these documents. No document was presented to show that the DENR Secretary or the President has classified the Lot as alienable and disposable. No CENRO or PENRO certification was presented that the Lot, per verification through survey, falls within the alienable and disposable zone. The 22 April 1991 letter of Land Management Inspector Conlu is not proof that the DENR Secretary or the President has classified the Lot as alienable and disposable, or that the Lot falls within the alienable and disposable zone. The mere issuance of the letter does not prove the facts stated in such letter. 311[38] Further, the burden is on respondents to prove that the Lot ceased to have the status of a military reservation or other inalienable land of the public domain. No proof was ever submitted by respondents that the Calumpang Point Naval Reservation, or the Lot, ceased as a military reservation. Even if its ownership and control had been transferred by the Americans to the Philippine government, the Calumpang Point Naval Reservation remained as an official military reservation. Thus, being a military reservation at the time, the Calumpang Point Naval Reservation, to which the Lot is a part of, can not be subject to occupation, entry or settlement. 312[39] This is clear from Sections 83 and 88 of CA 141, which provide: SECTION 83. Upon the recommendation of the Secretary of Agriculture and Commerce, the President may designate by proclamation any tract or tracts of land of the public domain as reservations for the use of the Commonwealth of the Philippines or of any of its branches, or of the inhabitants thereof, in accordance
304 305 306 307 308 309 310 311 312

Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

with regulations prescribed for this purpose, or for quasi-public uses or purposes when the public interest requires it, including reservations for highways, rights of way for railroads, hydraulic power sites, irrigation systems, communal pastures or leguas comunales, public parks, public quarries, public fishponds, workingmens village and other improvements for the public benefit. SECTION 88. The tract or tracts of land reserved under the provisions of section eighty-three shall be non-alienable and shall not be subject to occupation, entry, sale, lease, or other disposition until again declared alienable under the provision of this Act or by proclamation of the President. (Emphasis supplied)

Well-entrenched is the rule that unless a land is reclassified and declared alienable and disposable, occupation in the concept of an owner, no matter how long, cannot ripen into ownership and be registered as a title. 313[40] Consequently, respondents could not have occupied the Lot in the concept of an owner in 1947 and subsequent years when respondents declared the Lot for taxation purposes, or even earlier when respondents predecessors-in-interest possessed the Lot, because the Lot was considered inalienable from the time of its declaration as a military reservation in 1904. Therefore, respondents failed to prove, by clear and convincing evidence, that the Lot is alienable and disposable. Public lands not shown to have been classified as alienable and disposable land remain part of the inalienable public domain. 314[41] In view of the lack of sufficient evidence showing that the Lot was already classified as alienable and disposable, the Lot applied for by respondents is inalienable land of the public domain, not subject to registration under Section 14(1) of PD 1529 and Section 48(b) of CA 141, as amended by PD 1073. Hence, there is no need to discuss the other requisites dealing with respondents occupation and possession of the Lot in the concept of an owner. While it is an acknowledged policy of the State to promote the distribution of alienable public lands to spur economic growth and in line with the ideal of social justice, the law imposes stringent safeguards upon the grant of such resources lest they fall into the wrong hands to the prejudice of the national patrimony. 315[42] We must not, therefore, relax the stringent safeguards relative to the registration of imperfect titles.316[43] In Republic v. Estonilo,317[44] we ruled that persons claiming the protection of private rights in order to exclude their lands from military reservations must show by clear and convincing evidence that the properties in question have been acquired by a legal method of acquiring public lands. Here, respondents failed to do so, and are thus not entitled to have the Lot registered in their names. Clearly, both the trial and appellate courts gravely erred in granting respondents application for registration of title. WHEREFORE, we GRANT the petition. We SET ASIDE the 29 August 2003 Decision of the Court of Appeals in CA-G.R. CV No. 66522. We DISMISS respondents application for registration and issuance of title to Lot No. 233, Cad-617-D, Ternate Cadastre in LRC Case No. NC-96-782 filed with the Regional Trial Court of Naic, Cavite, Branch 15. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC DECISION April 29, 1964 G.R. No. L-19866 DAVAO STEEL CORPORATION, petitioner, vs. JOSE R. CABATUANDO, Judge of the Court of Agrarian Relations, 7th Regional District, Cebu, and CORNELIO CUYSON , respondents. Jose Batiquin for petitioner. Ramon B. Ceniza for respondent Cornelio Cuyson. , J.: The petitioner, Davao Steel Corporation, is a domestic corporation engaged in the steel and allied metals industry. After scouting around for a factory site, it decided upon an area planted to sugarcane and corn, located at Paknaan or Umapad, Mandawe, Cebu, and belonging to Domingo Mendoza, and, thereafter, sought to acquire it. The corporation negotiated with Mendoza without the latter informing the former that the land was being tilled by a tenant, and, instead, assuring it that there would be no trouble. On 8 May 1961, the corporation bought the land but withheld a part of the purchase price because one Roberta Ouano claimed ownership over a small portion of the land. With the consent of Mendoza, however, the withheld amount was paid to Ouano, thus constituting the corporation as the acknowledged absolute owner.

313 314 315 316 317

In the latter part of the same month of May, the laborers of the corporation cut down the entire coin crop; in June, residential houses for employees were constructed along the side; in September, the foundation of a factory was laid out in the center, a road was constructed, and stone wall built surrounding the factory site. In the process the sugarcane crop was also destroyed, except part that was planted outside the wall. The respondent, Cornelio Cuyson, had been the long-time tenant of both Domingo Mendoza and Roberta Ouano the land in question, and had been assisted by his children in its cultivation because of his advanced age (75 years). In the last week of May, 1961, he became bed-ridden, he could see from his house, which was separated only a river, the building construction going on in his landholding. It did not occur to him to send any one of his child to make his claim or protest for him. The corporation, the other hand, never contacted the respondent. On 8 June 1961, Cornelio Cuyson filed a complaint reinstatement and damages, and, after trial, the Court Agrarian Relations, Cebu City, rendered judgment against the petitioner, Davao Steel Corporation, for P250 as actual damages, P250 as exemplary damages, P200 as attorneys fees, plus costs, and ordered the respondent reinstated the portion of the land that is still devoted to agriculture.. Not satisfied, the petitioner filed with this Court a petition for certiorari to reverse or review the aforesaid decision, including its order denying leave to file a third party complaint against the vendor of the land. The petitioners theory that the Court of Agrarian Relations had no jurisdiction over the case because at time of the filing of the complaint no tenancy relationship existed between it and respondent Cuyson on account of the conversion of the land into one of industrial character is devoid of merit. When the petitioner corporation purchased the land, the same was still agricultural; it did not become industrial just because the corporation intended to make it so. The petitioner corporation, by purchase, succeeded into the duties of the former landholder (sec. 9, Tenancy Act), including the obligation respect the tenure of the tenants. The corporation cause the termination of the relationship by devoting the land to industrial purposes without the consent of the tenant or of the Court, and it cannot take cover in the wrongful conversion that it has itself caused. The conversion of the land `being set up as the cause of the termination of the tenancy relationship, the present case is a question, matter controversy, or dispute involving all those relationships which determine the varying rights of persons in the cultivation and use of agricultural land where one of the parties works the land . (Sec. 7, RA 1267, as amended by RA 1409), and, therefore, the case lies within the jurisdiction of the agrarian court. The corporation cannot disclaim knowledge that the land was tenanted because at the time of the purchase a reasonable inquiry would have disclosed the fact that the land was cultivated by a tenant (cf. Lopez et al. vs. Gonzaga, et al., L-18788, 1 Feb. 1964; Emas v. De Zuzuarregui, 53 Phil. 197, 204). Our decision in Melitona Estate v. De Guzman, L-11912, April 30, 1959, was based on the prior consent of the tenant to the industrialization of the land, and does not apply to the case at bar. While the decision to convert or not to convert the land from agricultural to industrial resides in the owner-corporation, yet, since the land is tenanted and with growing crops thereon, the owner cannot, unilaterally and without the consent of the tenant, exercise the right of conversion. The requisite consent of the tenant or of the Court is not based upon the premise that the tenants will not to convert is superior to that of the owners decision to convert, but that the tenant is entitled to security of tenure, and that the right of possession of the tenant, by express provision of the law, is not extinguished by the sale of the land worked by him (sec. 9, Act 1199). The destruction of the standing crops smacks of arbitrary high-handedness for which the corporation deserves the imposition of exemplary or deterrent damages. Crops worth P250.00 to the planter may be a measly sum to the multi-million-peso corporation but it may mean to the tenant, together with his family whether he and his family may eat or not three meals a day. While the award of exemplary damages is civil, Republic Act 1199 provides in its Section 55 the applicability of general laws to acts and omissions by either landlord or tenant against each other during, and in connection with their relationship and, as per Section 19 of Republic 1267, to contracts provided by the Act. Therefore, exemplary damages may be awarded in tenancy cases. But the third-party complaint that the petitioner sought to file against the vendor Mendoza is not within the jurisdiction of the tenancy court because the would-be plaintiff and the would-be defendant do not have any tenancy relationship inter se and the cause of action, based on the alleged misrepresentation of the vendor before the perfection of the sale that the vendeecorporation would have no trouble, is one of tort, which properly belongs to the jurisdiction of the ordinary courts. FOR THE FOREGOING REASONS, the decision under review is hereby affirmed, with costs against the petitioner, Davao Steel Corporation. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-43105 August 31, 1984 REPUBLIC OF THE PHILIPPINES (Director of Lands), petitioner, vs. THE HON. COURT OF APPEALS (SECOND DIVISION) AND SANTOS DEL RIO, respondents. G.R. No. L-43190 August 31, 1984 AURORA BAUTISTA, OLIMPIO LARIOS, FELICIDAD DE LA CRUZ, ELPIDIO LARIOS, LUCITA BANDA, BENITO SANTAYANA, FRUCTUOSA BANHAO LUCIO VELASCO, GREGORIO DATOY, FELIMON GUTIERREZ, ET AL., petitioners, vs. THE HON. COURT OF APPEALS AND SANTOS DEL RIO, respondents. Bonifacio, Perez & Concepcion for petitioners.

The Solicitor General for respondent Appellate Court. Eduardo Cagandahan for respondent Santos del Rio.

CUEVAS, J.: These two 1 Petitions for Review of the same decision of the defunct Court of Appeals 2 have been consolidated in this single decision, having arisen from one and the same Land Registration Cage (LRC Case No. N-283, Laguna), and presenting as they do issues which may be resolved jointly by this Court. The questioned decision of the Court of Appeals set aside the judgment of the trial court and ordered the registration of the land in favor of applicant, now private respondent, Santos del Rio. Petitioner Director of Lands in G.R. No. L-43105 claims that the land sought to be registered is part of the public domain and therefore not registerable. Petitioners private oppositors in G.R. No. L-43190, on the other hand, allege that they reclaimed the land by dumping duck egg shells thereon, and that they have been in possession of the same for more than twenty (20) years. The lot subject matter of this land registration case, with an area of 17,311 square meters, is situated near the shore of Laguna de Bay, about twenty (20) meters therefrom (Exh. D), 3 in Barrio Pinagbayanan, Pila, Laguna. It was purchased by Benedicto del Rio from Angel Pili on April 19, 1909. The Deed of Sale evidencing said purchase is duly recorded with the Registry of Deeds of Sta. Cruz, Laguna. The land was declared for tax purposes beginning the year 1918, and the realty taxes thereon had been paid since 1948. When Benedicto del Rio died in 1957, his heirs extrajudicially partitioned his estate and the subject parcel passed on to his son, Santos del Rio, as the latter's share in the inheritance. Santos del Rio, herein applicant-private respondent, filed his application for registration of said parcel on May 9, 1966. The application was opposed by the Director of Lands and by private oppositors, petitioners in G.R. No. L-43190. Sometime before 1966, private oppositors obtained permission from Santos del Rio to construct duck houses on the land in question. Although there was no definite commitment as to rentals, some of them had made voluntary payments to private respondent. In violation of the original agreement, private oppositors constructed residential houses on the land which prompted private respondent to file an ejectment suit against the former in 1966. 4 Meanwhile, during the latter part of 1965 and in 1966, private oppositors had simultaneously filed their respective sales applications with the Bureau of Lands, and in 1966, they opposed Santos del Rios application for registration. The Court of First Instance of Laguna dismissed the application for registration. Applicant appealed and obtained a favorable judgment from the Court of Appeals. The Director of Lands and the private oppositors filed their respective Petitions for Review of said decision. The two consolidated petitions raise substantially the same issues, to wit : 1) whether or not the parcel of land in question is public land; and 2) whether or not applicant private respondent has registerable title to the land. Property, which includes parcels of land found in Philippine territory, is either of public dominion or of private ownership. 5 Public lands, or those of public dominion, have been described as those which, under existing legislation are not the subject of private ownership, and are reserved for public purposes. 6 The New Civil Code enumerates properties of public dominion in Articles 420 and 502 thereof. Article 420 provides: The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State without being for public use, and are intended for some public service or for the development of the national wealth. Article 502 adds to the above enumeration, the following: (1) Rivers and their natural beds; (2) Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves; (3) Waters rising continuously or intermittently on lands of public dominion; (4) Lakes and lagoons formed by Nature on public lands and their beds; xxx xxx xxx (Emphasis supplied) The Director of Lands would like Us to believe that since a portion of the land sought to be registered is covered with water four to five months a year, the same is part of the lake bed of Laguna de Bay, or is at least, a foreshore land, which brings it within the enumeration in Art. 502 of the New Civil Code quoted above and therefore it cannot be the subject of registration.

The extent of a lake bed is defined in Art. 74 of the Law of Waters of 1866, as follows: The natural bed or basin of lakes, ponds, or pools, is the ground covered by their waters when at their highest ordinary depth. (Emphasis supplied) The phrase "highest ordinary depth" in the above definition has been interpreted in the case of Government of P.I. vs. Colegio de San Jose 7 to be the highest depth of the waters of Laguna de Bay during the dry season, such depth being the "regular, common, natural, which occurs always or most of the time during the year." The foregoing interpretation was the focal point in the Court of Appeals decision sought to be reviewed. We see no reason to disturb the same. Laguna de Bay is a lake. 8 While the waters of a lake are also subject to the same gravitational forces that cause the formation of tides 9 in seas and oceans, this phenomenon is not a regular daily occurrence in the case of lakes. 10 Thus, the alternation of high tides and low tides, which is an ordinary occurrence, could hardly account for the rise in the water level of the Laguna de Bay as observed four to five months a year during the rainy season. Rather, it is the rains which bring about the inundation of a portion of the land in question. Since the rise in the water level which causes the submersion of the land occurs during a shorter period (four to five months a year) than the level of the water at which the is completely dry, the latter should be considered as the "highest ordinary depth" of Laguna de Bay. Therefore, the land sought to be registered is not part of the bed or basin of Laguna de Bay. Neither can it be considered as foreshore land. The Brief for the Petitioner Director of Lands cites an accurate definition of a foreshore land, to wit: ... that part of (the land) which is between high and low water and left dry by the flux and reflux of the tides... 11 The strip of land that lies between the high and low water mark and that is alternately wet and dry according to the flow of the tide. 12 As aptly found by the Court a quo, the submersion in water of a portion of the land in question is due to the rains "falling directly on or flowing into Laguna de Bay from different sources. 13 Since the inundation of a portion of the land is not due to "flux and reflux of tides" it cannot be considered a foreshore land within the meaning of the authorities cited by petitioner Director of Lands. The land sought to be registered not being part of the bed or basin of Laguna de Bay, nor a foreshore land as claimed by the Director of Lands, it is not a public land and therefore capable of registration as private property provided that the applicant proves that he has a registerable title. This brings us to the second issue, which is whether or not applicant private respondent has registerable title to the land. The purpose of land registration under the Torrens System is not the acquisition of lands but only the registration of title which applicant already possesses over the land. 14 Registration under the Torrens Law was never intended as a means of acquiring ownership. Applicant in this case asserts ownership over the parcel of land he seeks to register and traces the roots of his title to a public instrument of sale (Exh. G) in favor of his father from whom he inherited said land. In addition to this muniment of title, he presents tax declarations (Exhs. F, G, H, I) covering the land since 1918 and also tax receipts (Exhs. J, J-1, J-2, J-3, J-4, K, K-1, K-2, K-3) dating back to 1948. While it is true that by themselves tax receipts and declarations of ownership for taxation purposes are not incontrovertible evidence of ownership, 15 they become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property. 16 The then Court of Appeals found applicant by himself and through his father before him, has been in open, continuous, public, peaceful, exclusive and adverse possession of the disputed land for more than thirty (30) years, counted from April 19, 1909, when the land was acquired from a third person by purchase. 17 The record does not show any circumstance of note sufficient enough to overthrow said findings of facts which is binding upon us. Since applicant has possessed the subject parcel in the concept of owner with just title and in good faith, his possession need only last for ten years in order for ordinary acquisitive prescription to set in. 18 Applicant has more than satisfied this legal requirement. And even if the land sought to be registered is public land as claimed by the petitioners still, applicant would be entitled to a judicial confirmation of his imperfect title, since he has also satisfied the requirements of the Public Land Act (Commonwealth Act No. 141 as amended by Republic Act No. 1942). Sec. 48 of said Act enumerates as among the persons entitled to judicial confirmation of imperfect title, the following: (a) ... (b) Those who, by themselves or through their predecessors-in-interest, have been in the open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under bona fide c of ownership, for at least tirty years immediately preceding the filing of the application for confirmation of title ... The claim of private oppositors, petitioners in G.R. No. L43190, that they have reclaimed the land from the waters of Laguna de Bay and that they have possessed the same for more than twenty (20) years does not improve their position. In the first place, private persons cannot, by themselves reclaim land from water bodies belonging to the public domain without proper permission from government authorities. 19 And even if such reclamation had been authorized, the reclaimed land does not automatically belong to the party reclaiming the same as they may still be subject to the terms of the authority earlier granted. 20 Private oppositors-petitioners failed to show proper authority for the alleged reclamation, therefore, their claimed title to the litigated parcel must fall. In the second place, their alleged possession can never ripen into ownership. Only possession acquired and enjoyed in the concept of owner can serve as the root of a title acquired by prescription. 21 As correctly found by the appellate court, the private oppositors-petitioners entered into possession of the land with the permission of, and as tenants of, the applicant del Rio. The fact that some of them at one time or another did not pay rent cannot be considered in their favor. Their use of the land and their nonpayment of rents thereon were merely tolerated by applicant and these could not have affected the character of the latter's possession 22 which has already ripened into ownership at the time of the filing of this application for registration. The applicant private-respondent having satisfactorily established his registerable title over the parcel of land described in his application, he is clearly entitled to the registration in his favor of said land. IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED and the registration in favor of applicant private-respondent of the land described in his application is hereby ordered. Costs against private petitioners. SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-43105 August 31, 1984 REPUBLIC OF THE PHILIPPINES (Director of Lands), petitioner, vs. THE HON. COURT OF APPEALS (SECOND DIVISION) AND SANTOS DEL RIO, respondents. G.R. No. L-43190 August 31, 1984 AURORA BAUTISTA, OLIMPIO LARIOS, FELICIDAD DE LA CRUZ, ELPIDIO LARIOS, LUCITA BANDA, BENITO SANTAYANA, FRUCTUOSA BANHAO LUCIO VELASCO, GREGORIO DATOY, FELIMON GUTIERREZ, ET AL., petitioners, vs. THE HON. COURT OF APPEALS AND SANTOS DEL RIO, respondents. Bonifacio, Perez & Concepcion for petitioners. The Solicitor General for respondent Appellate Court. Eduardo Cagandahan for respondent Santos del Rio.

