G.R. No.

154080
January 22, 2008
NELSIE B. CAETE, RONA ANAS, MILAGROSA APUAN,
ERLINDA AQUINO, GODOFREDO AQUINO, CORITA
BARREDO, TESSIE BARREDO, JESUS BATRINA,
ALBERTO BUENAVENTURA, BONIFACIO
BUENAVENTURA, EUSEBIO CAPIRAL, MARIO
CAPIRAL, LOLITA CAPIRAL, ELENA CAPIRAL, LETICIA
CAPIRAL, RENATO CAPIRAL, ELY CABANGON, ERWIN
CATALUNA, JESSIE CONRADO, JOEL CONRADO,
NARCISIO CONRADO, RICARDO CALAMPIANO,
ALUMNIO CORSANES, NILO COLATOY, MARJETO
DAYAN, HENRY DIAZ, SALVACION ESMANDE,
REYNALDO FUENTEBELLA, GERRY GEQUILLANA,
DELSIE GARCIA, NERISSA GONZALES, VISITACION
JUNSAY, ESTELA JOVEN, JOSE LANZUELA, MARLON
MALANGAYON, RENATO MARCELO, ANITA
MARZONIA, MARCELINO MONTALBO, AMADO MULI,
JR., LEONITA MULI, EDUARDO OLVIDO, ALMARIO
PACON, ASUNCION PACON, SALVACION
PAGAYUNAN, ESTER PANTALEON, SHERLITA RABE,
ANITA REYES, MEDELYN RIOS, BERTITO RIVAS,
ENGRACIA RIVERA, GERALYN RIVERA, ARMANDO
RIVERA, MA. MERCY SHERVA, ALEXANDER
SANGALAN, ERNESTO SANTIAGO, JOY SANTIAGO,
ELENA TALION, JOE RANDY TRESVALLES, ELIAS
VALENZUELA, GERRY VALENZUELA, LILIBETH
VALENZUELA, JOSEPHINE VICTORINO, JOJO
VICTORINO, MAXIMINO VICTORINO, NOEL VICTORINO,
REYNANTE VICTORINO, ROBERTO VICTORINO and
JOVITO VILLAREAL, represented by NELSIE B.
CAETE, petitioners,
vs.
GENUINO ICE COMPANY, INC., respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari seeks to set aside the
1
Decision of the Court of Appeals dated January 9, 2002 in
CA-G.R. SP No. 64337 entitled "Genuino Ice Company, Inc.
vs. Hon. Victorino P. Evangelista, Nelsie B. Caete, et al.,"
2
and its Resolution dated June 26, 2002, dismissing
petitioners "Second Amended Complaint" in Civil Case No.
Q-99-36483 filed in Branch 223 of the Regional Trial Court

of Quezon City.

as Lot 668, situated at Barangay Culiat,

Quezon City x x x."

Records show that on January 11, 1999, petitioners filed a

complaint for cancellation of title to property covered by
3
4
Transfer Certificate of Title (TCT) Nos. N-140441; 14399;
5
6
7
RT-94384 (292245); RT-94794 (292246); and 292247.
Petitioners alleged that said titles are spurious, fictitious and
were issued "under mysterious circumstances," considering
that the holders thereof including their predecessors-ininterest were never in actual, adverse and physical
possession of the property, rendering them ineligible to
8
acquire title to the said property under the Friar Lands Act.
Petitioners also sought to nullify Original Certificate of Title
(OCT) No. 614 from which the foregoing titles sought to be
cancelled originated or were derived.
9

Respondent Genuino Ice Co., Inc. filed a motion to dismiss

on the ground that the complaint states no cause of action
because petitioners are not real parties-in-interest; that no
relief may be granted as a matter of law; and that petitioners
failed to exhaust administrative remedies, but it was denied
by the trial court. Respondent moved for reconsideration but
the same was denied.
On November 4, 1999, petitioners filed a "Second Amended
10
Complaint" which sought to annul, in addition to the titles
already alleged in the original complaint, TCT Nos. 274095
11
12
13
and 274096; 274097 and 274098; and 274099.
The Second Amended Complaint alleged the following
causes of action, as well as the remedy sought to be
obtained, thus:
4. That plaintiffs (petitioners) and their
predecessors-in-interest are among those who
have been in actual, adverse, peaceful and
continuous possession in concept of owners of
unregistered parcels of land situated at Sitio
Mabilog, Barangay Culiat, Quezon City, Metro
Manila, which parcels of land are more particularly
described as follows:
(1) "A parcel of unregistered land known

(2) "A parcel of unregistered land known

as Lot 669, situated at Barangay Culiat,
Quezon City x x x."
5. That the above-described real property is a
portion of a friar land known as "Piedad Estate,"
which property is intended for distribution among
the bona fide occupants thereof pursuant to the
Friar Lands Act.
6. That transfer certificates of title allegedly having
originated or derived from Original Certificate of
Title No. 614 were issued by the Register of Deeds
of Quezon City, which transfer certificates of title
are in truth and in fact fictitious, spurious and null
and void, for the following reasons: (a) that no
record of any agency of the government shows as
to how and in what manner was OCT 614 issued;
(b) that no record of any proceedings whatsoever,
whether judicial or administrative, can support
defendants claim that the above-described
property originated from OCT 614; and (c) that the
transfer certificates of title over the abovedescribed property were issued under mysterious
circumstances for the above-named defendants
and their so-called predecessors-in-interest never
had any actual, adverse, physical possession of
the said property, thus, not allowed to acquire title
over the property in litigation pursuant to the Friar
Lands Act.
7. That defendants are holders of transfer
certificates of title of the above-described property,
which transfer certificates of title are null and void,
for reasons specifically mentioned in Paragraph 6
hereof x x x;
8. That the acts in acquiring and keeping the said
transfer certificates of title in violation of the Friar
Lands Act and other existing laws are prejudicial to
plaintiffs rights over the above-described property.

9. That equity demands that defendants transfer

certificates of title as specified in Paragraph 7
hereof be declared fictitious, spurious and null and
void ab initio.
PRAYER
WHEREFORE, premises considered, it is most
respectfully prayed of this Honorable Court that
judgment be rendered in favor of plaintiffs and
against defendants:
(1) Declaring as null and void ab initio OCT 614
and all transfer certificates of title derived
therefrom;
(2) Declaring as null and void defendants transfer
certificates of title over the property in litigation;
(3) Ordering defendant Register of Deeds of
Quezon City to cancel defendants transfer
certificates of title and all transfer certificates of title
derived therefrom;
(4) Declaring the plaintiffs as bona fide occupants
of the property in litigation pursuant to the
provisions of the Friar Lands Act and other existing
14
laws.
Respondent moved to dismiss the Second Amended
Complaint on the following grounds:
a) The complaint states no cause of action
because: (1) on the allegations alone, plaintiffs
(petitioners) are not real parties in interest who
may bring suit to cancel defendants (including
respondent) titles; (2) based on the allegations and
prayer of the complaint, no relief, as a matter of
law, may be granted;
b) Prescription has set in;

c) There are earlier similar complaints (Civil Case

Nos. Q-95-22834 and Q-95-23111) filed by a
different set of plaintiffs against a different set of
defendants but which involve the same subject
matter, cause of action and allegations of the
plaintiffs, with respect to the cancellation of OCT
614 and succeeding titles derived from it. Said
complaints have since been dismissed by Branch
93 of the Regional Trial Court of Quezon City, the
dismissal of which is the subject of a pending
15
certiorari proceeding in the appellate court.
16

On January 3, 2001, the trial court denied respondents

motion to dismiss the Second Amended Complaint. Its
motion for reconsideration was likewise denied hence
respondent filed a petition for certiorari with the Court of
Appeals.
The appellate court granted respondents petition for
certiorari and dismissed petitioners Second Amended
Complaint for failure to state a cause of action. Hence, the
instant petition raising the following issues:
A. THAT THE COURT OF APPEALS ERRED IN
DECLARING THAT THE COMPLAINT FILED BY
THE PETITIONERS WITH THE REGIONAL TRIAL
COURT OF QUEZON CITY IN CIVIL CASE NO.
Q-99-36483 DOES NOT STATE A VALID CAUSE
OF ACTION;
B. THAT THE COURT OF APPEALS ERRED IN
DECLARING THAT THE PETITIONERS ARE NOT
REAL PARTIES IN INTEREST;
C. THAT THE COURT OF APPEALS ERRED IN
APPLYING THE DOCTRINE OF "EXHAUSTION
OF ADMINISTRATIVE REMEDIES"; and,
D. THAT THE COURT OF APPEALS ACTED
WITH GRAVE ABUSE OF DISCRETION AND
DENIED PETITIONERS RIGHT TO DUE
PROCESS WHEN IT DISMISSED THEIR
17
COMPLAINT.

We deny the petition.

The subject lots are part of the Piedad Estate, Quezon City,
a Friar Land acquired on December 23, 1903 by the
Philippine Government from the Philippine Sugar Estates
Development Company, Ltd., La Sociedad Agricola de
Ultramar, the British-Manila Estate Company, Ltd., and the
Recoleto Order of the Philippine Islands, as indicated in
Public Act No. 1120 (Friar Lands Act) enacted on April 26,
18
1904.
After the Piedad Estate was registered in OCT No. 614 in
the name of the Philippine Government in 1910 under the
provisions of Act 496, the area was subdivided originally
into 874 lots. As a result of subsequent surveys executed in
the course of disposition, the number of lots increased to
1,305. Disposition of these lots was made by the Bureau of
Lands thru sales, under the Friar Lands Act, as early as
1910 and records show that even before the Second World
19
War, all lots in the Piedad Estate have been disposed of.
The Piedad Estate has long been segregated from the mass
of the public domain and has become private land duly
registered under the Torrens system following the
procedure for the confirmation of private lands prescribed in
Act 496. Thus the lands inside the Piedad Estate are no
20
longer lands of the public domain.
One who acquires land under the Friar Lands Act, as well
as his successors-in-interest, may not claim successional
rights to purchase by reason of occupation from time
immemorial, as this contravenes the historical fact that friar
lands were bought by the Government of the Philippine
Islands, pursuant to an Act of Congress of the United
States, approved on July 1, 1902, not from individual
persons but from certain companies, a society and a
religious order. Under the Friar Lands Act, only "actual
settlers and occupants at the time said lands are acquired
by the Government" were given preference to lease,
purchase, or acquire their holdings, in disregard of the
settlement and occupation of persons before the
21
government acquired the lands.

The basic rules of proper pleading and procedure require

that every pleading shall contain in a methodical and logical
form, a plain, concise and direct statement of the ultimate
facts on which the party pleading relies for his claim or
defense, as the case may be, omitting the statement of
22
mere evidentiary facts. And in all averments of fraud or
mistake, the circumstances constituting fraud or mistake
23
must be stated with particularity.
It is axiomatic that the averments of the complaint
determine the nature of the action, and
consequently, the jurisdiction of the courts. This is
because the complaint must contain a concise
statement of the ultimate facts constituting the
plaintiff's cause of action and must specify the
relief sought. No rule is better established than that
which requires the complaint to contain a
statement of all the facts constituting the plaintiff's
cause of action. Additionally, Section 5, Rule 8 of
the Rules of Court provides that in all averments of
fraud or mistake, the circumstances constituting
fraud or mistake must be stated with particularity.
In the case at bar, while there are allegations of
fraud in the above quoted complaints, the same
are not particular enough to bring the controversy
within the SEC's jurisdiction. The said allegations
are not statements of ultimate facts but are mere
conclusions of law.
A pleading should state the ultimate facts essential
to the rights of action or defense asserted, as
distinguished from mere conclusions of fact, or
conclusions of law. General allegations that a
contract is valid or legal, or is just, fair and
reasonable, are mere conclusions of law. Likewise,
allegations that a contract is void, voidable, invalid,
illegal, ultra vires, or against public policy, without
stating facts showing its invalidity, are mere
24
conclusions of law.
"Ultimate facts" means the essential facts constituting the
plaintiff's cause of action, or such facts as are so essential
that they cannot be stricken out without leaving the
25
statement of the cause of action inadequate. "Cause of

action" has been defined as an act or omission of one party

26
in violation of the legal right or rights of the other; and its
essential elements are: 1) a right in favor of the plaintiff by
whatever means and under whatever law it arises or is
created; 2) an obligation on the part of the named defendant
to respect or not to violate such right; and 3) an act or
omission on the part of the named defendant violative of the
right of the plaintiff or constituting a breach of the obligation
of defendant to the plaintiff for which the latter may maintain
an action for recovery of damages. If these elements are not
extant, the complaint becomes vulnerable to a motion to
27
dismiss on the ground of failure to state a cause of action.
In the resolution of a motion to dismiss based on failure to
state a cause of action, only the facts alleged in the
28
complaint as well as its annexes must be considered. The
test in such case is whether a court can render a valid
judgment on the complaint based upon the facts alleged
29
and pursuant to the prayer therein.
Corollarily, the question of whether or not a complaint states
a cause of action against a defendant or the action is
premature is one of law. The trial court can consider all the
pleadings filed, including annexes, motions and the
evidence on record. However in so doing, the trial court
does not rule on the truth or falsity of such documents. It
merely includes such documents in the hypothetical
admission. Any review of a finding of lack of cause of action
based on these documents would not involve a calibration
of the probative value of such pieces of evidence but would
only limit itself to the inquiry of whether the law was properly
applied given the facts and these supporting documents.
Therefore, what would inevitably arise from such a review
are pure questions of law, and not questions of fact.
The trial court must likewise apply relevant statutes and
jurisprudence in determining whether the allegations in a
complaint establish a cause of action. While it focuses on
the complaint, a court clearly cannot disregard decisions
material to the proper appreciation of the questions before
it. In resolving a motion to dismiss, every court must take
cognizance of decisions this Court has rendered because
they are proper subjects of mandatory judicial notice. The
said decisions, more importantly, form part of the legal

system, and failure of any court to apply them shall

constitute an abdication of its duty to resolve a dispute in
accordance with law, and shall be a ground for
30
administrative action against an inferior court magistrate.
Considering the foregoing, it is not difficult to see the need
for particularity and incipient substantiation in the
petitioners Second Amended Complaint.
First, their initial claim that OCT 614 of which all the other
subject titles are derivatives is null and void, has been
proven wrong. As has been held in Pinlac and other cases,
OCT 614 did legally exist and was previously issued in the
name of the Philippine Government in 1910 under the
provisions of Act 496.
Second, the Ad Hoc Committee of the then Ministry of
Natural Resources, which was specifically tasked to
investigate the historical background of the Piedad Estate,
found that as early as the period prior to the Second World
War, all lots in the Piedad Estate had already been
disposed of.
Third, the Piedad Estate has been placed under the
Torrens system of land registration, which means that all
lots therein are titled.
Fourth, as held in the Balicudiong case, one who acquires
land under the Friar Lands Act, as well as his successors-ininterest, may not claim successional rights to purchase by
reason of occupation from time immemorial, which means
that petitioners claimed actual, adverse, peaceful and
continuous possession of the subject property is really of no
moment unless it is shown that their predecessors-ininterest were actual settlers and occupants at the time said
lands were acquired by the Government, and whose rights
were not disregarded even though they were in occupation
of the same before the government acquired the land; yet,
no period of time in relation to adverse possession is
alleged.
Petitioners Second Amended Complaint betrays no more
than an incomplete narration of facts unsupported by

documentary or other exhibits; the allegations therein

partake of conclusions of law unsupported by a particular
averment of circumstances that will show why or how such
inferences or conclusions were arrived at. It is replete with
sweeping generalizations and inferences derived from facts
that are not found therein. While there are allegations of
fraud upon the claim that the subject titles were fictitious,
spurious and obtained under "mysterious circumstances,"
the same are not specific to bring the controversy within the
trial courts jurisdiction. There is no explanation or narration
of facts as would show why said titles are claimed to be
fictitious or spurious, contrary to the requirement of the
Rules that the circumstances constituting fraud must be
stated with particularity; otherwise, the allegation of fraud
would simply be an unfounded conclusion of law. In the
absence of specific averments, the complaint is defective,
for it presents no basis upon which the court should act, or
for the defendant to meet it with an intelligent answer.
As to the second issue raised, petitioners claim that they are
bona fide occupants of the subject property within the
contemplation of the Friar Lands Act, having allegedly been
in actual, adverse, peaceful and continuous possession of
the property, although it is not stated for how long and since
when. In their second amended complaint, they seek
judgment
(4) Declaring the plaintiffs as bona fide occupants
of the property in litigation pursuant to the
provisions of the Friar Lands Act and other existing
laws. (Emphasis supplied)
They do not pray to be declared owners of the subject
property despite their alleged adverse possession but
only to be adjudged as the "bona fide occupants" thereof. In
other words, petitioners concede the States ownership of
the property.
Being so, petitioners may not be considered the real parties
in interest for the purpose of maintaining the suit for
cancellation of the subject titles. The Court of Appeals is
correct in declaring that only the State, through the Solicitor
General, may institute such suit. Jurisprudence on the

matter has been settled and the issue need not be

belabored. Thus
The Court also holds that private respondents are
not the proper parties to initiate the present suit.
The complaint, praying as it did for the cancellation
of the transfer certificates of title of petitioners on
the ground that they were derived from a
"spurious" OCT No. 4216, assailed in effect the
validity of said title. While private respondents did
not pray for the reversion of the land to the
government, we agree with the petitioners that the
prayer in the complaint will have the same result of
reverting the land to the government under the
Regalian doctrine. Gabila vs. Barriga ruled that
only the government is entitled to this relief. The
Court in that case held:
"The present motion to dismiss is actually
predicated on Section 1(g), Rule 16 of the
Revised Rules of Court, i.e., failure of the
complaint to state a cause of action, for it
alleges in paragraph 12 thereof that the
plaintiff admits that he has no right to
demand the cancellation or amendment of
the defendants title, because, even if the
said title were canceled or amended, the
ownership of the land embraced therein,
or of the portion thereof affected by the
amendment, would revert to the public
domain. In his amended complaint the
plaintiff makes no pretense at all that any
part of the land covered by the
defendants title was privately owned by
him or by his predecessors-in-interest.
Indeed, it is admitted therein that the said
land was at all times a part of the public
domain until December 18, 1964, when
the government issued a title thereon in
favor of defendant. Thus, if there is any
person or entity to relief, it can only be the
government.

In the case at bar, the plaintiffs own averments

negate the existence of such right, for it would
appear therefrom that whatever right might have
been violated by the defendant belonged to the
government, not to the plaintiff. Plaintiff-appellant
argues that although his complaint is captioned as
one for cancellation of title, he has nevertheless
stated therein several causes of action based on
his alleged rights of possession and ownership
over the improvements, on defendant-appellees
alleged fraudulent acquisition of the land, and on
the damages allegedly incurred by him (plaintiffappellant) in relation to the improvements. These
matters are merely ancillary to the central issue of
whether or not defendant-appellees title should be
canceled or amended, and they may not be leaned
upon in an effort to make out a cause of action in
relation to the said focal issue. Indeed, the
principal relief prayed for in the amended complaint
is the cancellation or amendment of defendant31
appellees title."
Under Rule 3, Section 2 of the Rules of Court, a real party in
interest is the party who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of
the suit. "Interest" within the meaning of the rule means
material interest, an interest in issue and to be affected by
the decree, as distinguished from mere interest in the
question involved, or a mere incidental interest. The interest
of the party must also be personal and not one based on a
desire to vindicate the constitutional right of some third and
unrelated party. Real interest, on the other hand, means a
present substantial interest, as distinguished from a mere
expectancy or a future, contingent, subordinate, or
32
consequential interest.
If petitioners are to be believed, they would possess a mere
inchoate interest in the properties covered by the subject
titles, a mere expectancy conditioned upon the fact that if
the questioned titles are cancelled and the property is
reverted to the State, they would probably or possibly be
given preferential treatment as qualified buyers or lessees
of the property under the Friar Lands Act. But this certainly

is not the "interest" required by law that grants them license

or the personality to prosecute their case. Only to the State
does the privilege belong.

SO ORDERED.
*

Austria-Martinez, Corona , Nachura, Reyes, JJ., concur.

On the issue of exhaustion of administrative remedies,
suffice it to state that since petitioners do not possess the
necessary interest to prosecute the case for cancellation of
title in the courts, neither do they have the right to pursue
administrative remedies outside thereof. They are not the
owners; nor are they qualified applicants therefor. It has not
been shown by their complaint that they have previously
taken steps to avail of the benefits under the Friar Lands
Act, since all they seek, should the questioned titles be
nullified, is to be declared bona fide occupants of the
property covered by the questioned titles. Neither is there
any indication that they possess the qualifications
necessary to enable them to avail of the preference granted
under the Act.
Finally, there is no merit in petitioners contention that
respondent belatedly filed the petition for certiorari with the
Court of Appeals, and that the appellate court gravely
abused its discretion when it entertained and resolved the
same.
The Order of the trial court dated January 3, 2001 denying
respondents motion to dismiss the Second Amended
Complaint was received by the respondent on January 16,
2001. Respondent filed a motion for reconsideration on
January 18, 2001 which was denied on February 28, 2001.
Respondent received the order denying its motion for
reconsideration on March 27, 2001. On the same day, it
filed a Notice to File Petition for Certiorari. On April 2, 2001,
the petition for certiorari was filed with the Court of Appeals.
Clearly, the same was timely filed hence, the appellate court
correctly entertained the same.
WHEREFORE, the petition is DENIED. The Decision of the
Court of Appeals dated January 9, 2002 in CA-G.R. SP No.
64337 dismissing petitioners "Second Amended Complaint"
in Civil Case No. Q-99-36483 and the Resolution dated June
26, 2002 denying the motion for reconsideration, are
AFFIRMED.

G.R. No. 175746

March 12, 2008
CHARLES L. ONG, Petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, Respondent.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari assails the April 25,
1
2006 Decision of the Court of Appeals in CA-G.R. CV No.
76085, which reversed and set aside the January 16, 2002
2
Decision of the Municipal Trial Court of Mangaldan,
Pangasinan in Land Registration Case No. 99-023, and the
3
November 20, 2006 Resolution which denied petitioners
motion for reconsideration.
The antecedent facts are as follows.
On July 1, 1999, petitioner Charles L. Ong (petitioner) in his
behalf and as duly authorized representative of his brothers,
namely, Roberto, Alberto and Cesar, filed an Application for
4
Registration of Title over Lot 15911 (subject lot) situated in
Barangay Anolid, Mangaldan, Pangasinan with an area of
five hundred seventy four (574) square meters, more or
less. They alleged that they are the co-owners of the subject
lot; that the subject lot is their exclusive property having
acquired the same by purchase from spouses Tony Bautista
and Alicia Villamil on August 24, 1998; that the subject lot is
presently unoccupied; and that they and their predecessorsin-interest have been in open, continuous and peaceful
possession of the subject lot in the concept of owners for
more than thirty (30) years.
After due notice and publication, only respondent Republic
of the Philippines (respondent), represented by the Office of
the Solicitor General, opposed the application for
registration of title. Respondent asserted that neither
applicants nor their predecessors-in-interest have been in
open, continuous, exclusive and notorious possession and
occupation of the subject lot since June 12, 1945 or earlier
as required by Section 48(b) of Commonwealth Act No. 141,
as amended by Presidential Decree (P.D.) No. 1073; that
applicants failed to adduce any muniment of title to prove
their claims; that the tax declaration appended to the

application does not appear genuine and merely shows

pretended possession of recent vintage; that the application
was filed beyond the period allowed under P.D. No. 892;
and that the subject lot is part of the public domain which
cannot be the subject of private appropriation.

General, Makati City, Metro Manila, the Office of the

Provincial Prosecutor, Dagupan City, Atty. Celestino
Domingo Jr., the Office of the Land Registration Authority,
Quezon City, as well as the applicant.
SO ORDERED.

On January 16, 2002, the trial court rendered a Decision in

favor of petitioner and his brothers, viz:
The foregoing evidences presented by the applicant
indubitably established sufficient basis to grant the applicant
(sic) for registration. Originally, the whole parcel of land was
owned by spouses Teofilo Abellara and Abella Charmine
who acquired the same by virtue of a Deed of Sale from
Cynthia Cacho, Agustin Cacho, Jr., Jasmin Cacho, Jover
Cacho and Lauro Cacho. Later, they sold the same parcel
of land to spouses Tony C. Villamil and Alicia Bautista, who
in turn sold the same land to herein applicants.
The same parcel of land has been declared in the name of
the applicant and her predecessors-in-interest and its taxes
has (sic) been religiously paid.
The said circumstances further show that the possession
and ownership of the applicant and her (sic) predecessorsin-interest over the same parcel of land has (sic) been
continuous and peaceful under bona fide claim of ownership
before the filing of the instant application for registration on
[July 1, 1999].
WHEREFORE, after confirming the Order of General
Default, the Court hereby orders and decrees the
registration of a parcel of land as shown on plan ap-01004897 approved by the Bureau of Land(s) situated in
Barangay Anolid, Mangaldan, Pangasinan, containing an
area of Five Hundred Seventy Four (574) square meters,
subject of the application for registration of title, in
accordance with Presidential Decree No. 1529, in favor of
CHARLIE L. ONG in his behalf and as representative of his
brothers namely, ROBERTO L. ONG, ALBERTO L. ONG
and CESAR L. ONG.
Furnish copies of this Decision to the Office of the Solicitor

Aggrieved, respondent appealed to the Court of Appeals

which rendered the assailed Decision, the dispositive
portion of which reads:
WHEREFORE, the instant appeal is GRANTED.
Accordingly, the decision of the court a quo granting the
application for registration of title of applicants-appellees is
REVERSED and SET ASIDE. No pronouncement as to
costs.
SO ORDERED.