CUEVAS, J.: These two 1 Petitions for Review of the same decision of the defunct Court of Appeals 2 have been consolidated in this single decision, having arisen from one and the same Land Registration Cage (LRC Case No. N-283, Laguna), and presenting as they do issues which may be resolved jointly by this Court. The questioned decision of the Court of Appeals set aside the judgment of the trial court and ordered the registration of the land in favor of applicant, now private respondent, Santos del Rio. Petitioner Director of Lands in G.R. No. L-43105 claims that the land sought to be registered is part of the public domain and therefore not registerable. Petitioners private oppositors in G.R. No. L-43190, on the other hand, allege that they reclaimed the land by dumping duck egg shells thereon, and that they have been in possession of the same for more than twenty (20) years. The lot subject matter of this land registration case, with an area of 17,311 square meters, is situated near the shore of Laguna de Bay, about twenty (20) meters therefrom (Exh. D), 3 in Barrio Pinagbayanan, Pila, Laguna. It was purchased by Benedicto del Rio from Angel Pili on April 19, 1909. The Deed of Sale evidencing said purchase is duly recorded with the Registry of Deeds of Sta. Cruz, Laguna. The land was declared for tax purposes beginning the year 1918, and the realty taxes thereon had been paid since 1948. When Benedicto del Rio died in 1957, his heirs extrajudicially partitioned his estate and the subject parcel passed on to his son, Santos del Rio, as the latter's share in the inheritance. Santos del Rio, herein applicant-private respondent, filed his application for registration of said parcel on May 9, 1966. The application was opposed by the Director of Lands and by private oppositors, petitioners in G.R. No. L-43190. Sometime before 1966, private oppositors obtained permission from Santos del Rio to construct duck houses on the land in question. Although there was no definite commitment as to rentals, some of them had made voluntary payments to private respondent. In violation of the original agreement, private oppositors constructed residential houses on the land which prompted private respondent to file an ejectment suit against the former in 1966. 4 Meanwhile, during the latter part of 1965 and in 1966, private oppositors had simultaneously filed their respective sales applications with the Bureau of Lands, and in 1966, they opposed Santos del Rios application for registration. The Court of First Instance of Laguna dismissed the application for registration. Applicant appealed and obtained a favorable judgment from the Court of Appeals. The Director of Lands and the private oppositors filed their respective Petitions for Review of said decision. The two consolidated petitions raise substantially the same issues, to wit : 1) whether or not the parcel of land in question is public land; and 2) whether or not applicant private respondent has registerable title to the land. Property, which includes parcels of land found in Philippine territory, is either of public dominion or of private ownership. 5 Public lands, or those of public dominion, have been described as those which, under existing legislation are not the subject of private ownership, and are reserved for public purposes. 6 The New Civil Code enumerates properties of public dominion in Articles 420 and 502 thereof. Article 420 provides: The following things are property of public dominion: (1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, banks, shores, roadsteads, and others of similar character; (2) Those which belong to the State without being for public use, and are intended for some public service or for the development of the national wealth. Article 502 adds to the above enumeration, the following:

(1) Rivers and their natural beds; (2) Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves; (3) Waters rising continuously or intermittently on lands of public dominion; (4) Lakes and lagoons formed by Nature on public lands and their beds; xxx xxx xxx (Emphasis supplied) The Director of Lands would like Us to believe that since a portion of the land sought to be registered is covered with water four to five months a year, the same is part of the lake bed of Laguna de Bay, or is at least, a foreshore land, which brings it within the enumeration in Art. 502 of the New Civil Code quoted above and therefore it cannot be the subject of registration. The extent of a lake bed is defined in Art. 74 of the Law of Waters of 1866, as follows: The natural bed or basin of lakes, ponds, or pools, is the ground covered by their waters when at their highest ordinary depth. (Emphasis supplied) The phrase "highest ordinary depth" in the above definition has been interpreted in the case of Government of P.I. vs. Colegio de San Jose 7 to be the highest depth of the waters of Laguna de Bay during the dry season, such depth being the "regular, common, natural, which occurs always or most of the time during the year." The foregoing interpretation was the focal point in the Court of Appeals decision sought to be reviewed. We see no reason to disturb the same. Laguna de Bay is a lake. 8 While the waters of a lake are also subject to the same gravitational forces that cause the formation of tides 9 in seas and oceans, this phenomenon is not a regular daily occurrence in the case of lakes. 10 Thus, the alternation of high tides and low tides, which is an ordinary occurrence, could hardly account for the rise in the water level of the Laguna de Bay as observed four to five months a year during the rainy season. Rather, it is the rains which bring about the inundation of a portion of the land in question. Since the rise in the water level which causes the submersion of the land occurs during a shorter period (four to five months a year) than the level of the water at which the is completely dry, the latter should be considered as the "highest ordinary depth" of Laguna de Bay. Therefore, the land sought to be registered is not part of the bed or basin of Laguna de Bay. Neither can it be considered as foreshore land. The Brief for the Petitioner Director of Lands cites an accurate definition of a foreshore land, to wit: ... that part of (the land) which is between high and low water and left dry by the flux and reflux of the tides... 11 The strip of land that lies between the high and low water mark and that is alternately wet and dry according to the flow of the tide. 12 As aptly found by the Court a quo, the submersion in water of a portion of the land in question is due to the rains "falling directly on or flowing into Laguna de Bay from different sources. 13 Since the inundation of a portion of the land is not due to "flux and reflux of tides" it cannot be considered a foreshore land within the meaning of the authorities cited by petitioner Director of Lands. The land sought to be registered not being part of the bed or basin of Laguna de Bay, nor a foreshore land as claimed by the Director of Lands, it is not a public land and therefore capable of registration as private property provided that the applicant proves that he has a registerable title. This brings us to the second issue, which is whether or not applicant private respondent has registerable title to the land. The purpose of land registration under the Torrens System is not the acquisition of lands but only the registration of title which applicant already possesses over the land. 14 Registration under the Torrens Law was never intended as a means of acquiring ownership. Applicant in this case asserts ownership over the parcel of land he seeks to register and traces the roots of his title to a public instrument of sale (Exh. G) in favor of his father from whom he inherited said land. In addition to this muniment of title, he presents tax declarations (Exhs. F, G, H, I) covering the land since 1918 and also tax receipts (Exhs. J, J-1, J-2, J-3, J-4, K, K-1, K-2, K-3) dating back to 1948. While it is true that by themselves tax receipts and declarations of ownership for taxation purposes are not incontrovertible evidence of ownership, 15 they become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property. 16 The then Court of Appeals found applicant by himself and through his father before him, has been in open, continuous, public, peaceful, exclusive and adverse possession of the disputed land for more than thirty (30) years, counted from April 19, 1909, when the land was acquired from a third person by purchase. 17 The record does not show any circumstance of note sufficient enough to overthrow said findings of facts which is binding upon us. Since applicant has possessed the subject parcel in the concept of owner with just title and in good faith, his possession need only last for ten years in order for ordinary acquisitive prescription to set in. 18 Applicant has more than satisfied this legal requirement. And even if the land sought to be registered is public land as claimed by the petitioners still, applicant would be entitled to a judicial confirmation of his imperfect title, since he has also satisfied the requirements of the Public Land Act (Commonwealth Act No. 141 as amended by Republic Act No. 1942). Sec. 48 of said Act enumerates as among the persons entitled to judicial confirmation of imperfect title, the following: (a) ... (b) Those who, by themselves or through their predecessors-in-interest, have been in the open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under bona fide c of ownership, for at least tirty years immediately preceding the filing of the application for confirmation of title ... The claim of private oppositors, petitioners in G.R. No. L43190, that they have reclaimed the land from the waters of Laguna de Bay and that they have possessed the same for more than twenty (20) years does not improve their position. In the first place, private persons cannot, by themselves reclaim land from water bodies belonging to the public domain without proper permission from government authorities. 19 And even if such reclamation had been authorized, the reclaimed land does not automatically belong to the party reclaiming the same as they may still be subject to the terms of the authority earlier granted. 20 Private oppositors-petitioners failed to show proper authority for the alleged reclamation, therefore, their claimed title to the litigated parcel must fall. In the second place, their alleged possession can never ripen into ownership. Only possession acquired and enjoyed in the concept of owner can serve as the root of a title acquired by prescription. 21 As correctly found by the appellate court, the private oppositors-petitioners entered into possession of the land with the permission of, and as tenants of, the applicant del Rio. The fact that some of them at one time or another did not pay rent cannot be considered in their favor. Their use of the land and their nonpayment of rents thereon were merely tolerated by applicant and these could not have affected the character of the latter's possession 22 which has already ripened into ownership at the time of the filing of this application for registration.

The applicant private-respondent having satisfactorily established his registerable title over the parcel of land described in his application, he is clearly entitled to the registration in his favor of said land. IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED and the registration in favor of applicant private-respondent of the land described in his application is hereby ordered. Costs against private petitioners. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-11014 January 21, 1958

VICTORIANA ESPIRITU, JORGE ROBLES, JOSEFINA DE VERA, FAUSTINO QINTIVES, LEONOR BRIONES, EVANGELINA PATACSIL, TEOFILO ANCHETA and BRIGIDA MANGONON, petitioners-appellants, vs. THE MUNICIPAL COUNCIL, MUNICIPAL MAYOR and THE CHIEF OF POLICE OF POZORRUBIO, PANGASINAN, respondents-appellees. Teodulfo L. Reyes and Romulo M. Abarcar for appellants. MONTEMAYOR, J.: This is an appeal from the decision of the Court of First Instance of Pangasinan of April 28, 1956, dismissing the petition for prohibition filed by appellants, lifting the preliminary injunction against the appellees and ordering the removal of appellants' stalls from the public plaza of appellee municipality, within ten days from notice. Pending appeal, counsel for the appellees filed a Manifestation on September 16, 1957, copy of which was duly served on appellants, that several months after the oral argument held before this Tribunal on January 25, 1957, appellants had voluntarily vacated the public plaza of Pozorrubio by transferring and removing their buildings and therefrom to private lots fronting the plaza; and that the municipality had already begun the construction of concrete fences in the premises, formerly occupied by appellants, without any complaint whatsover from them or their counsel; and that consequently, the present case has become moot and academic, and asking that the present appeal be dismissed. By resolution of this Court of October 21, 1957, appellants were required to comment on this Manifestation and petition for dismissal, within ten days from notice. Despite notice of his resolution, appellants failed to file their required comment. For this reason, we could well summarily dismiss this appeal by resolution. However, for the satisfaction of the parties and for possible guidance of town officials and residents, we havre deemed it convenient and necessary to decide the case by formal decision. The facts are not disputed. In fact, no evidence was submitted at the hearing before the trial court, the parties having petitioned that the case be decided on the pleadings. During the last world war, the market building of the town of Pozorrubio was destroyed, and after Liberation, the market vendors began constructing temporary and make-shifts stalls,, even small residences, on a portion of the town plaza. The Municipal Treasurer collected from these stall owners fees at the rate of P.25 per square meter a month. In time, the whole municipal market was rehabilitated, but the owners of the structures on the plaza failed and refused to transfer to said market place. The Municipal Council of Pozorrubio received petitions from civic organizations like the Women's Club and the Puericulture Center, for the removal of the market stalls on the plaza, which were being used not only as stalls, but also for residence purposes, said organization desiring to convert said portion of the plaza into a children's park. The Provincial Board of Pangasinan had also presented to the Council the petition of another civic organization of Pozorrubio, asking for the removal of the stalls from the plaza, and the attention of the COuncil was also called to the latter-circular of the Secretary of the Interior about the existence of these stalls on the public plaza, said to be illegal. As a result, the Municipal Council of Pozorrubio No. 20, Series of 1951, stating that the public market had already been rehabilitated, and ordering the occupants and owners of the structures on the plaza to remove their buildings within sixty days from receipt of the resolution. In answer to this resolution, eight of the market stall building owners filed a petition for prohibition in the Cour of First Instance of Pangasinan against the Municipal Council, the Municipal Mayor, and the Chief of Police of Pozorrubio. Pending hearing, the trial court issued a writ of preliminary injunction. The trial court found that the fee of P.25 per square meter collected by the Municipal Tresurer, was not for the rent of the portion of the public plaza occupied by the market stalls, as claimed by appellants, but rather the market stall fees charges on all market vendors in a public market; and that there was absolutely no contract or agreement between the appellants on one side and the municipality on the other, about renting of the Plaza to the former. There is reason to believe that the occupation of the plaza and the construction of temporary buildings thereon by appellants mostly for market, even residence purposes, was merley tolerated by the municipality, because of the destruction of the public market during thewar, but the trouble is that appellants, even after the rehabilitationof the old market, refused to transfer to said market place, perhaps to save the trouble and expense of transferring their buildings, or possibly to continue enjoying the benefits from the strategic position of their stalls at the plaza. There is absolutelyno question that the town plaza cannot be used for the construction of market stalls, specially of residences, and that such structures constitute a nuisance subject to abatement according to law. Town Plazas are properties of public dominion, to be devoted to public use and to be made available to the public in general. They are outside the commerce of man and cannot be disposed of or even leased by the municipality to private parties.1 While in case of war or during an emergency, town plazas may be occupied temporarily by private individuals, as was done and as was tolerated by the Municipality of Pozorrubio, when the emergency has ceased, said temporary occupation or use must also cease, and the town officials should see to it that the town plazas should ever be kept open to the public and free from encumbrances or illegal private constructions. Appellants must have realized the absolute lack of merit in their stand and the futility of their appeal because they voluntarily removed their buildings on the plaza. As a matter f fact, after the filing of the prohibition with the trial court, two out of the eight petitioners informed the trial court that they were included as petitioners without their consent, and so asked that they be excluded from the case. In view of the foregoing, the decision appealed from is hereby affirmed. With costs against appellants

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-11014 January 21, 1958

VICTORIANA ESPIRITU, JORGE ROBLES, JOSEFINA DE VERA, FAUSTINO QINTIVES, LEONOR BRIONES, EVANGELINA PATACSIL, TEOFILO ANCHETA and BRIGIDA MANGONON, petitioners-appellants, vs. THE MUNICIPAL COUNCIL, MUNICIPAL MAYOR and THE CHIEF OF POLICE OF POZORRUBIO, PANGASINAN, respondents-appellees. Teodulfo L. Reyes and Romulo M. Abarcar for appellants. MONTEMAYOR, J.: This is an appeal from the decision of the Court of First Instance of Pangasinan of April 28, 1956, dismissing the petition for prohibition filed by appellants, lifting the preliminary injunction against the appellees and ordering the removal of appellants' stalls from the public plaza of appellee municipality, within ten days from notice. Pending appeal, counsel for the appellees filed a Manifestation on September 16, 1957, copy of which was duly served on appellants, that several months after the oral argument held before this Tribunal on January 25, 1957, appellants had voluntarily vacated the public plaza of Pozorrubio by transferring and removing their buildings and therefrom to private lots fronting the plaza; and that the municipality had already begun the construction of concrete fences in the premises, formerly occupied by appellants, without any complaint whatsover from them or their counsel; and that consequently, the present case has become moot and academic, and asking that the present appeal be dismissed. By resolution of this Court of October 21, 1957, appellants were required to comment on this Manifestation and petition for dismissal, within ten days from notice. Despite notice of his resolution, appellants failed to file their required comment. For this reason, we could well summarily dismiss this appeal by resolution. However, for the satisfaction of the parties and for possible guidance of town officials and residents, we havre deemed it convenient and necessary to decide the case by formal decision. The facts are not disputed. In fact, no evidence was submitted at the hearing before the trial court, the parties having petitioned that the case be decided on the pleadings. During the last world war, the market building of the town of Pozorrubio was destroyed, and after Liberation, the market vendors began constructing temporary and make-shifts stalls,, even small residences, on a portion of the town plaza. The Municipal Treasurer collected from these stall owners fees at the rate of P.25 per square meter a month. In time, the whole municipal market was rehabilitated, but the owners of the structures on the plaza failed and refused to transfer to said market place. The Municipal Council of Pozorrubio received petitions from civic organizations like the Women's Club and the Puericulture Center, for the removal of the market stalls on the plaza, which were being used not only as stalls, but also for residence purposes, said organization desiring to convert said portion of the plaza into a children's park. The Provincial Board of Pangasinan had also presented to the Council the petition of another civic organization of Pozorrubio, asking for the removal of the stalls from the plaza, and the attention of the COuncil was also called to the latter-circular of the Secretary of the Interior about the existence of these stalls on the public plaza, said to be illegal. As a result, the Municipal Council of Pozorrubio No. 20, Series of 1951, stating that the public market had already been rehabilitated, and ordering the occupants and owners of the structures on the plaza to remove their buildings within sixty days from receipt of the resolution. In answer to this resolution, eight of the market stall building owners filed a petition for prohibition in the Cour of First Instance of Pangasinan against the Municipal Council, the Municipal Mayor, and the Chief of Police of Pozorrubio. Pending hearing, the trial court issued a writ of preliminary injunction. The trial court found that the fee of P.25 per square meter collected by the Municipal Tresurer, was not for the rent of the portion of the public plaza occupied by the market stalls, as claimed by appellants, but rather the market stall fees charges on all market vendors in a public market; and that there was absolutely no contract or agreement between the appellants on one side and the municipality on the other, about renting of the Plaza to the former. There is reason to believe that the occupation of the plaza and the construction of temporary buildings thereon by appellants mostly for market, even residence purposes, was merley tolerated by the municipality, because of the destruction of the public market during thewar, but the trouble is that appellants, even after the rehabilitationof the old market, refused to transfer to said market place, perhaps to save the trouble and expense of transferring their buildings, or possibly to continue enjoying the benefits from the strategic position of their stalls at the plaza. There is absolutelyno question that the town plaza cannot be used for the construction of market stalls, specially of residences, and that such structures constitute a nuisance subject to abatement according to law. Town Plazas are properties of public dominion, to be devoted to public use and to be made available to the public in general. They are outside the commerce of man and cannot be disposed of or even leased by the municipality to private parties.1 While in case of war or during an emergency, town plazas may be occupied temporarily by private individuals, as was done and as was tolerated by the Municipality of Pozorrubio, when the emergency has ceased, said temporary occupation or use must also cease, and the town officials should see to it that the town plazas should ever be kept open to the public and free from encumbrances or illegal private constructions. Appellants must have realized the absolute lack of merit in their stand and the futility of their appeal because they voluntarily removed their buildings on the plaza. As a matter f fact, after the filing of the prohibition with the trial court, two out of the eight petitioners informed the trial court that they were included as petitioners without their consent, and so asked that they be excluded from the case. In view of the foregoing, the decision appealed from is hereby affirmed. With costs against appellants Republic of the Philippines SUPREME COURT Manila EN BANC FRANCISCO I. CHAVEZ, Petitioner, Present: G.R. No. 164527