In reversing the decision of the trial court, the Court of

Appeals found that the subject lot is part of the alienable
and disposable lands of the public domain. Thus, it was
incumbent upon petitioner to prove that they possessed the
subject lot in the nature and for the duration required by law.
However, petitioner failed to prove that he or his
predecessors-in-interest have been in adverse possession
of the subject lot in the concept of owner since June 12,
1945 or earlier as mandated by Section 14(1) of P.D. 1529.
It noted that the earliest tax declaration which petitioner
presented is dated 1971. Consequently, petitioner could not
fairly claim possession of the land prior to 1971. Neither was
petitioner able to prove that he or his predecessors-ininterest actually occupied the subject lot prior to the filing of
the application. Thus, the trial court erred in granting the
application for registration of title over the subject lot.
Hence, this petition raising the following issues:
1. WHETHER OR NOT PETITIONER,
TOGETHER WITH HIS BROTHERS, NAMELY,
ROBERTO L. ONG, ALBERTO L. ONG AND
CEZAR L. ONG, HAVE REGISTRABLE
OWNERSHIP OVER THE REAL PROPERTY

SUBJECT MATTER OF LAND REGISTRATION

CASE NO. 99-023, AND
2. WHETHER OR NOT THE FINDINGS AND
CONCLUSION OF THE FORMER SPECIAL
FOURTH DIVISION OF THE COURT OF
APPEALS THAT THE SUBJECT REAL
7
PROPERTY IS A PUBLIC LAND IS CORRECT.
The petition lacks merit.
Section 14(1) of P.D. 1529 ("Property Registration Decree"),
as amended, provides
SEC. 14. Who may apply. The following persons may file
in the proper Court of First Instance an application for
registration of title to land, whether personally or through
their duly authorized representatives:
(1) 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.
Thus, pursuant to the aforequoted provision of law,
applicants for registration of title must prove: (1) that the
subject land forms part of the disposable and alienable
lands of the public domain, and (2) that they have been in
open, continuous, exclusive and notorious possession and
occupation of the same under a bona fide claim of
8
ownership since June 12, 1945, or earlier. These requisites
involve questions of fact which are not proper in a petition
for review on certiorari. Factual findings of the court a quo
are generally binding on this Court except for certain
recognized exceptions, as is the case here, where the trial
court and the Court of Appeals arrived at conflicting
9
findings. After a careful review of the records, we sustain
the findings and conclusions of the Court of Appeals.
There is no dispute that the subject lot is classified as
alienable and disposable land of the public domain. The
10
Report dated January 17, 2000 of the Bureau of Lands

stated that the subject lot is "within the alienable and

disposable zone as classified under Project 50 L.C. Map
No. 698 and released and classified as such on November
11
21, 1927." This finding is, likewise, embodied in the
12
Report dated January 7, 1999 of the Department of
Environment and Natural Resources Community
Environment and Natural Resources Office (DENR13
CENRO) and the blue print Copy of the plan covering the
subject lot. However, petitioner failed to prove that he or his
predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of the
subject lot since June 12, 1945 or earlier.
The records show that petitioner and his brothers bought
the subject lot from spouses Tony Bautista and Alicia
14
Villamil on August 24, 1998, who in turn purchased the
same from spouses Teofilo Abellera and Abella Sarmen on
15
January 16, 1997. The latter bought the subject lot from
Cynthia, Agustin Jr., Jasmin, Omir and Lauro, all surnamed
16
Cacho, on July 10, 1979. The earliest tax declaration
which was submitted in evidence was Tax Declaration No.
17
25606 issued in 1971 in the names of spouses Agustin
Cacho and Eufrosinia Baustista. While tax declarations are
not conclusive proof of ownership, they constitute good
indicia of possession in the concept of owner and a claim of
18
title over the subject property. Even if we were to tack
petitioners claim of ownership over the subject lot to that of
their alleged predecessors-in-interest, spouses Agustin
Cacho and Eufrosinia Baustista in 1971, still this would fall
short of the required possession from June 12, 1945 or
earlier.1avvphi1
Further, as correctly pointed by the Court of Appeals,
possession alone is not sufficient to acquire title to alienable
lands of the public domain because the law requires
possession and occupation. As held in Republic v.
19
Alconaba:
The law speaks of possession and occupation. Since these
words are separated by the conjunction and, the clear
intention of the law is not to make one synonymous with the
other. Possession is broader than occupation because it
includes constructive possession. When, therefore, the law

adds the word occupation, it seeks to delimit the all

encompassing effect of constructive possession. Taken
together with the words open, continuous, exclusive and
notorious, the word occupation serves to highlight the fact
that for an applicant to qualify, his possession must not be a
mere fiction. Actual possession of a land consists in the
manifestation of acts of dominion over it of such a nature as
20
a party would naturally exercise over his own property.
Petitioner admitted that after he and his brothers bought the
subject lot from spouses Tony Bautista and Alicia Villamil in
1998, neither he nor his brothers actually occupied the
21
subject lot. No improvements were made thereon and the
22
most that they did was to visit the lot on several occasions.
Petitioners predecessor-in-interest, Tony Bautista testified
that he and his wife never actually occupied the subject lot
from the time they bought the same from spouses Teofilo
23
Abellera and Abella Sarmen in 1997. Aside from these two
testimonies, no other evidence was presented to establish
the character of the possession of the subject lot by
petitioners other alleged predecessors-in-interest. Clearly,
petitioners evidence failed to establish specific acts of
ownership to substantiate the claim that he and his
predecessors-in-interest possessed and occupied the
subject lot in the nature and duration required by law.
The burden of proof in land registration cases rests on the
applicant who must show by clear, positive and convincing
evidence that his alleged possession and occupation of the
24
land is of the nature and duration required by law.
Unfortunately, petitioners evidence do not constitute the
"well-nigh incontrovertible" evidence necessary in cases of
25
this nature. Accordingly, the Court of Appeals did not err in
reversing the Decision of the trial court and in denying his
application for registration of title over the subject lot.
WHEREFORE, in view of the foregoing, the petition is
DENIED. The April 25, 2006 Decision of the Court of
Appeals in CA-G.R. CV No. 76085 which reversed and set
aside the January 16, 2002 Decision of the Municipal Trial
Court of Mangaldan, Pangasinan in Land Registration Case
No. 99-023, and the November 20, 2006 Resolution denying
the motion for reconsideration, are AFFIRMED.

G.R. No. L-24066

December 9, 1925
VALENTIN SUSI, plaintiff-appellee,
vs.
ANGELA RAZON and THE DIRECTOR OF LANDS,
defendants. THE DIRECTOR OF LANDS, appellant.
Acting Attorney-General Reyes for appellant. Monico R.
Mercado for appellee.
VILLA-REAL, J.:
This action was commenced in the Court of First Instance of
Pampanga by a complaint filed by Valentin Susi against
Angela Razon and the Director of Lands, praying for
judgment: (a) Declaring plaintiff the sole and absolute owner
of the parcel of land described in the second paragraph of the
complaint; (b) annulling the sale made by the Director of
Lands in favor of Angela Razon, on the ground that the land
is a private property; (c) ordering the cancellation of the
certificate of title issued to said Angela Razon; and (d)
sentencing the latter to pay plaintiff the sum of P500 as
damages, with the costs.
For his answer to the complaint, the Director of Lands denied
each and every allegation contained therein and, as special
defense, alleged that the land in question was a property of
the Government of the United States under the administration
and control of the Philippine Islands before its sale to Angela
Razon, which was made in accordance with law.
After trial, whereat evidence was introduced by both parties,
the Court of First Instance of Pampanga rendered judgment
declaring the plaintiff entitled to the possession of the land,
annulling the sale made by the Director of Lands in favor of
Angela Razon, and ordering the cancellation of the certificate
of title issued to her, with the costs against Angela Razon.
From this judgment the Director of Lands took this appeal,
assigning thereto the following errors, to wit: (1) The holding
that the judgment rendered in a prior case between the
plaintiff and defendant Angela Razon on the parcel of land in
question is controlling in this action; (2) the holding that
plaintiff is entitled to recover the possession of said parcel of
land; the annulment of the sale made by the Director of Lands
to Angela Razon; and the ordering that the certificate of title

issued by the register of deeds of the Province of Pampanga

to Angela Razon by virtue of said sale be cancelled; and (3)
the denial of the motion for new trial filed by the Director of
Lands.
The evidence shows that on December 18, 1880, Nemesio
Pinlac sold the land in question, then a fish pond, tho
Apolonio Garcia and Basilio Mendoza for the sum of P12,
reserving the right to repurchase the same (Exhibit B). After
having been in possession thereof for about eight years, and
the fish pond having been destroyed, Apolonio Garcia and
Basilio Mendoza, on September 5, 1899, sold it to Valentin
Susi for the sum of P12, reserving the right to repurchase it
(Exhibit A). Before the execution of the deed of sale, Valentin
Susi had already paid its price and sown "bacawan" on said
land, availing himself of the firewood gathered thereon, with
the proceeds of the sale of which he had paid the price of the
property. The possession and occupation of the land in
question, first, by Apolonio Garcia and Basilio Mendoza, and
then by Valentin Susi has been open, continuous, adverse
and public, without any interruption, except during the
revolution, or disturbance, except when Angela Razon, on
September 13, 1913, commenced an action in the Court of
First Instance of Pampanga to recover the possession of said
land (Exhibit C), wherein after considering the evidence
introduced at the trial, the court rendered judgment in favor
of Valentin Susi and against Angela Razon, dismissing the
complaint (Exhibit E). Having failed in her attempt to obtain
possession of the land in question through the court, Angela
Razon applied to the Director of Lands for the purchase
thereof on August 15, 1914 (Exhibit C). Having learned of
said application, Valentin Susi filed and opposition thereto on
December 6, 1915, asserting his possession of the land for
twenty-five years (Exhibit P). After making the proper
administrative investigation, the Director of Lands overruled
the opposition of Valentin Susi and sold the land to Angela
Razon. By virtue of said grant the register of deeds of
Pampanga, on August 31, 1921, issued the proper certificate
of title to Angela Razon. Armed with said document, Angela
Razon required Valentin Susi to vacate the land in question,
and as he refused to do so, she brought and action for forcible
entry and detainer in the justice of the peace court of Guagua,
Pampanga, which was dismissed for lack of jurisdiction, the

case being one of title to real property (Exhibit F and M).

Valentin Susi then brought this action.
With these facts in view, we shall proceed to consider the
questions raised by the appellant in his assignments of
error.lawphi1.net
It clearly appears from the evidence that Valentin Susi has
been in possession of the land in question openly,
continuously, adversely, and publicly, personally and through
his predecessors, since the year 1880, that is, for about fortyfive years. While the judgment of the Court of First Instance
of Pampanga against Angela Razon in the forcible entry case
does not affect the Director of Lands, yet it is controlling as to
Angela Razon and rebuts her claim that she had been in
possession thereof. When on August 15, 1914, Angela
Razon applied for the purchase of said land, Valentin Susi
had already been in possession thereof personally and
through his predecessors for thirty-four years. And if it is
taken into account that Nemesio Pinlac had already made
said land a fish pond when he sold it on December 18, 1880,
it can hardly be estimated when he began to possess and
occupy it, the period of time being so long that it is beyond
the reach of memory. These being the facts, the doctrine laid
down by the Supreme Court of the United States in the case
of Cario vs. Government of the Philippine Islands (212 U.
1
S., 449 ), is applicable here. In favor of Valentin Susi, there
is, moreover, the presumption juris et de jure established in
paragraph (b) of section 45 of Act No. 2874, amending Act
No. 926, that all the necessary requirements for a grant by
the Government were complied with, for he has been in
actual and physical possession, personally and through his
predecessors, of an agricultural land of the public domain
openly, continuously, exclusively and publicly since July 26,
1894, with a right to a certificate of title to said land under the
provisions of Chapter VIII of said Act. So that when Angela
Razon applied for the grant in her favor, Valentin Susi had
already acquired, by operation of law, not only a right to a
grant, but a grant of the Government, for it is not necessary
that certificate of title should be issued in order that said grant
may be sanctioned by the courts, an application therefore is
sufficient, under the provisions of section 47 of Act No. 2874.
If by a legal fiction, Valentin Susi had acquired the land in

question by a grant of the State, it had already ceased to be

the public domain and had become private property, at least
by presumption, of Valentin Susi, beyond the control of the
Director of Lands. Consequently, in selling the land in
question to Angela Razon, the Director of Lands disposed of
a land over which he had no longer any title or control, and
the sale thus made was void and of no effect, and Angela
Razon did not thereby acquire any right.
The Director of Lands contends that the land in question
being of the public domain, the plaintiff-appellee cannot
maintain an action to recover possession thereof.lawphi1.net
If, as above stated, the land, the possession of which is in
dispute, had already become, by operation of law, private
property of the plaintiff, there lacking only the judicial sanction
of his title, Valentin Susi has the right to bring an action to
recover possession thereof and hold it.
For the foregoing, and no error having been found in the
judgment appealed from, the same is hereby affirmed in all
its parts, without special pronouncement as to costs. So
ordered.

G.R. No. 73002 December 29, 1986

THE DIRECTOR OF LANDS, petitioner,
vs.
INTERMEDIATE APPELLATE COURT and ACME
PLYWOOD & VENEER CO. INC., ETC., respondents.
D. Nacion Law Office for private respondent.
NARVASA, J.:
The Director of Lands has brought this appeal by certiorari
from a judgment of the Intermediate Appellate Court affirming
a decision of the Court of First Instance of Isabela, which
ordered registration in favor of Acme Plywood & Veneer Co.,
Inc. of five parcels of land measuring 481, 390 square meters,
more or less, acquired by it from Mariano and Acer Infiel,
members of the Dumagat tribe.
The registration proceedings were for confirmation of title
under Section 48 of Commonwealth Act No. 141 (The Public
Land Act). as amended: and the appealed judgment sums up
the findings of the trial court in said proceedings in this wise:
1. That Acme Plywood & Veneer Co. Inc.,
represented by Mr. Rodolfo Nazario is a corporation
duly organized in accordance with the laws of the
Republic of the Philippines and registered with the
Securities and Exchange Commission on
December 23, 1959;
2. That Acme Plywood & Veneer Co. Inc.,
represented by Mr. Rodolfo Nazario can acquire
real properties pursuant to the provisions of the
Articles of Incorporation particularly on the provision
of its secondary purposes (paragraph (9), Exhibit
'M-l');
3. That the land subject of the Land Registration
proceeding was ancestrally acquired by Acme
Plywood & Veneer Co., Inc., on October 29, 1962,
from Mariano Infiel and Acer Infiel, both members of
the Dumagat tribe and as such are cultural
minorities;

4. That the constitution of the Republic of the

Philippines of 1935 is applicable as the sale took
place on October 29, 1962;
5. That the possession of the Infiels over the land
relinquished or sold to Acme Plywood & Veneer Co.,
Inc., dates back before the Philippines was
discovered by Magellan as the ancestors of the
Infiels have possessed and occupied the land from
generation to generation until the same came into
the possession of Mariano Infiel and Acer Infiel;
6. That the possession of the applicant Acme
Plywood & Veneer Co., Inc., is continuous, adverse
and public from 1962 to the present and tacking the
possession of the Infiels who were granted from
whom the applicant bought said land on October 29,
1962, hence the possession is already considered
from time immemorial.
7. That the land sought to be registered is a private
land pursuant to the provisions of Republic Act No.
3872 granting absolute ownership to members of
the non-Christian Tribes on land occupied by them
or their ancestral lands, whether with the alienable
or disposable public land or within the public
domain;
8. That applicant Acme Plywood & Veneer Co. Inc.,
has introduced more than Forty-Five Million
(P45,000,000.00) Pesos worth of improvements,
said improvements were seen by the Court during
its ocular investigation of the land sought to be
registered on September 18, 1982;
9. That the ownership and possession of the land
sought to be registered by the applicant was duly
recognized by the government when the Municipal
Officials of Maconacon, Isabela, have negotiated for
the donation of the townsite from Acme Plywood &
Veneer Co., Inc., and this negotiation came to reality
when the Board of Directors of the Acme Plywood &
Veneer Co., Inc., had donated a part of the land

bought by the Company from the Infiels for the

townsite of Maconacon Isabela (Exh. 'N') on
November 15, 1979, and which donation was
accepted by the Municipal Government of
Maconacon, Isabela (Exh. 'N-l'), during their special
session on November 22, 1979.
The Director of Lands takes no issue with any of these
findings except as to the applicability of the 1935 Constitution
to the matter at hand. Concerning this, he asserts that, the
registration proceedings have been commenced only on July
17, 1981, or long after the 1973 Constitution had gone into
effect, the latter is the correctly applicable law; and since
section 11 of its Article XIV prohibits private corporations or
associations from holding alienable lands of the public
domain, except by lease not to exceed 1,000 hectares (a
prohibition not found in the 1935 Constitution which was in
force in 1962 when Acme purchased the lands in question
from the Infiels), it was reversible error to decree registration
in favor of Acme Section 48, paragraphs (b) and (c), of
Commonwealth Act No. 141, as amended, reads:
SEC. 48. The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any
such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First
Instance of the province where the land is located for
confirmation of their claims, and the issuance of a certificate
of title therefor, under the Land Registration Act, to wit:
xxx xxx xxx
(b) Those who by themselves or through their
predecessors-in-interest have been in open,
continuous, exclusive and notorious possession
and occupation of 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 war
or force majeure. These shall be conclusively
presumed to have performed all the conditions
essential to a Government grant and shall be
entitled to a certificate of title under the provisions of

this chapter.
(c) Members of the National Cultural minorities who
by themselves or through their predecessors-ininterest have been in open. continuous, exclusive
and notorious possession and occupation of lands
of the public domain suitable to agriculture, whether
disposable or not, under a bona fide claim of
ownership for at least 30 years shall be entitled to
the rights granted in subsection (b) hereof.
The Petition for Review does not dispute-indeed, in view of
the quoted findings of the trial court which were cited and
affirmed by the Intermediate Appellate Court, it can no longer
controvert before this Court-the fact that Mariano and Acer
Infiel, from whom Acme purchased the lands in question on
October 29, 1962, are members of the national cultural
minorities who had, by themselves and through their
progenitors, possessed and occupied those lands since time
immemorial, or for more than the required 30-year period and
were, by reason thereof, entitled to exercise the right granted
in Section 48 of the Public Land Act to have their title judicially
confirmed. Nor is there any pretension that Acme, as the
successor-in-interest of the Infiels, is disqualified to acquire
and register ownership of said lands under any provisions of
the 1973 Constitution other than Section 11 of its Article XIV
already referred to.
Given the foregoing, the question before this Court is whether
or not the title that the Infiels had transferred to Acme in 1962
could be confirmed in favor of the latter in proceedings
instituted by it in 1981 when the 1973 Constitution was
already in effect, having in mind the prohibition therein
against private corporations holding lands of the public
domain except in lease not exceeding 1,000 hectares.
The question turns upon a determination of the character of
the lands at the time of institution of the registration
proceedings in 1981. If they were then still part of the public
domain, it must be answered in the negative. If, on the other
hand, they were then already private lands, the constitutional
prohibition against their acquisition by private corporations or
associations obviously does not apply.

In this regard, attention has been invited to Manila Electric

1
Company vs. Castro-Bartolome, et al, where a similar set of
facts prevailed. In that case, Manila Electric Company, a
domestic corporation more than 60% of the capital stock of
which is Filipino-owned, had purchased in 1947 two lots in
Tanay, Rizal from the Piguing spouses. The lots had been
possessed by the vendors and, before them, by their
predecessor-in-interest, Olimpia Ramos, since prior to the
outbreak of the Pacific War in 1941. On December 1, 1976,
Meralco applied to the Court of First Instance of Rizal, Makati
Branch, for confirmation of title to said lots. The court,
assuming that the lots were public land, dismissed the
application on the ground that Meralco, a juridical person,
was not qualified to apply for registration under Section 48(b)
of the Public Land Act which allows only Filipino citizens or
natural persons to apply for judicial confirmation of imperfect
titles to public land. Meralco appealed, and a majority of this
Court upheld the dismissal. It was held that:
..., the said land is still public land. It would cease to
be public land only upon the issuance of the
certificate of title to any Filipino citizen claiming it
under section 48(b). Because it is still public land
and the Meralco, as a juridical person, is disqualified
to apply for its registration under section 48(b),
Meralco's application cannot be given due course or
has to be dismissed.
Finally, it may be observed that the constitutional
prohibition makes no distinction between (on the
one hand) alienable agricultural public lands as to
which no occupant has an imperfect title and (on the
other hand) alienable lands of the public domain as
to which an occupant has on imperfect title subject
to judicial confirmation.
Since section 11 of Article XIV does not distinguish,
we should not make any distinction or qualification.
The prohibition applies to alienable public lands as
to which a Torrens title may be secured under
section 48(b). The proceeding under section 48(b)
'presupposes that the land is public' (Mindanao vs.

Director of Lands, L-19535, July 30, 1967, 20 SCRA

641, 644).
The present Chief Justice entered a vigorous dissent, tracing
2
the line of cases beginning with Carino in 1909 thru Susi in
3
4
1925 down to Herico in 1980, which developed, affirmed
and reaffirmed the doctrine that open, exclusive and
undisputed possession of alienable public land for the period
prescribed by law creates the legal fiction whereby the land,
upon completion of the requisite period ipso jure and without
the need of judicial or other sanction, ceases to be public land
and becomes private property. That said dissent expressed
what is the better and, indeed, the correct, view-becomes
evident from a consideration of some of the principal rulings
cited therein,
The main theme was given birth, so to speak, in Carino
involving the Decree/Regulations of June 25, 1880 for
adjustment of royal lands wrongfully occupied by private
individuals in the Philippine Islands. It was ruled that:
5

It is true that the language of articles 4 and 5

attributes title to those 'who may prove' possession
for the necessary time and we do not overlook the
argument that this means may prove in registration
proceedings. It may be that an English conveyancer
would have recommended an application under the
foregoing decree, but certainly it was not calculated
to convey to the mind of an Igorot chief the notion
that ancient family possessions were in danger, if he
had read every word of it. The words 'may prove'
(acrediten) as well or better, in view of the other
provisions, might be taken to mean when called
upon to do so in any litigation. There are indications
that registration was expected from all but none
sufficient to show that, for want of it, ownership
actually gained would be lost. The effect of the
proof, wherever made, was not to confer title, but
simply to establish it, as already conferred by the
decree, if not by earlier law. ...
That ruling assumed a more doctrinal character because
expressed in more categorical language, in Susi:

.... In favor of Valentin Susi, there is, moreover, the

presumption juris et de jure established in
paragraph (b) of section 45 of Act No. 2874,
amending Act No. 926, that all the necessary
requirements for a grant by the Government were
complied with, for he has been in actual and
physical possession, personally and through his
predecessors, of an agricultural land of the public
domain openly, continuously, exclusively and
publicly since July 26, 1984, with a right to a
certificate of title to said land under the provisions of
Chapter VIII of said Act. So that when Angela Razon
applied for the grant in her favor, Valentin Susi had
already acquired, by operation of law not only a right
to a grant, but a grant of the Government, for it is not
necessary that a certificate of title should be issued
in order that said grant may be sanctioned by the
courts, an application therefore is sufficient, under
the provisions of section 47 of Act No. 2874. If by a
legal fiction, Valentin Susi had acquired the land in
question by a grant of the State, it had already
ceased to be of the public domain and had become
private property, at least by presumption, of Valentin
Susi, beyond the control of the Director of Lands.
Consequently, in selling the land in question of
Angela Razon, the Director of Lands disposed of a
land over which he had no longer any title or control,
and the sale thus made was void and of no effect,
and Angela Razon did not thereby acquire any right.
6

Succeeding cases, of which only some need be mentioned,

7
likeof Lacaste vs. Director of Lands, Mesina vs. Vda. de
8
9
Sonza, Manarpac vs. Cabanatuan, Miguel vs. Court of
10
Appeals
and Herico vs. Dar, supra, by invoking and
affirming the Susi doctrine have firmly rooted it in
jurisprudence.
Herico, in particular, appears to be squarely affirmative:

11

.... Secondly, under the provisions of Republic Act

No. 1942, which the respondent Court held to be
inapplicable to the petitioner's case, with the latter's

proven occupation and cultivation for more than 30

years since 1914, by himself and by his
predecessors-in-interest, title over the land has
vested on petitioner so as to segregate the land
from the mass of public land. Thereafter, it is no
longer disposable under the Public Land Act as by
free patent. ....
xxx xxx xxx
As interpreted in several cases, when the conditions
as specified in the foregoing provision are complied
with, the possessor is deemed to have acquired, by
operation of law, a right to a grant, a government
grant, without the necessity of a certificate of title
being issued. The land, therefore, ceases to be of
the public domain and beyond the authority of the
Director of Lands to dispose of. The application for
confirmation is mere formality, the lack of which
does not affect the legal sufficiency of the title as
would be evidenced by the patent and the Torrens
12
title to be issued upon the strength of said patent.
Nothing can more clearly demonstrate the logical inevitability
of considering possession of public land which is of the
character and duration prescribed by statute as the
equivalent of an express grant from the State than the dictum
13
of the statute itself
that the possessor(s) "... shall be
conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a
certificate of title .... " No proof being admissible to overcome
a conclusive presumption, confirmation proceedings would,
in truth be little more than a formality, at the most limited to
ascertaining whether the possession claimed is of the
required character and length of time; and registration
thereunder would not confer title, but simply recognize a title
already vested. The proceedings would not originally convert
the land from public to private land, but only confirm such a
conversion already affected by operation of law from the
moment the required period of possession became complete.
As was so well put in Carino, "... (T)here are indications that
registration was expected from all, but none sufficient to show
that, for want of it, ownership actually gained would be lost.
The effect of the proof, wherever made, was not to confer
title, but simply to establish it, as already conferred by the

decree, if not by earlier law."

If it is accepted-as it must be-that the land was already private
land to which the Infiels had a legally sufficient and
transferable title on October 29, 1962 when Acme acquired it
from said owners, it must also be conceded that Acme had a
perfect right to make such acquisition, there being nothing in
the 1935 Constitution then in force (or, for that matter, in the
1973 Constitution which came into effect later) prohibiting
corporations from acquiring and owning private lands.
Even on the proposition that the land remained technically
"public" land, despite immemorial possession of the Infiels
and their ancestors, until title in their favor was actually
confirmed in appropriate proceedings under the Public Land
Act, there can be no serious question of Acmes right to
acquire the land at the time it did, there also being nothing in
the 1935 Constitution that might be construed to prohibit
corporations from purchasing or acquiring interests in public
land to which the vendor had already acquired that type of
so-called "incomplete" or "imperfect" title. The only limitation
then extant was that corporations could not acquire, hold or
lease public agricultural lands in excess of 1,024 hectares.
The purely accidental circumstance that confirmation
proceedings were brought under the aegis of the 1973
Constitution which forbids corporations from owning lands of
the public domain cannot defeat a right already vested before
that law came into effect, or invalidate transactions then
perfectly valid and proper. This Court has already held, in
analogous circumstances, that the Constitution cannot impair
vested rights.
14

We hold that the said constitutional prohibition

has no retroactive application to the sales
application of Binan Development Co., Inc. because
it had already acquired a vested right to the land
applied for at the time the 1973 Constitution took
effect.
That vested right has to be respected. It could not
be abrogated by the new Constitution. Section 2,
Article XIII of the 1935 Constitution allows private
corporations to purchase public agricultural lands

not exceeding one thousand and twenty-four

hectares. Petitioner' prohibition action is barred by
the doctrine of vested rights in constitutional law.
xxx xxx xxx
The due process clause prohibits the annihilation of
vested rights. 'A state may not impair vested rights
by legislative enactment, by the enactment or by the
subsequent repeal of a municipal ordinance, or by a
change in the constitution of the State, except in a
legitimate exercise of the police power'(16 C.J.S.
1177-78).
xxx xxx xxx
In the instant case, it is incontestable that prior to
the effectivity of the 1973 Constitution the right of
the corporation to purchase the land in question had
become fixed and established and was no longer
open to doubt or controversy.
Its compliance with the requirements of the Public
Land Law for the issuance of a patent had the effect
of segregating the said land from the public domain.
The corporation's right to obtain a patent for the land
is protected by law. It cannot be deprived of that
right without due process (Director of Lands vs. CA,
15
123 Phil. 919).<re||an1w>
The fact, therefore, that the confirmation proceedings were
instituted by Acme in its own name must be regarded as
simply another accidental circumstance, productive of a
defect hardly more than procedural and in nowise affecting
the substance and merits of the right of ownership sought to
be confirmed in said proceedings, there being no doubt of
Acme's entitlement to the land. As it is unquestionable that in
the light of the undisputed facts, the Infiels, under either the
1935 or the 1973 Constitution, could have had title in
themselves confirmed and registered, only a rigid
subservience to the letter of the law would deny the same
benefit to their lawful successor-in-interest by valid
conveyance which violates no constitutional mandate.
The Court, in the light of the foregoing, is of the view, and so
holds, that the majority ruling in Meralco must be
reconsidered and no longer deemed to be binding precedent.

The correct rule, as enunciated in the line of cases already

referred to, is that alienable public land held by a possessor,
personally or through his predecessors-in-interest, openly,
continuously and exclusively for the prescribed statutory
period (30 years under The Public Land Act, as amended) is
converted to private property by the mere lapse or completion
of said period, ipso jure. Following that rule and on the basis
of the undisputed facts, the land subject of this appeal was
already private property at the time it was acquired from the
Infiels by Acme. Acme thereby acquired a registrable title,
there being at the time no prohibition against said
corporation's holding or owning private land. The objection
that, as a juridical person, Acme is not qualified to apply for
judicial confirmation of title under section 48(b) of the Public
Land Act is technical, rather than substantial and, again, finds
its answer in the dissent in Meralco:
6. To uphold respondent judge's denial of Meralco's
application on the technicality that the Public Land
Act allows only citizens of the Philippines who are
natural persons to apply for confirmation of their title
would be impractical and would just give rise to
multiplicity of court actions. Assuming that there was
a technical error not having filed the application for
registration in the name of the Piguing spouses as
the original owners and vendors, still it is conceded
that there is no prohibition against their sale of the
land to the applicant Meralco and neither is there
any prohibition against the application being refiled
with retroactive effect in the name of the original
owners and vendors (as such natural persons) with
the end result of their application being granted,
because of their indisputable acquisition of
ownership by operation of law and the conclusive
presumption therein provided in their favor. It should
not be necessary to go through all the rituals at the
great cost of refiling of all such applications in their
names and adding to the overcrowded court
dockets when the Court can after all these years
dispose of it here and now. (See Francisco vs. City
of Davao)
The ends of justice would best be served, therefore,

by considering the applications for confirmation as

amended to conform to the evidence, i.e. as filed in
the names of the original persons who as natural
persons are duly qualified to apply for formal
confirmation of the title that they had acquired by
conclusive presumption and mandate of the Public
Land Act and who thereafter duly sold to the herein
corporations (both admittedly Filipino corporations
duly qualified to hold and own private lands) and
granting the applications for confirmation of title to
the private lands so acquired and sold or
exchanged.
There is also nothing to prevent Acme from reconveying the
lands to the Infiels and the latter from themselves applying
for confirmation of title and, after issuance of the certificate/s
of title in their names, deeding the lands back to Acme. But
this would be merely indulging in empty charades, whereas
the same result is more efficaciously and speedily obtained,
with no prejudice to anyone, by a liberal application of the rule
on amendment to conform to the evidence suggested in the
dissent in Meralco.
While this opinion seemingly reverses an earlier ruling of
comparatively recent vintage, in a real sense, it breaks no
precedent, but only reaffirms and re-established, as it were,
doctrines the soundness of which has passed the test of
searching examination and inquiry in many past cases.
Indeed, it is worth noting that the majority opinion, as well as
the concurring opinions of Chief Justice Fernando and
Justice Abad Santos, in Meralco rested chiefly on the
proposition that the petitioner therein, a juridical person, was
disqualified from applying for confirmation of an imperfect title
to public land under Section 48(b) of the Public Land Act.
Reference to the 1973 Constitution and its Article XIV,
Section 11, was only tangential limited to a brief paragraph in
the main opinion, and may, in that context, be considered as
essentially obiter. Meralco, in short, decided no constitutional
question.
WHEREFORE, there being no reversible error in the
appealed judgment of the Intermediate Appellate Court, the
same is hereby affirmed, without costs in this instance.