- versus -

NATIONAL HOUSING AUTHORITY, R-II BUILDERS, INC., R-II HOLDINGS, INC., HARBOUR CENTRE PORT TERMINAL, INC., and MR. REGHIS ROMERO II,

PUNO, CJ, QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, VELASCO, NACHURA, and REYES, JJ. Promulgated: August 15, 2007 DECISION

Respondents. x-----------------------------------------------------------------------------------------x

VELASCO, JR., J.: In this Petition for Prohibition and Mandamus with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction under Rule 65, petitioner, in his capacity as taxpayer, seeks: to declare NULL AND VOID the Joint Venture Agreement (JVA) dated March 9, 1993 between the National Housing Authority and R-II Builders, Inc. and the Smokey Mountain Development and Reclamation Project embodied therein; the subsequent amendments to the said JVA; and all other agreements signed and executed in relation thereto including, but not limited to the Smokey Mountain Asset Pool Agreement dated 26 September 1994 and the separate agreements for Phase I and Phase II of the Projectas well as all other transactions which emanated therefrom, for being UNCONSTITUTIONAL and INVALID; to enjoin respondentsparticularly respondent NHAfrom further implementing and/or enforcing the said project and other agreements related thereto, and from further deriving and/or enjoying any rights, privileges and interest therefrom x x x; and to compel respondents to disclose all documents and information relating to the projectincluding, but not limited to, any subsequent agreements with respect to the different phases of the project, the revisions over the original plan, the additional works incurred thereon, the current financial condition of respondent R-II Builders, Inc., and the transactions made respecting the project.318[1] The Facts On March 1, 1988, then President Corazon C. Aquino issued Memorandum Order No. (MO) 161 319[2] approving and directing the implementation of the Comprehensive and Integrated Metropolitan Manila Waste Management Plan (the Plan). The Metro Manila Commission, in coordination with various government agencies, was tasked as the lead agency to implement the Plan as formulated by the Presidential Task Force on Waste Management created by Memorandum Circular No. 39. A day after, on March 2, 1988, MO 161-A 320[3] was issued, containing the guidelines which prescribed the functions and responsibilities of fifteen (15) various government departments and offices tasked to implement the Plan, namely: Department of Public Works and Highway (DPWH), Department of Health (DOH), Department of Environment and Natural Resources (DENR), Department of Transportation and Communication, Department of Budget and Management, National Economic and Development Authority (NEDA), Philippine Constabulary Integrated National Police, Philippine Information Agency and the Local Government Unit (referring to the City of Manila), Department of Social Welfare and Development, Presidential Commission for Urban Poor, National Housing Authority (NHA), Department of Labor and Employment, Department of Education, Culture and Sports (now Department of Education), and Presidential Management Staff. Specifically, respondent NHA was ordered to conduct feasibility studies and develop low-cost housing projects at the dumpsite and absorb scavengers in NHA resettlement/low-cost housing projects.321[4] On the other hand, the DENR was tasked to review and evaluate proposed projects under the Plan with regard to their environmental impact, conduct regular monitoring of activities of the Plan to ensure compliance with environmental standards and assist DOH in the conduct of the study on hospital waste management.322[5] At the time MO 161-A was issued by President Aquino, Smokey Mountain was a wasteland in Balut, Tondo, Manila, where numerous Filipinos resided in subhuman conditions, collecting items that may have some monetary value from the garbage. The Smokey Mountain dumpsite is bounded on the north by the Estero Marala, on the south by the property of the National Government, on the east by the property of B and I Realty Co., and on the west by Radial Road 10 (R-10). Pursuant to MO 161-A, NHA prepared the feasibility studies of the Smokey Mountain low-cost housing project which resulted in the formulation of the Smokey Mountain Development Plan and Reclamation of the Area Across R-10 or the Smokey Mountain Development and Reclamation Project (SMDRP; the Project). The Project aimed to convert the Smokey Mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area across R-10, adjacent to the Smokey Mountain as the enabling component of the project.323[6] Once finalized, the Plan was submitted to President Aquino for her approval.

318 319 320 321 322 323

On July 9, 1990, the Build-Operate-and-Transfer (BOT) Law (Republic Act No. [RA] 6957) was enacted. 324[7] Its declared policy under Section 1 is [t]o recognize the indispensable role of the private sector as the main engine for national growth and development and provide the most appropriate favorable incentives to mobilize private resources for the purpose. Sec. 3 authorized and empowered [a]ll government infrastructure agencies, including government-owned and controlled corporations and local government units x x x to enter into contract with any duly pre-qualified private contractor for the financing, construction, operation and maintenance of any financially viable infrastructure facilities through the build-operate-transfer or build and transfer scheme. RA 6957 defined build-and-transfer scheme as [a] contractual arrangement whereby the contractor undertakes the construction, including financing, of a given infrastructure facility, and its turnover after the completion to the government agency or local government unit concerned which shall pay the contractor its total investment expended on the project, plus reasonable rate of return thereon. The last paragraph of Sec. 6 of the BOT Law provides that the repayment scheme in the case of land reclamation or the building of industrial estates may consist of [t]he grant of a portion or percentage of the reclaimed land or industrial estate built, subject to the constitutional requirements with respect to the ownership of lands. On February 10, 1992, Joint Resolution No. 03325[8] was passed by both houses of Congress. Sec. 1 of this resolution provided, among other things, that: Section 1. There is hereby approved the following national infrastructure projects for implementation under the provisions of Republic Act No. 6957 and its implementing rules and regulations: xxxx (d) xxxx (k) Land reclamation, dredging and other related development facilities; Port infrastructure like piers, wharves, quays, storage handling, ferry service and related facilities;

(l) Industrial estates, regional industrial centers and export processing zones including steel mills, iron-making and petrochemical complexes and related infrastructure and utilities; xxxx (p) Environmental and solid waste management-related facilities such as collection equipment, composting plants, incinerators, landfill and tidal barriers, among others; and (q) Development of new townsites and communities and related facilities.

This resolution complied with and conformed to Sec. 4 of the BOT Law requiring the approval of all national infrastructure projects by the Congress. On January 17, 1992, President Aquino proclaimed MO 415 326[9] approving and directing the implementation of the SMDRP. Secs. 3 and 4 of the Memorandum Order stated: Section 3. The National Housing Authority is hereby directed to implement the Smokey Mountain Development Plan and Reclamation of the Area Across R-10 through a private sector joint venture scheme at the least cost to the government . Section 4. The land area covered by the Smokey Mountain dumpsite is hereby conveyed to the National Housing Authority as well as the area to be reclaimed across R-10. (Emphasis supplied.) In addition, the Public Estates Authority (PEA) was directed to assist in the evaluation of proposals regarding the technical feasibility of reclamation, while the DENR was directed to (1) facilitate titling of Smokey Mountain and of the area to be reclaimed and (2) assist in the technical evaluation of proposals regarding environmental impact statements. 327[10] In the same MO 415, President Aquino created an Executive Committee (EXECOM) to oversee the implementation of the Plan, chaired by the National Capital RegionCabinet Officer for Regional Development (NCR-CORD) with the heads of the NHA, City of Manila, DPWH, PEA, Philippine Ports Authority (PPA), DENR, and Development Bank of the Philippines (DBP) as members.328[11] The NEDA subsequently became a member of the EXECOM. Notably, in a September 2, 1994 Letter, 329[12] PEA General Manager Amado Lagdameo approved the plans for the reclamation project prepared by the NHA. In conformity with Sec. 5 of MO 415, an inter-agency technical committee (TECHCOM) was created composed of the technical representatives of the EXECOM [t]o assist the NHA in the evaluation of the project proposals, assist in the resolution of all issues and problems in the project to ensure that all aspects of the development from squatter relocation, waste management, reclamation, environmental protection, land and house construction meet governing regulation of the region and to facilitate the completion of the project. 330[13] Subsequently, the TECHCOM put out the Public Notice and Notice to Pre-Qualify and Bid for the right to become NHAs joint venture partner in the implementation of the SMDRP. The notices were published in newspapers of general circulation on January 23 and 26 and February 1, 14, 16, and 23, 1992, respectively. Out of the thirteen (13) contractors who responded, only five (5) contractors fully complied with the required pre-qualification documents. Based on the evaluation of the pre-qualification documents, the EXECOM declared the New San Jose Builders, Inc. and R-II Builders, Inc. (RBI) as the top two contractors. 331[14]

324 325 326 327 328 329 330 331

Thereafter, the TECHCOM evaluated the bids (which include the Pre-feasibility Study and Financing Plan) of the top two (2) contractors in this manner: (1) (2) (3) (4) The DBP, as financial advisor to the Project, evaluated their Financial Proposals; The DPWH, PPA, PEA and NHA evaluated the Technical Proposals for the Housing Construction and Reclamation; The DENR evaluated Technical Proposals on Waste Management and Disposal by conducting the Environmental Impact Analysis; and The NHA and the City of Manila evaluated the socio-economic benefits presented by the proposals.

On June 30, 1992, Fidel V. Ramos assumed the Office of the President (OP) of the Philippines. On August 31, 1992, the TECHCOM submitted its recommendation to the EXECOM to approve the R-II Builders, Inc. (RBI) proposal which garnered the highest score of 88.475%. Subsequently, the EXECOM made a Project briefing to President Ramos. As a result, President Ramos issued Proclamation No. 39 332[15] on September 9, 1992, which reads: WHEREAS, the National Housing Authority has presented a viable conceptual plan to convert the Smokey Mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area across Road Radial 10 (R-10) adjacent to the Smokey Mountain as the enabling component of the project; xxxx These parcels of land of public domain are hereby placed under the administration and disposition of the National Housing Authority to develop, subdivide and dispose to qualified beneficiaries, as well as its development for mix land use (commercial/industrial) to provide employment opportunities to on-site families and additional areas for port-related activities. In order to facilitate the early development of the area for disposition, the Department of Environment and Natural Resources, through the Lands and Management Bureau, is hereby directed to approve the boundary and subdivision survey and to issue a special patent and title in the name of the National Housing Authority, subject to final survey and private rights, if any there be. (Emphasis supplied.) On October 7, 1992, President Ramos authorized NHA to enter into a Joint Venture Agreement with RBI [s]ubject to final review and approval of the Joint Venture Agreement by the Office of the President.333[16] On March 19, 1993, the NHA and RBI entered into a Joint Venture Agreement 334[17] (JVA) for the development of the Smokey Mountain dumpsite and the reclamation of the area across R-10 based on Presidential Decree No. (PD) 757 335[18] which mandated NHA [t]o undertake the physical and socio-economic upgrading and development of lands of the public domain identified for housing, MO 161-A which required NHA to conduct the feasibility studies and develop a low-cost housing project at the Smokey Mountain, and MO 415 as amended by MO 415-A which approved the Conceptual Plan for Smokey Mountain and creation of the EXECOM and TECHCOM. Under the JVA, the Project involves the clearing of Smokey Mountain for eventual development into a low cost medium rise housing complex and industrial/commercial site with the reclamation of the area directly across [R-10] to act as the enabling component of the Project. 336[19] The JVA covered a lot in Tondo, Manila with an area of two hundred twelve thousand two hundred thirty-four (212,234) square meters and another lot to be reclaimed also in Tondo with an area of four hundred thousand (400,000) square meters. The Scope of Work of RBI under Article II of the JVA is as follows: a) Radial Road 10. To fully finance all aspects of development of Smokey Mountain and reclamation of no more than 40 hectares of Manila Bay area across

b) To immediately commence on the preparation of feasibility report and detailed engineering with emphasis to the expedient acquisition of the Environmental Clearance Certificate (ECC) from the DENR. c) The construction activities will only commence after the acquisition of the ECC, and

d) Final details of the contract, including construction, duration and delivery timetables, shall be based on the approved feasibility report and detailed engineering. Other obligations of RBI are as follows: 2.02 The [RBI] shall develop the PROJECT based on the Final Report and Detailed Engineering as approved by the Office of the President. All costs and expenses for hiring technical personnel, date gathering, permits, licenses, appraisals, clearances, testing and similar undertaking shall be for the account of the [RBI]. 2.03 The [RBI] shall undertake the construction of 3,500 temporary housing units complete with basic amenities such as plumbing, electrical and sewerage facilities within the temporary housing project as staging area to temporarily house the squatter families from the Smokey Mountain while development is being undertaken. These temporary housing units shall be turned over to the [NHA] for disposition.

332 333 334 335 336

2.04 The [RBI] shall construct 3,500 medium rise low cost permanent housing units on the leveled Smokey Mountain complete with basic utilities and amenities, in accordance with the plans and specifications set forth in the Final Report approved by the [NHA]. Completed units ready for mortgage take out shall be turned over by the [RBI] to NHA on agreed schedule. 2.05 The [RBI] shall reclaim forty (40) hectares of Manila Bay area directly across [R-10] as contained in Proclamation No. 39 as the enabling component of the project and payment to the [RBI] as its asset share. 2.06 The [RBI] shall likewise furnish all labor materials and equipment necessary to complete all herein development works to be undertaken on a phase to phase basis in accordance with the work program stipulated therein. The profit sharing shall be based on the approved pre-feasibility report submitted to the EXECOM, viz: For the developer (RBI): 1. 2. 3. For the NHA: 1. 2. 3. residents. 4. 5. To own the Industrial Area site consisting of 3.2 hectares, and To own the open spaces, roads and facilities within the Smokey Mountain area. To own the temporary housing consisting of 3,500 units. To own the cleared and fenced incinerator site consisting of 5 hectares situated at the Smokey Mountain area. To own the 3,500 units of permanent housing to be constructed by [RBI] at the Smokey Mountain area to be awarded to qualified on site To own the forty (40) hectares of reclaimed land. To own the commercial area at the Smokey Mountain area composed of 1.3 hectares, and To own all the constructed units of medium rise low cost permanent housing units beyond the 3,500 units share of the [NHA].

In the event of extraordinary increase in labor, materials, fuel and non-recoverability of total project expenses, 337[20] the OP, upon recommendation of the NHA, may approve a corresponding adjustment in the enabling component. The functions and responsibilities of RBI and NHA are as follows: For RBI: 4.01 Immediately commence on the preparation of the FINAL REPORT with emphasis to the expedient acquisition, with the assistance of the [NHA] of Environmental Compliance Certificate (ECC) from the Environmental Management Bureau (EMB) of the [DENR]. Construction shall only commence after the acquisition of the ECC. The Environment Compliance Certificate (ECC) shall form part of the FINAL REPORT. The FINAL REPORT shall provide the necessary subdivision and housing plans, detailed engineering and architectural drawings, technical specifications and other related and required documents relative to the Smokey Mountain area. With respect to the 40-hectare reclamation area, the [RBI] shall have the discretion to develop the same in a manner that it deems necessary to recover the [RBIs] investment, subject to environmental and zoning rules. 4.02 4.03 Finance the total project cost for land development, housing construction and reclamation of the PROJECT. Warrant that all developments shall be in compliance with the requirements of the FINAL REPORT.

4.04 Provide all administrative resources for the submission of project accomplishment reports to the [NHA] for proper evaluation and supervision on the actual implementation. 4.05 Negotiate and secure, with the assistance of the [NHA] the grant of rights of way to the PROJECT, from the owners of the adjacent lots for access road, water, electrical power connections and drainage facilities. 4.06 Provide temporary field office and transportation vehicles (2 units), one (1) complete set of computer and one (1) unit electric typewriter for the [NHAs] field personnel to be charged to the PROJECT. For the NHA: 4.07 The [NHA] shall be responsible for the removal and relocation of all squatters within Smokey Mountain to the Temporary Housing Complex or to other areas prepared as relocation areas with the assistance of the [RBI]. The [RBI] shall be responsible in releasing the funds allocated and committed for relocation as detailed in the FINAL REPORT. 4.08 Assist the [RBI] and shall endorse granting of exemption fees in the acquisition of all necessary permits, licenses, appraisals, clearances and accreditations for the PROJECT subject to existing laws, rules and regulations.
337

4.09 The [NHA] shall inspect, evaluate and monitor all works at the Smokey Mountain and Reclamation Area while the land development and construction of housing units are in progress to determine whether the development and construction works are undertaken in accordance with the FINAL REPORT. If in its judgment, the PROJECT is not pursued in accordance with the FINAL REPORT, the [NHA] shall require the [RBI] to undertake necessary remedial works. All expenses, charges and penalties incurred for such remedial, if any, shall be for the account of the [RBI]. 4.10 The [NHA] shall assist the [RBI] in the complete electrification of the PROJECT. x x x

4.11 Handle the processing and documentation of all sales transactions related to its assets shares from the venture such as the 3,500 units of permanent housing and the allotted industrial area of 3.2 hectares. 4.12 All advances outside of project costs made by the [RBI] to the [NHA] shall be deducted from the proceeds due to the [NHA].