G.R. No. 144057

January 17, 2005
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and CORAZON
NAGUIT, respondents.
DECISION
TINGA, J.:
This is a Petition for Review on Certiorari under Rule 45 of
the 1997 Rules of Civil Procedure, seeking to review the
1
Decision of the Sixth Division of the Court of Appeals dated
July 12, 2000 in CA-G.R. SP No. 51921. The appellate court
affirmed the decisions of both the Regional Trial Court
2
(RTC), Branch 8, of Kalibo, Aklan dated February 26, 1999,
3
and the 7th Municipal Circuit Trial Court (MCTC) of IbajayNabas, Aklan dated February 18, 1998, which granted the
application for registration of a parcel of land of Corazon
Naguit (Naguit), the respondent herein.
The facts are as follows:
On January 5, 1993, Naguit, a Filipino citizen, of legal age
and married to Manolito S. Naguit, filed with the MCTC of
Ibajay-Nabas, Aklan, a petition for registration of title of a
parcel of land situated in Brgy. Union, Nabas, Aklan. The
parcel of land is designated as Lot No. 10049, Cad. 758-D,
Nabas Cadastre, AP 060414-014779, and contains an
area of 31,374 square meters. The application seeks judicial
confirmation of respondents imperfect title over the
aforesaid land.
On February 20, 1995, the court held initial hearing on the
application. The public prosecutor, appearing for the
government, and Jose Angeles, representing the heirs of
Rustico Angeles, opposed the petition. On a later date,
however, the heirs of Rustico Angeles filed a formal
opposition to the petition. Also on February 20, 1995, the
court issued an order of general default against the whole
world except as to the heirs of Rustico Angeles and the
government.
The evidence on record reveals that the subject parcel of

land was originally declared for taxation purposes in the

name of Ramon Urbano (Urbano) in 1945 under Tax
4
Declaration No. 3888 until 1991. On July 9, 1992, Urbano
executed a Deed of Quitclaim in favor of the heirs of
Honorato Maming (Maming), wherein he renounced all his
rights to the subject property and confirmed the sale made
5
by his father to Maming sometime in 1955 or 1956.
Subsequently, the heirs of Maming executed a deed of
absolute sale in favor of respondent Naguit who thereupon
started occupying the same. She constituted Manuel
Blanco, Jr. as her attorney-in-fact and administrator. The
administrator introduced improvements, planted trees, such
as mahogany, coconut and gemelina trees in addition to
existing coconut trees which were then 50 to 60 years old,
and paid the corresponding taxes due on the subject land.
At present, there are parcels of land surrounding the subject
land which have been issued titles by virtue of judicial
decrees. Naguit and her predecessors-in-interest have
occupied the land openly and in the concept of owner
without any objection from any private person or even the
government until she filed her application for registration.
After the presentation of evidence for Naguit, the public
prosecutor manifested that the government did not intend to
present any evidence while oppositor Jose Angeles, as
representative of the heirs of Rustico Angeles, failed to
appear during the trial despite notice. On September 27,
1997, the MCTC rendered a decision ordering that the
subject parcel be brought under the operation of the
Property Registration Decree or Presidential Decree (P.D.)
No. 1529 and that the title thereto registered and confirmed
6
in the name of Naguit.
The Republic of the Philippines (Republic), thru the Office of
the Solicitor General (OSG), filed a motion for
reconsideration. The OSG stressed that the land applied for
was declared alienable and disposable only on October 15,
1980, per the certification from Regional Executive Director
Raoul T. Geollegue of the Department of Environment and
7
Natural Resources, Region VI. However, the court denied
the motion for reconsideration in an order dated February
8
18, 1998. 1awphi1.nt

Thereafter, the Republic appealed the decision and the

order of the MCTC to the RTC, Kalibo, Aklan, Branch 8. On
February 26, 1999, the RTC rendered its decision,
9
dismissing the appeal.
Undaunted, the Republic elevated the case to the Court of
Appeals via Rule 42 of the 1997 Rules of Civil Procedure.
On July 12, 2000, the appellate court rendered a decision
dismissing the petition filed by the Republic and affirmed in
toto the assailed decision of the RTC.
Hence, the present petition for review raising a pure
question of law was filed by the Republic on September 4,
10
2000.
The OSG assails the decision of the Court of Appeals
contending that the appellate court gravely erred in holding
that there is no need for the governments prior release of
the subject lot from the public domain before it can be
considered alienable or disposable within the meaning of
P.D. No. 1529, and that Naguit had been in possession of
Lot No. 10049 in the concept of owner for the required
11
period.
Hence, the central question for resolution is whether is
necessary under Section 14(1) of the Property Registration
Decree that the subject land be first classified as alienable
and disposable before the applicants possession under a
bona fide claim of ownership could even start.
The OSG invokes our holding in Director of Lands v.
12
Intermediate Appellate Court in arguing that the property
which is in open, continuous and exclusive possession must
first be alienable. Since the subject land was declared
alienable only on October 15, 1980, Naguit could not have
maintained a bona fide claim of ownership since June 12,
1945, as required by Section 14 of the Property Registration
Decree, since prior to 1980, the land was not alienable or
disposable, the OSG argues.
Section 14 of the Property Registration Decree, governing
original registration proceedings, bears close examination. It
expressly 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) 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.
(2) Those who have acquired ownership over
private lands by prescription under the provisions
of existing laws.
....
There are three obvious requisites for the filing of an
application for registration of title under Section 14(1) that
the property in question is alienable and disposable land of
the public domain; that the applicants by themselves or
through their predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and
occupation, and; that such possession is under a bona fide
claim of ownership since June 12, 1945 or earlier.
Petitioner suggests an interpretation that the alienable and
disposable character of the land should have already been
established since June 12, 1945 or earlier. This is not borne
out by the plain meaning of Section 14(1). "Since June 12,
1945," as used in the provision, qualifies its antecedent
phrase "under a bonafide claim of ownership." Generally
speaking, qualifying words restrict or modify only the words
or phrases to which they are immediately associated, and
13
not those distantly or remotely located. Ad proximum
antecedents fiat relation nisi impediatur sentencia.
Besides, we are mindful of the absurdity that would result if
we adopt petitioners position. Absent a legislative
amendment, the rule would be, adopting the OSGs view,
that all lands of the public domain which were not declared
alienable or disposable before June 12, 1945 would not be
susceptible to original registration, no matter the length of
unchallenged possession by the occupant. Such

interpretation renders paragraph (1) of Section 14 virtually

inoperative and even precludes the government from giving
it effect even as it decides to reclassify public agricultural
lands as alienable and disposable. The unreasonableness
of the situation would even be aggravated considering that
before June 12, 1945, the Philippines was not yet even
considered an independent state.
Instead, the more reasonable interpretation of Section 14(1)
is that it merely requires the property sought to be
registered as already alienable and disposable at the time
the application for registration of title is filed. If the State, at
the time the application is made, has not yet deemed it
proper to release the property for alienation or disposition,
the presumption is that the government is still reserving the
right to utilize the property; hence, the need to preserve its
ownership in the State irrespective of the length of adverse
possession even if in good faith. However, if the property
has already been classified as alienable and disposable, as
it is in this case, then there is already an intention on the
part of the State to abdicate its exclusive prerogative over
the property.
This reading aligns conformably with our holding in Republic
14
v. Court of Appeals . Therein, the Court noted that "to
prove that the land subject of an application for registration
is alienable, an 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
15
investigators; and a legislative act or a statute." In that
case, the subject land had been certified by the DENR as
alienable and disposable in 1980, thus the Court concluded
that the alienable status of the land, compounded by the
established fact that therein respondents had occupied the
land even before 1927, sufficed to allow the application for
registration of the said property. In the case at bar, even the
petitioner admits that the subject property was released and
certified as within alienable and disposable zone in 1980 by
16
the DENR.
This case is distinguishable from Bracewell v. Court of
17
Appeals, wherein the Court noted that while the claimant

had been in possession since 1908, it was only in 1972 that

the lands in question were classified as alienable and
disposable. Thus, the bid at registration therein did not
succeed. In Bracewell, the claimant had filed his application
in 1963, or nine (9) years before the property was declared
alienable and disposable.1awphi1.nt Thus, in this case,
where the application was made years after the property
had been certified as alienable and disposable, the
Bracewell ruling does not apply.
18

A different rule obtains for forest lands, such as those

which form part of a reservation for provincial park
19
purposes the possession of which cannot ripen into
20
ownership. It is elementary in the law governing natural
resources that forest land cannot be owned by private
21
persons. As held in Palomo v. Court of Appeals, forest
land is not registrable and possession thereof, no matter
how lengthy, cannot convert it into private property, unless
such lands are reclassified and considered disposable and
22
alienable. In the case at bar, the property in question was
undisputedly classified as disposable and alienable; hence,
the ruling in Palomo is inapplicable, as correctly held by the
23
Court of Appeals.
It must be noted that the present case was decided by the
lower courts on the basis of Section 14(1) of the Property
Registration Decree, which pertains to original registration
through ordinary registration proceedings. The right to file
the application for registration derives from a bona fide
claim of ownership going back to June 12, 1945 or earlier,
by reason of the claimants open, continuous, exclusive and
notorious possession of alienable and disposable lands of
the public domain.
A similar right is given under Section 48(b) of the Public
Land Act, which reads:
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 those 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 xxx xxx
(b) Those who by themselves or through their predecessors
in interest have been in open, continuous, exclusive, and
notorious possession and occupation of agricultural lands of
the public domain, under a bona fide claim of acquisition of
ownership, for at least thirty years immediately preceding
the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be
conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a
certificate of title under the provisions of this chapter.
When the Public Land Act was first promulgated in 1936,
the period of possession deemed necessary to vest the right
to register their title to agricultural lands of the public domain
commenced from July 26, 1894. However, this period was
amended by R.A. No. 1942, which provided that the bona
fide claim of ownership must have been for at least thirty
(30) years. Then in 1977, Section 48(b) of the Public Land
Act was again amended, this time by P.D. No. 1073, which
pegged the reckoning date at June 12, 1945. This new
starting point is concordant with Section 14(1) of the
Property Registration Decree.
Indeed, there are no material differences between Section
14(1) of the Property Registration Decree and Section 48(b)
of the Public Land Act, as amended. True, the Public Land
Act does refer to "agricultural lands of the public domain,"
while the Property Registration Decree uses the term
"alienable and disposable lands of the public domain." It
must be noted though that the Constitution declares that
"alienable lands of the public domain shall be limited to
24
agricultural lands." Clearly, the subject lands under
Section 48(b) of the Public Land Act and Section 14(1) of
the Property Registration Decree are of the same type.
Did the enactment of the Property Registration Decree and
the amendatory P.D. No. 1073 preclude the application for
registration of alienable lands of the public domain,
possession over which commenced only after June 12,
1945? It did not, considering Section 14(2) of the Property
Registration Decree, which governs and authorizes the

application of "those who have acquired ownership of

private lands by prescription under the provisions of existing
laws."
Prescription is one of the modes of acquiring ownership
25
under the Civil Code. There is a consistent jurisprudential
rule that properties classified as alienable public land may
be converted into private property by reason of open,
continuous and exclusive possession of at least thirty (30)
26
years. With such conversion, such property may now fall
within the contemplation of "private lands" under Section
14(2), and thus susceptible to registration by those who
have acquired ownership through prescription. Thus, even if
possession of the alienable public land commenced on a
date later than June 12, 1945, and such possession being
been open, continuous and exclusive, then the possessor
may have the right to register the land by virtue of Section
14(2) of the Property Registration Decree.
The land in question was found to be cocal in nature, it
having been planted with coconut trees now over fifty years
27
old. The inherent nature of the land but confirms its
certification in 1980 as alienable, hence agricultural. There
is no impediment to the application of Section 14(1) of the
Property Registration Decree, as correctly accomplished by
the lower courts.l^vvphi1.net
The OSG posits that the Court of Appeals erred in holding
that Naguit had been in possession in the concept of owner
for the required period. The argument begs the question. It
is again hinged on the assertionshown earlier to be
unfoundedthat there could have been no bona fide claim
of ownership prior to 1980, when the subject land was
declared alienable or disposable.
We find no reason to disturb the conclusion of both the RTC
and the Court of Appeals that Naguit had the right to apply
for registration owing to the continuous possession by her
and her predecessors-in-interest of the land since 1945.
The basis of such conclusion is primarily factual, and the
Court generally respects the factual findings made by lower
courts. Notably, possession since 1945 was established
through proof of the existence of 50 to 60-year old trees at
the time Naguit purchased the property as well as tax

declarations executed by Urbano in 1945. Although tax

declarations and realty tax payment of property are not
conclusive evidence of ownership, nevertheless, they are
good indicia of the possession in the concept of owner for
no one in his right mind would be paying taxes for a
property that is not in his actual or at least constructive
possession. They constitute at least proof that the holder
has a claim of title over the property. The voluntary
declaration of a piece of property for taxation purposes
manifests not only ones sincere and honest desire to obtain
title to the property and announces his adverse claim
against the State and all other interested parties, but also
the intention to contribute needed revenues to the
Government. Such an act strengthens ones bona fide claim
28
of acquisition of ownership.
Considering that the possession of the subject parcel of
land by the respondent can be traced back to that of her
predecessors-in-interest which commenced since 1945 or
for almost fifty (50) years, it is indeed beyond any cloud of
doubt that she has acquired title thereto which may be
properly brought under the operation of the Torrens system.
That she has been in possession of the land in the concept
of an owner, open, continuous, peaceful and without any
opposition from any private person and the government
itself makes her right thereto undoubtedly settled and
deserving of protection under the law.
WHEREFORE, foregoing premises considered, the assailed
Decision of the Court of Appeals dated July 12, 2000 is
hereby AFFIRMED. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and ChicoNazario, JJ., concur.

G.R. No. 156117

May 26, 2005
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
JEREMIAS AND DAVID HERBIETO, respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari,
under Rule 45 of the 1997 Rules of Civil Procedure, seeking
the reversal of the Decision of the Court of Appeals in CA1
G.R. CV No. 67625, dated 22 November 2002, which
affirmed the Judgment of the Municipal Trial Court (MTC) of
2
Consolacion, Cebu, dated 21 December 1999, granting the
application for land registration of the respondents.
Respondents in the present Petition are the Herbieto
brothers, Jeremias and David, who filed with the MTC, on
23 September 1998, a single application for registration of
two parcels of land, Lots No. 8422 and 8423, located in
Cabangahan, Consolacion, Cebu (Subject Lots). They
claimed to be owners in fee simple of the Subject Lots,
which they purchased from their parents, spouses Gregorio
3
Herbieto and Isabel Owatan, on 25 June 1976. Together
with their application for registration, respondents submitted
the following set of documents:
(a) Advance Survey Plan of Lot No. 8422, in the
name of respondent Jeremias; and Advance
Survey Plan of Lot No. 8423, in the name of
4
respondent David;
5
(b) The technical descriptions of the Subject Lots;
(c) Certifications by the Department of
Environment and Natural Resources (DENR)
dispensing with the need for Surveyor's Certificates
6
for the Subject Lots;
(d) Certifications by the Register of Deeds of Cebu
City on the absence of certificates of title covering
7
the Subject Lots;
(e) Certifications by the Community Environment
and Natural Resources Office (CENRO) of the
DENR on its finding that the Subject Lots are
alienable and disposable, by virtue of Forestry

Administrative Order No. 4-1063, dated 25 June

8
1963;
(f) Certified True Copies of Assessment of Real
Property (ARP) No. 941800301831, in the name of
Jeremias, covering Lot No. 8422, issued in 1994;
and ARP No. 941800301833, in the name of
9
David, covering Lot No. 8423, also issued in 1994;
and
(g) Deed of Definite Sale executed on 25 June
1976 by spouses Gregorio Herbieto and Isabel
Owatan selling the Subject Lots and the
improvements thereon to their sons and
respondents herein, Jeremias and David, for
P1,000. Lot No. 8422 was sold to Jeremias, while
10
Lot No. 8423 was sold to David.
On 11 December 1998, the petitioner Republic of the
Philippines (Republic) filed an Opposition to the
respondents' application for registration of the Subject Lots
arguing that: (1) Respondents failed to comply with the
period of adverse possession of the Subject Lots required
by law; (2) Respondents' muniments of title were not
genuine and did not constitute competent and sufficient
evidence of bona fide acquisition of the Subject Lots; and
(3) The Subject Lots were part of the public domain
belonging to the Republic and were not subject to private
11
appropriation.
The MTC set the initial hearing on 03 September 1999 at
12
8:30 a.m. All owners of the land adjoining the Subject Lots
13
were sent copies of the Notice of Initial Hearing. A copy of
the Notice was also posted on 27 July 1999 in a
conspicuous place on the Subject Lots, as well as on the
bulletin board of the municipal building of Consolacion,
14
Cebu, where the Subject Lots were located. Finally, the
Notice was also published in the Official Gazette on 02
15
August 1999 and The Freeman Banat News on 19
16
December 1999.
During the initial hearing on 03 September 1999, the MTC
17
issued an Order of Special Default, with only petitioner
Republic opposing the application for registration of the
Subject Lots. The respondents, through their counsel,

proceeded to offer and mark documentary evidence to

prove jurisdictional facts. The MTC commissioned the Clerk
of Court to receive further evidence from the respondents
and to submit a Report to the MTC after 30 days.
On 21 December 1999, the MTC promulgated its Judgment
ordering the registration and confirmation of the title of
respondent Jeremias over Lot No. 8422 and of respondent
David over Lot No. 8423. It subsequently issued an Order
on 02 February 2000 declaring its Judgment, dated 21
December 1999, final and executory, and directing the
Administrator of the Land Registration Authority (LRA) to
18
issue a decree of registration for the Subject Lots.
Petitioner Republic appealed the MTC Judgment, dated 21
19
December 1999, to the Court of Appeals. The Court of
Appeals, in its Decision, dated 22 November 2002, affirmed
the appealed MTC Judgment reasoning thus:
In the case at bar, there can be no question that
the land sought to be registered has been
classified as within the alienable and disposable
zone since June 25, 1963. Article 1113 in relation
to Article 1137 of the Civil Code, respectively
provides that "All things which are within the
commerce of men are susceptible of prescription,
unless otherwise provided. Property of the State or
any of its subdivisions of patrimonial character
shall not be the object of prescription" and that
"Ownership and other real rights over immovables
also prescribe through uninterrupted adverse
possession thereof for thirty years, without need of
title or of good faith."
As testified to by the appellees in the case at
bench, their parents already acquired the subject
parcels of lands, subject matter of this application,
since 1950 and that they cultivated the same and
planted it with jackfruits, bamboos, coconuts, and
other trees (Judgment dated December 21, 1999,
p. 6). In short, it is undisputed that herein appellees
or their predecessors-in-interest had occupied and
possessed the subject land openly, continuously,

exclusively, and adversely since 1950.

Consequently, even assuming arguendo that
appellees' possession can be reckoned only from
June 25, 1963 or from the time the subject lots had
been classified as within the alienable and
disposable zone, still the argument of the appellant
does not hold water.
As earlier stressed, the subject property, being
alienable since 1963 as shown by CENRO Report
dated June 23, 1963, may now be the object of
prescription, thus susceptible of private ownership.
By express provision of Article 1137, appellees
are, with much greater right, entitled to apply for its
registration, as provided by Section 14(4) of P.D.
1529 which allows individuals to own land in any
manner provided by law. Again, even considering
that possession of appelless should only be
reckoned from 1963, the year when CENRO
declared the subject lands alienable, herein
appellees have been possessing the subject
parcels of land in open, continuous, and in the
concept of an owner, for 35 years already when
they filed the instant application for registration of
title to the land in 1998. As such, this court finds no
20
reason to disturb the finding of the court a quo.
The Republic filed the present Petition for the review and
reversal of the Decision of the Court of Appeals, dated 22
November 2002, on the basis of the following arguments:
First, respondents failed to establish that they and their
predecessors-in-interest had been in open, continuous, and
adverse possession of the Subject Lots in the concept of
owners since 12 June 1945 or earlier. According to the
petitioner Republic, possession of the Subject Lots prior to 25
June 1963 cannot be considered in determining compliance
with the periods of possession required by law. The Subject
Lots were classified as alienable and disposable only on 25
June 1963, per CENRO's certification. It also alleges that the
Court of Appeals, in applying the 30-year acquisitive
prescription period, had overlooked the ruling in Republic v.
21
Doldol, where this Court declared that Commonwealth Act

No. 141, otherwise known as the Public Land Act, as

amended and as it is presently phrased, requires that
possession of land of the public domain must be from 12 June
1945 or earlier, for the same to be acquired through judicial
confirmation of imperfect title.
Second, the application for registration suffers from fatal
infirmity as the subject of the application consisted of two
parcels of land individually and separately owned by two
applicants. Petitioner Republic contends that it is implicit in
the provisions of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree, as amended,
that the application for registration of title to land shall be filed
by a single applicant; multiple applicants may file a single
application only in case they are co-owners. While an
application may cover two parcels of land, it is allowed only
when the subject parcels of land belong to the same applicant
or applicants (in case the subject parcels of land are coowned) and are situated within the same province. Where the
authority of the courts to proceed is conferred by a statute
and when the manner of obtaining jurisdiction is mandatory,
it must be strictly complied with or the proceedings will be
utterly void. Since the respondents failed to comply with the
procedure for land registration under the Property
Registration Decree, the proceedings held before the MTC is
void, as the latter did not acquire jurisdiction over it.
I
Jurisdiction
Addressing first the issue of jurisdiction, this Court finds that
the MTC had no jurisdiction to proceed with and hear the
application for registration filed by the respondents but for
reasons different from those presented by petitioner
Republic.
A. The misjoinder of causes of action and parties does not
affect the jurisdiction of the MTC to hear and proceed with
respondents' application for registration.
Respondents filed a single application for registration of the
Subject Lots even though they were not co-owners.
Respondents Jeremias and David were actually seeking the
individual and separate registration of Lots No. 8422 and

8423, respectively.
Petitioner Republic believes that the procedural irregularity
committed by the respondents was fatal to their case,
depriving the MTC of jurisdiction to proceed with and hear
their application for registration of the Subject Lots, based
on this Court's pronouncement in Director of Lands v. Court
22
of Appeals, to wit:
. . . In view of these multiple omissions which
constitute non-compliance with the above-cited
sections of the Act, We rule that said defects have
not invested the Court with the authority or
jurisdiction to proceed with the case because the
manner or mode of obtaining jurisdiction as
prescribed by the statute which is mandatory has
not been strictly followed, thereby rendering all
proceedings utterly null and void.
This Court, however, disagrees with petitioner Republic in
this regard. This procedural lapse committed by the
respondents should not affect the jurisdiction of the MTC to
proceed with and hear their application for registration of the
Subject Lots.
23

The Property Registration Decree recognizes and

expressly allows the following situations: (1) the filing of a
single application by several applicants for as long as they
are co-owners of the parcel of land sought to be
24
registered; and (2) the filing of a single application for
registration of several parcels of land provided that the
25
same are located within the same province. The Property
Registration Decree is silent, however, as to the present
situation wherein two applicants filed a single application for
two parcels of land, but are seeking the separate and
individual registration of the parcels of land in their
respective names.
Since the Property Registration Decree failed to provide for
such a situation, then this Court refers to the Rules of Court
to determine the proper course of action. Section 34 of the
Property Registration Decree itself provides that, "[t]he
Rules of Court shall, insofar as not inconsistent with the

provisions of this Decree, be applicable to land registration

and cadastral cases by analogy or in a suppletory character
and whenever practicable and convenient."
Considering every application for land registration filed in
strict accordance with the Property Registration Decree as a
single cause of action, then the defect in the joint application
for registration filed by the respondents with the MTC
constitutes a misjoinder of causes of action and parties.
Instead of a single or joint application for registration,
respondents Jeremias and David, more appropriately,
should have filed separate applications for registration of
Lots No. 8422 and 8423, respectively.
Misjoinder of causes of action and parties do not involve a
question of jurisdiction of the court to hear and proceed with
26
the case. They are not even accepted grounds for
27
dismissal thereof. Instead, under the Rules of Court, the
misjoinder of causes of action and parties involve an implied
admission of the court's jurisdiction. It acknowledges the
power of the court, acting upon the motion of a party to the
case or on its own initiative, to order the severance of the
misjoined cause of action, to be proceeded with separately
(in case of misjoinder of causes of action); and/or the
dropping of a party and the severance of any claim against
said misjoined party, also to be proceeded with separately
(in case of misjoinder of parties).
The misjoinder of causes of action and parties in the
present Petition may have been corrected by the MTC motu
propio or on motion of the petitioner Republic. It is
regrettable, however, that the MTC failed to detect the
misjoinder when the application for registration was still
pending before it; and more regrettable that the petitioner
Republic did not call the attention of the MTC to the fact by
filing a motion for severance of the causes of action and
parties, raising the issue of misjoinder only before this
Court.
B. Respondents, however, failed to comply with the
publication requirements mandated by the Property
Registration Decree, thus, the MTC was not invested with
jurisdiction as a land registration court.

Although the misjoinder of causes of action and parties in

the present Petition did not affect the jurisdiction of the MTC
over the land registration proceeding, this Court,
nonetheless, has discovered a defect in the publication of
the Notice of Initial Hearing, which bars the MTC from
assuming jurisdiction to hear and proceed with respondents'
application for registration.
28

A land registration case is a proceeding in rem, and

jurisdiction in rem cannot be acquired unless there be
constructive seizure of the land through publication and
29
service of notice.
Section 23 of the Property Registration Decree requires that
the public be given Notice of the Initial Hearing of the
application for land registration by means of (1) publication;
(2) mailing; and (3) posting. Publication of the Notice of
Initial Hearing shall be made in the following manner:
1. By publication.
Upon receipt of the order of the court setting the
time for initial hearing, the Commissioner of Land
Registration shall cause a notice of initial hearing
to be published once in the Official Gazette and
once in a newspaper of general circulation in the
Philippines: Provided, however, that the publication
in the Official Gazette shall be sufficient to confer
jurisdiction upon the court. Said notice shall be
addressed to all persons appearing to have an
interest in the land involved including the adjoining
owners so far as known, and "to all whom it may
concern." Said notice shall also require all persons
concerned to appear in court at a certain date and
time to show cause why the prayer of said
application shall not be granted.
Even as this Court concedes that the aforequoted Section
23(1) of the Property Registration Decree expressly
provides that publication in the Official Gazette shall be
sufficient to confer jurisdiction upon the land registration
court, it still affirms its declaration in Director of Lands v.
30
Court of Appeals that publication in a newspaper of

general circulation is mandatory for the land registration

court to validly confirm and register the title of the applicant
or applicants. That Section 23 of the Property Registration
Decree enumerated and described in detail the
requirements of publication, mailing, and posting of the
Notice of Initial Hearing, then all such requirements,
including publication of the Notice in a newspaper of general
circulation, is essential and imperative, and must be strictly
complied with. In the same case, this Court expounded on
the reason behind the compulsory publication of the Notice
of Initial Hearing in a newspaper of general circulation, thus

It may be asked why publication in a newspaper of

general circulation should be deemed mandatory
when the law already requires notice by publication
in the Official Gazette as well as by mailing and
posting, all of which have already been complied
with in the case at hand. The reason is due
process and the reality that the Official Gazette is
not as widely read and circulated as newspaper
and is oftentimes delayed in its circulation, such
that the notices published therein may not reach
the interested parties on time, if at all. Additionally,
such parties may not be owners of neighboring
properties, and may in fact not own any other real
estate. In sum, the all encompassing in rem nature
of land registration cases, the consequences of
default orders issued against the whole world and
the objective of disseminating the notice in as wide
a manner as possible demand a mandatory
construction of the requirements for publication,
31
mailing and posting.
In the instant Petition, the initial hearing was set by the
MTC, and was in fact held, on 03 September 1999 at 8:30
a.m. While the Notice thereof was printed in the issue of the
Official Gazette, dated 02 August 1999, and officially
released on 10 August 1999, it was published in The
Freeman Banat News, a daily newspaper printed in Cebu
City and circulated in the province and cities of Cebu and in
the rest of Visayas and Mindanao, only on 19 December
1999, more than three months after the initial hearing.