4.13 The [NHA] shall be responsible for the acquisition of the Mother Title for the Smokey Mountain and Reclamation Area within 90 days upon submission of Survey returns to the Land Management Sector. The land titles to the 40-hectare reclaimed land, the 1.3 hectare commercial area at the Smokey Mountain area and the constructed units of medium-rise permanent housing units beyond the 3,500 units share of the [NHA] shall be issued in the name of the [RBI] upon completion of the project. However, the [RBI] shall have the authority to pre-sell its share as indicated in this agreement.

The final details of the JVA, which will include the construction duration, costs, extent of reclamation, and delivery timetables, shall be based on the FINAL REPORT which will be contained in a Supplemental Agreement to be executed later by the parties. The JVA may be modified or revised by written agreement between the NHA and RBI specifying the clauses to be revised or modified and the corresponding amendments. If the Project is revoked or terminated by the Government through no fault of RBI or by mutual agreement, the Government shall compensate RBI for its actual expenses incurred in the Project plus a reasonable rate of return not exceeding that stated in the feasibility study and in the contract as of the date of such revocation, cancellation, or termination on a schedule to be agreed upon by both parties. As a preliminary step in the project implementation, consultations and dialogues were conducted with the settlers of the Smokey Mountain Dumpsite Area. At the same time, DENR started processing the application for the Environmental Clearance Certificate (ECC) of the SMDRP. As a result however of the consultative dialogues, public hearings, the report on the on-site field conditions, the Environmental Impact Statement (EIS) published on April 29 and May 12, 1993 as required by the Environmental Management Bureau of DENR, the evaluation of the DENR, and the recommendations from other government agencies, it was discovered that design changes and additional work have to be undertaken to successfully implement the Project.338[21] Thus, on February 21, 1994, the parties entered into another agreement denominated as the Amended and Restated Joint Venture Agreement 339[22] (ARJVA) which delineated the different phases of the Project. Phase I of the Project involves the construction of temporary housing units for the current residents of the Smokey Mountain dumpsite, the clearing and leveling-off of the dumpsite, and the construction of medium-rise low-cost housing units at the cleared and leveled dumpsite. 340[23] Phase II of the Project involves the construction of an incineration area for the on-site disposal of the garbage at the dumpsite. 341[24] The enabling component or consideration for Phase I of the Project was increased from 40 hectares of reclaimed lands across R-10 to 79 hectares. 342[25] The revision also provided for the enabling component for Phase II of 119 hectares of reclaimed lands contiguous to the 79 hectares of reclaimed lands for Phase I.343[26] Furthermore, the amended contract delineated the scope of works and the terms and conditions of Phases I and II, thus: The PROJECT shall consist of Phase I and Phase II. Phase I shall involve the following: a. the construction of 2,992 units of temporary housing for the [are] being undertaken b. the clearing of Smokey Mountain and the subsequent industrial/commercial site within the Smokey Mountain area c. affected residents while clearing and development of Smokey construction of 3,520 units of medium rise housing and the Mountain development of the

the reclamation and development of a 79 hectare area directly Phase I

across Radial Road 10 to serve as the enabling component of

Phase II shall involve the following: a. the construction and operation of an incinerator plant that will conform to the emission standards of the DENR contiguous to that to be reclaimed under Phase I to serve as the enabling

b. the reclamation and development of 119-hectare area component of Phase II.

Under the ARJVA, RBI shall construct 2,992 temporary housing units, a reduction from 3,500 units under the JVA. 344[27] However, it was required to construct 3,520 mediumrise low-cost permanent housing units instead of 3,500 units under the JVA. There was a substantial change in the design of the permanent housing units such that a loft shall be incorporated in each unit so as to increase the living space from 20 to 32 square meters. The additions and changes in the Original Project Component are as follows: ORIGINAL
338 339 340 341 342 343 344

CHANGES/REVISIONS

1.

TEMPORARY HOUSING Wood/Plywood, ga. 31 G.I. sheets future 12 SM floor area. 12 sm floor area. Concrete/Steel Frame Structure Sheet usable life of 3 years, gauge 26 G.I. roofing use as permanent structures for factory and warehouses mixed 17 sm &

2.

MEDIUM RISE MASS HOUSING Box type precast Shelter Conventional and precast component 20 square meter concrete structures, 32 square floor area with 2.4 meter meter floor area with loft floor height; bare type, 160 units/ (sleeping quarter) 3.6 m. floor building. height, painted and improved architectural faade, 80 units/ building.

3. MITIGATING MEASURES 3.1 For reclamation work a. 100% use of Smokey Mountain material as dredgefill b. Concrete Sheet Piles short depth of embedment Need to remove more than 3.0 meters of silt after sub-soil investigation. 345[28] Use of clean dredgefill material below the MLLW and SM material mixed with dredgefill above MLLW.

Use of Steel Sheet Piles needed for longer depth of embedment.

c. Silt removal approximately 1.0 meter only

These material and substantial modifications served as justifications for the increase in the share of RBI from 40 hectares to 79 hectares of reclaimed land. Under the JVA, the specific costs of the Project were not stipulated but under the ARJVA, the stipulated cost for Phase I was pegged at six billion six hundred ninety-three million three hundred eighty-seven thousand three hundred sixty-four pesos (PhP 6,693,387,364). In his February 10, 1994 Memorandum, the Chairperson of the SMDRP EXECOM submitted the ARJVA for approval by the OP. After review of said agreement, the OP directed that certain terms and conditions of the ARJVA be further clarified or amended preparatory to its approval. Pursuant to the Presidents directive, the parties reached an agreement on the clarifications and amendments required to be made on the ARJVA. On August 11, 1994, the NHA and RBI executed an Amendment To the Amended and Restated Joint Venture Agreement (AARJVA) 346[29] clarifying certain terms and condition of the ARJVA, which was submitted to President Ramos for approval, to wit: Phase II shall involve the following: a. b. the construction and operation of an incinerator plant that will conform to the emission standards of the DENR the reclamation and development of 119-hectare area contiguous to that to be reclaimed under Phase I to serve as the enabling component of Phase II, the exact size and configuration of which shall be approved by the SMDRP Committee347[30]

Other substantial amendments are the following: 4. Paragraph 2.05 of Article II of the ARJVA is hereby amended to read as follows: 2.05. The DEVELOPER shall reclaim seventy nine (79) hectares of the Manila Bay area directly across Radial Road 10 (R-10) to serve as payment to the DEVELOPER as its asset share for Phase I and to develop such land into commercial area with port facilities; provided, that the port plan shall be integrated with the Philippine Port Authoritys North Harbor plan for the Manila Bay area and provided further, that the final reclamation and port plan for said reclaimed area shall be submitted for approval by the Public Estates Authority and the Philippine Ports Authority, respectively: provided finally, that subject to par. 2.02 above, actual reclamation work may commence upon approval of the final reclamation plan by the Public Estates Authority. xxxx 9. A new paragraph to be numbered 5.05 shall be added to Article V of the ARJVA, and shall read as follows: 5.05. In the event this Agreement is revoked, cancelled or terminated by the AUTHORITY through no fault of the DEVELOPER, the AUTHORITY shall compensate the DEVELOPER for the value of the completed portions of, and actual expenditures on the PROJECT plus a reasonable rate of return thereon, not exceeding that stated in the Cost Estimates of Items of Work previously approved by the SMDRP Executive
345 346 347

Committee and the AUTHORITY and stated in this Agreement, as of the date of such revocation, cancellation, or termination, on a schedule to be agreed upon by the parties, provided that said completed portions of Phase I are in accordance with the approved FINAL REPORT.

Afterwards, President Ramos issued Proclamation No. 465 dated August 31, 1994 348[31] increasing the proposed area for reclamation across R-10 from 40 hectares to 79 hectares,349[32] to wit: NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the law, and as recommended by the SMDRP Executive Committee, do hereby authorize the increase of the area of foreshore or submerged lands of Manila Bay to be reclaimed, as previously authorized under Proclamation No. 39 (s. 1992) and Memorandum Order No. 415 (s. 1992), from Four Hundred Thousand (400,000) square meters, more or less, to Seven Hundred Ninety Thousand (790,000) square meters, more or less. On September 1, 1994, pursuant to Proclamation No. 39, the DENR issued Special Patent No. 3591 conveying in favor of NHA an area of 211,975 square meters covering the Smokey Mountain Dumpsite. In its September 7, 1994 letter to the EXECOM, the OP through then Executive Secretary Teofisto T. Guingona, Jr., approved the ARJVA as amended by the AARJVA. On September 8, 1994, the DENR issued Special Patent 3592 pursuant to Proclamation No. 39, conveying in favor of NHA a 401,485-square meter area. On September 26, 1994, the NHA, RBI, Home Insurance and Guaranty Corporation (HIGC), now known as the Home Guaranty Corporation, and the Philippine National Bank (PNB)350[33] executed the Smokey Mountain Asset Pool Formation Trust Agreement (Asset Pool Agreement). 351[34] Thereafter, a Guaranty Contract was entered into by NHA, RBI, and HIGC. On June 23, 1994, the Legislature passed the Clean Air Act.352[35] The Act made the establishment of an incinerator illegal and effectively barred the implementation of the planned incinerator project under Phase II. Thus, the off-site disposal of the garbage at the Smokey Mountain became necessary. 353[36] The land reclamation was completed in August 1996. 354[37] Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR issued Special Patent No. 3598 conveying in favor of NHA an additional 390,000 square meter area. During the actual construction and implementation of Phase I of the SMDRP, the Inter-Agency Technical Committee found and recommended to the EXECOM on December 17, 1997 that additional works were necessary for the completion and viability of the Project. The EXECOM approved the recommendation and so, NHA instructed RBI to implement the change orders or necessary works.355[38] Such necessary works comprised more than 25% of the original contract price and as a result, the Asset Pool incurred direct and indirect costs. Based on C1 12 A of the Implementing Rules and Regulations of PD 1594, a supplemental agreement is required for all change orders and extra work orders, the total aggregate cost of which being more than twenty-five (25%) of the escalated original contract price. The EXECOM requested an opinion from the Department of Justice (DOJ) to determine whether a bidding was required for the change orders and/or necessary works. The DOJ, through DOJ Opinion Nos. 119 and 155 dated August 26, 1993 and November 12, 1993, opined that a rebidding, pursuant to the aforequoted provisions of the implementing rules (referring to PD 1594) would not be necessary where the change orders inseparable from the original scope of the project, in which case, a negotiation with the incumbent contractor may be allowed. Thus, on February 19, 1998, the EXECOM issued a resolution directing NHA to enter into a supplemental agreement covering said necessary works. On March 20, 1998, the NHA and RBI entered into a Supplemental Agreement covering the aforementioned necessary works and submitted it to the President on March 24, 1998 for approval. Outgoing President Ramos decided to endorse the consideration of the Supplemental Agreement to incoming President Joseph E. Estrada. On June 30, 1998, Estrada became the 13th Philippine President. However, the approval of the Supplemental Agreement was unacted upon for five months. As a result, the utilities and the road networks were constructed to cover only the 79-hectare original enabling component granted under the ARJVA. The 220-hectare extension of the 79-hectare area was no longer technically feasible. Moreover, the financial crises and unreliable real estate situation made it difficult to sell the remaining reclaimed lots. The devaluation of the peso and the increase in interest cost led to the substantial increase in the cost of reclamation. On August 1, 1998, the NHA granted RBIs request to suspend work on the SMDRP due to the delay in the approval of the Supplemental Agreement, the consequent absence of an enabling component to cover the cost of the necessary works for the project, and the resulting inability to replenish the Asset Pool funds partially used for the completion of the necessary works.356[39]

348 349 350 351 352 353 354 355 356

As of August 1, 1998 when the project was suspended, RBI had already accomplished a portion of the necessary works and change orders which resulted in [RBI] and the Asset Pool incurring advances for direct and indirect cost which amount can no longer be covered by the 79-hectare enabling component under the ARJVA. 357[40] Repeated demands were made by RBI in its own capacity and on behalf of the asset pool on NHA for payment for the advances for direct and indirect costs subject to NHA validation. In November 1998, President Estrada issued Memorandum Order No. 33 reconstituting the SMDRP EXECOM and further directed it to review the Supplemental Agreement and submit its recommendation on the completion of the SMDRP. The reconstituted EXECOM conducted a review of the project and recommended the amendment of the March 20, 1998 Supplemental Agreement to make it more feasible and to identify and provide new sources of funds for the project and provide for a new enabling component to cover the payment for the necessary works that cannot be covered by the 79-hectare enabling component under the ARJVA.358[41] The EXECOM passed Resolution Nos. 99-16-01 and 99-16-02359[42] which approved the modification of the Supplemental Agreement, to wit: a) b) Approval of 150 hectares additional reclamation in order to make the reclamation feasible as part of the enabling component.

The conveyance of the 15-hectare NHA Vitas property (actually

17 hectares based on surveys) to the SMDRP Asset Pool. of

c) The inclusion in the total development cost of other additional, necessary and indispensable infrastructure works and the revision the original cost stated in the Supplemental Agreement dated March 20, 1998 from PhP 2,953,984,941.40 to PhP 2,969,134,053.13. d) Revision in the sharing agreement between the parties.

In the March 23, 2000 OP Memorandum, the EXECOM was authorized to proceed and complete the SMDRP subject to certain guidelines and directives. After the parties in the case at bar had complied with the March 23, 2000 Memorandum, the NHA November 9, 2000 Resolution No. 4323 approved the conveyance of the 17-hectare Vitas property in favor of the existing or a newly created Asset Pool of the project to be developed into a mixed commercial-industrial area, subject to certain conditions. On January 20, 2001, then President Estrada was considered resigned. On the same day, President Gloria M. Arroyo took her oath as the 14th President of the Philippines. As of February 28, 2001, the estimated total project cost of the SMDRP has reached P8.65 billion comprising of P4.78 billion in direct cost and P3.87 billion in indirect cost,360[43] subject to validation by the NHA. On August 28, 2001, NHA issued Resolution No. 4436 to pay for the various necessary works/change orders to SMDRP, to effect the corresponding enabling component consisting of the conveyance of the NHAs Vitas Property and an additional 150-hectare reclamation area and to authorize the release by NHA of PhP 480 million as advance to the project to make the Permanent Housing habitable, subject to reimbursement from the proceeds of the expanded enabling component. 361[44] On November 19, 2001, the Amended Supplemental Agreement (ASA) was signed by the parties, and on February 28, 2002, the Housing and Urban Development Coordinating Council (HUDCC) submitted the agreement to the OP for approval. In the July 20, 2002 Cabinet Meeting, HUDCC was directed to submit the works covered by the PhP 480 million [advance to the Project] and the ASA to public bidding. 362[45] On August 28, 2002, the HUDCC informed RBI of the decision of the Cabinet. In its September 2, 2002 letter to the HUDCC Chairman, RBI lamented the decision of the government to bid out the remaining works under the ASA thereby unilaterally terminating the Project with RBI and all the agreements related thereto. RBI demanded the payment of just compensation for all accomplishments and costs incurred in developing the SMDRP plus a reasonable rate of return thereon pursuant to Section 5.05 of the ARJVA and Section 6.2 of the ASA. 363[46] Consequently, the parties negotiated the terms of the termination of the JVA and other subsequent agreements. On August 27, 2003, the NHA and RBI executed a Memorandum of Agreement (MOA) whereby both parties agreed to terminate the JVA and other subsequent agreements, thus: 1. TERMINATION 1.1 In compliance with the Cabinet directive dated 30 July 2002 to submit the works covered by the P480 Million and the ASA to public bidding, the following agreements executed by and between the NHA and the DEVELOPER are hereby terminated, to wit: a. b. c. d. e. xxxx 5.
357 358 359 360 361 362 363

Joint Venture Agreement (JVA) dated 19 March 1993 Amended and Restated Joint Venture Agreement (ARJVA) dated 21 February 1994 Amendment and Restated Joint Venture Agreement dated 11 August 1994 Supplemental Agreement dated 24 March 1998 Amended Supplemental Agreement (ASA) dated 19 November 2001.

SETTLEMENT OF CLAIMS

5.1

Subject to the validation of the DEVELOPERs claims, the NHA hereby agrees to initially compensate the Developer for the abovementioned costs as follows: a. Direct payment to DEVELOPER of the amounts herein listed in the following manner: a.1 a.2 P250 Million in cash from the escrow account in accordance with Section 2 herewith; Conveyance of a 3 hectare portion of the Vitas Industrial area immediately after joint determination of the appraised value of the said property in accordance with the procedure herein set forth in the last paragraph of Section 5.3. For purposes of all payments to be made through conveyance of real properties, the parties shall secure from the NHA Board of Directors all documents necessary and sufficient to effect the transfer of title over the properties to be conveyed to RBI, which documents shall be issued within a reasonable period.

5.2

Any unpaid balance of the DEVELOPERS claims determined after the validation process referred to in Section 4 hereof, may be paid in cash, bonds or through the conveyance of properties or any combination thereof. The manner, terms and conditions of payment of the balance shall be specified and agreed upon later within a period of three months from the time a substantial amount representing the unpaid balance has been validated pursuant hereto including, but not limited to the programming of quarterly cash payments to be sourced by the NHA from its budget for debt servicing, from its income or from any other sources. In any case the unpaid balance is agreed to be paid, either partially or totally through conveyance of properties, the parties shall agree on which properties shall be subject to conveyance. The NHA and DEVELOPER hereby agree to determine the valuation of the properties to be conveyed by getting the average of the appraisals to be made by two (2) mutually acceptable independent appraisers.

5.3

Meanwhile, respondent Harbour Centre Port Terminal, Inc. (HCPTI) entered into an agreement with the asset pool for the development and operations of a port in the Smokey Mountain Area which is a major component of SMDRP to provide a source of livelihood and employment for Smokey Mountain residents and spur economic growth. A Subscription Agreement was executed between the Asset Pool and HCPTI whereby the asset pool subscribed to 607 million common shares and 1,143 million preferred shares of HCPTI. The HCPTI preferred shares had a premium and penalty interest of 7.5% per annum and a mandatory redemption feature. The asset pool paid the subscription by conveying to HCPTI a 10-hectare land which it acquired from the NHA being a portion of the reclaimed land of the SMDRP. Corresponding certificates of titles were issued to HCPTI, namely: TCT Nos. 251355, 251356, 251357, and 251358. Due to HCPTIs failure to obtain a license to handle foreign containerized cargo from PPA, it suffered a net income loss of PhP 132,621,548 in 2002 and a net loss of PhP 15,540,063 in 2003. The Project Governing Board of the Asset Pool later conveyed by way of dacion en pago a number of HCPTI shares to RBI in lieu of cash payment for the latters work in SMDRP. On August 5, 2004, former Solicitor General Francisco I. Chavez, filed the instant petition which impleaded as respondents the NHA, RBI, R-II Holdings, Inc. (RHI), HCPTI, and Mr. Reghis Romero II, raising constitutional issues. The NHA reported that thirty-four (34) temporary housing structures and twenty-one (21) permanent housing structures had been turned over by respondent RBI. It claimed that 2,510 beneficiary-families belonging to the poorest of the poor had been transferred to their permanent homes and benefited from the Project.