Indubitably, such publication of the Notice, way after the

date of the initial hearing, would already be worthless and
ineffective. Whoever read the Notice as it was published in
The Freeman Banat News and had a claim to the Subject
Lots was deprived of due process for it was already too late
for him to appear before the MTC on the day of the initial
hearing to oppose respondents' application for registration,
and to present his claim and evidence in support of such
claim. Worse, as the Notice itself states, should the
claimant-oppositor fail to appear before the MTC on the
date of initial hearing, he would be in default and would
forever be barred from contesting respondents' application
for registration and even the registration decree that may be
issued pursuant thereto. In fact, the MTC did issue an Order
of Special Default on 03 September 1999.
The late publication of the Notice of Initial Hearing in the
newspaper of general circulation is tantamount to no
publication at all, having the same ultimate result. Owing to
such defect in the publication of the Notice, the MTC failed
to constructively seize the Subject Lots and to acquire
jurisdiction over respondents' application for registration
thereof. Therefore, the MTC Judgment, dated 21 December
1999, ordering the registration and confirmation of the title
of respondents Jeremias and David over Lots No. 8422 and
8423, respectively; as well as the MTC Order, dated 02
February 2000, declaring its Judgment of 21 December
1999 final and executory, and directing the LRA
Administrator to issue a decree of registration for the
Subject Lots, are both null and void for having been issued
by the MTC without jurisdiction.
II
Period of Possession
Respondents failed to comply with the required period of
possession of the Subject Lots for the judicial confirmation or
legalization of imperfect or incomplete title.
While this Court has already found that the MTC did not have
jurisdiction to hear and proceed with respondents' application
for registration, this Court nevertheless deems it necessary
to resolve the legal issue on the required period of
possession for acquiring title to public land.

Respondents' application filed with the MTC did not state the
statutory basis for their title to the Subject Lots. They only
alleged therein that they obtained title to the Subject Lots by
purchase from their parents, spouses Gregorio Herbieto and
Isabel Owatan, on 25 June 1976. Respondent Jeremias, in
his testimony, claimed that his parents had been in
possession of the Subject Lots in the concept of an owner
32
since 1950.
Yet, according to the DENR-CENRO Certification, submitted
by respondents themselves, the Subject Lots are "within
Alienable and Disposable, Block I, Project No. 28 per LC Map
No. 2545 of Consolacion, Cebu certified under Forestry
Administrative Order No. 4-1063, dated June 25, 1963.
Likewise, it is outside Kotkot-Lusaran Mananga Watershed
Forest Reservation per Presidential Proclamation No. 932
33
dated June 29, 1992." The Subject Lots are thus clearly part
of the public domain, classified as alienable and disposable
as of 25 June 1963.
As already well-settled in jurisprudence, no public land can
be acquired by private persons without any grant, express or
34
implied, from the government; and it is indispensable that
the person claiming title to public land should show that his
title was acquired from the State or any other mode of
35
acquisition recognized by law.
The Public Land Act, as amended, governs lands of the
public domain, except timber and mineral lands, friar lands,
36
and privately-owned lands which reverted to the State. It
explicitly enumerates the means by which public lands may
be disposed, as follows:
(1) For homestead settlement;
(2) By sale;
(3) By lease;
(4) By confirmation of imperfect or incomplete titles;
(a) By judicial legalization; or
(b) By administrative legalization (free
37
patent).
Each mode of disposition is appropriately covered by
separate chapters of the Public Land Act because there are

specific requirements and application procedure for every

38
mode. Since respondents herein filed their application
39
before the MTC, then it can be reasonably inferred that they
are seeking the judicial confirmation or legalization of their
imperfect or incomplete title over the Subject Lots.
Judicial confirmation or legalization of imperfect or
40
incomplete title to land, not exceeding 144 hectares, may
be availed of by persons identified under Section 48 of the
Public Land Act, as amended by Presidential Decree No.
1073, which reads
Section 48. The following-described citizens of the
Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest
therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance
of the province where the land is located for
confirmation of their claims and the issuance of a
certificate of title thereafter, under the Land
Registration Act, to wit:
(a) [Repealed by Presidential Decree No. 1073].
(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 applications
for confirmation of title, except when prevented by
war or force majeure. These shall be conclusively
presumed to have performed all the conditions
essential to a Government grant and shall be
entitled to a certificate of title under the provisions of
this chapter.
(c) Members of the national cultural minorities who
by themselves or through their predecessors-ininterest have been in open, continuous, exclusive
and notorious possession and occupation of lands
of the public domain suitable to agriculture whether

disposable or not, under a bona fide claim of

ownership since June 12, 1945 shall be entitled to
the rights granted in subsection (b) hereof.
Not being members of any national cultural minorities,
respondents may only be entitled to judicial confirmation or
legalization of their imperfect or incomplete title under
Section 48(b) of the Public Land Act, as amended. Section
48(b), as amended, now requires adverse possession of the
land since 12 June 1945 or earlier. In the present Petition, the
Subject Lots became alienable and disposable only on 25
June 1963. Any period of possession prior to the date when
the Subject Lots were classified as alienable and disposable
is inconsequential and should be excluded from the
computation of the period of possession; such possession
can never ripen into ownership and unless the land had been
classified as alienable and disposable, the rules on
41
confirmation of imperfect title shall not apply thereto. It is
very apparent then that respondents could not have complied
with the period of possession required by Section 48(b) of the
Public Land Act, as amended, to acquire imperfect or
incomplete title to the Subject Lots that may be judicially
confirmed or legalized.
The confirmation of respondents' title by the Court of Appeals
was based on the erroneous supposition that respondents
were claiming title to the Subject Lots under the Property
Registration Decree. According to the Decision of the Court
of Appeals, dated 22 November 2002, Section 14(4) of the
Property Registration Decree allows individuals to own land
in any other manner provided by law. It then ruled that the
respondents, having possessed the Subject Lots, by
themselves and through their predecessors-in-interest, since
25 June 1963 to 23 September 1998, when they filed their
application, have acquired title to the Subject Lots by
extraordinary prescription under Article 1113, in relation to
42
Article 1137, both of the Civil Code.
The Court of Appeals overlooked the difference between the
Property Registration Decree and the Public Land Act. Under
the Property Registration Decree, there already exists a title
which is confirmed by the court; while under the Public Land
Act, the presumption always is that the land applied for

pertains to the State, and that the occupants and possessors

only claim an interest in the same by virtue of their imperfect
43
title or continuous, open, and notorious possession. As
established by this Court in the preceding paragraphs, the
Subject Lots respondents wish to register are undoubtedly
alienable and disposable lands of the public domain and
respondents may have acquired title thereto only under the
provisions of the Public Land Act.
However, it must be clarified herein that even though
respondents may acquire imperfect or incomplete title to the
Subject Lots under the Public Land Act, their application for
judicial confirmation or legalization thereof must be in
accordance with the Property Registration Decree, for
Section 50 of the Public Land Act reads
SEC. 50. Any person or persons, or their legal
representatives or successors in right, claiming any
lands or interest in lands under the provisions of this
chapter, must in every case present an application
to the proper Court of First Instance, praying that the
validity of the alleged title or claim be inquired into
and that a certificate of title be issued to them under
44
the provisions of the Land Registration Act.
Hence, respondents' application for registration of the
Subject Lots must have complied with the substantial
requirements under Section 48(b) of the Public Land Act and
the procedural requirements under the Property Registration
Decree.
Moreover, provisions of the Civil Code on prescription of
ownership and other real rights apply in general to all types
of land, while the Public Land Act specifically governs lands
of the public domain. Relative to one another, the Public Land
45
Act may be considered a special law that must take
precedence over the Civil Code, a general law. It is an
established rule of statutory construction that between a
general law and a special law, the special law prevails
46
Generalia specialibus non derogant.
WHEREFORE, based on the foregoing, the instant Petition is
GRANTED. The Decision of the Court of Appeals in CA-G.R.

CV No. 67625, dated 22 November 2002, is REVERSED.

The Judgment of the MTC of Consolacion, Cebu in LRC Case
No. N-75, dated 21 December 1999, and its Order, dated 02
February 2000 are declared NULL AND VOID. Respondents'
application for registration is DISMISSED.
SO ORDERED.
Puno, Acting C.J., (Chairman), Austria-Martinez, and Callejo,
Sr., JJ., concur.
Tinga, J., out of the country.

G.R. No. 179987

September 3, 2013
HEIRS OF MARIO MALABANAN, (Represented by Sally
A. Malabanan), Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, Respondent.
RESOLUTION
BERSAMIN, J.:
For our consideration and resolution are the motions for
reconsideration of the parties who both assail the decision
promulgated on April 29, 2009, whereby we upheld the
ruling of the Court of Appeals (CA) denying the application
of the petitioners for the registration of a parcel of land
situated in Barangay Tibig, Silang, Cavite on the ground that
they had not established by sufficient evidence their right to
the registration in accordance with either Section 14(1) or
Section 14(2) of Presidential Decree No. 1529 (Property
Registration Decree).
Antecedents
The property subject of the application for registration is a
parcel of land situated in Barangay Tibig, Silang Cavite,
more particularly identified as Lot 9864-A, Cad-452-D, with
an area of 71,324-square meters. On February 20, 1998,
applicant Mario Malabanan, who had purchased the
property from Eduardo Velazco, filed an application for land
registration covering the property in the Regional Trial Court
(RTC) in Tagaytay City, Cavite, claiming that the property
formed part of the alienable and disposable land of the
public domain, and that he and his predecessors-in-interest
had been in open, continuous, uninterrupted, public and
adverse possession and occupation of the land for more
than 30 years, thereby entitling him to the judicial
1
confirmation of his title.
To prove that the property was an alienable and disposable
land of the public domain, Malabanan presented during trial
a certification dated June 11, 2001 issued by the
Community Environment and Natural Resources Office
(CENRO) of the Department of Environment and Natural
Resources (DENR), which reads:

This is to certify that the parcel of land designated as Lot

No. 9864 Cad 452-D, Silang Cadastre as surveyed for Mr.
Virgilio Velasco located at Barangay Tibig, Silang, Cavite
containing an area of 249,734 sq. meters as shown and
described on the Plan Ap-04-00952 is verified to be within
the Alienable or Disposable land per Land Classification
Map No. 3013 established under Project No. 20-A and
2
approved as such under FAO 4-1656 on March 15, 1982.

possession prior to the classification of the land as alienable

and disposable was inconsequential and should be
excluded from the computation of the period of possession.
Noting that the CENRO-DENR certification stated that the
property had been declared alienable and disposable only
on March 15, 1982, Velazcos possession prior to March 15,
1982 could not be tacked for purposes of computing
Malabanans period of possession.

After trial, on December 3, 2002, the RTC rendered

judgment granting Malabanans application for land
registration, disposing thusly:

Due to Malabanans intervening demise during the appeal in

the CA, his heirs elevated the CAs decision of February 23,
2007 to this Court through a petition for review on certiorari.

WHEREFORE, this Court hereby approves this application

for registration and thus places under the operation of Act
141, Act 496 and/or P.D. 1529, otherwise known as
Property Registration Law, the lands described in Plan Csd04-0173123-D, Lot 9864-A and containing an area of
Seventy One Thousand Three Hundred Twenty Four
(71,324) Square Meters, as supported by its technical
description now forming part of the record of this case, in
addition to other proofs adduced in the name of MARIO
MALABANAN, who is of legal age, Filipino, widower, and
with residence at Munting Ilog, Silang, Cavite.

The petitioners assert that the ruling in Republic v. Court of

5
Appeals and Corazon Naguit (Naguit) remains the
controlling doctrine especially if the property involved is
agricultural land. In this regard, Naguit ruled that any
possession of agricultural land prior to its declaration as
alienable and disposable could be counted in the reckoning
of the period of possession to perfect title under the Public
Land Act (Commonwealth Act No. 141) and the Property
Registration Decree. They point out that the ruling in
Herbieto, to the effect that the declaration of the land
subject of the application for registration as alienable and
disposable should also date back to June 12, 1945 or
earlier, was a mere obiter dictum considering that the land
registration proceedings therein were in fact found and
declared void ab initio for lack of publication of the notice of
initial hearing.

Once this Decision becomes final and executory, the

corresponding decree of registration shall forthwith issue.
SO ORDERED.

The Office of the Solicitor General (OSG) appealed the

judgment to the CA, arguing that Malabanan had failed to
prove that the property belonged to the alienable and
disposable land of the public domain, and that the RTC
erred in finding that he had been in possession of the
property in the manner and for the length of time required by
law for confirmation of imperfect title.
On February 23, 2007, the CA promulgated its decision
reversing the RTC and dismissing the application for
registration of Malabanan. Citing the ruling in Republic v.
4
Herbieto (Herbieto), the CA declared that under Section
14(1) of the Property Registration Decree, any period of

The petitioners also rely on the ruling in Republic v. T.A.N.

6
Properties, Inc. to support their argument that the property
had been ipso jure converted into private property by reason
of the open, continuous, exclusive and notorious possession
by their predecessors-in-interest of an alienable land of the
public domain for more than 30 years. According to them,
what was essential was that the property had been
"converted" into private property through prescription at the
time of the application without regard to whether the
property sought to be registered was previously classified
as agricultural land of the public domain.
As earlier stated, we denied the petition for review on

certiorari because Malabanan failed to establish by

sufficient evidence possession and occupation of the
property on his part and on the part of his predecessors-in
interest since June 12, 1945, or earlier.
Petitioners Motion for Reconsideration
In their motion for reconsideration, the petitioners submit
that the mere classification of the land as alienable or
disposable should be deemed sufficient to convert it into
patrimonial property of the State. Relying on the rulings in
7
8
Spouses De Ocampo v. Arlos, Menguito v. Republic and
9
Republic v. T.A.N. Properties, Inc., they argue that the
reclassification of the land as alienable or disposable
opened it to acquisitive prescription under the Civil Code;
that Malabanan had purchased the property from Eduardo
Velazco believing in good faith that Velazco and his
predecessors-in-interest had been the real owners of the
land with the right to validly transmit title and ownership
thereof; that consequently, the ten-year period prescribed
by Article 1134 of the Civil Code, in relation to Section 14(2)
of the Property Registration Decree, applied in their favor;
and that when Malabanan filed the application for
registration on February 20, 1998, he had already been in
possession of the land for almost 16 years reckoned from
1982, the time when the land was declared alienable and
disposable by the State.
The Republics Motion for Partial Reconsideration
The Republic seeks the partial reconsideration in order to
obtain a clarification with reference to the application of the
rulings in Naguit and Herbieto.
Chiefly citing the dissents, the Republic contends that the
decision has enlarged, by implication, the interpretation of
Section 14(1) of the Property Registration Decree through
judicial legislation. It reiterates its view that an applicant is
entitled to registration only when the land subject of the
application had been declared alienable and disposable
since June 12, 1945 or earlier.

Ruling
We deny the motions for reconsideration.
In reviewing the assailed decision, we consider to be
imperative to discuss the different classifications of land in
relation to the existing applicable land registration laws of
the Philippines.
Classifications of land according to ownership
10

Land, which is an immovable property, may be classified

11
as either of public dominion or of private ownership. Land
is considered of public dominion if it either: (a) is intended
for public use; or (b) belongs to the State, without being for
public use, and is intended for some public service or for the
12
development of the national wealth. Land belonging to the
State that is not of such character, or although of such
character but no longer intended for public use or for public
13
service forms part of the patrimonial property of the State.
Land that is other than part of the patrimonial property of the
State, provinces, cities and municipalities is of private
ownership if it belongs to a private individual.
Pursuant to the Regalian Doctrine (Jura Regalia), a legal
concept first introduced into the country from the West by
Spain through the Laws of the Indies and the Royal
14
Cedulas, all lands of the public domain belong to the
15
State. This means that the State is the source of any
asserted right to ownership of land, and is charged with the
16
conservation of such patrimony.
All lands not appearing to be clearly under private
ownership are presumed to belong to the State. Also, public
lands remain part of the inalienable land of the public
domain unless the State is shown to have reclassified or
17
alienated them to private persons.
Classifications of public lands
according to alienability
Whether or not land of the public domain is alienable and
disposable primarily rests on the classification of public

lands made under the Constitution. Under the 1935

18
Constitution, lands of the public domain were classified
19
into three, namely, agricultural, timber and mineral.
Section 10, Article XIV of the 1973 Constitution classified
lands of the public domain into seven, specifically,
agricultural, industrial or commercial, residential,
resettlement, mineral, timber or forest, and grazing land,
with the reservation that the law might provide other
classifications. The 1987 Constitution adopted the
classification under the 1935 Constitution into agricultural,
20
forest or timber, and mineral, but added national parks.
Agricultural lands may be further classified by law according
21
to the uses to which they may be devoted. The
identification of lands according to their legal classification is
done exclusively by and through a positive act of the
22
Executive Department.
Based on the foregoing, the Constitution places a limit on
the type of public land that may be alienated. Under Section
2, Article XII of the 1987 Constitution, only agricultural lands
of the public domain may be alienated; all other natural
resources may not be.
Alienable and disposable lands of the State fall into two
categories, to wit: (a) patrimonial lands of the State, or those
classified as lands of private ownership under Article 425 of
23
the Civil Code, without limitation; and (b) lands of the
public domain, or the public lands as provided by the
Constitution, but with the limitation that the lands must only
be agricultural. Consequently, lands classified as forest or
timber, mineral, or national parks are not susceptible of
alienation or disposition unless they are reclassified as
24
agricultural. A positive act of the Government is necessary
25
to enable such reclassification, and the exclusive
prerogative to classify public lands under existing laws is
26
vested in the Executive Department, not in the courts. If,
however, public land will be classified as neither agricultural,
forest or timber, mineral or national park, or when public
land is no longer intended for public service or for the
development of the national wealth, thereby effectively
removing the land from the ambit of public dominion, a
declaration of such conversion must be made in the form of
a law duly enacted by Congress or by a Presidential

proclamation in cases where the President is duly

27
authorized by law to that effect. Thus, until the Executive
Department exercises its prerogative to classify or reclassify
lands, or until Congress or the President declares that the
State no longer intends the land to be used for public
service or for the development of national wealth, the
Regalian Doctrine is applicable.
Disposition of alienable public lands
Section 11 of the Public Land Act (CA No. 141) provides the
manner by which alienable and disposable lands of the
public domain, i.e., agricultural lands, can be disposed of, to
wit:
Section 11. Public lands suitable for agricultural
purposes can be disposed of only as follows, and
not otherwise:
(1) For homestead settlement;
(2) By sale;
(3) By lease; and
(4) By confirmation of imperfect or incomplete
titles;
(a) By judicial legalization; or
(b) By administrative legalization (free
patent).
The core of the controversy herein lies in the proper
interpretation of Section 11(4), in relation to Section 48(b) of
the Public Land Act, which expressly requires possession
by a Filipino citizen of the land since June 12, 1945, or
earlier, viz:
Section 48. The following-described citizens of the
Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but
whose titles have not been perfected or completed, may
apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the

issuance of a certificate of title thereafter, under the Land

Registration Act, to wit:
xxxx
(b) Those who by themselves or through their
predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation of
alienable and disposable lands of the public domain, under
a bona fide claim of acquisition of ownership, since June 12,
1945, or earlier, immediately preceding the filing of the
applications 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. (Bold emphasis
supplied)
Note that Section 48(b) of the Public Land Act used the
words "lands of the public domain" or "alienable and
disposable lands of the public domain" to clearly signify that
lands otherwise classified, i.e., mineral, forest or timber, or
national parks, and lands of patrimonial or private
ownership, are outside the coverage of the Public Land Act.
What the law does not include, it excludes. The use of the
descriptive phrase "alienable and disposable" further limits
the coverage of Section 48(b) to only the agricultural lands
of the public domain as set forth in Article XII, Section 2 of
the 1987 Constitution. Bearing in mind such limitations
under the Public Land Act, the applicant must satisfy the
following requirements in order for his application to come
28
under Section 14(1) of the Property Registration Decree,
to wit:
1. The applicant, by himself or through his
predecessor-in-interest, has been in possession
and occupation of the property subject of the
application;

taken place since June 12, 1945, or earlier; and

5. The property subject of the application must be
an agricultural land of the public domain.
Taking into consideration that the Executive Department is
vested with the authority to classify lands of the public
domain, Section 48(b) of the Public Land Act, in relation to
Section 14(1) of the Property Registration Decree,
presupposes that the land subject of the application for
registration must have been already classified as
agricultural land of the public domain in order for the
provision to apply. Thus, absent proof that the land is
already classified as agricultural land of the public domain,
the Regalian Doctrine applies, and overcomes the
presumption that the land is alienable and disposable as
laid down in Section 48(b) of the Public Land Act. However,
emphasis is placed on the requirement that the
classification required by Section 48(b) of the Public Land
Act is classification or reclassification of a public land as
agricultural.
The dissent stresses that the classification or
reclassification of the land as alienable and disposable
agricultural land should likewise have been made on June
12, 1945 or earlier, because any possession of the land
prior to such classification or reclassification produced no
legal effects. It observes that the fixed date of June 12,
1945 could not be minimized or glossed over by mere
judicial interpretation or by judicial social policy concerns,
and insisted that the full legislative intent be respected.

3. The possession and occupation must be under a

bona fide claim of acquisition of ownership;

We find, however, that the choice of June 12, 1945 as the

reckoning point of the requisite possession and occupation
was the sole prerogative of Congress, the determination of
which should best be left to the wisdom of the lawmakers.
Except that said date qualified the period of possession and
occupation, no other legislative intent appears to be
associated with the fixing of the date of June 12, 1945.
Accordingly, the Court should interpret only the plain and
literal meaning of the law as written by the legislators.

4. The possession and occupation must have

Moreover, an examination of Section 48(b) of the Public

2. The possession and occupation must be open,

continuous, exclusive, and notorious;

Land Act indicates that Congress prescribed no requirement

that the land subject of the registration should have been
classified as agricultural since June 12, 1945, or earlier. As
such, the applicants imperfect or incomplete title is derived
only from possession and occupation since June 12, 1945,
or earlier. This means that the character of the property
subject of the application as alienable and disposable
agricultural land of the public domain determines its
eligibility for land registration, not the ownership or title over
it.
Alienable public land held by a possessor, either personally
or through his predecessors-in-interest, openly,
continuously and exclusively during the prescribed statutory
period is converted to private property by the mere lapse or
29
completion of the period. In fact, by virtue of this doctrine,
corporations may now acquire lands of the public domain for
as long as the lands were already converted to private
ownership, by operation of law, as a result of satisfying the
requisite period of possession prescribed by the Public Land
30
Act. It is for this reason that the property subject of the
application of Malabanan need not be classified as alienable
and disposable agricultural land of the public domain for the
entire duration of the requisite period of possession.
To be clear, then, the requirement that the land should have
been classified as alienable and disposable agricultural land
at the time of the application for registration is necessary
only to dispute the presumption that the land is inalienable.
The declaration that land is alienable and disposable also
serves to determine the point at which prescription may run
against the State. The imperfect or incomplete title being
confirmed under Section 48(b) of the Public Land Act is title
that is acquired by reason of the applicants possession and
occupation of the alienable and disposable agricultural land
of the public domain. Where all the necessary requirements
for a grant by the Government are complied with through
actual physical, open, continuous, exclusive and public
possession of an alienable and disposable land of the public
domain, the possessor is deemed to have acquired by
operation of law not only a right to a grant, but a grant by
the Government, because it is not necessary that a

certificate of title be issued in order that such a grant be

31
sanctioned by the courts.
If one follows the dissent, the clear objective of the Public
Land Act to adjudicate and quiet titles to unregistered lands
in favor of qualified Filipino citizens by reason of their
occupation and cultivation thereof for the number of years
32
prescribed by law will be defeated. Indeed, we should
always bear in mind that such objective still prevails, as a
fairly recent legislative development bears out, when
33
Congress enacted legislation (Republic Act No. 10023) in
order to liberalize stringent requirements and procedures in
the adjudication of alienable public land to qualified
applicants, particularly residential lands, subject to area
34
limitations.
On the other hand, if a public land is classified as no longer
intended for public use or for the development of national
wealth by declaration of Congress or the President, thereby
converting such land into patrimonial or private land of the
State, the applicable provision concerning disposition and
registration is no longer Section 48(b) of the Public Land Act
but the Civil Code, in conjunction with Section 14(2) of the
35
Property Registration Decree. As such, prescription can
now run against the State.
To sum up, we now observe the following rules relative to
the disposition of public land or lands of the public domain,
namely:
(1) As a general rule and pursuant to the Regalian
Doctrine, all lands of the public domain belong to
the State and are inalienable. Lands that are not
clearly under private ownership are also presumed
to belong to the State and, therefore, may not be
alienated or disposed;
(2) The following are excepted from the general
rule, to wit:
(a) Agricultural lands of the public domain
are rendered alienable and disposable
through any of the exclusive modes
enumerated under Section 11 of the

Public Land Act. If the mode is judicial

confirmation of imperfect title under
Section 48(b) of the Public Land Act, the
agricultural land subject of the application
needs only to be classified as alienable
and disposable as of the time of the
application, provided the applicants
possession and occupation of the land
dated back to June 12, 1945, or earlier.
Thereby, a conclusive presumption that
the applicant has performed all the
conditions essential to a government
36
grant arises, and the applicant becomes
the owner of the land by virtue of an
imperfect or incomplete title. By legal
fiction, the land has already ceased to be
part of the public domain and has become
37
private property.
(b) Lands of the public domain
subsequently classified or declared as no
longer intended for public use or for the
development of national wealth are
removed from the sphere of public
dominion and are considered converted
into patrimonial lands or lands of private
ownership that may be alienated or
disposed through any of the modes of
acquiring ownership under the Civil Code.
If the mode of acquisition is prescription,
whether ordinary or extraordinary, proof
that the land has been already converted
to private ownership prior to the requisite
acquisitive prescriptive period is a
condition sine qua non in observance of
the law (Article 1113, Civil Code) that
property of the State not patrimonial in
character shall not be the object of
prescription.
To reiterate, then, the petitioners failed to present sufficient
evidence to establish that they and their predecessors-ininterest had been in possession of the land since June 12,

1945. Without satisfying the requisite character and period

of possession - possession and occupation that is open,
continuous, exclusive, and notorious since June 12, 1945,
or earlier - the land cannot be considered ipso jure
converted to private property even upon the subsequent
declaration of it as alienable and disposable. Prescription
never began to run against the State, such that the land has
remained ineligible for registration under Section 14(1) of
the Property Registration Decree. Likewise, the land
continues to be ineligible for land registration under Section
14(2) of the Property Registration Decree unless Congress
enacts a law or the President issues a proclamation
declaring the land as no longer intended for public service
or for the development of the national wealth.1wphi1
WHEREFORE, the Court DENIES the petitioners' Motion for
Reconsideration and the respondent's Partial Motion for
Reconsideration for their lack of merit.
SO ORDERED

G.R. No. 181502

February 2, 2010
FLORENCIA G. DIAZ, Petitioner,
vs.
REPUBLIC of the PHILIPPINES, Respondent.
RESOLUTION
CORONA, J.:
This is a letter-motion praying for reconsideration (for the
third time) of the June 16, 2008 resolution of this Court
denying the petition for review filed by petitioner Florencia
G. Diaz.
Petitioners late mother, Flora Garcia (Garcia), filed an
1
application for registration of a vast tract of land located in
Laur, Nueva Ecija and Palayan City in the then Court of
First Instance (CFI), Branch 1, Nueva Ecija on August 12,
2
1976. She alleged that she possessed the land as owner
and worked, developed and harvested the agricultural
products and benefits of the same continuously, publicly
and adversely for more or less 26 years.
The Republic of the Philippines, represented by the Office of
the Solicitor General (OSG), opposed the application
because the land in question was within the Fort Magsaysay
Military Reservation (FMMR), established by virtue of
3
Proclamation No. 237 (Proclamation 237) in 1955. Thus, it
was inalienable as it formed part of the public domain.
Significantly, on November 28, 1975, this Court already
4
ruled in Director of Lands v. Reyes that the property
subject of Garcias application was inalienable as it formed
part of a military reservation. Moreover, the existence of
Possessory Information Title No. 216 (allegedly registered
in the name of a certain Melecio Padilla on March 5, 1895),
on which therein respondent Paraaque Investment and
Development Corporation anchored its claim on the land,
was not proven. Accordingly, the decree of registration
issued in its favor was declared null and void.
Reyes notwithstanding, the CFI ruled in Garcias favor in a
5
decision dated July 1, 1981.
The Republic eventually appealed the decision of the CFI to

the Court of Appeals (CA). In its decision dated February 26,

1992, penned by Justice Vicente V. Mendoza (Mendoza
7
decision), the appellate court reversed and set aside the
decision of the CFI. The CA found that Reyes was applicable
to petitioners case as it involved the same property.
The CA observed that Garcia also traced her ownership of
the land in question to Possessory Information Title No. 216.
As Garcias right to the property was largely dependent on
the existence and validity of the possessory information title
the probative value of which had already been passed upon
by this Court in Reyes, and inasmuch as the land was
situated inside a military reservation, the CA concluded that
she did not validly acquire title thereto.