The Issues The grounds presented in the instant petition are: I NEITHER RESPONDENT NHA NOR RESPONDENT R-II BUILDERS MAY VALIDLY RECLAIM FORESHORE AND SUBMERGED LAND BECAUSE: 1. RESPONDENT NHA AND R-II BUILDERS WERE NEVER GRANTED ANY POWER AND AUTHORITY TO RECLAIM PUBLIC DOMAIN AS THIS POWER IS VESTED EXCLUSIVELY WITH THE PEA. LANDS OF THE

2. EVEN ASSUMING THAT RESPONDENTS NHA AND R-II BUILDERS WERE GIVEN THE POWER AND AUTHORITY TO FORESHORE AND SUBMERGED LAND, THEY WERE NEVER GIVEN THE AUTHORITY BY THE DENR TO DO SO. II RESPONDENT R-II BUILDERS CANNOT ACQUIRE THE RECLAIMED FORESHORE AND SUBMERGED LAND AREAS BECAUSE: 1. THE RECLAIMED FORESHORE AND SUBMERGED THE COMMERCE OF MAN. 2. PARCELS OF LAND ARE INALIENABLE PUBLIC LANDS

RECLAIM

WHICH ARE BEYOND

ASSUMING ARGUENDO THAT THE SUBJECT RECLAIMED FORESHORE AND SUBMERGED PARCELS OF LAND WERE ALREADY DECLARED ALIENABLE LANDS OF THE PUBLIC DOMAIN, RESPONDENT R-II BUILDERS STILL COULD NOT ACQUIRE THE SAME BECAUSE THERE WAS NEVER ANY DECLARATION THAT THE SAID LANDS WERE NO LONGER NEEDED FOR PUBLIC USE.

3. EVEN ASSUMING THAT THE SUBJECT RECLAIMED LANDS ARE ALIENABLE AND NO LONGER NEEDED FOR PUBLIC USE, RESPONDENT R-II BUILDERS STILL CANNOT ACQUIRE THE SAME BECAUSE THERE WAS NEVER ANY LAW AUTHORIZING THE SALE THEREOF. 4. 5. THERE WAS NEVER ANY PUBLIC BIDDING AWARDING OWNERSHIP OF THE SUBJECT LAND TO RESPONDENT R-II BUILDERS.

ASSUMING THAT ALL THE REQUIREMENTS FOR A VALID TRANSFER OF ALIENABLE PUBLIC HAD BEEN PERFORMED, RESPONDENT R-II BUILDERS, BEING PRIVATE CORPORATION IS NONETHELESS EXPRESSLYPROHIBITED BY THE PHILIPPINE CONSTITUTION TO ACQUIRE LANDS OF THE PUBLIC DOMAIN.

III RESPONDENT HARBOUR, BEING A PRIVATE CORPORATION WHOSE MAJORITY STOCKS ARE OWNED AND CONTROLLED BY RESPONDENT ROMEROS CORPORATIONS R-II BUILDERS AND R-II HOLDINGS IS DISQUALIFIED FROM BEING A TRANSFEREE OF PUBLIC LAND. IV RESPONDENTS MUST BE COMPELLED TO DISCLOSE ALL INFORMATION RELATED TO THE SMOKEY MOUNTAIN DEVELOPMENT AND RECLAMATION PROJECT. The Courts Ruling Before we delve into the substantive issues raised in this petition, we will first deal with several procedural matters raised by respondents. Whether petitioner has the requisite locus standi to file this case Respondents argue that petitioner Chavez has no legal standing to file the petition. Only a person who stands to be benefited or injured by the judgment in the suit or entitled to the avails of the suit can file a complaint or petition. 364[47] Respondents claim that petitioner is not a proper party-in-interest as he was unable to show that he has sustained or is in immediate or imminent danger of sustaining some direct and personal injury as a result of the execution and enforcement of the assailed contracts or agreements. 365[48] Moreover, they assert that not all government contracts can justify a taxpayers suit especially when no public funds were utilized in contravention of the Constitution or a law. We explicated in Chavez v. PCGG366[49] that in cases where issues of transcendental public importance are presented, there is no necessity to show that petitioner has experienced or is in actual danger of suffering direct and personal injury as the requisite injury is assumed. We find our ruling in Chavez v. PEA367[50] as conclusive authority on locus standi in the case at bar since the issues raised in this petition are averred to be in breach of the fair diffusion of the countrys natural resources and the constitutional right of a citizen to information which have been declared to be matters of transcendental public importance. Moreover, the pleadings especially those of respondents readily reveal that public funds have been indirectly utilized in the Project by means of Smokey Mountain Project Participation Certificates (SMPPCs) bought by some government agencies. Hence, petitioner, as a taxpayer, is a proper party to the instant petition before the court. Whether petitioners direct recourse to this Court was proper Respondents are one in asserting that petitioner circumvents the principle of hierarchy of courts in his petition. Judicial hierarchy was made clear in the case of People v. Cuaresma, thus: There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level (inferior) courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket. 368[51] x x x The OSG claims that the jurisdiction over petitions for prohibition and mandamus is concurrent with other lower courts like the Regional Trial Courts and the Court of Appeals. Respondent NHA argues that the instant petition is misfiled because it does not introduce special and important reasons or exceptional and compelling circumstances to warrant direct recourse to this Court and that the lower courts are more equipped for factual issues since this Court is not a trier of facts. Respondents RBI and RHI question the filing of the petition as this Court should not be unduly burdened with repetitions, invocation of jurisdiction over constitutional questions it had previously resolved and settled. In the light of existing jurisprudence, we find paucity of merit in respondents postulation. While direct recourse to this Court is generally frowned upon and discouraged, we have however ruled in Santiago v. Vasquez that such resort to us may be allowed in certain situations, wherein this Court ruled that petitions for certiorari, prohibition, or mandamus, though cognizable by other courts, may directly be filed with us if the redress desired cannot be obtained in the appropriate courts or where exceptional compelling circumstances justify availment of a remedy within and calling for the exercise of [this Courts] primary jurisdiction.369[52] The instant petition challenges the constitutionality and legality of the SMDRP involving several hectares of government land and hundreds of millions of funds of several government agencies. Moreover, serious constitutional challenges are made on the different aspects of the Project which allegedly affect the right of Filipinos to the distribution of natural resources in the country and the right to information of a citizenmatters which have been considered to be of extraordinary significance and grave consequence to the public in general. These concerns in the instant action compel us to turn a blind eye to the judicial structure meant to provide an orderly dispensation of justice and consider the instant petition as a justified deviation from an established precept. Core factual matters undisputed Respondents next challenge the projected review by this Court of the alleged factual issues intertwined in the issues propounded by petitioner. They listed a copious number of questions seemingly factual in nature which would make this Court a trier of facts. 370[53] We find the position of respondents bereft of merit.
364 365 366 367 368 369 370

For one, we already gave due course to the instant petition in our January 18, 2005 Resolution. 371[54] In said issuance, the parties were required to make clear and concise statements of established facts upon which our decision will be based. Secondly, we agree with petitioner that there is no necessity for us to make any factual findings since the facts needed to decide the instant petition are well established from the admissions of the parties in their pleadings 372[55] and those derived from the documents appended to said submissions. Indeed, the core facts which are the subject matter of the numerous issues raised in this petition are undisputed. Now we will tackle the issues that prop up the instant petition. Since petitioner has cited our decision in PEA as basis for his postulations in a number of issues, we first resolve the queryis PEA applicable to the case at bar? A juxtaposition of the facts in the two cases constrains the Court to rule in the negative. The Court finds that PEA is not a binding precedent to the instant petition because the facts in said case are substantially different from the facts and circumstances in the case at bar, thus: (1) The reclamation project in PEA was undertaken through a JVA entered into between PEA and AMARI. The reclamation project in the instant NHA case was undertaken by the NHA, a national government agency in consultation with PEA and with the approval of two Philippine Presidents; (2) In PEA, AMARI and PEA executed a JVA to develop the Freedom Islands and reclaim submerged areas without public bidding on April 25, 1995. In the instant NHA case, the NHA and RBI executed a JVA after RBI was declared the winning bidder on August 31, 1992 as the JVA partner of the NHA in the SMDRP after compliance with the requisite public bidding. (3) In PEA, there was no law or presidential proclamation classifying the lands to be reclaimed as alienable and disposal lands of public domain. In this RBI case, MO 415 of former President Aquino and Proclamation No. 39 of then President Ramos, coupled with Special Patents Nos. 3591, 3592, and 3598, classified the reclaimed lands as alienable and disposable; (4) In PEA, the Chavez petition was filed before the amended JVA was executed by PEA and AMARI. In this NHA case, the JVA and subsequent amendments were already substantially implemented. Subsequently, the Project was terminated through a MOA signed on August 27, 2003. Almost one year later on August 5, 2004, the Chavez petition was filed; (5) In PEA, AMARI was considered to be in bad faith as it signed the amended JVA after the Chavez petition was filed with the Court and after Senate Committee Report No. 560 was issued finding that the subject lands are inalienable lands of public domain. In the instant petition, RBI and other respondents are considered to have signed the agreements in good faith as the Project was terminated even before the Chavez petition was filed; (6) The PEA-AMARI JVA was executed as a result of direct negotiation between the parties and not in accordance with the BOT Law. The NHA-RBI JVA and subsequent amendments constitute a BOT contract governed by the BOT Law; and (7) In PEA, the lands to be reclaimed or already reclaimed were transferred to PEA, a government entity tasked to dispose of public lands under Executive Order No. (EO) 525.373[56] In the NHA case, the reclaimed lands were transferred to NHA, a government entity NOT tasked to dispose of public land and therefore said alienable lands were converted to patrimonial lands upon their transfer to NHA.374[57] Thus the PEA Decision375[58] cannot be considered an authority or precedent to the instant case. The principle of stare decisis376[59] has no application to the different factual setting of the instant case. We will now dwell on the substantive issues raised by petitioner. After a perusal of the grounds raised in this petition, we find that most of these issues are moored on our PEA Decision which, as earlier discussed, has no application to the instant petition. For this reason alone, the petition can already be rejected. Nevertheless, on the premise of the applicability of said decision to the case at bar, we will proceed to resolve said issues. First Issue: Whether respondents NHA and RBI have been granted the power and authority to reclaim lands of the public domain as this power is vested exclusively in PEA as claimed by petitioner Petitioner contends that neither respondent NHA nor respondent RBI may validly reclaim foreshore and submerged land because they were not given any power and authority to reclaim lands of the public domain as this power was delegated by law to PEA. Asserting that existing laws did not empower the NHA and RBI to reclaim lands of public domain, the Public Estates Authority (PEA), petitioner claims, is the primary authority for the reclamation of all foreshore and submerged lands of public domain, and relies on PEA where this Court held: Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government. The same section also states that [A]ll reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; x x x. Thus, under EO No. 525, in relation to PD No. 3-A and PD No. 1084, PEA became the primary implementing agency of the National Government to reclaim foreshore and submerged lands of the public domain. EO No. 525 recognized PEA as the government entity to undertake the reclamation of lands and ensure
371 372 373 374 375 376

their maximum utilization in promoting public welfare and interests. Since large portions of these reclaimed lands would obviously be needed for public service, there must be a formal declaration segregating reclaimed lands no longer needed for public service from those still needed for public service. 377[60] In the Smokey Mountain Project, petitioner clarifies that the reclamation was not done by PEA or through a contract executed by PEA with another person or entity but by the NHA through an agreement with respondent RBI. Therefore, he concludes that the reclamation is null and void. Petitioners contention has no merit. EO 525 reads: Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government. All reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; Provided, that, reclamation projects of any national government agency or entity authorized under its charter shall be undertaken in consultation with the PEA upon approval of the President . (Emphasis supplied.) The aforequoted provision points to three (3) requisites for a legal and valid reclamation project, viz: (1) (2) (3) approval by the President; favorable recommendation of PEA; and undertaken by any of the following: a. b. c. consultation by PEA by any person or entity pursuant to a contract it executed by the National Government agency or entity authorized with PEA with PEA under its charter to reclaim lands subject to

Without doubt, PEA under EO 525 was designated as the agency primarily responsible for integrating, directing, and coordinating all reclamation projects. Primarily means mainly, principally, mostly, generally. Thus, not all reclamation projects fall under PEAs authority of supervision, integration, and coordination. The very charter of PEA, PD 1084,378[61] does not mention that PEA has the exclusive and sole power and authority to reclaim lands of public domain. EO 525 even reveals the exceptionreclamation projects by a national government agency or entity authorized by its charter to reclaim land. One example is EO 405 which authorized the Philippine Ports Authority (PPA) to reclaim and develop submerged areas for port related purposes. Under its charter, PD 857, PPA has the power to reclaim, excavate, enclose or raise any of the lands vested in it. Thus, while PEA under PD 1084 has the power to reclaim land and under EO 525 is primarily responsible for integrating, directing and coordinating reclamation projects, such authority is NOT exclusive and such power to reclaim may be granted or delegated to another government agency or entity or may even be undertaken by the National Government itself, PEA being only an agency and a part of the National Government. Let us apply the legal parameters of Sec. 1, EO 525 to the reclamation phase of SMDRP. After a scrutiny of the facts culled from the records, we find that the project met all the three (3) requirements, thus: 1. There was ample approval by the President of the Philippines; as a matter of fact, two Philippine Presidents approved the same, namely: Presidents Aquino and Ramos. President Aquino sanctioned the reclamation of both the SMDRP housing and commercial-industrial sites through MO 415 (s. 1992) which approved the SMDRP under Sec. 1 and directed NHA x x x to implement the Smokey Mountain Development Plan and Reclamation of the Area across R-10 through a private sector joint venture scheme at the least cost to government under Section 3. For his part, then President Ramos issued Proclamation No. 39 (s. 1992) which expressly reserved the Smokey Mountain Area and the Reclamation Area for a housing project and related commercial/industrial development. Moreover, President Ramos issued Proclamation No. 465 (s. 1994) which authorized the increase of the Reclamation Area from 40 hectares of foreshore and submerged land of the Manila Bay to 79 hectares . It speaks of the reclamation of 400,000 square meters, more or less, of the foreshore and submerged lands of Manila Bay adjoining R-10 as an enabling component of the SMDRP. As a result of Proclamations Nos. 39 and 465, Special Patent No. 3591 covering 211,975 square meters of Smokey Mountain, Special Patent No. 3592 covering 401,485 square meters of reclaimed land, and Special Patent No. 3598 covering another 390,000 square meters of reclaimed land were issued by the DENR. Thus, the first requirement of presidential imprimatur on the SMDRP has been satisfied. 2. The requisite favorable endorsement of the reclamation phase was impliedly granted by PEA. President Aquino saw to it that there was coordination of the project with PEA by designating its general manager as member of the EXECOM tasked to supervise the project implementation. The assignment was made in Sec. 2 of MO 415 which provides: Section 2. An Executive Committee is hereby created to oversee the implementation of the Plan, chaired by the NCR-CORD, with the heads of the following agencies as members: The National Housing Authority, the City of Manila, the Department of Public Works and Highways, the Public Estates Authority, the Philippine Ports Authority, the Department of Environment and Natural Resources and the Development Bank of the Philippines. (Emphasis supplied.) The favorable recommendation by PEA of the JVA and subsequent amendments were incorporated as part of the recommendations of the EXECOM created under MO 415. While there was no specific recommendation on the SMDRP emanating solely from PEA, we find that the approbation of the Project and the land reclamation as an essential component by the EXECOM of which PEA is a member, and its submission of the SMDRP and the agreements on the Project to the President for approval amply met the second requirement of EO 525.
377 378

3. The third element was also presentthe reclamation was undertaken either by PEA or any person or entity under contract with PEA or by the National Government agency or entity authorized under its charter to reclaim lands subject to consultation with PEA. It cannot be disputed that the reclamation phase was not done by PEA or any person or entity under contract with PEA. However, the reclamation was implemented by the NHA, a national government agency whose authority to reclaim lands under consultation with PEA is derived from its charterPD 727 and other pertinent lawsRA 7279 379[62] and RA 6957 as amended by RA 7718. While the authority of NHA to reclaim lands is challenged by petitioner, we find that the NHA had more than enough authority to do so under existing laws. While PD 757, the charter of NHA, does not explicitly mention reclamation in any of the listed powers of the agency, we rule that the NHA has an implied power to reclaim land as this is vital or incidental to effectively, logically, and successfully implement an urban land reform and housing program enunciated in Sec. 9 of Article XIII of the 1987 Constitution. Basic in administrative law is the doctrine that a government agency or office has express and implied powers based on its charter and other pertinent statutes. Express powers are those powers granted, allocated, and delegated to a government agency or office by express provisions of law. On the other hand, implied powers are those that can be inferred or are implicit in the wordings of the law 380[63] or conferred by necessary or fair implication in the enabling act. 381[64] In Angara v. Electoral Commission , the Court clarified and stressed that when a general grant of power is conferred or duty enjoined, every particular power necessary for the exercise of the one or the performance of the other is also conferred by necessary implication.382[65] It was also explicated that when the statute does not specify the particular method to be followed or used by a government agency in the exercise of the power vested in it by law, said agency has the authority to adopt any reasonable method to carry out its functions. 383[66] The power to reclaim on the part of the NHA is implicit from PD 757, RA 7279, MO 415, RA 6957, and PD 3-A,384[67] viz: 1. NHAs power to reclaim derived from PD 757 provisions: a. Sec. 3 of PD 757 implies that reclamation may be resorted to in order to attain the goals of NHA: Section 3. Progress and Objectives. The Authority shall have the following purposes and objectives: xxxx b) c) To undertake housing, development, resettlement or other activities as would enhance the provision of housing to every Filipino; To harness and promote private participation in housing ventures in terms of capital expenditures, land, expertise, financing and other facilities for the sustained growth of the housing industry. (Emphasis supplied.)