However, acting on a letter written by a certain Atty. Restituto

S. Lazaro, the OSG filed a motion for reconsideration of the
CA resolution ordering the issuance of the decree of
registration. The OSG informed the appellate court that the
tract of land subject of the amicable settlement was still within
the military reservation.
On April 16, 2007, the CA issued an amended resolution
13
(amended resolution) annulling the compromise agreement
entered into between the parties. The relevant part of the
dispositive portion of the resolution read:
ACCORDINGLY, the Court resolves to:
(1) x x x x x x

During the pendency of the case in the CA, Garcia passed

away and was substituted by her heirs, one of whom was
8
petitioner Florencia G. Diaz. 1avvphi1

(2) x x x x x x

Petitioner filed a motion for reconsideration of the Mendoza

decision. While the motion was pending in the CA, petitioner
also filed a motion for recall of the records from the former
CFI. Without acting on the motion for reconsideration, the
appellate court, with Justice Mendoza as ponente, issued a
9
resolution upholding petitioners right to recall the records of
the case.

(4) x x x x x x

Subsequently, however, the CA encouraged the parties to

reach an amicable settlement on the matter and even gave
the parties sufficient time to draft and finalize the same.
The parties ultimately entered into a compromise agreement
with the Republic withdrawing its claim on the more or less
4,689 hectares supposedly outside the FMMR. For her part,
petitioner withdrew her application for the portion of the
property inside the military reservation. They filed a motion
10
for approval of the amicable settlement in the CA.
On June 30, 1999, the appellate court approved the
11
compromise agreement. On January 12, 2000, it directed
the Land Registration Administration to issue the
12
corresponding decree of registration in petitioners favor.

(3) x x x x x x

(5) x x x x x x
(6) REVERSE the Resolution dated June 30, 1999
of this Court approving the Amicable Settlement
dated May 18, 1999 executed between the Office of
the Solicitor General and Florencia Garcia Diaz[;]
(7) ANNUL and SET ASIDE the Amicable
Settlement dated May 18, 1999 executed between
the Office of the Solicitor General and Florencia
Garcia Diaz; the said Amicable Settlement is hereby
DECLARED to be without force and effect;
(8) GRANT the Motion for Reconsideration filed by
the Office of the Solicitor General and,
consequently, SET ASIDE the Resolution dated
January 12, 2000 which ordered, among other
matters, that a certificate of title be issued in the
name of plaintiff-appellee Florencia Garcia Diaz
over the portion of the subject property in
consonance with the Amicable Settlement dated
May 18, 1999 approved by the Court in its

22

Resolution dated June 30, 1999;

(9) SET ASIDE the Resolution dated June 30, 1999
approving the May 18, 1999 Amicable Settlement
and the Resolution dated September 20, 1999
amending the aforesaid June 30, 1999 Resolution;
and
(10) REINSTATE the Decision dated February 26,
1992 dismissing applicant-appellee Diaz
registration herein.
SO ORDERED.
(Emphasis supplied)
Petitioner moved for reconsideration. For the first time, she
assailed the validity of the Mendoza decision the February
26, 1992 decision adverted to in the CAs amended
resolution. She alleged that Justice Mendoza was the
assistant solicitor general during the initial stages of the land
registration proceedings in the trial court and therefore should
have inhibited himself when the case reached the CA. His
failure to do so, she laments, worked an injustice against her
constitutional right to due process. Thus, the Mendoza
decision should be declared null and void. The motion was
14
denied.
15

Thereafter, petitioner filed a petition for review on certiorari

16
in this Court. It was denied for raising factual issues. She
17
moved for reconsideration. This motion was denied with
finality on the ground that there was no substantial argument
warranting a modification of the Courts resolution. The Court
then ordered that no further pleadings would be entertained.
Accordingly, we ordered entry of judgment to be made in due
18
course.
Petitioner, however, insisted on filing a motion to lift entry of
judgment and motion for leave to file a second motion for
reconsideration and to refer the case to the Supreme Court
19
20
en banc. The Court denied it considering that a second
21
motion for reconsideration is a prohibited pleading.
Furthermore, the motion to refer the case to the banc was
likewise denied as the banc is not an appellate court to which

decisions or resolutions of the divisions may be appealed.

We reiterated our directive that no further pleadings would be
entertained and that entry of judgment be made in due
course.

Not one to be easily deterred, petitioner wrote identical

letters, first addressed to Justice Leonardo A. Quisumbing
(then Acting Chief Justice) and then to Chief Justice Reynato
23
S. Puno himself. The body of the letter, undoubtedly in the
nature of a third motion for reconsideration, is hereby
reproduced in its entirety:
This is in response to your call for "Moral Forces" in order to
"redirect the destiny of our country which is suffering from
moral decadence," that to your mind, is the problem which
confronts us. (Inquirer, January 15, 2009, page 1)[.]
I recently lost my case with the Supreme Court, G.R. N[o].
181502, and my lawyer has done all that is humanly possible
to convince the court to take a second look at the miscarriage
of justice that will result from the implementation of the
DISMISSAL in a MINUTE RESOLUTION of our Petition for
Review.
Pending before your Division (First Division) is a last
plea for justice so that the case may be elevated to the
Supreme Court en banc. I hope the Court exercises
utmost prudence in resolving the last plea. For ready
reference, a copy of the Motion is hereto attached as
Annex "A".
The issue that was brought before the Honorable Supreme
Court involves the Decision of then Justice Vicente Mendoza
of the Court of Appeals, which is NULL and VOID, ab initio.
It is null and void because destiny placed Hon. Justice
Vicente Mendoza in a position in which it became possible
for him to discharge the minimum requirement of due
process, [i.e.] the ability of the court to render "impartial
justice," because Mr. Justice Mendoza became the ponente
of the Court of Appeals Decision, reversing the findings of the
trial court, notwithstanding the fact that he, as Assistant
Solicitor General, was the very person who appeared on

behalf of the Republic, as the oppositor in the very same land

registration proceedings in which he lost.
In other words, he discharged the duties of prosecutor and
judge in the very same case.
In the case of the "Alabang Boys[,]" the public was outraged
by the actions of Atty. Verano who admitted having prepared
a simple resolution to be signed by the Secretary of Justice.
In my case, the act complained of is the worst kind of violation
of my constitutional right. It is simply immoral, illegal and
unconstitutional, for the prosecutor to eventually act as the
judge, and reverse the very decision in which he had lost.
If leaked to the tri-media[,] my case will certainly evoke even
greater spite from the public, and put the Supreme Court in
bad light. I must confess that I was tempted to pursue such
course of action. I however believe that such an action will do
more harm than good, and even destroy the good name of
Hon. Justice Mendoza.
I fully support your call for "moral force" that will slowly and
eventually lead our country to redirect its destiny and escape
from this moral decadence, in which we all find ourselves.
I am content with the fact that at least, the Chief Justice
continues to fight the dark forces that surround us everyday.
I only ask that the Supreme Court endeavor to ensure that
cases such as mine do not happen again, so that the next
person who seeks justice will not experience the pain and
frustration that I suffered under our judicial system.
Thank you, and more power to you, SIR. (Emphasis in the
original).
The language of petitioners letter/motion is unmistakable. It
is a thinly veiled threat precisely worded and calculated to
intimidate this Court into giving in to her demands to honor
an otherwise legally infirm compromise agreement, at the risk
of being vilified in the media and by the public.

This Court will not be cowed into submission. We deny

petitioners letter/third motion for reconsideration.
APPLICABILITY OF REYES
The Court agrees with the Republics position that Reyes is
applicable to this case.

in that case, as well as in this one, was whether our

decision in the case in which another person was the
applicant constituted res judicata as against his successorsin-interest.

By not applying our ruling in Reyes, the trial judge virtually

nullified the decision of this Court and therefore acted with
29
grave abuse of discretion. Notably, a judgment rendered
with grave abuse of discretion is void and does not exist in
30
legal contemplation.

(1) the former judgment or order must be final;

We ruled there, and we so rule now, that in registration

cases filed under the provisions of the Public Land Act for
the judicial confirmation of an incomplete and imperfect title,
an order dismissing an application for registration and
declaring the land as part of the public domain constitutes
res judicata, not only against the adverse claimant, but also
27
against all persons.

(2) the judgment or order must be on the merits;

We also declared in Aquino that:

(3) it must have been rendered by a court having

jurisdiction over the subject matter and parties; and

From another point of view, the decision in the first action

has become the "law of the case" or at least falls within the
rule of stare decisis. That adjudication should be followed
unless manifestly erroneous. It was taken and should be
taken as the authoritative view of the highest tribunal in the
Philippines. It is indispensable to the due administration of
justice especially by a court of last resort that a question
once deliberately examined and decided should be
28
considered as settled and closed to further argument. x x x

ACQUISITION OF PRIVATE RIGHTS

Be that as it may, the fact is that, even before the CFI came
out with its decision in favor of petitioner on July 1, 1981,
this Court, in Reyes, already made an earlier ruling on
November 28, 1975 that the disputed realty was inalienable
as it formed part of a military reservation. Thus, petitioners
argument that the findings of fact of the trial court on her
registrable title are binding on us on the principle that
findings of fact of lower courts are accorded great respect
and bind even this Court is untenable. Rather, it was
incumbent upon the court a quo to respect this Courts
ruling in Reyes, and not the other way around.

Before the military reservation was established, the

evidence is inconclusive as to possession, for it is shown by
the evidence that the land involved is largely mountainous
and forested. As a matter of fact, at the time of the
hearing, it was conceded that approximately 13,957
hectares of said land consist of public forest. x x x
32
(Emphasis supplied)

To constitute res judicata, the following elements must

concur:

(4) there must be between the first and second

actions, identity of parties, of subject matter, and of
24
causes of action.
The first three requisites have undoubtedly been complied
with. However, petitioner takes exception to the fourth
requisite, particularly on the issue of identity of parties. In
her petition for review filed in this Court, she contends that
since the applicants in the two cases are different, the
merits of the two cases should, accordingly, be determined
25
independently of each other.
This contention is erroneous.
The facts obtaining in this case closely resemble those in
26
Aquino v. Director of Lands. In that case, Quintin Taedo
endeavored to secure title to a considerable tract of land by
virtue of his possession thereof under CA 141. When the
case eventually reached this Court, we affirmed the trial
courts decision to dismiss the proceedings as the property
in question was part of the public domain. Quintins
successor-in-interest, Florencia Taedo, who despite
knowledge of the proceedings did not participate therein,
thereafter sold the same property to Benigno S. Aquino. The
latter sought to have it registered in his name. The question

However, despite having been apprised of the Court's

findings in Reyes (which should have been a matter of
judicial notice in the first place), the trial court still insisted
on its divergent finding and disregarded the Court's decision
in Reyes, declaring the subject land as forming part of a
military reservation, and thus outside the commerce of man.

All lower courts, especially the trial court concerned in this

case, ought to be reminded that it is their duty to obey the
decisions of the Supreme Court. A conduct becoming of
inferior courts demands a conscious awareness of the
position they occupy in the interrelation and operation of our
judicial system. As eloquently declared by Justice J.B. L.
Reyes, "There is only one Supreme Court from whose
31
decision all other courts should take their bearings."

Petitioner, however, argues that Proclamation 237 itself

recognizes that its effectivity is "subject to private rights, if
any there be."
By way of a background, we recognized in Reyes that the
property where the military reservation is situated is forest
land. Thus:

Concomitantly, we stated therein, and we remind petitioner

now, that forest lands are not registrable under CA 141.
[E]ven more important, Section 48[b] of CA No. 141, as
amended, applies exclusively to public agricultural land.
Forest lands or area covered with forest are excluded. It is
well-settled that forest land is incapable of registration;
and its inclusion in a title, whether such title be one
issued using the Spanish sovereignty or under the
present Torrens system of registration, nullifies the

title. (Emphasis supplied).

33

However, it is true that forest lands may be registered when

they have been reclassified as alienable by the President in
a clear and categorical manner (upon the recommendation
of the proper department head who has the authority to
classify the lands of the public domain into alienable or
34
disposable, timber and mineral lands) coupled with
possession by the claimant as well as that of her
predecessors-in-interest. Unfortunately for petitioner, she
was not able to produce such evidence. Accordingly, her
occupation thereof, and that of her predecessors-in-interest,
could not have ripened into ownership of the subject land.
This is because prior to the conversion of forest land as
alienable land, any occupation or possession thereof cannot
be counted in reckoning compliance with the thirty-year
possession requirement under Commonwealth Act 141 (CA
35
141) or the Public Land Act. This was our ruling in Almeda
36
v. CA. The rules on the confirmation of imperfect titles do
not apply unless and until the land classified as forest land
is released through an official proclamation to that effect.
Then and only then will it form part of the disposable
37
agricultural lands of the public domain.
Coming now to petitioners contention that her "private
rights" to the property, meaning her and her predecessors
possession thereof prior to the establishment of the FMMR,
must be respected, the same is untenable. As earlier stated,
we had already recognized the same land to be public forest
even before the FMMR was established. To reiterate:
Before the military reservation was established, the
evidence is inconclusive as to possession, for it is shown by
the evidence that the land involved is largely mountainous
and forested. As a matter of fact, at the time of the hearing,
it was conceded that approximately 13,957 hectares of said
land consist of public forest. x x x
Therefore, even if possession was for more than 30 years, it
could never ripen to ownership.
But even assuming that the land in question was alienable
land before it was established as a military reservation,

there was nevertheless still a dearth of evidence with

respect to its occupation by petitioner and her
predecessors-in-interest for more than 30 years. In Reyes,
we noted:
Evidently, Melecio Padilla, having died on February 9, 1900,
barely five (5) years after the inscription of the informacion
possessoria, could not have converted the same into a
record of ownership twenty (20) years after such inscription,
pursuant to Article 393 of the Spanish Mortgage Law.
xxx
During the lifetime of Melecio Padilla, only a small portion
thereof was cleared and cultivated under the kaingin
system, while some portions were used as grazing land.
After his death, his daughter, Maria Padilla, caused the
planting of vegetables and had about forty (40) tenants for
the purpose. During the Japanese occupation, Maria Padilla
died. x x x
xxx
A mere casual cultivation of portions of the land by the
claimant, and the raising thereon of cattle, do not constitute
possession under claim of ownership. In that sense,
possession is not exclusive and notorious as to give rise to
a presumptive grant from the State. While grazing livestock
over land is of course to be considered with other acts of
dominion to show possession, the mere occupancy of land
by grazing livestock upon it, without substantial inclosures,
or other permanent improvements, is not sufficient to
support a claim of title thru acquisitive prescription. 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
38
to constitute a grant from the State.
xxx
Furthermore, the fact that the possessory information title
on which petitioner also bases her claim of ownership was
39
found to be inexistent in Reyes, thus rendering its
probative value suspect, further militates against granting
her application for registration.

NULLITY OF COMPROMISE AGREEMENT

On the compromise agreement between the parties, we
agree with the CA that the same was null and void.
An amicable settlement or a compromise agreement is in
the nature of a contract and must necessarily comply with
the provisions of Article 1318 of the New Civil Code which
provides:
Art. 1318. There is no contract unless the following
requisites concur:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the
contract;
(3) Cause of the obligation which is established.
Petitioner was not able to provide any proof that the consent
of the Republic, through the appropriate government
agencies, i.e. the Department of Environment and Natural
Resources, Land Management Bureau, Land Registration
Authority, and the Office of the President, was secured by
40
the OSG when it executed the agreement with her. The
lack of authority on the part of the OSG rendered the
compromise agreement between the parties null and void
because although it is the duty of the OSG to represent the
State in cases involving land registration proceedings, it
must do so only within the scope of the authority granted to
41
it by its principal, the Republic of the Philippines.
In this case, although the OSG was authorized to appear as
counsel for respondent, it was never given the specific or
special authority to enter into a compromise agreement with
petitioner. This is in violation of the provisions of Rule 138
Section 23, of the Rules of Court which requires "special
authority" for attorneys to bind their clients.
Section 23. Authority of attorneys to bind clients.
Attorneys have authority to bind their clients in any case by
any agreement in relation thereto made in writing, and in

taking appeals, and in all matters of ordinary judicial

procedure. But they cannot, without special authority,
compromise their clients litigation, or receive anything in
discharge of a clients claim but the full amount in cash.
(Emphasis supplied).
Moreover, the land in question could not have been a valid
subject matter of a contract because, being forest land, it
was inalienable. Article 1347 of the Civil Code provides:
Art. 1347. All things which are not outside the
commerce of men, including future things, may be the
object of a contract. All rights which are not
intransmissible may also be the object of contracts.
No contract may be entered into upon future inheritance
except in cases expressly authorized by law.
All services which are not contrary to law, morals, good
customs, public order or public policy may likewise be the
object of a contract. (Emphasis supplied)
Finally, the Court finds the cause or consideration of the
obligation contrary to law and against public policy. The
agreement provided that, in consideration of petitioners
withdrawal of her application for registration of title from that
portion of the property located within the military
reservation, respondent was withdrawing its claim on that
part of the land situated outside said reservation. The
Republic could not validly enter into such undertaking as the
subject matter of the agreement was outside the commerce
of man.
PETITIONERS CONTEMPT OF COURT
This Court, being the very institution that dispenses justice,
cannot reasonably be expected to just sit by and do nothing
when it comes under attack.
That petitioners letter-motion constitutes an attack against
the integrity of this Court cannot be denied. Petitioner
started her letter innocently enough by stating:

This is in response to your call for "Moral Forces" in order to

"redirect the destiny of our country which is suffering from
moral decadence," that to your mind, is the problem which
confronts us. (Inquirer, January 15, 2009, page 1)[.]
It, however, quickly progressed into a barely concealed
resentment for what she perceived as this Courts failure to
exercise "utmost prudence" in rendering "impartial justice" in
deciding her case. Petitioner recounted:
I recently lost my case with the Supreme Court, G.R. N[o].
181502, and my lawyer has done all that is humanly
possible to convince the court to take a second look at the
miscarriage of justice that will result from the
implementation of the DISMISSAL in a MINUTE
RESOLUTION of our Petition for Review.
Pending before your Division (First Division) is a last
plea for justice so that the case may be elevated to the
Supreme Court en banc. I hope the Court exercises
utmost prudence in resolving the last plea. For ready
reference, a copy of the Motion is hereto attached as
Annex "A".
The issue that was brought before the Honorable Supreme
Court involves the Decision of then Justice Vicente Mendoza
of the Court of Appeals, which is NULL and VOID, ab initio.

evident in her arrogant declaration that:

If leaked to the tri-media[,] my case will certainly evoke even
greater spite from the public, and put the Supreme Court in
bad light.
But she hastens to add in the same breath that:
I must confess that I was tempted to pursue such course of
action. I however believe that such an action will do more
harm than good, and even destroy the good name of Hon.
Justice Mendoza.
Petitioner ends her letter by taking this Court to task:
. . . endeavor to ensure that cases such as mine do not
happen again, so that the next person who seeks justice will
not experience the pain and frustration that I suffered under
our judicial system.
When required to show cause why she should not be cited
for contempt for her baseless charges and veiled threats,
petitioner answered:
xxx

It is null and void because destiny placed Hon. Justice

Vicente Mendoza in a position in which it became possible
for him to discharge the minimum requirement of due
process, [i.e.] the ability of the court to render "impartial
justice," because Mr. Justice Mendoza became the ponente
of the Court of Appeals Decision, reversing the findings of the
trial court, notwithstanding the fact that he, as Assistant
Solicitor General, was the very person who appeared on
behalf of the Republic, as the oppositor in the very same land
registration proceedings in which he lost. (Emphasis
supplied).

The Letter of January 26, 2009 is not a "veiled threat[.] It was

written in response to the call of the Chief Justice for a moral
revolution. Juxtaposed against the factual backdrop of the
"Alabang Boys" case and the Meralco [c]ase, involving Mr.
Justice Jose L. Sabio which also enjoyed wide publicity over
the tri-media, petitioner felt that the facts of the said cases
pale in comparison to the facts of her case where the lawyer
of her opponent eventually became justice of the appellate
court and ended up reversing the very decision in which he
lost, in clear violation of her [c]onstitutional [r]ight to
fundamental fair play for no contestant in any litigation can
ever serve as a judge without transgression of the due
process clause. This is basic.

Petitioner then indirectly hints that, when push comes to

shove, she has no choice but to expose the irregularity
concerning the Mendoza decision to the media. This is

Petitioner confesses that she may have been emotional in the

delivery of her piece, because correctly or incorrectly[,] she
believes they are irrefutable. If in the course of that emotional

delivery, she has offended your honors sensibilities, she is

ready for the punishment, and only prays that his Court
temper its strike with compassion as her letter to the Chief
Justice was never written with a view of threatening the Court.
xxx
Petitioner wrote the Chief Justice in order to obtain redress
and correction of the inequity bestowed upon her by destiny.
It was never meant as a threat.
The Court now puts an end to petitioners irresponsible
insinuations and threats of "going public" with this case. We
are not blind to petitioners clever and foxy interplay of threats
alternating with false concern for the reputation of this Court.
It is well to remind petitioner that the Court has consistently
rendered justice with neither fear nor favor. The disposition in
this case was arrived at after a careful and thorough
deliberation of the facts of this case and all the matters
pertaining thereto. The records of the case, in fact, show that
all the pertinent issues raised by petitioner were passed upon
and sufficiently addressed by the appellate court and this
Court in their respective resolutions.
As to petitioners complaint regarding this Courts denial of
her petition through a mere minute resolution (which
allegedly deprived her of due process as the Court did not
issue a full-blown decision stating the facts and applicable
jurisprudence), suffice it to say that the Court is not dutybound to issue decisions or resolutions signed by the justices
all the time. It has ample discretion to formulate ponencias,
extended resolutions or even minute resolutions issued by or
upon its authority, depending on its evaluation of a case, as
long as a legal basis exists. When a minute resolution (signed
by the Clerk of Court upon orders of the Court) denies or
dismisses a petition or motion for reconsideration for lack of
merit, it is understood that the assailed decision or order,
together with all its findings of fact and legal conclusions, are
42
deemed sustained.
Furthermore, petitioner has doggedly pursued her case in
this Court by filing three successive motions for

reconsideration, including the letter-motion subject of this

resolution. This, despite our repeated warnings that "no
further pleadings shall be entertained in this case." Her
unreasonable persistence constitutes utter defiance of this
Courts orders and an abuse of the rules of procedure. This,
alongside her thinly veiled threats to leak her case to the
media to gain public sympathy although the tone of
petitioners compliance with our show-cause resolution was
decidedly subdued compared to her earlier letters
constitutes contempt of court.
In Republic v. Unimex,

43

we held:

A statement of this Court that no further pleadings would be

entertained is a declaration that the Court has already
considered all issues presented by the parties and that it has
adjudicated the case with finality. It is a directive to the parties
to desist from filing any further pleadings or motions. Like all
orders of this Court, it must be strictly observed by the parties.
It should not be circumvented by filing motions ill-disguised
as requests for clarification.
A FEW OBSERVATIONS
If petitioner was, as she adamantly insists, only guarding
her constitutional right to due process, then why did she
question the validity of the Mendoza decision late in the
proceedings, that is, only after her motion for
reconsideration in the CA (for its subsequent annulment of
the compromise agreement) was denied? It is obvious that it
was only when her case became hopeless that her present
counsel frantically searched for some ground, any ground to
resuscitate his clients lost cause, subsequently raising the
issue. This is evident from a statement in her petition to this
Court that:
It is this fresh discovery by the undersigned counsel of
the nullity of the proceedings of the Court of Appeals that
places in doubt the entire proceedings it previously
conducted, which led to the rendition of the February 26,
1992 Decision, a fact that escaped the scrutiny of
applicant for registration Flora L. Garcia, as well as her
lawyer, Atty. Cayetano Dante Diaz, who died in 1993, and

the late Justice Fernando A. Santiago, who stood as

counsel for Flora L. Garcias successor-in-interest, herein
44
petitioner, Florencia G. Garcia. (Emphasis supplied).
The above cited statement does not help petitioners cause
at all. If anything, it only proves how desperate the case has
become for petitioner and her counsel.
WHEREFORE, the letter-motion dated January 26, 2009 of
petitioner is NOTED and is hereby treated as a third motion
for reconsideration. The motion is DENIED considering that
a third motion for reconsideration is a prohibited pleading and
the plea utterly lacks merit.
Petitioner is found GUILTY of contempt of court. Accordingly,
a FINE of Five Thousand Pesos is hereby imposed on her,
payable within ten days from receipt of this resolution. She is
hereby WARNED that any repetition hereof shall be dealt
with more severely.
Treble costs against petitioner.

G.R. No. 173423

March 5, 2014
SPS. ANTONIO FORTUNA and ERLINDA FORTUNA,
Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, Respondent.
DECISION

Although the respondent, Republic of the Philippines

5
(Republic), opposed the application, it did not present any
evidence in support of its opposition. Since no private
opposition to the registration was filed, the RTC issued an
order of general default on November 11, 1996 against the
6
whole world, except the Republic.

BRION, J.:

In its Decision dated May 7, 2001, the RTC granted the

application for registration in favor of the spouses Fortuna.
The RTC declared that "[the spouses Fortuna] have
established [their] possession, including that of their
predecessors-in-interest of the land sought to be registered,
has been open, continuous, peaceful, adverse against the
whole world and in the concept of an owner since 1948, or
8
for a period of over fifty (50) years."

They contend that the applicable law is Section 48(b) of

Commonwealth Act No. 141 or the Public Land Act (PLA),
as amended by Republic Act (RA) No. 1942. RA No. 1942
amended the PLA by requiring 30 years of open,
continuous, exclusive, and notorious possession to acquire
imperfect title over an agricultural land of the public domain.
This 30-year period, however, was removed by PD No.
1073 and instead required that the possession should be
since June 12, 1945. The amendment introduced by PD No.
12
1073 was carried in Section 14(1) of the PRD.