Land reclamation is an integral part of the development of resources for some of the housing requirements of the NHA. Private participation in housing projects may also take the form of land reclamation. b. Sec. 5 of PD 757 serves as proof that the NHA, as successor of the Tondo Foreshore Development Authority (TFDA), has the power to reclaim, thus:

Section 5. Dissolution of Existing Housing Agencies. The People's Homesite and Housing Corporation (PHHC), the Presidential Assistant on Housing Resettlement Agency (PAHRA), the Tondo Foreshore Development Authority (TFDA) , the Central Institute for the Training and Relocation of Urban Squatters (CITRUS), the Presidential Committee for Housing and Urban Resettlement (PRECHUR), Sapang Palay Development Committee, Inter-Agency Task Force to Undertake the Relocation of Families in Barrio Nabacaan, Villanueva, Misamis Oriental and all other existing government housing and resettlement agencies, task forces and ad-hoc committees, are hereby dissolved. Their powers and functions, balance of appropriations, records, assets, rights, and choses in action, are transferred to, vested in, and assumed by the Authority. x x x (Emphasis supplied.) PD 570 dated October 30, 1974 created the TFDA, which defined its objectives, powers, and functions. Sec. 2 provides: Section 2. Objectives and Purposes . The Authority shall have the following purposes and objectives: a) To undertake all manner of activity, business or development projects for the establishment of harmonious, comprehensive, integrated and healthy living community in the Tondo Foreshoreland and its resettlement site; b) To undertake and promote the physical and socio-economic amelioration of the Tondo Foreshore residents in particular and the nation in general (Emphasis supplied.) The powers and functions are contained in Sec. 3, to wit: a) To develop and implement comprehensive and integrated urban renewal programs for the Tondo Foreshore and Dagat-dagatan lagoon and/or any other additional/alternative resettlement site and to formulate and enforce general and specific policies for its development which shall ensure reasonable degree of compliance with environmental standards. b) To prescribe guidelines and standards for the reservation, conservation and utilization of public lands covering the Tondo Foreshore land and its resettlement sites; c) To construct, acquire, own, lease, operate and maintain infrastructure facilities, housing complex, sites and services;
379 380 381 382 383 384

d) To determine, regulate and supervise the establishment and operation of housing, sites, services and commercial and industrial complexes and any other enterprises to be constructed or established within the Tondo Foreshore and its resettlement sites; e) To undertake and develop, by itself or through joint ventures with other public or private entities, all or any of the different phases of development of the Tondo Foreshore land and its resettlement sites; f) To acquire and own property, property-rights and interests, and encumber or otherwise dispose of the same as it may deem appropriate (Emphasis supplied.) From the foregoing provisions, it is readily apparent that the TFDA has the explicit power to develop public lands covering the Tondo foreshore land and any other additional and alternative resettlement sites under letter b, Sec. 3 of PD 570. Since the additional and/or alternative sites adjacent to Tondo foreshore land cover foreshore and submerged areas, the reclamation of said areas is necessary in order to convert them into a comprehensive and integrated resettlement housing project for the slum dwellers and squatters of Tondo. Since the powers of TFDA were assumed by the NHA, then the NHA has the power to reclaim lands in the Tondo foreshore area which covers the 79-hectare land subject of Proclamations Nos. 39 and 465 and Special Patents Nos. 3592 and 3598. c. Sec. 6 of PD 757 delineates the functions and powers of the NHA which embrace the authority to reclaim land, thus:

Sec. 6. Powers and functions of the Authority .The Authority shall have the following powers and functions to be exercised by the Board in accordance with its established national human settlements plan prepared by the Human Settlements Commission: (a) xxxx (c) resettlement; xxxx (e) and private entities; xxxx (k) (l) xxxx (s) Perform such other acts not inconsistent with this Decree, as may be necessary to effect the policies and objectives herein declared. (Emphasis supplied.) The NHAs authority to reclaim land can be inferred from the aforequoted provisions. It can make use of public lands under letter (c) of Sec. 6 which includes reclaimed land as site for its comprehensive and integrated housing projects under letter (a) which can be undertaken through joint ventures with private entities under letter (e). Taken together with letter (s) which authorizes NHA to perform such other activities necessary to effect the policies and objectives of PD 757, it is safe to conclude that the NHAs power to reclaim lands is a power that is implied from the exercise of its explicit powers under Sec. 6 in order to effectively accomplish its policies and objectives under Sec. 3 of its charter. Thus, the reclamation of land is an indispensable component for the development and construction of the SMDRP housing facilities. 2. NHAs implied power to reclaim land is enhanced by RA 7279. Develop and undertake housing development and/or resettlement projects through joint ventures or other arrangements with public Prescribe guidelines and standards for the reservation, conservation and utilization of public lands identified for housing and Develop and implement the comprehensive and integrated housing program provided for in Section hereof;

Enter into contracts whenever necessary under such terms and conditions as it may deem proper and reasonable; Acquire property rights and interests and encumber or otherwise dispose the same as it may deem appropriate;

PD 757 identifies NHAs mandate to [d]evelop and undertake housing development and/or resettlement projects through joint ventures or other arrangements with public and private entities. The power of the NHA to undertake reclamation of land can be inferred from Secs. 12 and 29 of RA 7279, which provide: Section 12. Disposition of Lands for Socialized Housing. The National Housing Authority, with respect to lands belonging to the National Government, and the local government units with respect to other lands within their respective localities, shall coordinate with each other to formulate and make available various alternative schemes for the disposition of lands to the beneficiaries of the Program . These schemes shall not be limited to those involving transfer of ownership in fee simple but shall include lease, with option to purchase, usufruct or such other variations as the local government units or the National Housing Authority may deem most expedient in carrying out the purposes of this Act. xxxx Section 29. Resettlement.With two (2) years from the effectivity of this Act, the local government units, in coordination with the National Housing Authority, shall implement the relocation and resettlement of persons living in danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and in other public places as sidewalks, roads, parks, and playgrounds. The local government unit, in coordination with the National Housing Authority, shall provide relocation or resettlement sites with basic services and facilities and access to employment and livelihood opportunities sufficient to meet the basic needs of the affected families. (Emphasis supplied.)

Lands belonging to the National Government include foreshore and submerged lands which can be reclaimed to undertake housing development and resettlement projects. 3. MO 415 explains the undertaking of the NHA in SMDRP:

WHEREAS, Memorandum Order No. 161-A mandated the National Housing Authority to conduct feasibility studies and develop low-cost housing projects at the dumpsites of Metro Manila ; WHEREAS, the National Housing Authority has presented a viable Conceptual Plan to convert the Smokey Mountain dumpsite into a habitable housing project inclusive of the reclamation area across R-10 as enabling component of the Project ; WHEREAS, the said Plan requires the coordinated and synchronized efforts of the City of Manila and other government agencies and instrumentalities to ensure effective and efficient implementation ; WHEREAS, the government encourages private sector initiative in the implementation of its projects. (Emphasis supplied.)

Proceeding from these whereas clauses, it is unequivocal that reclamation of land in the Smokey Mountain area is an essential and vital power of the NHA to effectively implement its avowed goal of developing low-cost housing units at the Smokey Mountain dumpsites. The interpretation made by no less than the President of the Philippines as Chief of the Executive Branch, of which the NHA is a part, must necessarily command respect and much weight and credit. 4. RA 6957 as amended by RA 7718the BOT Lawserves as an exception to PD 1084 and EO 525.

Based on the provisions of the BOT Law and Implementing Rules and Regulations, it is unequivocal that all government infrastructure agencies like the NHA can undertake infrastructure or development projects using the contractual arrangements prescribed by the law, and land reclamation is one of the projects that can be resorted to in the BOT project implementation under the February 10, 1992 Joint Resolution No. 3 of the 8th Congress. From the foregoing considerations, we find that the NHA has ample implied authority to undertake reclamation projects. Even without an implied power to reclaim lands under NHAs charter, we rule that the authority granted to NHA, a national government agency, by the President under PD 3A reinforced by EO 525 is more than sufficient statutory basis for the reclamation of lands under the SMDRP. PD 3-A is a law issued by then President Ferdinand E. Marcos under his martial law powers on September 23, 1972. It provided that [t]he provisions of any law to the contrary notwithstanding, the reclamation of areas, underwater, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under the proper contract. It repealed, in effect, RA 1899 which previously delegated the right to reclaim lands to municipalities and chartered cities and revested it to the National Government. 385[68] Under PD 3-A, national government can only mean the Executive Branch headed by the President. It cannot refer to Congress as it was dissolved and abolished at the time of the issuance of PD 3-A on September 23, 1972. Moreover, the Executive Branch is the only implementing arm in the government with the equipment, manpower, expertise, and capability by the very nature of its assigned powers and functions to undertake reclamation projects. Thus, under PD 3-A, the Executive Branch through the President can implement reclamation of lands through any of its departments, agencies, or offices. Subsequently, on February 4, 1977, President Marcos issued PD 1084 creating the PEA, which was granted, among others, the power to reclaim land, including foreshore and submerged areas by dredging, filling or other means or to acquire reclaimed lands. The PEAs power to reclaim is not however exclusive as can be gleaned from its charter, as the President retained his power under PD 3-A to designate another agency to reclaim lands. On February 14, 1979, EO 525 was issued. It granted PEA primary responsibility for integrating, directing, and coordinating reclamation projects for and on behalf of the National Government although other national government agencies can be designated by the President to reclaim lands in coordination with the PEA. Despite the issuance of EO 525, PD 3-A remained valid and subsisting. Thus, the National Government through the President still retained the power and control over all reclamation projects in the country. The power of the National Government through the President over reclamation of areas, that is, underwater whether foreshore or inland, was made clear in EO 543 386[69] which took effect on June 24, 2006. Under EO 543, PEA was renamed the Philippine Reclamation Authority (PRA) and was granted the authority to approve reclamation projects, a power previously reposed in the President under EO 525. EO 543 reads: Section 1. The power of the President to approve reclamation projects is hereby delegated to the Philippine Reclamation Authority [formerly PEA], through its governing board, subject to compliance with existing laws and rules and subject to the condition that reclamation contracts to be executed with any person or entity go through public bidding. Section 2. Nothing in the Order shall be construed as diminishing the Presidents authority to modify, amend or nullify PRAs action. Section 3. All executive issuances inconsistent with this Executive Order are hereby repealed or amended accordingly. (Emphasis supplied.) Sec. 2 of EO 543 strengthened the power of control and supervision of the President over reclamation of lands as s/he can modify, amend, or nullify the action of PEA (now PRA). From the foregoing issuances, we conclude that the Presidents delegation to NHA, a national government agency, to reclaim lands under the SMDRP, is legal and valid, firmly anchored on PD 3-A buttressed by EO 525 notwithstanding the absence of any specific grant of power under its charter, PD 757. Second Issue: Whether respondents NHA and RBI were given the power and authority by DENR to reclaim foreshore and submerged lands Petitioner Chavez puts forth the view that even if the NHA and RBI were granted the authority to reclaim, they were not authorized to do so by the DENR. Again, reliance is made on our ruling in PEA where it was held that the DENRs authority is necessary in order for the government to validly reclaim foreshore and submerged lands. In PEA, we expounded in this manner:
385 386

As manager, conservator and overseer of the natural resources of the State, DENR exercises supervision and control over alienable and disposable public lands. DENR also exercises exclusive jurisdiction on the management and disposition of all lands of the public domain. Thus, DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should be reclaimed or not. This means that PEA needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay, or in any part of the country. DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under Sections 6 and 7 of CA No. 141. Once DENR decides that the reclaimed lands should be so classified, it then recommends to the President the issuance of a proclamation classifying the lands as alienable or disposable lands of the public domain open to disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. 141. In short, DENR is vested with the power to authorize the reclamation of areas under water, while PEA is vested with the power to undertake the physical reclamation of areas under water, whether directly or through private contractors. DENR is also empowered to classify lands of the public domain into alienable or disposable lands subject to the approval of the President. On the other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.387[70] Despite our finding that PEA is not a precedent to the case at bar, we find after all that under existing laws, the NHA is still required to procure DENRs authorization before a reclamation project in Manila Bay or in any part of the Philippines can be undertaken. The requirement applies to PEA, NHA, or any other government agency or office granted with such power under the law. Notwithstanding the need for DENR permission, we nevertheless find petitioners position bereft of merit. The DENR is deemed to have granted the authority to reclaim in the Smokey Mountain Project for the following reasons: 1. Sec. 17, Art. VII of the Constitution provides that the President shall have control of all executive departments, bureaus and offices. The President is assigned the task of seeing to it that all laws are faithfully executed. Control, in administrative law, means the power of an officer to alter, modify, nullify or set aside what a subordinate officer has done in the performance of his duties and to substitute the judgment of the former for that of the latter. 388[71] As such, the President can exercise executive power motu proprio and can supplant the act or decision of a subordinate with the Presidents own. The DENR is a department in the executive branch under the President, and it is only an alter ego of the latter. Ordinarily the proposed action and the staff work are initially done by a department like the DENR and then submitted to the President for approval. However, there is nothing infirm or unconstitutional if the President decides on the implementation of a certain project or activity and requires said department to implement it. Such is a presidential prerogative as long as it involves the department or office authorized by law to supervise or execute the Project. Thus, as in this case, when the President approved and ordered the development of a housing project with the corresponding reclamation work, making DENR a member of the committee tasked to implement the project, the required authorization from the DENR to reclaim land can be deemed satisfied. It cannot be disputed that the ultimate power over alienable and disposable public lands is reposed in the President of the Philippines and not the DENR Secretary. To still require a DENR authorization on the Smokey Mountain when the President has already authorized and ordered the implementation of the Project would be a derogation of the powers of the President as the head of the executive branch. Otherwise, any department head can defy or oppose the implementation of a project approved by the head of the executive branch, which is patently illegal and unconstitutional. In Chavez v. Romulo, we stated that when a statute imposes a specific duty on the executive department, the President may act directly or order the said department to undertake an activity, thus: [A]t the apex of the entire executive officialdom is the President. Section 17, Article VII of the Constitution specifies [her] power as Chief executive departments, bureaus and offices. [She] shall ensure that the laws be faithfully executed. As Chief Executive, President Arroyo holds the steering wheel that controls the course of her government. She lays down policies in the execution of her plans and programs. Whatever policy she chooses, she has her subordinates to implement them. In short, she has the power of control. Whenever a specific function is entrusted by law or regulation to her subordinate, she may act directly or merely direct the performance of a duty x x x. Such act is well within the prerogative of her office (emphasis supplied).389[72]

Moreover, the power to order the reclamation of lands of public domain is reposed first in the Philippine President. The Revised Administrative Code of 1987 grants authority to the President to reserve lands of public domain for settlement for any specific purpose, thus: Section 14. Power to Reserve Lands of the Public and Private Domain of the Government.(1) The President shall have the power to reserve for settlement or public use, and for specific public purposes, any of the lands of the public domain , the use of which is not otherwise directed by law. The reserved land shall thereafter remain subject to the specific public purpose indicated until otherwise provided by law or proclamation. (Emphasis supplied.) President Aquino reserved the area of the Smokey Mountain dumpsite for settlement and issued MO 415 authorizing the implementation of the Smokey Mountain Development Project plus the reclamation of the area across R-10. Then President Ramos issued Proclamation No. 39 covering the 21-hectare dumpsite and the 40-hectare commercial/industrial area, and Proclamation No. 465 and MO 415 increasing the area of foreshore and submerged lands of Manila Bay to be reclaimed from 40 to 79 hectares. Having supervision and control over the DENR, both Presidents directly assumed and exercised the power granted by the Revised Administrative Code to the DENR Secretary to authorize the NHA to reclaim said lands. What can be done indirectly by the DENR can be done directly by the President. It would be absurd if the power of the President cannot be exercised simply because the head of a department in the executive branch has not acted favorably on a project already approved by the President. If such arrangement is allowed then the department head will become more powerful than the President. 2. Under Sec. 2 of MO 415, the DENR is one of the members of the EXECOM chaired by the NCR-CORD to oversee the implementation of the Project. The EXECOM was the one which recommended approval of the project plan and the joint venture agreements. Clearly, the DENR retained its power of supervision and control over the laws affected by the Project since it was tasked to facilitate the titling of the Smokey Mountain and of the area to be reclaimed, which shows that it had tacitly given its authority to the NHA to undertake the reclamation.
387 388 389

3. Former DENR Secretary Angel C. Alcala issued Special Patents Nos. 3591 and 3592 while then Secretary Victor O. Ramos issued Special Patent No. 3598 that embraced the areas covered by the reclamation. These patents conveyed the lands to be reclaimed to the NHA and granted to said agency the administration and disposition of said lands for subdivision and disposition to qualified beneficiaries and for development for mix land use (commercial/industrial) to provide employment opportunities to on-site families and additional areas for port related activities. Such grant of authority to administer and dispose of lands of public domain under the SMDRP is of course subject to the powers of the EXECOM of SMDRP, of which the DENR is a member. 4. The issuance of ECCs by the DENR for SMDRP is but an exercise of its power of supervision and control over the lands of public domain covered by the Project.

Based on these reasons, it is clear that the DENR, through its acts and issuances, has ratified and confirmed the reclamation of the subject lands for the purposes laid down in Proclamations Nos. 39 and 465. Third Issue: Whether respondent RBI can acquire reclaimed foreshore and submerged lands considered as inalienable and outside the commerce of man Petitioner postulates that respondent RBI cannot acquire the reclaimed foreshore and submerged areas as these are inalienable public lands beyond the commerce of man based on Art. 1409 of the Civil Code which provides: Article 1409. The following contracts are inexistent and void from the beginning: (1) xxxx (7) Those expressly prohibited or declared void by law. Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy;

These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived. Secs. 2 and 3, Art. XII of the Constitution declare that all natural resources are owned by the State and they cannot be alienated except for alienable agricultural lands of the public domain. One of the States natural resources are lands of public domain which include reclaimed lands. Petitioner contends that for these reclaimed lands to be alienable, there must be a law or presidential proclamation officially classifying these reclaimed lands as alienable and disposable and open to disposition or concession. Absent such law or proclamation, the reclaimed lands cannot be the enabling component or consideration to be paid to RBI as these are beyond the commerce of man. We are not convinced of petitioners postulation. The reclaimed lands across R-10 were classified alienable and disposable lands of public domain of the State for the following reasons, viz: First, there were three (3) presidential proclamations classifying the reclaimed lands across R-10 as alienable or disposable hence open to disposition or concession, to wit: (1) MO 415 issued by President Aquino, of which Sec. 4 states that [t]he land covered by the Smokey Mountain Dumpsite is hereby conveyed to the National Housing Authority as well as the area to be reclaimed across R-10. The directive to transfer the lands once reclaimed to the NHA implicitly carries with it the declaration that said lands are alienable and disposable. Otherwise, the NHA cannot effectively use them in its housing and resettlement project. (2) Proclamation No. 39 issued by then President Ramos by which the reclaimed lands were conveyed to NHA for subdivision and disposition to qualified beneficiaries and for development into a mixed land use (commercial/industrial) to provide employment opportunities to on-site families and additional areas for port-related activities. Said directive carries with it the pronouncement that said lands have been transformed to alienable and disposable lands. Otherwise, there is no legal way to convey it to the beneficiaries. (3) Proclamation No. 465 likewise issued by President Ramos enlarged the reclaimed area to 79 hectares to be developed and disposed of in the implementation of the SMDRP. The authority put into the hands of the NHA to dispose of the reclaimed lands tacitly sustains the conversion to alienable and disposable lands. Secondly, Special Patents Nos. 3591, 3592, and 3598 issued by the DENR anchored on Proclamations Nos. 39 and 465 issued by President Ramos, without doubt, classified the reclaimed areas as alienable and disposable. Admittedly, it cannot be said that MO 415, Proclamations Nos. 39 and 465 are explicit declarations that the lands to be reclaimed are classified as alienable and disposable. We find however that such conclusion is derived and implicit from the authority given to the NHA to transfer the reclaimed lands to qualified beneficiaries. The query is, when did the declaration take effect? It did so only after the special patents covering the reclaimed areas were issued. It is only on such date that the reclaimed lands became alienable and disposable lands of the public domain. This is in line with the ruling in PEA where said issue was clarified and stressed: PD No. 1085, coupled with President Aquinos actual issuance of a special patent covering the Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain . PD No. 1085 and President Aquinos issuance of a land patent also constitute a declaration that the Freedom Islands are no longer needed for public service . The Freedom Islands are thus alienable or disposable lands of the public domain, open to disposition or concession to qualified parties. 390[73] (Emphasis supplied.)

390

Thus, MO 415 and Proclamations Nos. 39 and 465 cumulatively and jointly taken together with Special Patent Nos. 3591, 3592, and 3598 more than satisfy the requirement in PEA that [t]here must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession (emphasis supplied). 391[74] Apropos the requisite law categorizing reclaimed land as alienable or disposable, we find that RA 6957 as amended by RA 7718 provides ample authority for the classification of reclaimed land in the SMDRP for the repayment scheme of the BOT project as alienable and disposable lands of public domain. Sec. 6 of RA 6957 as amended by RA 7718 provides: For the financing, construction, operation and maintenance of any infrastructure projects undertaken through the build-operate-and transfer arrangement or any of its variations pursuant to the provisions of this Act, the project proponent x x x may likewise be repaid in the form of a share in the revenue of the project or other non-monetary payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed land , subject to the constitutional requirements with respect to the ownership of the land. (Emphasis supplied.) While RA 6957 as modified by RA 7718 does not expressly declare that the reclaimed lands that shall serve as payment to the project proponent have become alienable and disposable lands and opened for disposition; nonetheless, this conclusion is necessarily implied, for how else can the land be used as the enabling component for the Project if such classification is not deemed made? It may be argued that the grant of authority to sell public lands, pursuant to PEA, does not convert alienable lands of public domain into private or patrimonial lands. We ruled in PEA that alienable lands of public domain must be transferred to qualified private parties, or to government entities not tasked to dispose of public lands, before these lands can become private or patrimonial lands (emphasis supplied).392[75] To lands reclaimed by PEA or through a contract with a private person or entity, such reclaimed lands still remain alienable lands of public domain which can be transferred only to Filipino citizens but not to a private corporation. This is because PEA under PD 1084 and EO 525 is tasked to hold and dispose of alienable lands of public domain and it is only when it is transferred to Filipino citizens that it becomes patrimonial property. On the other hand, the NHA is a government agency not tasked to dispose of public lands under its charterThe Revised Administrative Code of 1987. The NHA is an end-user agency authorized by law to administer and dispose of reclaimed lands. The moment titles over reclaimed lands based on the special patents are transferred to the NHA by the Register of Deeds, they are automatically converted to patrimonial properties of the State which can be sold to Filipino citizens and private corporations, 60% of which are owned by Filipinos. The reason is obvious: if the reclaimed land is not converted to patrimonial land once transferred to NHA, then it would be useless to transfer it to the NHA since it cannot legally transfer or alienate lands of public domain. More importantly, it cannot attain its avowed purposes and goals since it can only transfer patrimonial lands to qualified beneficiaries and prospective buyers to raise funds for the SMDRP. From the foregoing considerations, we find that the 79-hectare reclaimed land has been declared alienable and disposable land of the public domain; and in the hands of NHA, it has been reclassified as patrimonial property. Petitioner, however, contends that the reclaimed lands were inexistent prior to the three (3) Presidential Acts (MO 415 and Proclamations Nos. 39 and 465) and hence, the declaration that such areas are alienable and disposable land of the public domain, citing PEA, has no legal basis. Petitioners contention is not well-taken. Petitioners sole reliance on Proclamations Nos. 39 and 465 without taking into consideration the special patents issued by the DENR demonstrates the inherent weakness of his proposition. As was ruled in PEA cited by petitioner himself, PD No. 1085, coupled with President Aquinos actual issuance of a special patent covering the Freedom Islands is equivalent to an official proclamation classifying the Freedom islands as alienable or disposable lands of public domain. In a similar vein, the combined and collective effect of Proclamations Nos. 39 and 465 with Special Patents Nos. 3592 and 3598 is tantamount to and can be considered to be an official declaration that the reclaimed lots are alienable or disposable lands of the public domain. The reclaimed lands covered by Special Patents Nos. 3591, 3592, and 3598, which evidence transfer of ownership of reclaimed lands to the NHA, are official acts of the DENR Secretary in the exercise of his power of supervision and control over alienable and disposable public lands and his exclusive jurisdiction over the management and disposition of all lands of public domain under the Revised Administrative Code of 1987. Special Patent No. 3592 speaks of the transfer of Lots 1 and 2, and RI-003901-000012-D with an area of 401,485 square meters based on the survey and technical description approved by the Bureau of Lands. Lastly, Special Patent No. 3598 was issued in favor of the NHA transferring to said agency a tract of land described in Plan RL-00-000013 with an area of 390,000 square meters based on the survey and technical descriptions approved by the Bureau of Lands. The conduct of the survey, the preparation of the survey plan, the computation of the technical description, and the processing and preparation of the special patent are matters within the technical area of expertise of administrative agencies like the DENR and the Land Management Bureau and are generally accorded not only respect but at times even finality.393[76] Preparation of special patents calls for technical examination and a specialized review of calculations and specific details which the courts are ill-equipped to undertake; hence, the latter defer to the administrative agency which is trained and knowledgeable on such matters. 394[77] Subsequently, the special patents in the name of the NHA were submitted to the Register of Deeds of the City of Manila for registration, and corresponding certificates of titles over the reclaimed lots were issued based on said special patents. The issuance of certificates of titles in NHAs name automatically converts the reclaimed lands to patrimonial properties of the NHA. Otherwise, the lots would not be of use to the NHAs housing projects or as payment to the BOT contractor as the enabling component of the BOT contract. The laws of the land have to be applied and interpreted depending on the changing conditions and times. Tempora mutantur et legis mutantur in illis (time changes and laws change with it). One such law that should be treated differently is the BOT Law (RA 6957) which brought about a novel way of implementing government contracts by allowing reclaimed land as part or full payment to the contractor of a government project to satisfy the huge financial requirements of the undertaking. The NHA holds the lands covered by Special Patents Nos. 3592 and 3598 solely for the purpose of the SMDRP undertaken by authority of the BOT Law and for disposition in accordance with said special law. The lands become alienable and disposable lands of public domain upon issuance of the special patents and become patrimonial properties of the Government from the time the titles are issued to the NHA. As early as 1999, this Court in Baguio v. Republic laid down the jurisprudence that: It is true that, once a patent is registered and the corresponding certificate of title is issued, the land covered by them ceases to be part of the public domain and becomes private property, and the Torrens Title issued pursuant to the patent becomes indefeasible upon the expiration of one year from the date of issuance of such patent.395[78]

391 392 393 394 395

The doctrine was reiterated in Republic v. Heirs of Felipe Alijaga, Sr. ,396[79] Heirs of Carlos Alcaraz v. Republic ,397[80] and the more recent case of Doris Chiongbian-Oliva v. Republic of the Philippines.398[81] Thus, the 79-hectare reclaimed land became patrimonial property after the issuance of certificates of titles to the NHA based on Special Patents Nos. 3592 and 3598. One last point. The ruling in PEA cannot even be applied retroactively to the lots covered by Special Patents Nos. 3592 (40 hectare reclaimed land) and 3598 (39-hectare reclaimed land). The reclamation of the land under SMDRP was completed in August 1996 while the PEA decision was rendered on July 9, 2002. In the meantime, subdivided lots forming parts of the reclaimed land were already sold to private corporations for value and separate titles issued to the buyers. The Project was terminated through a Memorandum of Agreement signed on August 27, 2003. The PEA decision became final through the November 11, 2003 Resolution. It is a settled precept that decisions of the Supreme Court can only be applied prospectively as they may prejudice vested rights if applied retroactively. In Benzonan v. Court of Appeals, the Court trenchantly elucidated the prospective application of its decisions based on considerations of equity and fair play, thus: At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code judicial decisions applying or interpreting the laws of the Constitution shall form a part of the legal system of the Philippines. But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that laws shall have no retroactive effect unless the contrary is provided. This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional. The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974] x x x when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof. 399[82] Fourth Issue: Whether respondent RBI can acquire reclaimed lands when there was no declaration that said lands are no longer needed for public use Petitioner Chavez avers that despite the declaration that the reclaimed areas are alienable lands of the public domain, still, the reclamation is flawed for there was never any declaration that said lands are no longer needed for public use. We are not moved by petitioners submission. Even if it is conceded that there was no explicit declaration that the lands are no longer needed for public use or public service, there was however an implicit executive declaration that the reclaimed areas R-10 are not necessary anymore for public use or public service when President Aquino through MO 415 conveyed the same to the NHA partly for housing project and related commercial/industrial development intended for disposition to and enjoyment of certain beneficiaries and not the public in general and partly as enabling component to finance the project. President Ramos, in issuing Proclamation No. 39, declared, though indirectly, that the reclaimed lands of the Smokey Mountain project are no longer required for public use or service, thus: These parcels of land of public domain are hereby placed under the administration and disposition of the National Housing Authority to develop, subdivide and dispose to qualified beneficiaries, as well as its development for mix land use (commercial/industrial) to provide employment opportunities to on-site families and additional areas for port related activities. (Emphasis supplied.) While numerical count of the persons to be benefited is not the determinant whether the property is to be devoted to public use, the declaration in Proclamation No. 39 undeniably identifies only particular individuals as beneficiaries to whom the reclaimed lands can be sold, namelythe Smokey Mountain dwellers. The rest of the Filipinos are not qualified; hence, said lands are no longer essential for the use of the public in general. In addition, President Ramos issued on August 31, 1994 Proclamation No. 465 increasing the area to be reclaimed from forty (40) hectares to seventy-nine (79) hectares, elucidating that said lands are undoubtedly set aside for the beneficiaries of SMDRP and not the publicdeclaring the power of NHA to dispose of land to be reclaimed, thus: The authority to administer, develop, or dispose lands identified and reserved by this Proclamation and Proclamation No. 39 (s.1992), in accordance with the SMDRP, as enhance, is vested with the NHA, subject to the provisions of existing laws. (Emphasis supplied.) MO 415 and Proclamations Nos. 39 and 465 are declarations that proclaimed the non-use of the reclaimed areas for public use or service as the Project cannot be successfully implemented without the withdrawal of said lands from public use or service. Certainly, the devotion of the reclaimed land to public use or service conflicts with the intended use of the Smokey Mountain areas for housing and employment of the Smokey Mountain scavengers and for financing the Project because the latter cannot be accomplished without abandoning the public use of the subject land. Without doubt, the presidential proclamations on SMDRP together with the issuance of the special patents had effectively removed the reclaimed lands from public use. More decisive and not in so many words is the ruling in PEA which we earlier cited, that PD No. 1085 and President Aquinos issuance of a land patent also constitute a declaration that the Freedom Islands are no longer needed for public service. Consequently, we ruled in that case that the reclaimed lands are open to disposition or concession to qualified parties.400[83] In a similar vein, presidential Proclamations Nos. 39 and 465 jointly with the special patents have classified the reclaimed lands as alienable and disposable and open to disposition or concession as they would be devoted to units for Smokey Mountain beneficiaries. Hence, said lands are no longer intended for public use or service and shall form part of

396 397 398 399 400

the patrimonial properties of the State under Art. 422 of the Civil Code. 401[84] As discussed a priori, the lands were classified as patrimonial properties of the NHA ready for disposition when the titles were registered in its name by the Register of Deeds. Moreover, reclaimed lands that are made the enabling components of a BOT infrastructure project are necessarily reclassified as alienable and disposable lands under the BOT Law; otherwise, absurd and illogical consequences would naturally result. Undoubtedly, the BOT contract will not be accepted by the BOT contractor since there will be no consideration for its contractual obligations. Since reclaimed land will be conveyed to the contractor pursuant to the BOT Law, then there is an implied declaration that such land is no longer intended for public use or public service and, hence, considered patrimonial property of the State. Fifth Issue: Whether there is a law authorizing sale of reclaimed lands Petitioner next claims that RBI cannot acquire the reclaimed lands because there was no law authorizing their sale. He argues that unlike PEA, no legislative authority was granted to the NHA to sell reclaimed land. This position is misplaced. Petitioner relies on Sec. 60 of Commonwealth Act (CA) 141 to support his view that the NHA is not empowered by any law to sell reclaimed land, thus: Section 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any person, corporation or association authorized to purchase or lease public lands for agricultural purposes. The area of the land so leased or sold shall be such as shall, in the judgment of the Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes for which such sale or lease if requested and shall in no case exceed one hundred and forty-four hectares: Provided, however, That this limitation shall not apply to grants, donations, transfers, made to a province, municipality or branch or subdivision of the Government for the purposes deemed by said entities conducive to the public interest; but the land so granted donated or transferred to a province, municipality, or branch or subdivision of the Government shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by Congress; Provided, further, That any person, corporation, association or partnership disqualified from purchasing public land for agricultural purposes under the provisions of this Act, may lease land included under this title suitable for industrial or residential purposes, but the lease granted shall only be valid while such land is used for the purposes referred to. (Emphasis supplied.) Reliance on said provision is incorrect as the same applies only to a province, municipality or branch or subdivision of the Government. The NHA is not a government unit but a government corporation performing governmental and proprietary functions. In addition, PD 757 is clear that the NHA is empowered by law to transfer properties acquired by it under the law to other parties, thus: Section 6. Powers and functions of the Authority . The Authority shall have the following powers and functions to be exercised by the Boards in accordance with the established national human settlements plan prepared by the Human Settlements Commission: xxxx (k) (l) Enter into contracts whenever necessary under such terms and conditions as it may deem proper and reasonable; Acquire property rights and interests, and encumber or otherwise dispose the same as it may deem appropriate (Emphasis supplied.)

Letter (l) is emphatic that the NHA can acquire property rights and interests and encumber or otherwise dispose of them as it may deem appropriate. The transfer of the reclaimed lands by the National Government to the NHA for housing, commercial, and industrial purposes transformed them into patrimonial lands which are of course owned by the State in its private or proprietary capacity. Perforce, the NHA can sell the reclaimed lands to any Filipino citizen or qualified corporation.

Sixth Issue: Whether the transfer of reclaimed lands to RBI was done by public bidding Petitioner also contends that there was no public bidding but an awarding of ownership of said reclaimed lands to RBI. Public bidding, he says, is required under Secs. 63 and 67 of CA 141 which read: Section 63. Whenever it is decided that lands covered by this chapter are not needed for public purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce for authority to dispose of the same. Upon receipt of such authority, the Director of Lands shall give notice by public advertisement in the same manner as in the case of leases or sales of agricultural public land, that the Government will lease or sell, as the case may be, the lots or blocks specified in the advertisement, for the purpose stated in the notice and subject to the conditions specified in this chapter. xxxx Section 67. The lease or sale shall be made through oral bidding; and adjudication shall be made to the highest bidder. However, where an applicant has made improvements on the land by virtue of a permit issued to him by competent authority, the sale or lease shall be made by sealed bidding as prescribed in section twenty-six of this Act, the provisions of which shall be applied whenever applicable. If all or part of the lots remain unleased or unsold, the Director of Lands shall from time to time announce in the Official Gazette or in any other newspapers of general circulation, the lease of sale of those lots, if necessary.