The Republic appealed the RTC decision with the CA,

arguing that the spouses Fortuna did not present an official
proclamation from the government that the lot has been
classified as alienable and disposable agricultural land. It
also claimed that the spouses Fortunas evidence Tax
Declaration No. 8366 showed that possession over the lot
dates back only to 1948, thus, failing to meet the June 12,
1945 cut-off period provided under Section 14(1) of
Presidential Decree (PD) No. 1529 or the Property
Registration Decree (PRD).

The spouses Fortuna point out that PD No. 1073 was

issued on January 25, 1977 and published on May 9, 1977;
and the PRD was issued on June 11, 1978 and published
on January 2, 1979. On the basis of the Courts ruling in
13
Taada, et al. v. Hon. Tuvera, etc., et al., they allege that
PD No. 1073 and the PRD should be deemed effective only
on May 24, 1977 and January 17, 1979, respectively. By
these dates, they claim to have already satisfied the 30-year
requirement under the RA No. 1942 amendment because
Pastoras possession dates back, at the latest, to 1947.

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

the petitioners, spouses Antonio and Erlinda Fortuna,
2
assailing the decision dated May 16, 2005 and the
3
resolution dated June 27, 2006 of the Court of Appeals
(CA) in CA-G.R. CV No. 71143. The CA reversed and set
4
aside the decision dated May 7, 2001 of the Regional Trial
Court (RTC) of San Fernando, La Union, Branch 66, in Land
Registration Case (LRC) No. 2372.
THE BACKGROUND FACTS
In December 1994, the spouses Fortuna filed an application
for registration of a 2,597-square meter land identified as
Lot No. 4457, situated in Bo. Canaoay, San Fernando, La
Union. The application was filed with the RTC and docketed
as LRC No. 2372.
The spouses Fortuna stated that Lot No. 4457 was originally
owned by Pastora Vendiola, upon whose death was
succeeded by her children, Clemente and Emeteria Nones.
Through an affidavit of adjudication dated August 3, 1972,
Emeteria renounced all her interest in Lot No. 4457 in favor
of Clemente. Clemente later sold the lot in favor of Rodolfo
Cuenca on May 23, 1975. Rodolfo sold the same lot to the
spouses Fortuna through a deed of absolute sale dated May
4, 1984.
The spouses Fortuna claimed that they, through themselves
and their predecessors-in-interest, have been in quiet,
peaceful, adverse and uninterrupted possession of Lot No.
4457 for more than 50 years, and submitted as evidence the
lots survey plan, technical description, and certificate of
assessment.

In its decision dated May 16, 2005, the CA reversed and

set aside the RTC decision. Although it found that the
spouses Fortuna were able to establish the alienable and
10
disposable nature of the land, they failed to show that they
complied with the length of possession that the law requires,
i.e., since June 12, 1945. It agreed with the Republics
argument that Tax Declaration No. 8366 only showed that
the spouses Fortunas predecessor-in-interest, Pastora,
proved that she had been in possession of the land only
since 1948.
The CA denied the spouses Fortunas motion for
reconsideration of its decision in its resolution dated June
11
27, 2006.

THE PARTIES ARGUMENTS

Through the present petition, the spouses Fortuna seek a
review of the CA rulings.

They allege that although Tax Declaration No. 8366 was

made in 1948, this does not contradict that fact that Pastora
possessed Lot No. 4457 before 1948. The failure to present
documentary evidence proving possession earlier than 1948
was explained by Filma Salazar, Records Officer of the
Provincial Assessors Office, who testified that the records
were lost beyond recovery due to the outbreak of World War
II.
Notwithstanding the absence of documents executed earlier
than 1948, the spouses Fortuna contend that evidence
exists indicating that Pastora possessed the lot even before
1948. First, Tax Declaration No. 8366 does not contain a
statement that it is a new tax declaration. Second, the
annotation found at the back of Tax Declaration No. 8366
14
states that "this declaration cancels Tax Nos. 10543[.]"

Since Tax Declaration No. 8366 was issued in 1948, the

cancelled Tax Declaration No. 10543 was issued, at the
latest, in 1947, indicating that there was already an owner
and possessor of the lot before 1948. Third, they rely on the
testimony of one Macaria Flores in LRC No. 2373. LRC No.
2373 was also commenced by the spouses Fortuna to
15
register Lot Nos. 4462, 27066, and 27098, which were
also originally owned by Pastora and are adjacent to the
subject Lot No. 4457. Macaria testified that she was born in
1926 and resided in a place a few meters from the three
lots. She stated that she regularly passed by these lots on
her way to school since 1938. She knew the property was
owned by Pastora because the latters family had
constructed a house and planted fruit-bearing trees thereon;
they also cleaned the area. On the basis of Macarias
testimony and the other evidence presented in LRC No.
2373, the RTC granted the spouses Fortunas application
for registration of Lot Nos. 4462, 27066, and 27098 in its
16
decision of January 3, 2005. The RTCs decision has
lapsed into finality unappealed.
The spouses Fortuna claim that Macarias testimony in LRC
No. 2373 should be considered to prove Pastoras
possession prior to 1948. Although LRC No. 2373 is a
separate registration proceeding, it pertained to lots
adjacent to the subject property, Lot No. 4457, and
belonged to the same predecessor-in-interest. Explaining
their failure to present Macaria in the proceedings before
the RTC in LRC No. 2372, the spouses Fortuna said "it was
only after the reception of evidence x x x that [they] were
able to trace and establish the identity and competency of
17
Macaria[.]"
Commenting on the spouses Fortunas petition, the
Republic relied mostly on the CAs ruling which denied the
registration of title and prayed for the dismissal of the
petition.
THE COURTS RULING
We deny the petition for failure of the spouses Fortuna to
sufficiently prove their compliance with the requisites for the
acquisition of title to alienable lands of the public domain.

The nature of Lot No. 4457 as alienable anddisposable

public land has not been sufficientlyestablished
The Constitution declares that all lands of the public domain
18
are owned by the State. Of the four classes of public land,
i.e., agricultural lands, forest or timber lands, mineral lands,
and national parks, only agricultural lands may be
19
alienated. Public land that has not been classified as
alienable agricultural land remains part of the inalienable
public domain. Thus, it is essential for any applicant for
registration of title to land derived through a public grant to
establish foremost the alienable and disposable nature of
the land. The PLA provisions on the grant and disposition of
alienable public lands, specifically, Sections 11 and 48(b),
will find application only from the time that a public land has
been classified as agricultural and declared as alienable
and disposable.
20

Under Section 6 of the PLA, the classification and the

reclassification of public lands are the prerogative of the
Executive Department. 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 Department of Environment and Natural
Resources (DENR) Secretary is likewise empowered by law
to approve a land classification and declare such land as
21
alienable and disposable.
Accordingly, jurisprudence has required that an applicant for
registration of title acquired through a public land grant must
present incontrovertible evidence that the land subject of the
application is alienable or disposable by establishing 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.
In this case, the CA declared that the alienable nature of the
22
land was established by the notation in the survey plan,
which states:
This survey is inside alienable and disposable area as per
Project No. 13 L.C. Map No. 1395 certified August 7, 1940.

It is outside any civil or military reservation.

23

It also relied on the Certification dated July 19, 1999 from

the DENR Community Environment and Natural Resources
Office (CENRO) that "there is, per record, neither any public
land application filed nor title previously issued for the
24
subject parcel[.]" However, we find that neither of the
above documents is evidence of a positive act from the
government reclassifying the lot as alienable and disposable
agricultural land of the public domain.
Mere notations appearing in survey plans are inadequate
proof of the covered properties alienable and disposable
25
character. These notations, at the very least, only
establish that the land subject of the application for
registration falls within the approved alienable and
disposable area per verification through survey by the
proper government office. The applicant, however, must
also present a copy of the original classification of the land
into alienable and disposable land, as declared by the
26
DENR Secretary or as proclaimed by the President. In
27
Republic v. Heirs of Juan Fabio, the Court ruled that [t]he
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
28
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.
The survey plan and the DENR-CENRO certification are not
proof that the President or the DENR Secretary has
reclassified and released the public land as alienable and
disposable. The offices that prepared these documents are
not the official repositories or legal custodian of the
issuances of the President or the DENR Secretary declaring
29
the public land as alienable and disposable.
For failure to present incontrovertible evidence that Lot No.
4457 has been reclassified as alienable and disposable land
of the public domain though a positive act of the Executive

Department, the spouses Fortunas claim of title through a

public land grant under the PLA should be denied.

1942. Section 48(b) of the PLA, as amended by RA No.

1942, read:

was exactly 30 years counted backward from January 25,

1977 the effectivity date of PD No. 1073.

In judicial confirmation of imperfector incomplete title, the

period ofpossession should commence, at thelatest, as of
May 9, 1947

(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, for at least thirty years immediately preceding
the filing of the application for confirmation of title, except
when prevented by war or force majeure. [emphasis and
underscore ours]

It appears, however, that January 25, 1977 was the date PD

No. 1073 was enacted; based on the certification from the
31
National Printing Office, PD No. 1073 was published in
Vol. 73, No. 19 of the Official Gazette, months later than its
enactment or on May 9, 1977. This uncontroverted fact
materially affects the cut-off date for applications for judicial
confirmation of incomplete title under Section 48(b) of the
PLA.

On January 25, 1977, PD No. 1073 replaced the 30-year

period of possession by requiring possession since June 12,
1945. Section 4 of PD No. 1073 reads:

Although Section 6 of PD No. 1073 states that "[the] Decree

shall take effect upon its promulgation," the Court has
32
declared in Taada, et al. v. Hon. Tuvera, etc., et al. that
the publication of laws is an indispensable requirement for
its effectivity. "[A]ll statutes, including those of local
application and private laws, shall be published as a
condition for their effectivity, which shall begin fifteen days
after publication unless a different effectivity date is fixed by
33
the legislature." Accordingly, Section 6 of PD No. 1073
should be understood to mean that the decree took effect
only upon its publication, or on May 9, 1977. This, therefore,
moves the cut-off date for applications for judicial
confirmation of imperfect or incomplete title under Section
48(b) of the PLA to May 8, 1947. In other words, applicants
must prove that they have been in open, continuous,
exclusive and notorious possession and occupation of
agricultural lands of the public domain, under a bona fide
claim of acquisition of ownership, for at least 30 years, or at
least since May 8, 1947.

Although the above finding that the spouses Fortuna failed

to establish the alienable and disposable character of Lot
No. 4457 serves as sufficient ground to deny the petition
and terminate the case, we deem it proper to continue to
address the other important legal issues raised in the
petition.
As mentioned, the PLA is the law that governs the grant and
disposition of alienable agricultural lands. Under Section 11
of the PLA, alienable lands of the public domain may be
disposed of, among others, by judicial confirmation of
imperfect or incomplete title. This mode of acquisition of title
is governed by Section 48(b) of the PLA, the original version
of which states:
Sec. 48. The following-described citizens of the Philippines,
occupying lands of the public domain or claiming to own any
such lands or an interest therein, but whose titles have not
been perfected or completed, may apply to the Court of First
Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate
of title therefor, under the Land Registration Act, to wit:
xxxx
(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, except as against the
Government, since July twenty-sixth, eighteen hundred and
ninety- four, except when prevented by war or force
majeure. These shall be conclusively presumed to have
performed all the conditions essential to a government grant
and shall be entitled to a certificate of title under the
provisions of this chapter. [emphasis supplied]
On June 22, 1957, the cut-off date of July 26, 1894 was
replaced by a 30-year period of possession under RA No.

SEC. 4. The provisions of Section 48(b) and Section 48(c),

Chapter VIII of the Public Land Act are hereby amended in
the sense that these provisions shall apply only to alienable
and disposable lands of the public domain which have been
in open, continuous, exclusive and notorious possession
and occupation by the applicant himself or thru his
predecessor-in-interest, under a bona fide claim of
acquisition of ownership, since June 12, 1945. [emphasis
supplied]
Under the PD No. 1073 amendment, possession of at least
32 years from 1945 up to its enactment in 1977 is
required. This effectively impairs the vested rights of
applicants who had complied with the 30-year possession
required under the RA No. 1942 amendment, but whose
possession commenced only after the cut-off date of June
12, 1945 was established by the PD No. 1073 amendment.
30
To remedy this, the Court ruled in Abejaron v. Nabasa that
"Filipino citizens who by themselves or their predecessorsin-interest have been, prior to the effectivity of P.D. 1073 on
January 25, 1977, in open, continuous, exclusive and
notorious possession and occupation of agricultural lands of
the public domain, under a bona fide claim of acquisition of
ownership, for at least 30 years, or at least since January
24, 1947 may apply for judicial confirmation of their
imperfect or incomplete title under Sec. 48(b) of the [PLA]."
January 24, 1947 was considered as the cut-off date as this

The spouses Fortuna were unable to provethat they

possessed Lot No. 4457 since May 8, 1947
Even if the Court assumes that Lot No. 4457 is an alienable
and disposable agricultural land of the public domain, the
spouses Fortunas application for registration of title would
still not prosper for failure to sufficiently prove that they
possessed the land since May 8, 1947.
The spouses Fortunas allegation that: (1) the absence of a
notation that Tax Declaration No. 8366 was a new tax

declaration and (2) the notation stating that Tax Declaration

No. 8366 cancels the earlier Tax Declaration No. 10543
both indicate that Pastora possessed the land prior to 1948
or, at the earliest, in 1947. We also observe that Tax
Declaration No. 8366 contains a sworn statement of the
34
owner that was subscribed on October 23, 1947. While
these circumstances may indeed indicate possession as of
1947, none proves that it commenced as of the cut-off date
of May 8, 1947. Even if the tax declaration indicates
possession since 1947, it does not show the nature of
Pastoras possession. Notably, Section 48(b) of the PLA
speaks of possession and occupation. "Since these words
are separated by the conjunction and, the clear intention of
the law is not to make one synonymous with the other.
Possession is broader than occupation because it includes
constructive possession. When, therefore, the law adds the
word occupation, it seeks to delimit the all encompassing
effect of constructive possession. Taken together with the
words open, continuous, exclusive and notorious, the word
occupation serves to highlight the fact that for an applicant
35
to qualify, his possession must not be a mere fiction."
Nothing in Tax Declaration No. 8366 shows that Pastora
exercised acts of possession and occupation such as
cultivation of or fencing off the land. Indeed, the lot was
36
described as "cogonal."
The spouses Fortuna seeks to remedy the defects of Tax
Declaration No. 8366 by relying on Macarias testimony in a
separate land registration proceeding, LRC No. 2373.
Macaria alleged that she passed by Pastoras lots on her
way to school, and she saw Pastoras family construct a
house, plant fruit-bearing trees, and clean the area.
However, the Court is not convinced that Macarias
testimony constituted as the "well-nigh incontrovertible
evidence" required in cases of this nature.
The records disclose that the spouses Fortuna acquired
adjoining parcels of land, all of which are claimed to have
previously belonged to Pastora. These parcels of land were
covered by three separate applications for registration, to
wit:
a. LRC No. N-1278, involving Lot Nos. 1 and 2,
with a total area of 2,961 sq. m., commenced by

Emeteria;
b. LRC No. 2373, involving Lot Nos. 4462, 27066,
and 27098, with a total area of 4,006 sq. m.,
commenced by the spouses Fortuna; and
c. LRC No. 2372 (the subject case), involving Lot
No. 4457, with a total area of 2,597 sq. m.
As these cases involved different but adjoining lots that
belonged to the same predecessor-in-interest, the spouses
Fortuna alleged that the final rulings in LRC Nos. N-1278
37
and 2373, upholding Pastoras ownership, be taken into
account in resolving the present case.
Notably, the total land area of the adjoining lots that are
claimed to have previously belonged to Pastora is 9,564 sq.
m. This is too big an area for the Court to consider that
Pastoras claimed acts of possession and occupation (as
testified to by Macaria) encompassed the entirety of the lots.
Given the size of the lots, it is unlikely that Macaria (age 21
in 1947) could competently assess and declare that its
entirety belonged to Pastora because she saw acts of
possession and occupation in what must have been but a
limited area. As mentioned, Tax Declaration No. 8366
described Lot No. 4457 as "cogonal," thus, Macaria could
not have also been referring to Lot No. 4457 when she said
that Pastora planted fruit-bearing trees on her properties.
The lower courts' final rulings in LRC Nos. N-1278 and
2373, upholding Pastora's possession, do not tie this
Court's hands into ruling in favor of the spouses Fortuna.
Much to our dismay, the rulings in LRC Nos. N-1278 and
2373 do not even show that the lots have been officially
reclassified as alienable lands of the public domain or that
the nature and duration of Pastora's occupation met the
requirements of the PLA, thus, failing to convince us to
either disregard the rules of evidence or consider their
merits. In this regard, we reiterate our directive in Santiago
38
v. De las Santos:
Both under the 193 5 and the present Constitutions, the
conservation no less than the utilization of the natural

resources is ordained. There would be a failure to abide by

its command if the judiciary does not scrutinize with care
applications to private ownership of real estate. To be
granted, they must be grounded in well-nigh incontrovertible
evidence. Where, as in this case, no such proof would be
forthcoming, there is no justification for viewing such claim
with favor. It is a basic assumption of our polity that lands of
whatever classification belong to the state. Unless alienated
in accordance with law, it retains its rights over the same as
do minus.
WHEREFORE, the petition is DENIED. The decision dated
May 16, 2005 and the resolution dated June 27, 2006 of the
Court of Appeals in CA-G.R. CV No. 71143 are AFFIRMED
insofar as these dismissed the spouses Antonio and Erlinda
Fortuna's application of registration of title on the basis of
the grounds discussed above. Costs against the spouses
Fortuna.
SO ORDERED.

G.R. No. 160453

November 12, 2012
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
ARCADIO IVAN A. SANTOS III, and ARCADIO C.
SANTOS, JR., Respondents.
DECISION
BERSAMIN, J.:

easement of 20 meters from the river bank; and that

assuming that the property was not covered by the legal
easement, title to the property could not be registered in
favor of the applicants for the reason that the property was
an orchard that had dried up and had not resulted from
3
accretion.

PROPERTY SOUGHT TO BE REGISTERED IS AN

ACCRETION TO THE ADJOINING PROPERTY OWNED
BY APPELLEES DESPITE THE ADMISSION OF
APPELLEE ARCADIO C. SANTOS JR. THAT THE SAID
PROPERTY WAS NOT FORMED AS A RESULT OF THE
GRADUAL FILLING UP OF SOIL THROUGH THE
CURRENT OF THE RIVER.

Ruling of the RTC

By law, accretion - the gradual and imperceptible deposit
made through the effects of the current of the waterbelongs to the owner of the land adjacent to the banks of
rivers where it forms. The drying up of the river is not
accretion. Hence, the dried-up river bed belongs to the
State as property of public dominion, not to the riparian
owner, unless a law vests the ownership in some other
person.
Antecedents
Alleging continuous and adverse possession of more than
ten years, respondent Arcadio Ivan A. Santos III (Arcadio
Ivan) applied on March 7, 1997 for the registration of Lot
4998-B (the property) in the Regional Trial Court (RTC) in
Parafiaque City. The property, which had an area of 1,045
square meters, more or less, was located in Barangay San
Dionisio, Paraaque City, and was bounded in the
Northeast by Lot 4079 belonging to respondent Arcadio C.
Santos, Jr. (Arcadio, Jr.), in the Southeast by the
Paraaque River, in the Southwest by an abandoned road,
and in the Northwest by Lot 4998-A also owned by Arcadio
1
Ivan.

On May 10, 2000, the RTC granted the application for land
registration, disposing:
WHEREFORE, the Court hereby declares the applicants,
ARCADIO IVAN A. SANTOS, III and ARCADIO C.
SANTOS, JR., both Filipinos and of legal age, as the TRUE
and ABSOLUTE OWNERS of the land being applied for
which is situated in the Barangay of San Dionisio, City of
Paraaque with an area of one thousand forty five (1045)
square meters more or less and covered by Subdivision
Plan Csd-00-000343, being a portion of Lot 4998, Cad. 299,
Case 4, Paraaque Cadastre, LRC Rec. No. and orders the
registration of Lot 4998-B in their names with the following
technical description, to wit:

II
THE TRIAL COURT ERRED IN GRANTING THE
APPLICATION FOR LAND REGISTRATION DESPITE
APPELLEES FAILURE TO FORMALLY OFFER IN
EVIDENCE AN OFFICIAL CERTIFICATION THAT THE
SUBJECT PARCEL OF LAND IS ALIENABLE AND
DISPOSABLE.
III
THE TRIAL COURT ERRED IN RULING THAT
APPELLEES HAD SUFFICIENTLY ESTABLISHED THEIR
CONTINUOUS, OPEN, PUBLIC AND ADVERSE
OCCUPATION OF THE SUBJECT PROPERTY FOR A
PERIOD OF MORE THAN THIRTY (30) YEARS.

xxxx
On May 27, 2003, the CA affirmed the RTC.

Once this Decision became (sic) final and executory, let the
corresponding Order for the Issuance of the Decree be
issued.

The Republic filed a motion for reconsideration, but the CA

7
denied the motion on October 20, 2003.

SO ORDERED.

Issues

On May 21, 1998, Arcadio Ivan amended his application for

land registration to include Arcadio, Jr. as his co-applicant
because of the latters co-ownership of the property. He
alleged that the property had been formed through accretion
and had been in their joint open, notorious, public,
continuous and adverse possession for more than 30
2
years.

The Republic, through the Office of the Solicitor General

(OSG), appealed.

Hence, this appeal, in which the Republic urges that:

I
RESPONDENTS CLAIM THAT THE SUBJECT
PROPERTY IS AN ACCRETION TO THEIR ADJOINING
LAND THAT WOULD ENTITLE THEM TO REGISTER IT
UNDER ARTICLE 457 OF THE NEW CIVIL CODE IS
CONTRADICTED BY THEIR OWN EVIDENCE.

The City of Paraaque (the City) opposed the application for

land registration, stating that it needed the property for its
flood control program; that the property was within the legal

Ruling of the CA
In its appeal, the Republic ascribed the following errors to
5
the RTC, to wit:

THE TRIAL COURT ERRED IN RULING THAT THE

II
ASSUMING THAT THE LAND SOUGHT TO BE
REGISTERED WAS "PREVIOUSLY A PART OF THE

PARAAQUE RIVER WHICH BECAME AN ORCHARD

AFTER IT DRIED UP," THE REGISTRATION OF SAID
PROPERTY IN FAVOR OF RESPONDENTS CANNOT BE
ALTERNATIVELY JUSTIFIED UNDER ARTICLE 461 OF
THE CIVIL CODE.
III
THE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR IN NOT RULING THAT THE FAILURE OF
RESPONDENTS TO FORMALLY OFFER IN EVIDENCE
AN OFFICIAL CERTIFICATION THAT THE SUBJECT
PROPERTY IS ALIENABLE AND DISPOSABLE IS FATAL
TO THEIR APPLICATION FOR LAND REGISTRATION.
IV
THE FINDING OF THE COURT OF APPEALS THAT
RESPONDENTS HAVE CONTINUOUSLY, OPENLY,
PUBLICLY AND ADVERSELY OCCUPIED THE SUBJECT
PROPERTY FOR MORE THAN THIRTY (30) YEARS IS
NOT SUPPORTED BY WELL-NIGH INCONTROVERTIBLE
EVIDENCE.
To be resolved are whether or not Article 457 of the Civil
Code was applicable herein; and whether or not
respondents could claim the property by virtue of acquisitive
prescription pursuant to Section 14(1) of Presidential
Decree No. 1529 (Property Registration Decree).

On the basis of the evidence presented by the applicants,

the Court finds that Arcadio Ivan A. Santos III and Arcadio
C. Santos, Jr., are the owners of the land subject of this
application which was previously a part of the Paraaque
River which became an orchard after it dried up and further
considering that Lot 4 which adjoins the same property is
owned by applicant, Arcadio C. Santos, Jr., after it was
obtained by him through inheritance from his mother,
Concepcion Cruz, now deceased. Conformably with Art.
457 of the New Civil Code, it is provided that:
"Article 457. To the owners of the lands adjoining the bank
of rivers belong the accretion which they gradually receive
9
from the effects of the current of the waters."
The CA upheld the RTCs pronouncement, holding:
It could not be denied that "to the owners of the lands
adjoining the banks of rivers belong the accretion which
they gradually receive from the effects of the current of the
waters" (Article 457 New Civil Code) as in this case, Arcadio
Ivan Santos III and Arcadio Santos, Jr., are the owners of
the land which was previously part of the Paraaque River
which became an orchard after it dried up and considering
that Lot 4 which adjoins the same property is owned by the
applicant which was obtained by the latter from his mother
10
(Decision, p. 3; p. 38 Rollo).

Ruling
The appeal is meritorious.
I.
The CA grossly erred in applying Article 457 of the Civil
Code to respondents benefit
Article 457 of the Civil Code provides that "(t)o the owners
of lands adjoining the banks of rivers belong the accretion
which they gradually receive from the effects of the currents
of the waters."
In ruling for respondents, the RTC pronounced as follows:

The Republic submits, however, that the application by both

lower courts of Article 457 of the Civil Code was erroneous
in the face of the fact that respondents evidence did not
establish accretion, but instead the drying up of the
Paraaque River.
The Republics submission is correct.
Respondents as the applicants for land registration carried
the burden of proof to establish the merits of their
application by a preponderance of evidence, by which is
meant such evidence that is of greater weight, or more
11
convincing than that offered in opposition to it. They would
be held entitled to claim the property as their own and apply

for its registration under the Torrens system only if they

established that, indeed, the property was an accretion to
their land.
Accretion is the process whereby the soil is deposited along
12
the banks of rivers. The deposit of soil, to be considered
accretion, must be: (a) gradual and imperceptible; (b) made
through the effects of the current of the water; and (c) taking
13
place on land adjacent to the banks of rivers.
Accordingly, respondents should establish the concurrence
of the elements of accretion to warrant the grant of their
application for land registration.
However, respondents did not discharge their burden of
proof. They did not show that the gradual and imperceptible
deposition of soil through the effects of the current of the
river had formed Lot 4998-B. Instead, their evidence
revealed that the property was the dried-up river bed of the
Paraaque River, leading both the RTC and the CA to
themselves hold that Lot 4998-B was "the land which was
previously part of the Paraaque River xxx (and) became an
orchard after it dried up."
Still, respondents argue that considering that Lot 4998-B did
not yet exist when the original title of Lot 4 was issued in
their mothers name in 1920, and that Lot 4998-B came
about only thereafter as the land formed between Lot 4 and
the Paraaque River, the unavoidable conclusion should
then be that soil and sediments had meanwhile been
deposited near Lot 4 by the current of the Paraaque River,
resulting in the formation of Lot 4998-B.
The argument is legally and factually groundless. For one,
respondents thereby ignore that the effects of the current of
the river are not the only cause of the formation of land
along a river bank. There are several other causes,
including the drying up of the river bed. The drying up of the
river bed was, in fact, the uniform conclusion of both lower
courts herein. In other words, respondents did not establish
at all that the increment of land had formed from the gradual
and imperceptible deposit of soil by the effects of the
current. Also, it seems to be highly improbable that the large

volume of soil that ultimately comprised the dry land with an

area of 1,045 square meters had been deposited in a
gradual and imperceptible manner by the current of the river
in the span of about 20 to 30 years the span of time
intervening between 1920, when Lot 4 was registered in the
name of their deceased parent (at which time Lot 4998-B
was not yet in existence) and the early 1950s (which
respondents witness Rufino Allanigue alleged to be the
time when he knew them to have occupied Lot 4988-B). The
only plausible explanation for the substantial increment was
that Lot 4988-B was the dried-up bed of the Paraaque
River. Confirming this explanation was Arcadio, Jr.s own
testimony to the effect that the property was previously a
part of the Paraaque River that had dried up and become
an orchard.
We observe in this connection that even Arcadio, Jr.s own
Transfer Certificate of Title No. 44687 confirmed the uniform
conclusion of the RTC and the CA that Lot 4998-B had been
formed by the drying up of the Paraaque River. Transfer
Certificate of Title No. 44687 recited that Lot 4 of the
consolidated subdivision plan Pcs-13-002563, the lot therein
described, was bounded "on the SW along line 5-1 by Dried
14
River Bed."
That boundary line of "SW along line 5-1" corresponded
with the location of Lot 4998-B, which was described as
"bounded by Lot 4079 Cad. 299, (Lot 1, Psu-10676), in the
name of respondent Arcadio Santos, Jr. (Now Lot 4, Psd15
13-002563) in the Northeast."
The RTC and the CA grossly erred in treating the dried-up
river bed as an accretion that became respondents property
pursuant to Article 457 of the Civil Code. That land was
definitely not an accretion. The process of drying up of a
river to form dry land involved the recession of the water
level from the river banks, and the dried-up land did not
equate to accretion, which was the gradual and
imperceptible deposition of soil on the river banks through
the effects of the current. In accretion, the water level did
not recede and was more or less maintained. Hence,
respondents as the riparian owners had no legal right to
claim ownership of Lot 4998-B. Considering that the clear

and categorical language of Article 457 of the Civil Code

has confined the provision only to accretion, we should
apply the provision as its clear and categorical language
tells us to. Axiomatic it is, indeed, that where the language
of the law is clear and categorical, there is no room for
16
interpretation; there is only room for application. The first
17
and fundamental duty of courts is then to apply the law.
The State exclusively owned Lot 4998-B and may not be
divested of its right of ownership. Article 502 of the Civil
Code expressly declares that rivers and their natural beds
18
are public dominion of the State. It follows that the river
beds that dry up, like Lot 4998-B, continue to belong to the

Lot 5000, thus, the Court opts to grant the application.