401

He finds that the NHA and RBI violated Secs. 63 and 67 of CA 141, as the reclaimed lands were conveyed to RBI by negotiated contract and not by public bidding as required by law. This stand is devoid of merit. There is no doubt that respondent NHA conducted a public bidding of the right to become its joint venture partner in the Smokey Mountain Project. Notices or Invitations to Bid were published in the national dailies on January 23 and 26, 1992 and February 1, 14, 16, and 23, 1992. The bidding proper was done by the Bids and Awards Committee (BAC) on May 18, 1992. On August 31, 1992, the Inter-Agency Techcom made up of the NHA, PEA, DPWH, PPA, DBP, and DENR opened the bids and evaluated them, resulting in the award of the contract to respondent RBI on October 7, 1992. On March 19, 1993, respondents NHA and RBI signed the JVA. On February 23, 1994, said JVA was amended and restated into the ARJVA. On August 11, 1994, the ARJVA was again amended. On September 7, 1994, the OP approved the ARJVA and the amendments to the ARJVA. From these factual settings, it cannot be gainsaid that there was full compliance with the laws and regulations governing public biddings involving a right, concession, or property of the government. Petitioner concedes that he does not question the public bidding on the right to be a joint venture partner of the NHA, but the absence of bidding in the sale of alienable and disposable lands of public domain pursuant to CA 141 as amended. Petitioners theory is incorrect. Secs. 63 and 67 of CA 141, as amended, are in point as they refer to government sale by the Director of Lands of alienable and disposable lands of public domain . This is not present in the case at bar. The lands reclaimed by and conveyed to the NHA are no longer lands of public domain. These lands became proprietary lands or patrimonial properties of the State upon transfer of the titles over the reclaimed lands to the NHA and hence outside the ambit of CA 141. The NHA can therefore legally transfer patrimonial land to RBI or to any other interested qualified buyer without any bidding conducted by the Director of Lands because the NHA, unlike PEA, is a government agency not tasked to sell lands of public domain. Hence, it can only hold patrimonial lands and can dispose of such lands by sale without need of public bidding. Petitioner likewise relies on Sec. 79 of PD 1445 which requires public bidding when government property has become unserviceable for any cause or is no longer needed. It appears from the Handbook on Property and Supply Management System, Chapter 6, that reclaimed lands which have become patrimonial properties of the State, whose titles are conveyed to government agencies like the NHA, which it will use for its projects or programs, are not within the ambit of Sec. 79. We quote the determining factors in the Disposal of Unserviceable Property, thus: Determining Factors in the Disposal of Unserviceable Property
[85]

Property, which can no longer be repaired or reconditioned; Property whose maintenance costs of repair more than outweigh the benefits and services that will be derived from its continued use; Property that has become obsolete or outmoded because of changes in technology; Serviceable property that has been rendered unnecessary due to change in the agencys function or mandate; Unused supplies, materials and spare parts that were procured in excess of requirements; and Unused supplies and materials that [have] become dangerous to use because of long storage or use of which is determined to be hazardous. 402

Reclaimed lands cannot be considered unserviceable properties. The reclaimed lands in question are very much needed by the NHA for the Smokey Mountain Project because without it, then the projects will not be successfully implemented. Since the reclaimed lands are not unserviceable properties and are very much needed by NHA, then Sec. 79 of PD 1445 does not apply. More importantly, Sec. 79 of PD 1445 cannot be applied to patrimonial properties like reclaimed lands transferred to a government agency like the NHA which has entered into a BOT contract with a private firm. The reason is obvious. If the patrimonial property will be subject to public bidding as the only way of disposing of said property, then Sec. 6 of RA 6957 on the repayment scheme is almost impossible or extremely difficult to implement considering the uncertainty of a winning bid during public auction. Moreover, the repayment scheme of a BOT contract may be in the form of non-monetary payment like the grant of a portion or percentage of reclaimed land. Even if the BOT partner participates in the public bidding, there is no assurance that he will win the bid and therefore the payment in kind as agreed to by the parties cannot be performed or the winning bid prize might be below the estimated valuation of the land. The only way to harmonize Sec. 79 of PD 1445 with Sec. 6 of RA 6957 is to consider Sec. 79 of PD 1445 as inapplicable to BOT contracts involving patrimonial lands. The law does not intend anything impossible (lex non intendit aliquid impossibile). Seventh Issue: Whether RBI, being a private corporation, is barred by the Constitution to acquire lands of public domain Petitioner maintains that RBI, being a private corporation, is expressly prohibited by the 1987 Constitution from acquiring lands of public domain. Petitioners proposition has no legal mooring for the following reasons: 1. RA 6957 as amended by RA 7718 explicitly states that a contractor can be paid a portion as percentage of the reclaimed land subject to the constitutional requirement that only Filipino citizens or corporations with at least 60% Filipino equity can acquire the same. It cannot be denied that RBI is a private corporation, where Filipino citizens own at least 60% of the stocks. Thus, the transfer to RBI is valid and constitutional. 2. When Proclamations Nos. 39 and 465 were issued, inalienable lands covered by said proclamations were converted to alienable and disposable lands of public domain. When the titles to the reclaimed lands were transferred to the NHA, said alienable and disposable lands of public domain were automatically classified as lands of the private domain or patrimonial properties of the State because the NHA is an agency NOT tasked to dispose of alienable or disposable lands of public domain. The only way it can transfer the reclaimed land in conjunction with its projects and to attain its goals is when it is automatically converted to patrimonial properties of the State. Being patrimonial or private properties of
402

the State, then it has the power to sell the same to any qualified personunder the Constitution, Filipino citizens as private corporations, 60% of which is owned by Filipino citizens like RBI. 3. The NHA is an end-user entity such that when alienable lands of public domain are transferred to said agency, they are automatically classified as patrimonial properties. The NHA is similarly situated as BCDA which was granted the authority to dispose of patrimonial lands of the government under RA 7227. The nature of the property holdings conveyed to BCDA is elucidated and stressed in the May 6, 2003 Resolution in Chavez v. PEA, thus: BCDA is an entirely different government entity. BCDA is authorized by law to sell specific government lands that have long been declared by presidential proclamations as military reservations for use by the different services of the armed forces under the Department of National Defense. BCDAs mandate is specific and limited in area, while PEAs mandate is general and national. BCDA holds government lands that have been granted to end-user government entitiesthe military services of the armed forces. In contrast, under Executive Order No. 525, PEA holds the reclaimed public lands, not as an end-user entity, but as the government agency primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government. x x x Well-settled is the doctrine that public land granted to an end-user government agency for a specific public use may subsequently be withdrawn by Congress from public use and declared patrimonial property to be sold to private parties. R.A. No. 7227 creating the BCDA is a law that declares specific military reservations no longer needed for defense or military purposes and reclassifies such lands as patrimonial property for sale to private parties. Government owned lands, as long as they are patrimonial property, can be sold to private parties, whether Filipino citizens or qualified private corporations. Thus, the so-called Friar Lands acquired by the government under Act No. 1120 are patrimonial property which even private corporations can acquire by purchase. Likewise, reclaimed alienable lands of the public domain if sold or transferred to a public or municipal corporation for a monetary consideration become patrimonial property in the hands of the public or municipal corporation. Once converted to patrimonial property, the land may be sold by the public or municipal corporation to private parties, whether Filipino citizens or qualified private corporations. 403[86] (Emphasis supplied.) The foregoing Resolution makes it clear that the SMDRP was a program adopted by the Government under Republic Act No. 6957 (An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and For Other Purposes), as amended by RA 7718, which is a special law similar to RA 7227. Moreover, since the implementation was assigned to the NHA, an end-user agency under PD 757 and RA 7279, the reclaimed lands registered under the NHA are automatically classified as patrimonial lands ready for disposition to qualified beneficiaries. The foregoing reasons likewise apply to the contention of petitioner that HCPTI, being a private corporation, is disqualified from being a transferee of public land. What was transferred to HCPTI is a 10-hectare lot which is already classified as patrimonial property in the hands of the NHA. HCPTI, being a qualified corporation under the 1987 Constitution, the transfer of the subject lot to it is valid and constitutional. Eighth Issue: Whether respondents can be compelled to disclose all information related to the SMDRP

Petitioner asserts his right to information on all documents such as contracts, reports, memoranda, and the like relative to SMDRP. Petitioner asserts that matters relative to the SMDRP have not been disclosed to the public like the current stage of the Project, the present financial capacity of RBI, the complete list of investors in the asset pool, the exact amount of investments in the asset pool and other similar important information regarding the Project. He prays that respondents be compelled to disclose all information regarding the SMDRP and furnish him with originals or at least certified true copies of all relevant documents relating to the said project including, but not limited to, the original JVA, ARJVA, AARJVA, and the Asset Pool Agreement. This relief must be granted. The right of the Filipino people to information on matters of public concern is enshrined in the 1987 Constitution, thus: ARTICLE II xxxx SEC. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest. ARTICLE III SEC. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law.

In Valmonte v. Belmonte, Jr., this Court explicated this way: [A]n essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and the people. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be

403

responsive to the peoples will. Yet, this open dialogue can be effective only to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only when the participants in the discussion are aware of the issues and have access to information relating thereto can such bear fruit. 404[87] In PEA, this Court elucidated the rationale behind the right to information: These twin provisions of the Constitution seek to promote transparency in policy-making and in the operations of the government, as well as provide the people sufficient information to exercise effectively other constitutional rights. These twin provisions are essential to the exercise of freedom of expression. If the government does not disclose its official acts, transactions and decisions to citizens, whatever citizens say, even if expressed without any restraint, will be speculative and amount to nothing. These twin provisions are also essential to hold public officials at all times x x x accountable to the people, for unless citizens have the proper information, they cannot hold public officials accountable for anything. Armed with the right information, citizens can participate in public discussions leading to the formulation of government policies and their effective implementation. An informed citizenry is essential to the existence and proper functioning of any democracy.405[88] Sec. 28, Art. II compels the State and its agencies to fully disclose all of its transactions involving public interest. Thus, the government agencies, without need of demand from anyone, must bring into public view all the steps and negotiations leading to the consummation of the transaction and the contents of the perfected contract. 406[89] Such information must pertain to definite propositions of the government, meaning official recommendations or final positions reached on the different matters subject of negotiation. The government agency, however, need not disclose intra-agency or inter-agency recommendations or communications during the stage when common assertions are still in the process of being formulated or are in the exploratory stage. The limitation also covers privileged communication like information on military and diplomatic secrets; information affecting national security; information on investigations of crimes by law enforcement agencies before the prosecution of the accused; information on foreign relations, intelligence, and other classified information. It is unfortunate, however, that after almost twenty (20) years from birth of the 1987 Constitution, there is still no enabling law that provides the mechanics for the compulsory duty of government agencies to disclose information on government transactions. Hopefully, the desired enabling law will finally see the light of day if and when Congress decides to approve the proposed Freedom of Access to Information Act. In the meantime, it would suffice that government agencies post on their bulletin boards the documents incorporating the information on the steps and negotiations that produced the agreements and the agreements themselves, and if finances permit, to upload said information on their respective websites for easy access by interested parties. Without any law or regulation governing the right to disclose information, the NHA or any of the respondents cannot be faulted if they were not able to disclose information relative to the SMDRP to the public in general. The other aspect of the peoples right to know apart from the duty to disclose is the duty to allow access to information on matters of public concern under Sec. 7, Art. III of the Constitution. The gateway to information opens to the public the following: (1) official records; (2) documents and papers pertaining to official acts, transactions, or decisions; and (3) government research data used as a basis for policy development. Thus, the duty to disclose information should be differentiated from the duty to permit access to information. There is no need to demand from the government agency disclosure of information as this is mandatory under the Constitution; failing that, legal remedies are available. On the other hand, the interested party must first request or even demand that he be allowed access to documents and papers in the particular agency. A request or demand is required; otherwise, the government office or agency will not know of the desire of the interested party to gain access to such papers and what papers are needed. The duty to disclose covers only transactions involving public interest, while the duty to allow access has a broader scope of information which embraces not only transactions involving public interest, but any matter contained in official communications and public documents of the government agency. We find that although petitioner did not make any demand on the NHA to allow access to information, we treat the petition as a written request or demand. We order the NHA to allow petitioner access to its official records, documents, and papers relating to official acts, transactions, and decisions that are relevant to the said JVA and subsequent agreements relative to the SMDRP. Ninth Issue: Whether the operative fact doctrine applies to the instant petition Petitioner postulates that the operative fact doctrine is inapplicable to the present case because it is an equitable doctrine which could not be used to countenance an inequitable result that is contrary to its proper office. On the other hand, the petitioner Solicitor General argues that the existence of the various agreements implementing the SMDRP is an operative fact that can no longer be disturbed or simply ignored, citing Rieta v. People of the Philippines. 407[90] The argument of the Solicitor General is meritorious. The operative fact doctrine is embodied in De Agbayani v. Court of Appeals, wherein it is stated that a legislative or executive act, prior to its being declared as unconstitutional by the courts, is valid and must be complied with, thus: As the new Civil Code puts it: When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern. Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws of the Constitution. It is understandable why it should be so, the Constitution being supreme and paramount. Any legislative or executive act contrary to its terms cannot survive. Such a view has support in logic and possesses the merit of simplicity. It may not however be sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication.
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In the language of an American Supreme Court decision : The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, with respect to particular relations, individual and corporate, and particular conduct, private and official. This language has been quoted with approval in a resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores. An even more recent instance is the opinion of Justice Zaldivar speaking for the Court in Fernandez v. Cuerva and Co.408[91] (Emphasis supplied.)

This doctrine was reiterated in the more recent case of City of Makati v. Civil Service Commission, wherein we ruled that: Moreover, we certainly cannot nullify the City Governments order of suspension, as we have no reason to do so, much less retroactively apply such nullification to deprive private respondent of a compelling and valid reason for not filing the leave application. For as we have held, a void act though in law a mere scrap of paper nonetheless confers legitimacy upon past acts or omissions done in reliance thereof. Consequently, the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached. It would indeed be ghastly unfair to prevent private respondent from relying upon the order of suspension in lieu of a formal leave application. 409[92] (Emphasis supplied.) The principle was further explicated in the case of Rieta v. People of the Philippines, thus: In similar situations in the past this Court had taken the pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter Bank to wit: The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. x x x It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to [the determination of its invalidity], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects with respect to particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.

In the May 6, 2003 Resolution in Chavez v. PEA,410[93] we ruled that De Agbayani 411[94] is not applicable to the case considering that the prevailing law did not authorize private corporations from owning land. The prevailing law at the time was the 1935 Constitution as no statute dealt with the same issue. In the instant case, RA 6957 was the prevailing law at the time that the joint venture agreement was signed. RA 6957, entitled An Act Authorizing The Financing, Construction, Operation And Maintenance Of Infrastructure Projects By The Private Sector And For Other Purposes, which was passed by Congress on July 24, 1989, allows repayment to the private contractor of reclaimed lands.412[95] Such law was relied upon by respondents, along with the above-mentioned executive issuances in pushing through with the Project. The existence of such law and issuances is an operative fact to which legal consequences have attached. This Court is constrained to give legal effect to the acts done in consonance with such executive and legislative acts; to do otherwise would work patent injustice on respondents. Further, in the May 6, 2003 Resolution in Chavez v. PEA, we ruled that in certain cases, the transfer of land, although illegal or unconstitutional, will not be invalidated on considerations of equity and social justice. However, in that case, we did not apply the same considering that PEA, respondent in said case, was not entitled to equity principles there being bad faith on its part, thus: There are, moreover, special circumstances that disqualify Amari from invoking equity principles. Amari cannot claim good faith because even before Amari signed the Amended JVA on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning precisely the qualification of Amari to acquire the Freedom Islands. Even before the filing of this petition, two Senate Committees had already approved on September 16, 1997 Senate Committee Report No. 560. This Report concluded, after a well-publicized investigation into PEAs sale of the Freedom Islands to Amari, that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended JVA.413[96] Such indicia of bad faith are not present in the instant case. When the ruling in PEA was rendered by this Court on July 9, 2002, the JVAs were all executed. Furthermore, when petitioner filed the instant case against respondents on August 5, 2004, the JVAs were already terminated by virtue of the MOA between the NHA and RBI. The respondents had no reason to think that their agreements were unconstitutional or even questionable, as in fact, the concurrent acts of the executive department lent validity to the implementation of the Project. The SMDRP agreements have produced vested rights in favor of the slum dwellers, the buyers of reclaimed land who were issued titles over said land, and the agencies and investors who made investments in the project or who bought SMPPCs. These properties and rights cannot be disturbed or questioned after the passage of around ten (10) years from the start of the SMDRP implementation. Evidently, the operative fact principle has set in. The titles to the lands in the hands of the buyers can no longer be invalidated. The Courts Dispositions Based on the issues raised in this petition, we find that the March 19, 1993 JVA between NHA and RBI and the SMDRP embodied in the JVA, the subsequent amendments to the JVA and all other agreements signed and executed in relation to it, including, but not limited to, the September 26, 1994 Smokey Mountain Asset Pool Agreement and the agreement on Phase I of the Project as well as all other transactions which emanated from the Project, have been shown to be valid, legal, and constitutional. Phase II has been struck down by the Clean Air Act.
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With regard to the prayer for prohibition, enjoining respondents particularly respondent NHA from further implementing and/or enforcing the said Project and other agreements related to it, and from further deriving and/or enjoying any rights, privileges and interest from the Project, we find the same prayer meritless. Sec. 2 of Rule 65 of the 1997 Rules of Civil Procedure provides: Sec. 2. Petition for prohibition.When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasijudicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require. It has not been shown that the NHA exercised judicial or quasi-judicial functions in relation to the SMDRP and the agreements relative to it. Likewise, it has not been shown what ministerial functions the NHA has with regard to the SMDRP. A ministerial duty is one which is so clear and specific as to leave no room for the exercise of discretion in its performance. It is a duty which an officer performs in a given state of facts in a prescribed manner in obedience to the mandate of legal authority, without regard to the exercise of his/her own judgment upon the propriety of the act done. 414[97] Whatever is left to be done in relation to the August 27, 2003 MOA, terminating the JVA and other related agreements, certainly does not involve ministerial functions of the NHA but instead requires exercise of judgment. In fact, Item No. 4 of the MOA terminating the JVAs provides for validation of the developers (RBIs) claims arising from the termination of the SMDRP through the various government agencies. 415[98] Such validation requires the exercise of discretion. In addition, prohibition does not lie against the NHA in view of petitioners failure to avail and exhaust all administrative remedies. Clear is the rule that prohibition is only available when there is no adequate remedy in the ordinary course of law. More importantly, prohibition does not lie to restrain an act which is already a fait accompli. The operative fact doctrine protecting vested rights bars the grant of the writ of prohibition to the case at bar. It should be remembered that petitioner was the Solicitor General at the time SMDRP was formulated and implemented. He had the opportunity to question the SMDRP and the agreements on it, but he did not. The moment to challenge the Project had passed. On the prayer for a writ of mandamus, petitioner asks the Court to compel respondents to disclose all documents and information relating to the project, including, but not limited to, any subsequent agreements with respect to the different phases of the Project, the revisions of the original plan, the additional works incurred on the Project, the current financial condition of respondent RBI, and the transactions made with respect to the project. We earlier ruled that petitioner will be allowed access to official records relative to the SMDRP. That would be adequate relief to satisfy petitioners right to the information gateway. WHEREFORE, the petition is PARTIALLY GRANTED. The prayer for a writ of prohibition is DENIED for lack of merit. The prayer for a writ of mandamus is GRANTED. Respondent NHA is ordered to allow access to petitioner to all public documents and official records relative to the SMDRP including, but not limited to, the March 19, 1993 JVA between the NHA and RBI and subsequent agreements related to the JVA, the revisions over the original plan, and the additional works incurred on and the transactions made with respect to the Project.

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