Finally, in the light of the evidence adduced by the
applicants in this case and in view of the foregoing reports
of the Department of Agrarian Reforms, Land Registration
Authority and the Department of Environment and Natural
Resources, the Court finds and so holds that the applicants
have satisfied all the requirements of law which are
essential to a government grant and is, therefore, entitled to
the issuance of a certificate of title in their favor. So also,
oppositor failed to prove that the applicants are not entitled
thereto, not having presented any witness.
In fine, the application is GRANTED.

State as its property of public dominion, unless there is an

express law that provides that the dried-up river beds
19
should belong to some other person.

As already mentioned, the CA affirmed the RTC.

Both lower courts erred.

II
Acquisitive prescription was not applicable in favor of
respondents
The RTC favored respondents application for land
registration covering Lot 4998-B also because they had
taken possession of the property continuously, openly,
publicly and adversely for more than 30 years based on
their predecessor-in-interest being the adjoining owner of
the parcel of land along the river bank. It rendered the
20
following ratiocination, viz:
In this regard, the Court found that from the time the
applicants became the owners thereof, they took
possession of the same property continuously, openly,
publicly and adversely for more than thirty (30) years
because their predecessors-in-interest are the adjoining
owners of the subject parcel of land along the river bank.
Furthermore, the fact that applicants paid its realty taxes,
had it surveyed per subdivision plan Csd-00-000343 (Exh.
"L") which was duly approved by the Land Management
Services and the fact that Engr. Chito B. Cainglet, OIC
Chief, Surveys Division Land Registration Authority, made a
Report that the subject property is not a portion of the
Paraaque River and that it does not fall nor overlap with

The relevant legal provision is Section 14(1) of Presidential

Decree No. 1529 (Property Registration Decree), which
pertinently states:
Section 14. Who may apply. The following persons may
file in the proper [Regional Trial Court] an application for
registration of title to land, whether personally or through
their duly authorized representatives:
(1) 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.
xxxx
Under Section 14(1), then, applicants for confirmation of
imperfect title must prove the following, namely: (a) that the
land forms part of the disposable and alienable agricultural
lands of the public domain; and (b) that they have been in
open, continuous, exclusive, and notorious possession and
occupation of the land under a bona fide claim of ownership
21
either since time immemorial or since June 12, 1945.

The Republic assails the findings by the lower courts that

respondents "took possession of the same property
continuously, openly, publicly and adversely for more than
22
thirty (30) years."
Although it is well settled that the findings of fact of the trial
court, especially when affirmed by the CA, are accorded the
highest degree of respect, and generally will not be
disturbed on appeal, with such findings being binding and
23
conclusive on the Court, the Court has consistently
recognized exceptions to this rule, including the following, to
wit: (a) when the findings are grounded entirely on
speculation, surmises, or conjectures; (b) when the
inference made is manifestly mistaken, absurd, or
impossible; (c) when there is grave abuse of discretion; (d)
when the judgment is based on a misapprehension of facts;
(e) when the findings of fact are conflicting; (f) when in
making its findings the CA went beyond the issues of the
case, or its findings are contrary to the admissions of both
the appellant and the appellee; (g) when the findings are
contrary to those of the trial court; (h) when the findings are
conclusions without citation of specific evidence on which
they are based; (i) when the facts set forth in the petition as
well as in the petitioners main and reply briefs are not
disputed by respondent; and (j) when the findings of fact are
premised on the supposed absence of evidence and
24
contradicted by the evidence on record.
Here, the findings of the RTC were obviously grounded on
speculation, surmises, or conjectures; and that the inference
made by the RTC and the CA was manifestly mistaken,
absurd, or impossible. Hence, the Court should now review
the findings.
In finding that respondents had been in continuous, open,
public and adverse possession of the land for more than 30
years, the RTC declared:
In this regard, the Court found that from the time the
applicant became the owners thereof, they took possession
of the same property continuously, openly, publicly and
adversely for more than thirty years because their
predecessor in interest are the adjoining owners of the

subject parcel of land along the river banks. Furthermore,

the fact that the applicant paid its realty taxes, had it
surveyed per subdivision plan Csd-00-000343 (Exh. "L")
which was duly approved by the Land Management
Services and the fact that Engr. Chito B. Cainglet, OIC
Chief, Surveys Division Land Registration Authority, made a
Report that the subject property is not a portion of the
Paraaque River and that it does not fall nor overlap with
Lot 5000, thus, the Court opts to grant the application.
The RTC apparently reckoned respondents period of
supposed possession to be "more than thirty years" from
the fact that "their predecessors in interest are the adjoining
owners of the subject parcel of land." Yet, its decision
nowhere indicated what acts respondents had performed
showing their possession of the property "continuously,
openly, publicly and adversely" in that length of time. The
decision mentioned only that they had paid realty taxes and
had caused the survey of the property to be made. That, to
us, was not enough to justify the foregoing findings,
because, firstly, the payment of realty taxes did not
conclusively prove the payors ownership of the land the
25
taxes were paid for, the tax declarations and payments
26
being mere indicia of a claim of ownership; and, secondly,
the causing of surveys of the property involved was not itself
an of continuous, open, public and adverse possession.
The principle that the riparian owner whose land receives
the gradual deposits of soil does not need to make an
express act of possession, and that no acts of possession
are necessary in that instance because it is the law itself
that pronounces the alluvium to belong to the riparian owner
from the time that the deposit created by the current of the
27
water becomes manifest has no applicability herein. This
is simply because Lot 4998-B was not formed through
accretion. Hence, the ownership of the land adjacent to the
river bank by respondents predecessor-in-interest did not
translate to possession of Lot 4998-B that would ripen to
acquisitive prescription in relation to Lot 4998-B.
On the other hand, the claim of thirty years of continuous,
open, public and adverse possession of Lot 4998-B was not
even validated or preponderantly established. The

admission of respondents themselves that they declared the

property for taxation purposes only in 1997 and paid realty
28
taxes only from 1999 signified that their alleged
possession would at most be for only nine years as of the
filing of their application for land registration on March 7,
1997.
Yet, even conceding, for the sake of argument, that
respondents possessed Lot 4998-B for more than thirty
years in the character they claimed, they did not thereby
acquire the land by prescription or by other means without
any competent proof that the land was already declared as
alienable and disposable by the Government. Absent that
declaration, the land still belonged to the State as part of its
public dominion.
Article 419 of the Civil Code distinguishes property as being
either of public dominion or of private ownership. Article 420
of the Civil Code lists the properties considered as part of
public dominion, namely: (a) 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; and (b) 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. As earlier mentioned, Article 502 of the Civil Code
declares that rivers and their natural beds are of public
dominion.
Whether the dried-up river bed may be susceptible to
acquisitive prescription or not was a question that the Court
29
resolved in favor of the State in Celestial v. Cachopero, a
case involving the registration of land found to be part of a
dried-up portion of the natural bed of a creek. There the
Court held:
As for petitioners claim of ownership over the subject land,
admittedly a dried-up bed of the Salunayan Creek, based on
(1) her alleged long term adverse possession and that of
her predecessor-in-interest, Marcelina Basadre, even prior
to October 22, 1966, when she purchased the adjoining
property from the latter, and (2) the right of accession under
Art. 370 of the Spanish Civil Code of 1889 and/or Article

461 of the Civil Code, the same must fail.

Appeals, this Court held:

Since property of public dominion is outside the commerce

of man and not susceptible to private appropriation and
acquisitive prescription, the adverse possession which may
be the basis of a grant of title in the confirmation of an
imperfect title refers only to alienable or disposable portions
of the public domain. It is only after the Government has
declared the land to be alienable and disposable agricultural
land that the year of entry, cultivation and exclusive and
adverse possession can be counted for purposes of an
imperfect title.

The law is clear and unambiguous. It leaves no room for

interpretation. Article 370 applies only if there is a natural
change in the course of the waters. The rules on alluvion do
not apply to man-made or artificial accretions nor to
accretions to lands that adjoin canals or esteros or artificial
drainage systems. Considering our earlier finding that the
dried-up portion of Estero Calubcub was actually caused by
the active intervention of man, it follows that Article 370
does not apply to the case at bar and, hence, the Del
Rosarios cannot be entitled thereto supposedly as riparian
owners.

A creek, like the Salunayan Creek, is a recess or arm

extending from a river and participating in the ebb and flow
of the sea. As such, under Articles 420(1) and 502(1) of the
Civil Code, the Salunayan Creek, including its natural bed,
is property of the public domain which is not susceptible to
private appropriation and acquisitive prescription. And,
absent any declaration by the government, that a portion of
the creek has dried-up does not, by itself, alter its
inalienable character.
xxxx
Had the disputed portion of the Salunayan Creek dried up
after the present Civil Code took effect, the subject land
would clearly not belong to petitioner or her predecessor-ininterest since under the aforementioned provision of Article
461, "river beds which are abandoned through the natural
change in the course of the waters ipso facto belong to the
owners of the land occupied by the new course," and the
owners of the adjoining lots have the right to acquire them
only after paying their value.
And both Article 370 of the Old Code and Article 461 of the
present Civil Code are applicable only when "river beds are
abandoned through the natural change in the course of the
waters." It is uncontroverted, however, that, as found by
both the Bureau of Lands and the DENR Regional
Executive Director, the subject land became dry as a result
of the construction an irrigation canal by the National
Irrigation Administration. Thus, in Ronquillo v. Court of

The dried-up portion of Estero Calubcub should thus be

considered as forming part of the land of the public domain
which cannot be subject to acquisition by private ownership.
xxx (Emphasis supplied)
Furthermore, both provisions pertain to situations where
there has been a change in the course of a river, not where
the river simply dries up. In the instant Petition, it is not even
alleged that the Salunayan Creek changed its course. In
such a situation, commentators are of the opinion that the
dry river bed remains property of public dominion. (Bold
emphases supplied)
Indeed, under the Regalian doctrine, all lands not otherwise
appearing to be clearly within private ownership are
30
presumed to belong to the State. No public land can be
acquired by private persons without any grant, express or
implied, from the Government. It is indispensable, therefore,
31
that there is a showing of a title from the State. Occupation
of public land in the concept of owner, no matter how long,
32
cannot ripen into ownership and be registered as a title.
Subject to the exceptions defined in Article 461 of the Civil
Code (which declares river beds that are abandoned
through the natural change in the course of the waters as
ipso facto belonging to the owners of the land occupied by
the new course, and which gives to the owners of the
adjoining lots the right to acquire only the abandoned river
beds not ipso facto belonging to the owners of the land

affected by the natural change of course of the waters only

after paying their value), all river beds remain property of
public dominion and cannot be acquired by acquisitive
prescription unless previously declared by the Government
to be alienable and disposable. Considering that Lot 4998-B
was not shown to be already declared to be alienable and
disposable, respondents could not be deemed to have
acquired the property through prescription.
Nonetheless, respondents insist that the property was
already classified as alienable and disposable by the
Government. They cite as proof of the classification as
alienable and disposable the following notation found on the
33
survey plan, to wit:
NOTE
ALL CORNERS NOT OTHERWISE DESCRIBED ARE OLD
BL CYL. CONC. MONS 15 X 60CM
All corners marked PS are cyl. conc. mons 15 x 60 cm
Surveyed in accordance with Survey Authority NO. 00760448 of the Regional Executive Director issued by the CENROFFICER dated Dec. 2, 1996.
This survey is inside L.C. Map No. 2623, Proj. No. 25
classified as alienable/disposable by the Bureau of Forest
Devt. on Jan. 3, 1968.
Lot 4998-A = Lot 5883} Cad 299
Lot 4998-B = Lot 5884} Paranaque Cadastre.
Was the notation on the survey plan to the effect that Lot
4998-B was "inside" the map "classified as
alienable/disposable by the Bureau of Forest Development
on 03 Jan. 1968" sufficient proof of the propertys nature as
alienable and disposable public land?
To prove that the land subject of an application for
registration is alienable, an applicant must conclusively
establish the existence of a positive act of the Government,

such as a presidential proclamation, executive order,

administrative action, investigation reports of the Bureau of
Lands investigator, or a legislative act or statute. Until then,
the rules on confirmation of imperfect title do not apply.
As to the proofs that are admissible to establish the
alienability and disposability of public land, we said in
Secretary of the Department of Environment and Natural
34
Resources v. Yap that:
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. To overcome this presumption, incontrovertible
evidence must be established that the land subject of the
application (or claim) is alienable or disposable.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. 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.
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 well-nigh 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." (Emphasis supplied)
35

In Menguito v. Republic, which we reiterated in Republic v.

36
Sarmiento, we specifically resolved the issue of whether

the notation on the survey plan was sufficient evidence to

establish the alienability and disposability of public land, to
wit:
To prove that the land in question formed part of the
alienable and disposable lands of the public domain,
petitioners relied on the printed words which read: "This
survey plan is inside Alienable and Disposable Land Area,
Project No. 27-B as per L.C. Map No. 2623, certified by the
Bureau of Forestry on January 3, 1968," appearing on
Exhibit "E" (Survey Plan No. Swo-13-000227).
This proof is not sufficient. Section 2, Article XII of the 1987
Constitution, provides: "All lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural resources are
owned by the State. x x x."
For the original registration of title, the applicant (petitioners
in this case) must overcome the presumption that the land
sought to be registered forms part of the public domain.
Unless public land is shown to have been reclassified or
alienated to a private person by the State, it remains part of
the inalienable public domain. Indeed, "occupation thereof in
the concept of owner, no matter how long, cannot ripen into
ownership and be registered as a title." To overcome such
presumption, incontrovertible evidence must be shown by
the applicant. Absent such evidence, the land sought to be
registered remains inalienable.
In the present case, petitioners cite a surveyor-geodetic
engineers notation in Exhibit "E" indicating that the survey
was inside alienable and disposable land. Such notation
does not constitute a positive government act validly
changing the classification of the land in question. Verily, a
mere surveyor has no authority to reclassify lands of the
public domain. By relying solely on the said surveyors
assertion, petitioners have not sufficiently proven that the
land in question has been declared alienable. (Emphasis
supplied)
In Republic v. T.A.N. Properties, Inc.,

37

we dealt with the

sufficiency of the certification by the Provincial

Environmental Officer (PENRO) or Community
Environmental Officer (CENRO) to the effect that a piece of
public land was alienable and disposable in the following
manner, viz:
x x x it is not enough for the 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 for land
registration must present a copy of the original classification
approved by the DENR Secretary and certified as a true
copy by the legal custodian of the official records. These
facts must be established to prove that the land is alienable
and disposable. Respondent failed to do so because the
certifications presented by respondent do not, by
themselves, prove that the land is alienable and disposable.
Only Torres, respondents Operations Manager, identified
the certifications submitted by respondent.1wphi1 The
government officials who issued the certifications were not
presented before the trial court to testify on their contents.
The trial court should not have accepted the contents of the
certifications as proof of the facts stated therein. Even if the
certifications are presumed duly issued and admissible in
evidence, they have no probative value in establishing that
the land is alienable and disposable.
xxxx
The CENRO and Regional Technical Director, FMS-DENR,
certifications do not prove that Lot 10705-B falls within the
alienable and disposable land as proclaimed by the DENR
Secretary. Such government certifications do not, by their
mere issuance, prove the facts stated therein. Such
government certifications may fall under the class of
documents contemplated in the second sentence of Section
23 of Rule 132. As such, the certifications are prima facie
evidence of their due execution and date of issuance but

they do not constitute prima facie evidence of the facts

stated therein. (Emphasis supplied)
These rulings of the Court indicate that the notation on the
survey plan of Lot 4998-B, Cad-00-000343 to the effect that
the "survey is inside a map classified as
alienable/disposable by the Bureau of Forest Devt" did not
prove that Lot 4998-B was already classified as alienable
and disposable. Accordingly, respondents could not validly
assert acquisitive prescription of Lot 4988-B.
WHEREFORE, the Court REVERSES and SETS ASIDE the
decision of the Court of Appeals promulgated on May 27,
2003; DISMISSES the application for registration of Arcadio
C. Santos, Jr. and Arcadio Ivan S. Santos III respecting Lot
4998-B with a total area of 1,045 square meters, more or
less, situated in Barangay San Dionisio, Paraaque City,
Metro Manila; and DECLARES Lot 4998-B as exclusively
belonging to the State for being part of the dried--up bed of
the Parat1aque River.
Respondents shall pay the costs of suit.
SO ORDERED.

G.R. No. 192896

July 24, 2013
DREAM VILLAGE NEIGHBORHOOD ASSOCIATION,
INC., represented by its Incumbent President, GREG
SERIEGO, Petitioner,
vs.
BASES DEVELOPMENT AUTHORITY, Respondent.
DECISION
REYES, J.:
1

Before us on Petition for Review under Rule 45 of the

2
Rules of Court is the Decision dated September 10, 2009
3
and Resolution dated July 13, 2010 of the Court of Appeals
(CA) in CA-G.R. SP No. 85228 nullifying and setting aside
4
for lack of jurisdiction the Resolution dated April 28, 2004
of the Commission on the Settlement of Land Problems
(COSLAP) in COS LAP Case No. 99-500. The fallo of the
assailed COS LAP Resolution reads, as follows:
WHEREFORE, premises considered, judgment is hereby
rendered as follows:
1. Declaring the subject property, covering an area
of 78,466 square meters, now being occupied by
the members of the Dream Village Neighborhood
Association, Inc. to be outside of Swo-00-0001302
BCDA property.
2. In accordance with the tenets of social justice,
members of said association are advised to apply
for sales patent on their respective occupied lots
with the Land Management Bureau, DENR-NCR,
pursuant to R.A. Nos. 274 and 730.
3. Directing the Land Management Bureau-DENRNCR to process the sales patent application of
complainants pursuant to existing laws and
regulation.
4. The peaceful possession of actual occupants be
respected by the respondents.
5
SO ORDERED.

Antecedent Facts
Petitioner Dream Village Neighborhood Association, Inc.
(Dream Village) claims to represent more than 2,000
families who have been occupying a 78,466-square meter
lot in Western Bicutan, Taguig City since 1985 "in the
concept of owners continuously, exclusively and
6
notoriously." The lot used to be part of the Hacienda de
Maricaban (Maricaban), owned by Dolores Casal y Ochoa
7
and registered under a Torrens title, Original Certificate of
Title (OCT) No. 291, issued on October 17, 1906 by the
8
Registry of Deeds of Rizal. Maricaban covered several
parcels of land with a total area of over 2,544 hectares
spread out over Makati, Pasig, Taguig, Pasay, and
9
Paraaque.
Following the purchase of Maricaban by the government of
the United States of America (USA) early in the American
colonial period, to be converted into the military reservation
known as Fort William Mckinley, Transfer Certificate of Title
(TCT) No. 192 was issued in the name of the USA to cancel
10
OCT No. 291. The US government later transferred 30
has. of Maricaban to the Manila Railroad Company, for
which TCT No. 192 was cancelled by TCT Nos. 1218 and
1219, the first in the name of the Manila Railroad Company
for 30 has., and the second in the name of the USA for the
11
rest of the Maricaban property.
On January 29, 1914, TCT No. 1219 was cancelled and
replaced by TCT No. 1688, and later that year, on
September 15, 1914, TCT No. 1688 was cancelled and
replaced by TCT No. 2288, both times in the name of the
12
USA. On December 6, 1956, the USA formally ceded Fort
William Mckinley to the Republic of the Philippines
(Republic), and on September 11, 1958, TCT No. 2288 was
cancelled and replaced by TCT No. 61524, this time in the
13
name of the Republic. On July 12, 1957, President Carlos
P. Garcia issued Proclamation No. 423 withdrawing from
sale or settlement the tracts of land within Fort William
Mckinley, now renamed Fort Bonifacio, and reserving them
14
for military purposes.
On January 7, 1986, President Ferdinand E. Marcos issued

Proclamation No. 2476 declaring certain portions of Fort

15
Bonifacio alienable and disposable in the manner provided
under Republic Act (R.A.) Nos. 274 and 730, in relation to
16
the Public Land Act, thus allowing the sale to the settlers
of home lots in Upper Bicutan, Lower Bicutan, Signal
17
Village, and Western Bicutan.
On October 16, 1987, President Corazon C. Aquino issued
Proclamation No. 172 amending Proclamation No. 2476 by
limiting to Lots 1 and 2 of the survey Swo-13-000298 the
18
areas in Western Bicutan open for disposition.
19

On March 13, 1992, R.A. No. 7227 was passed creating

the Bases Conversion and Development Authority (BCDA)
to oversee and accelerate the conversion of Clark and
Subic military reservations and their extension camps (John
Hay Station, Wallace Air Station, ODonnell Transmitter
Station, San Miguel Naval Communications Station and
20
Capas Relay Station) to productive civilian uses. Section 8
of the said law provides that the capital of the BCDA will be
provided from sales proceeds or transfers of lots in nine (9)
military camps in Metro Manila, including 723 has. of Fort
Bonifacio. The law, thus, expressly authorized the President
of the Philippines "to sell the above lands, in whole or in
part, which are hereby declared alienable and disposable
pursuant to the provisions of existing laws and regulations
21
governing sales of government properties," specifically to
raise capital for the BCDA. Titles to the camps were
22
transferred to the BCDA for this purpose, and TCT No.
61524 was cancelled on January 3, 1995 by TCT Nos.
23888, 23887, 23886, 22460, 23889, 23890, and 23891,
23
now in the name of the BCDA.
Excepted from disposition by the BCDA are: a)
approximately 148.80 has. reserved for the National Capital
Region (NCR) Security Brigade, Philippine Army officers
housing area, and Philippine National Police jails and
support services (presently known as Camp Bagong Diwa);
b) approximately 99.91 has. in Villamor Air Base for the
Presidential Airlift Wing, one squadron of helicopters for the
NCR and respective security units; c) twenty one (21) areas
segregated by various presidential proclamations; and d) a
proposed 30.15 has. as relocation site for families to be

affected by the construction of Circumferential Road 5 and

Radial Road 4, provided that the boundaries and technical
description of these exempt areas shall be determined by
24
an actual ground survey.
Now charging the BCDA of wrongfully asserting title to
Dream Village and unlawfully subjecting its members to
summary demolition, resulting in unrest and tensions among
25
the residents, on November 22, 1999, the latter filed a
letter-complaint with the COSLAP to seek its assistance in
the verification survey of the subject 78,466-sq m property,
which they claimed is within Lot 1 of Swo-13-000298 and
thus is covered by Proclamation No. 172. They claim that
they have been occupying the area for thirty (30) years "in
the concept of owners continuously, exclusively and
notoriously for several years," and have built their houses of
sturdy materials thereon and introduced paved roads,
drainage and recreational and religious facilities. Dream
Village, thus, asserts that the lot is not among those
transferred to the BCDA under R.A. No. 7227, and therefore
patent applications by the occupants should be processed
by the Land Management Bureau (LMB).
On August 15, 2000, Dream Village formalized its complaint
26
by filing an Amended Petition in the COSLAP. Among the
reliefs it sought were:
d. DECLARING the subject property as alienable
and disposable by virtue of applicable laws;
e. Declaring the portion of Lot 1 of subdivision Plan
SWO-13-000298, situated in the barrio of Western
Bicutan, Taguig, Metro Manila, which is presently
being occupied by herein petitioner as within the
coverage of Proclamation Nos. 2476 and 172 and
outside the claim of AFP-RSBS INDUSTRIAL
PARK COMPLEX and/or BASES CONVESION
DEVELOPMENT AUTHORITY.
f. ORDERING the Land Management Bureau to
process the application of the ASSOCIATION
members for the purchase of their respective lots
under the provisions of Acts Nos. 274 and 730.

(Underscoring supplied)
28

Respondent BCDA in its Answer dated November 23,

2000 questioned the jurisdiction of the COSLAP to hear
Dream Villages complaint, while asserting its title to the
subject property pursuant to R.A. No. 7227. It argued that
under Executive Order (E.O.) No. 561 which created the
COSLAP, its task is merely to coordinate the various
government offices and agencies involved in the settlement
of land problems or disputes, adding that BCDA does not
fall in the enumeration in Section 3 of E.O. No. 561, it being
neither a pastureland-lease holder, a timber concessionaire,
or a government reservation grantee, but the holder of
patrimonial government property which cannot be the
subject of a petition for classification, release or subdivision
by the occupants of Dream Village.
29

In its Resolution dated April 28, 2004, the COSLAP

narrated that it called a mediation conference on March 22,
2001, during which the parties agreed to have a
relocation/verification survey conducted of the subject lot.
On April 4, 2001, the COSLAP wrote to the Department of
Environment and Natural Resources (DENR)-Community
Environment and Natural Resources Office-NCR requesting
the survey, which would also include Swo-00-0001302,
covering the adjacent AFP-RSBS Industrial Park
established by Proclamation No. 1218 on May 8, 1998 as
well as the abandoned Circumferential Road 5 (C-5
30
Road).
On April 1, 2004, the COSLAP received the final report of
the verification survey and a blueprint copy of the survey
plan from Atty. Rizaldy Barcelo, Regional Technical Director
for Lands of DENR. Specifically, Item No. 3 of the DENR
report states:
3. Lot-1, Swo-000298 is inside Proclamation 172. Dream
Village Neighborhood Association, Inc. is outside Lot-1,
Swo-13-000298 and inside Lot-10, 11 & Portion of Lot 13,
Swo-00-0001302 with an actual area of 78,466 square
meters. Likewise, the area actually is outside Swo-0031
0001302 of BCDA. (Emphasis ours and underscoring
supplied)

COSLAP Ruling
On the basis of the DENRs verification survey report, the
COSLAP resolved that Dream Village lies outside of BCDA,
and particularly, outside of Swo-00-0001302, and thus
directed the LMB of the DENR to process the applications of
Dream Villages members for sales patent, noting that in
view of the length of time that they "have been openly,
continuously and notoriously occupying the subject property
in the concept of an owner, x x x they are qualified to apply
for sales patent on their respective occupied lots pursuant to
R.A. Nos. 274 and 730 in relation to the provisions of the
32
Public Land Act."
On the question of its jurisdiction over the complaint, the
COSLAP cited the likelihood that the summary eviction by
the BCDA of more than 2,000 families in Dream Village
could stir up serious social unrest, and maintained that
Section 3(2) of E.O. No. 561 authorizes it to "assume
jurisdiction and resolve land problems or disputes which are
critical and explosive in nature considering, for instance, the
large number of parties involved, the presence or
emergence of social tension or unrest, or other similar
critical situations requiring immediate action," even as
Section 3(2)(d) of E.O. No. 561 also allows it to take
cognizance of "petitions for classification, release and/or
subdivision of lands of the public domain," exactly the
ultimate relief sought by Dream Village. Rationalizing that it
was created precisely to provide a more effective
mechanism for the expeditious settlement of land problems
"in general," the COSLAP invoked as its authority the 1990
33
case of Baaga v. COSLAP, where this Court said:
It is true that Executive Order No. 561 provides that the
COSLAP may take cognizance of cases which are "critical
and explosive in nature considering, for instance, the large
number of parties involved, the presence or emergence of
social tension or unrest, or other similar critical situations
requiring immediate action." However, the use of the word
"may" does not mean that the COSLAPs jurisdiction is
merely confined to the above mentioned cases. The
provisions of the said Executive Order are clear that the
COSLAP was created as a means of providing a more

effective mechanism for the expeditious settlement of land

problems in general, which are frequently the source of
conflicts among settlers, landowners and cultural minorities.
Besides, the COSLAP merely took over from the abolished
PACLAP whose functions, including its jurisdiction, power
and authority to act on, decide and resolve land disputes
(Sec. 2, P.D. No. 832) were all assumed by it. The said
Executive Order No. 561 containing said provision, being
enacted only on September 21, 1979, cannot affect the
exercise of jurisdiction of the PACLAP Provincial Committee
of Koronadal on September 20, 1978. Neither can it affect
the decision of the COSLAP which merely affirmed said
34
exercise of jurisdiction.
35

In its Motion for Reconsideration filed on May 20, 2004,

the BCDA questioned the validity of the survey results since
it was conducted without its representatives present, at the
same time denying that it received a notification of the
36
DENR verification survey. It maintained that there is no
basis for the COSLAPs finding that the members of Dream
Village were in open, continuous, and adverse possession
in the concept of owner, because not only is the property
not among those declared alienable and disposable, but it is
37
a titled patrimonial property of the State.
38

In the Order dated June 17, 2004, the COSLAP denied

BCDAs Motion for Reconsideration, insisting that it had due
notice of the verification survey, while also noting that
although the BCDA wanted to postpone the verification
survey due to its tight schedule, it actually stalled the survey
when it failed to suggest an alternative survey date to
ensure its presence.
CA Ruling
39

On Petition for Review to the CA, the BCDA argued that

the dispute is outside the jurisdiction of the COSLAP
because of the lands history of private ownership and
40
because it is registered under an indefeasible Torrens title ;
that Proclamation No. 172 covers only Lots 1 and 2 of Swo13-000298 in Western Bicutan, whereas Dream Village
occupies Lots 10, 11 and part of 13 of Swo-00-0001302,
41
which also belongs to the BCDA ; that the COSLAP
resolution is based on an erroneous DENR report stating

that Dream Village is outside of BCDA, because Lots 10,

11, and portion of Lot 13 of Swo-00-0001302 are within the
42
DA ; that the COSLAP was not justified in ignoring BCDAs
request to postpone the survey to the succeeding year
because the presence of its representatives in such an
important verification survey was indispensable for the
impartiality of the survey aimed at resolving a highly volatile
43
situation ; that the COSLAP is a mere coordinating
44
administrative agency with limited jurisdiction ; and, that
the present case is not among those enumerated in Section
45
3 of E.O. No. 561 .

WITH LAW AND APPLICABLE DECISIONS OF THIS

HONORABLE COURT;
B
THE HONORABLE CA ERRED IN RULING THAT COSLAP
HAD NO JURISDICTION OVER THE CONTROVERSY
49
BETWEEN THE PARTIES HEREIN.
The Courts Ruling
We find no merit in the petition.

The COSLAP, on the other hand, maintained that Section

3(2)(e) of E.O. No. 561 provides that it may assume
jurisdiction and resolve land problems or disputes in "other
46
similar land problems of grave urgency and magnitude,"
and the present case is one such problem.
47

The CA in its Decision dated September 10, 2009 ruled

that the COSLAP has no jurisdiction over the complaint
because the question of whether Dream Village is within the
areas declared as available for disposition in Proclamation
No. 172 is beyond its competence to determine, even as the
land in dispute has been under a private title since 1906,
and presently its title is held by a government agency, the
BCDA, in contrast to the case of Baaga relied upon by
Dream Village, where the disputed land was part of the
public domain and the disputants were applicants for sales
patent thereto.
Dream Villages motion for reconsideration was denied in
48
the appellate courts Order of July 13, 2010.
Petition for Review in the Supreme Court
On petition for review on certiorari to this Court, Dream
Village interposes the following issues:
A
IN ANNULLING THE RESOLUTION OF COSLAP IN
COSLAP CASE NO. 99-500, THE HONORABLE CA
DECIDED THE CASE IN A MANNER NOT CONSISTENT

The BCDA holds title to Fort Bonifacio.

That the BCDA has title to Fort Bonifacio has long been
decided with finality. In Samahan ng Masang Pilipino sa
50
Makati, Inc. v. BCDA, it was categorically ruled as follows:
First, it is unequivocal that the Philippine Government, and
now the BCDA, has title and ownership over Fort Bonifacio.
The case of Acting Registrars of Land Titles and Deeds of
Pasay City, Pasig and Makati is final and conclusive on the
ownership of the then Hacienda de Maricaban estate by the
Republic of the Philippines. Clearly, the issue on the
ownership of the subject lands in Fort Bonifacio is laid to
rest. Other than their view that the USA is still the owner of
the subject lots, petitioner has not put forward any claim of
51
ownership or interest in them.
The facts in Samahan ng Masang Pilipino sa Makati are
essentially not much different from the controversy below.
There, 20,000 families were long-time residents occupying
98 has. of Fort Bonifacio in Makati City, who vainly sought
to avert their eviction and the demolition of their houses by
the BCDA upon a claim that the land was owned by the
USA under TCT No. 2288. The Supreme Court found that
TCT No. 2288 had in fact been cancelled by TCT No. 61524
in the name of the Republic, which title was in turn
cancelled on January 3, 1995 by TCT Nos. 23888, 23887,
23886, 22460, 23889, 23890, and 23891, all in the name of
the BCDA. The Court ruled that the BCDAs aforesaid titles
over Fort Bonifacio are valid, indefeasible and beyond

question, since TCT No. 61524 was cancelled in favor of

BCDA pursuant to an explicit authority under R.A. No. 7227,
the legal basis for BCDAs takeover and management of the
52
subject lots.
Dream Village sits on the abandoned C-5 Road, which
lies outside the area declared in Proclamation Nos.
2476 and 172 as alienable and disposable.
Pursuant to Proclamation No. 2476, the following surveys
were conducted by the Bureau of Lands to delimit the
boundaries of the areas excluded from the coverage of
Proclamation No. 423:
Barangay Survey Plan Date Approved
1. Lower Bicutan SWO-13-000253 October 21,
1986
2. Signal Village SWO-13-000258 May 13, 1986
3. Upper Bicutan SWO-13-000258 May 13, 1986
4. Western Bicutan SWO-13-000298 January 15,
53
1987
However, the survey plan for Western Bicutan, Swo-13000298, shows that Lots 3, 4, 5 and 6 thereof are inside the
area segregated for the Libingan ng mga Bayani under
Proclamation No. 208, which then leaves only Lots 1 and 2
of Swo-13-000298 as available for disposition. For this
reason, it was necessary to amend Proclamation No. 2476.
Thus, in Proclamation No. 172 only Lots 1 and 2 of Swo-1354
000298 are declared alienable and disposable.
The DENR verification survey report states that Dream
Village is not situated in Lot 1 of Swo-13-000298 but
actually occupies Lots 10, 11 and part of 13 of Swo-000001302: "x x x Dream Village is outside Lot1, SWO-13000298 and inside Lot 10, 11 & portion of Lot 13, SWO-000001302 with an actual area of 78466 square meters. The
area is actually is [sic] outside SWO-00-0001302 of
55
BCDA." Inexplicably and gratuitously, the DENR also
states that the area is outside of BCDA, completely
oblivious that the BCDA holds title over the entire Fort
Bonifacio, even as the BCDA asserts that Lots 10, 11 and
13 of SWO-00-0001302 are part of the abandoned right-ofway of C-5 Road. This area is described as lying north of

Lot 1 of Swo-13-000298 and of Lots 3, 4, 5 and 6 of Swo13-000298 (Western Bicutan) inside the Libingan ng mga
Bayani, and the boundary line of Lot 1 mentioned as C-5
Road is really the proposed alignment of C-5 Road, which
was abandoned when, as constructed, it was made to
traverse northward into the Libingan ng mga Bayani. Dream
Village has not disputed this assertion.
The mere fact that the original plan for C-5 Road to cross
Swo-00-0001302 was abandoned by deviating it northward
to traverse the southern part of Libingan ng mga Bayani
does not signify abandonment by the government of the
bypassed lots, nor that these lots would then become
alienable and disposable. They remain under the title of the
BCDA, even as it is significant that under Section 8(d) of
R.A. No. 7227, a relocation site of 30.5 has. was to be
reserved for families affected by the construction of C-5
Road. It is nowhere claimed that Lots 10, 11 and 13 of Swo00-0001302 are part of the said relocation site. These lots
56
border C-5 Road in the south, making them commercially
valuable to BCDA, a farther argument against a claim that
the government has abandoned them to Dream Village.

(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.
Art. 421. All other property of the State, which is not of the
character stated in the preceding article, is patrimonial
property.
One question laid before us is whether the area occupied by
Dream Village is susceptible of acquisition by prescription.
57
In Heirs of Mario Malabanan v. Republic, it was pointed
out that from the moment R.A. No. 7227 was enacted, the
subject military lands in Metro Manila

While property of the State or any of its subdivisions

patrimonial in character may be the object of
prescription, those "intended for some public service or for
the development of the national wealth" are considered
property of public dominion and therefore not
susceptible to acquisition by prescription.

became alienable and disposable. However, it was also

clarified that the said lands did not thereby become
patrimonial, since the BCDA law makes the express
reservation that they are to be sold in order to raise funds
for the conversion of the former American bases in Clark
and Subic. The Court noted that the purpose of the law can
be tied to either "public service" or "the development of
national wealth" under Article 420(2) of the Civil Code, such
that the lands remain property of the public dominion, albeit
their status is now alienable and disposable. The Court then
explained that it is only upon their sale to a private person or
entity as authorized by the BCDA law that they become
private property and cease to be property of the public
58
dominion:

Article 1113 of the Civil Code provides that "property of the

State or any of its subdivisions not patrimonial in character
shall not be the object of prescription." Articles 420 and 421
identify what is property of public dominion and what is
patrimonial property:

For as long as the property belongs to the State, although

already classified as alienable or disposable, it remains
property of the public dominion if when it is "intended for
some public service or for the development of the national
59
wealth."

Art. 420. The following things are property of public

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

Thus, under Article 422 of the Civil Code, public domain

lands become patrimonial property only if there is a
declaration that these are alienable or disposable, together
with an express government manifestation that the property
is already patrimonial or no longer retained for public
service or the development of national wealth. Only when
the property has become patrimonial can the prescriptive

period for the acquisition of property of the public dominion

begin to run. Also under Section 14(2) of Presidential
Decree (P.D.) No. 1529, it is provided that before acquisitive
prescription can commence, the property sought to be
registered must not only be classified as alienable and
disposable, it must also be expressly declared by the State
that it is no longer intended for public service or the
development of the national wealth, or that the property has
been converted into patrimonial. Absent such an express
declaration by the State, the land remains to be property of
60
public dominion.
Since the issuance of Proclamation No. 423 in 1957, vast
portions of the former Maricaban have been legally
disposed to settlers, besides those segregated for public or
government use. Proclamation No. 1217 (1973) established
the Maharlika Village in Bicutan, Taguig to serve the needs
of resident Muslims of Metro Manila; Proclamation No. 2476
(1986), as amended by Proclamation No. 172 (1987),
declared more than 400 has. of Maricaban in Upper and
Lower Bicutan, Signal Village, and Western Bicutan as
alienable and disposable; Proclamation No. 518 (1990)
formally exempted from Proclamation No. 423 the
Barangays of Cembo, South Cembo, West Rembo, East
Rembo, Comembo, Pembo and Pitogo, comprising 314
has., and declared them open for disposition.
The above proclamations notwithstanding, Fort Bonifacio
remains property of public dominion of the State, because
although declared alienable and disposable, it is reserved
for some public service or for the development of the
national wealth, in this case, for the conversion of military
61
reservations in the country to productive civilian uses.
Needless to say, the acquisitive prescription asserted by
Dream Village has not even begun to run.
Ownership of a land registered under a Torrens title
cannot be lost by prescription or adverse possession.
Dream Village has been unable to dispute BCDAs claim
that Lots 10, 11 and part of 13 of Swo-00-0001302 are the
abandoned right-of-way of C-5 Road, which is within the
vast titled territory of Fort Bonifacio. We have already

established that these lots have not been declared alienable

and disposable under Proclamation Nos. 2476 or 172.
Moreover, it is a settled rule that lands under a Torrens title
62
cannot be acquired by prescription or adverse possession.
Section 47 of P.D. No. 1529, the Property Registration
Decree, expressly provides that no title to registered land in
derogation of the title of the registered owner shall be
acquired by prescription or adverse possession. And,
although the registered landowner may still lose his right to
recover the possession of his registered property by reason
63
of laches, nowhere has Dream Village alleged or proved
laches, which has been defined as such neglect or omission
to assert a right, taken in conjunction with lapse of time and
other circumstances causing prejudice to an adverse party,
as will operate as a bar in equity. Put any way, it is a delay
in the assertion of a right which works disadvantage to
another because of the inequity founded on some change in
the condition or relations of the property or parties. It is
based on public policy which, for the peace of society,
ordains that relief will be denied to a stale demand which
64
otherwise could be a valid claim.
The subject property having been expressly reserved
for a specific public purpose, the COSLAP cannot
exercise jurisdiction over the complaint of the Dream
Village settlers.
BCDA has repeatedly asserted that the COSLAP has no
jurisdiction to hear Dream Villages complaint. Concurring,
the CA has ruled that questions as to the physical identity of
Dream Village and whether it lies in Lots 10, 11 and 13 of
Swo-00-0001302, or whether Proclamation No. 172 has
released the disputed area for disposition are issues which
are "manifestly beyond the scope of the COSLAPs
jurisdiction vis--vis Paragraph 2, Section 3 of E.O. No.
65
561," rendering its Resolution a patent nullity and its
pronouncements void. Thus, the CA said, under Section 3
of E.O. No. 561, the COSLAPs duty would have been to
refer the conflict to another tribunal or agency of
government in view of the serious ramifications of the
disputed claims:

In fine, it is apparent that the COSLAP acted outside its

jurisdiction in taking cognizance of the case. It would have
been more prudent if the COSLAP has [sic] just referred the
controversy to the proper forum in order to fully thresh out
the ramifications of the dispute at bar. As it is, the impugned
Resolution is a patent nullity since the tribunal which
rendered it lacks jurisdiction. Thus, the pronouncements
contained therein are void. "We have consistently ruled that
a judgment for want of jurisdiction is no judgment at all. It
cannot be the source of any right or the creator of any
obligation. All acts performed pursuant to it and all claims
66
emanating from it have no legal effect." (Citation omitted)
We add that Fort Bonifacio has been reserved for a
declared specific public purpose under R.A. No. 7227,
which unfortunately for Dream Village does not encompass
the present demands of its members. Indeed, this purpose
was the very reason why title to Fort Bonifacio has been
transferred to the BCDA, and it is this very purpose which
takes the dispute out of the direct jurisdiction of the
COSLAP. A review of the history of the COSLAP will readily
clarify that its jurisdiction is limited to disputes over public
lands not reserved or declared for a public use or purpose.
On July 31, 1970, President Marcos issued E.O. No. 251
creating the Presidential Action Committee on Land
Problems (PACLAP) to expedite and coordinate the
investigation and resolution of all kinds of land disputes
between settlers, streamline and shorten administrative
procedures, adopt bold and decisive measures to solve land
67
problems, or recommend other solutions. E.O. No. 305,
issued on March 19, 1971, reconstituted the PACLAP and
gave it exclusive jurisdiction over all cases involving public
68
lands and other lands of the public domain, as well as
adjudicatory powers phrased in broad terms: "To
investigate, coordinate, and resolve expeditiously land
disputes, streamline administrative proceedings, and, in
general, to adopt bold and decisive measures to solve
problems involving public lands and lands of the public
69
domain."
On November 27, 1975, P.D. No. 832 reorganized the
PACLAP and enlarged its functions and duties. Section 2

thereof even granted it quasi judicial functions, to wit:

Sec. 2. Functions and duties of the PACLAP. The
PACLAP shall have the following functions and duties:
1. Direct and coordinate the activities, particularly
the investigation work, of the various government
agencies and agencies involved in land problems
or disputes, and streamline administrative
procedures to relieve small settlers and
landholders and members of cultural minorities of
the expense and time-consuming delay attendant
to the solution of such problems or disputes;
2. Refer for immediate action any land problem or
dispute brought to the attention of the PACLAP, to
any member agency having jurisdiction thereof:
Provided, That when the Executive Committee
decides to act on a case, its resolution, order or
decision thereon shall have the force and effect of
a regular administrative resolution, order or
decision, and shall be binding upon the parties
therein involved and upon the member agency
having jurisdiction thereof;
xxxx
4. Evolve and implement a system of procedure for the
speedy investigation and resolution of land disputes or
problems at provincial level, if possible. (Underscoring
supplied)
On September 21, 1979, E.O. No. 561 abolished the
PACLAP and created the COSLAP to be a more effective
administrative body to provide a mechanism for the
expeditious settlement of land problems among small
settlers, landowners and members of the cultural minorities
70
to avoid social unrest. Paragraph 2, Section 3 of E.O No.
561 now specifically enumerates the instances when the
COSLAP can exercise its adjudicatory functions:
Sec. 3. Powers and Functions. The Commission shall
have the following powers and functions:
1. Coordinate the activities, particularly the
investigation work, of the various government

offices and agencies involved in the settlement of

land problems or disputes, and streamline
administrative procedures to relieve small settlers
and landholders and members of cultural minorities
of the expense and time consuming delay
attendant to the solution of such problems or
disputes;
2. Refer and follow-up for immediate action by the
agency having appropriate jurisdiction any land
problem or dispute referred to the Commission:
Provided, That the Commission may, in the
following cases, assume jurisdiction and resolve
land problems or disputes which are critical and
explosive in nature considering, for instance, the
large number of the parties involved, the presence
or emergence of social tension or unrest, or other
similar critical situations requiring immediate
action:
(a) Between occupants/squatters and
pasture lease agreement holders or
timber concessionaires;
(b) Between occupants/squatters and
government reservation grantees;
(c) Between occupants/squatters and
public land claimants or applicants;
(d) Petitions for classification, release
and/or subdivision of lands of the public
domain; and
(e) Other similar land problems of grave
urgency and magnitude.
xxxx
Citing the constant threat of summary eviction and
demolition by the BCDA and the seriousness and urgency
of the reliefs sought in its Amended Petition, Dream Village
insists that the COSLAP was justified in assuming
jurisdiction of COSLAP Case No. 99-500. But in Longino v.
71
Atty. General, it was held that as an administrative
agency, COSLAPs jurisdiction is limited to cases
specifically mentioned in its enabling statute, E.O. No. 561.
The Supreme Court said:
Administrative agencies, like the COSLAP, are tribunals of

limited jurisdiction and, as such, could wield only such as

are specifically granted to them by the enabling statutes. x x
x.
xxxx
Under the law, E.O. No. 561, the COSLAP has two options
in acting on a land dispute or problem lodged before it,
namely, (a) refer the matter to the agency having
appropriate jurisdiction for settlement/resolution; or (b)
assume jurisdiction if the matter is one of those enumerated
in paragraph 2(a) to (e) of the law, if such case is critical
and explosive in nature, taking into account the large
number of the parties involved, the presence or emergence
of social tension or unrest, or other similar critical situations
requiring immediate action. In resolving whether to assume
jurisdiction over a case or to refer the same to the particular
agency concerned, the COSLAP has to consider the nature
or classification of the land involved, the parties to the case,
the nature of the questions raised, and the need for
immediate and urgent action thereon to prevent injuries to
persons and damage or destruction to property. The law
does not vest jurisdiction on the COSLAP over any land
72
dispute or problem. (Citation omitted)
The Longino ruling has been consistently cited in
subsequent COSLAP cases, among them Davao New Town
73
74
Development Corp. v. COSLAP, Barranco v. COSLAP,
75
76
NHA v. COSLAP, Cayabyab v. de Aquino, Ga, Jr. v.
77
78
Tubungan, Machado v. Gatdula, and Vda. de Herrera v.
79
Bernardo.
Thus, in Machado, it was held that the COSLAP cannot
invoke Section 3(2)(e) of E.O. No. 561 to assume
jurisdiction over "other similar land problems of grave
urgency," since the statutory construction principle of
ejusdem generis prescribes that where general words follow
an enumeration of persons or things, by words of a
particular and specific meaning, such general words are not
to be construed in their widest extent but are to be held as
applying only to persons or things of the same kind as those
80
specifically mentioned. Following this rule, COSLAPs
jurisdiction is limited to disputes involving lands in which the
81
government has a proprietary or regulatory interest, or
public lands covered with a specific license from the

government such as a pasture lease agreements, a timber

82
concessions, or a reservation grants, and where
moreover, the dispute is between occupants/squatters and
pasture lease agreement holders or timber concessionaires;
between occupants/squatters and government reservation
grantees; and between occupants/squatters and public land
claimants or applicants.
In Longino, the parties competed to lease a property of the
Philippine National Railways. The high court rejected
COSLAPs jurisdiction, noting that the disputed lot is not
public land, and neither party was a squatter, patent lease
agreement holder, government reservation grantee, public
land claimant or occupant, or a member of any cultural
minority, nor was the dispute critical and explosive in nature
so as to generate social tension or unrest, or a critical
83
situation which required immediate action.
In Davao New Town Development Corp., it was held that
the COSLAP has no concurrent jurisdiction with the
Department of Agrarian Reform (DAR) in respect of
disputes concerning the implementation of agrarian reform
laws, since "the grant of exclusive and primary jurisdiction
over agrarian reform matters on the DAR implies that no
other court, tribunal, or agency is authorized to resolve
84
disputes properly cognizable by the DAR." Thus, instead
of hearing and resolving the case, COSLAP should have
simply referred private respondents complaint to the DAR
or DARAB. According to the Court:
The abovementioned proviso Section (3)(2) of E.O. No. 561,
which vests COSLAP the power to resolve land disputes,
does not confer upon COSLAP blanket authority to assume
every matter referred to it. Its jurisdiction is confined only to
disputes over lands in which the government has proprietary
or regulatory interest. Moreover, the land dispute in Baaga
involved parties with conflicting free patent applications
which was within the authority of PACLAP to resolve, unlike
that of the instant case which is exclusively cognizable by
85
the DAR.
In Barranco, COSLAP issued a writ to demolish structures
encroaching into private property.The Supreme court ruled

that COSLAP may resolve only land disputes "involving

public lands or lands of the public domain or those covered
with a specific license from the government such as a
pasture lease agreement, a timber concession, or a
86
reservation grant."
In NHA, it was held that COSLAP has no jurisdiction over a
boundary dispute between two local government units, that
its decision is an utter nullity correctible by certiorari, that it
can never become final and any writ of execution based on
it is void, and all acts performed pursuant to it and all claims
87
emanating from it have no legal effect.
In Cayabyab, it was held that "the jurisdiction of COSLAP
does not extend to disputes involving the ownership of
private lands, or those already covered by a certificate of
title, as these fall exactly within the jurisdiction of the courts
88
and other administrative agencies."
In Ga, Jr., it was reiterated that the COSLAP has no
jurisdiction over controversies relating to ownership and
possession of private lands, and thus, the failure of
respondents to properly appeal from the COSLAP decision
before the appropriate court was held not fatal to the petition
for certiorari that they eventually filed with the CA. The latter
remedy remained available despite the lapse of the period
89
to appeal from the void COSLAP decision.
In Machado, the high court ruled that COSLAP has no
jurisdiction in disputes over private lands between private
parties, reiterating the essential rules contained in Section 3
of E.O. No. 561 governing the exercise by COSLAP of its
jurisdiction, to wit:
Under these terms, the COSLAP has two different rules in
acting on a land dispute or problem lodged before it, e.g.,
COSLAP can assume jurisdiction only if the matter is one of
those enumerated in paragraph 2(a) to (e) of the law.
Otherwise, it should refer the case to the agency having
appropriate jurisdiction for settlement or resolution. In
resolving whether to assume jurisdiction over a case or to
refer it to the particular agency concerned, the COSLAP
considers: (a) the nature or classification of the land

involved; (b) the parties to the case; (c) the nature of the
questions raised; and (d) the need for immediate and urgent
action thereon to prevent injury to persons and damage or
destruction to property. The terms of the law clearly do not
vest on the COSLAP the general power to assume
jurisdiction over any land dispute or problem. Thus, under
EO 561, the instances when the COSLAP may resolve land
disputes are limited only to those involving public lands or
those covered by a specific license from the government,
such as pasture lease agreements, timber concessions, or
90
reservation grants. (Citations omitted)
In Vda. de Herrera, the COSLAP assumed jurisdiction over
a complaint for "interference, disturbance, unlawful claim,
harassment and trespassing" over a private parcel of land.
The CA ruled that the parties were estopped to question
COSLAPs jurisdiction since they participated actively in the
proceedings. The Supreme Court, noting from the complaint
that the case actually involved a claim of title and
possession of private land, ruled that the RTC or the MTC
has jurisdiction since the dispute did not fall under Section
3, paragraph 2 (a) to (e) of E.O. No. 561, was not critical
and explosive in nature, did not involve a large number of
parties, nor was there social tension or unrest present or
91
emergent.
In the case at bar, COSLAP has invoked Baaga to assert
its jurisdiction. There, Guillermo Baaga had filed a free
patent application with the Bureau of Lands over a public
land with an area of 30 has. Gregorio Daproza (Daproza)
also filed a patent application for the same property. The
opposing claims and protests of the claimants remained
unresolved by the Bureau of Lands, and neither did it
conduct an investigation. Daproza wrote to the COSLAP,
which then opted to exercise jurisdiction over the
controversy. The high court sustained COSLAP, declaring
that its jurisdiction is not confined to the cases mentioned in
paragraph 2(a) to (e) of E.O. No. 561, but includes land
problems in general, which are frequently the source of
conflicts among settlers, landowners and cultural minorities.
But as the Court has since clarified in Longino and in the
other cases aforecited, the land dispute in Baaga was

between private individuals who were free patent applicants

over unregistered public lands. In contrast, the present
petition involves land titled to and managed by a
government agency which has been expressly reserved by
law for a specific public purpose other than for settlement.
Thus, as we have advised in Longino, the law does not vest
jurisdiction on the COSLAP over any land dispute or
problem, but it has to consider the nature or classification of
the land involved, the parties to the case, the nature of the
questions raised, and the need for immediate and urgent
action thereon to prevent injuries to persons and damage or
destruction to property.
WHEREFORE, premises considered, the petition is
DENIED.
SO ORDERED.

G.R. No. 169397

March 13, 2007
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
RESTITUTO SARMIENTO, represented by his attorneyin-fact, MAGDALENO SARMIENTO, Respondent.
DECISION
CARPIO MORALES, J.:
Restituto Sarmiento (respondent) through his brotherattorney-in-fact Magdaleno Sarmiento (Magdaleno) filed on
November 29, 2000 with the Metropolitan Trial Court
(MeTC) of Taguig, Metro Manila an application for
1
registration of a parcel of land, delineated as Lot 535-D
under Approved Survey Plan Swo-13-000465 with a total
land area of 2,664 square meters and located at Barangay
Wawa, Taguig, Metro Manila (the lot).
Respondent claimed to have acquired the lot through
2
donation under a Kasulatan ng Pagkakaloob dated July 16,
1988 executed by his father, Placido Sarmiento (Placido),
which lot formed part of Lot 535 that was allegedly inherited
by Placido from Florentina Sarmiento (Florentina).
Respondent further claimed that he and his predecessorsin-interest have been in open, continuous, uninterrupted,
adverse, and public possession of the lot in the concept of
3
an owner for more than 30 years.
Together with his application for registration, respondent
submitted the following documents:

3. Technical Description of Lot 535-D;

4. Owners Copy of Tax Declaration No. EL-0097

01681 in the name of Restituto A. Sarmiento;
5. Photocopy of the Kasulatan ng Pagkakaloob

6. Special Power of Attorney executed by Restituto

Sarmiento appointing Magdaleno Sarmiento as his
9
attorney-in-fact.
On January 17, 2001, the Solicitor General, through the
Prosecutor of Taguig who was deputized to assist in the
case, filed, as counsel for the Republic of the Philippines
10
(petitioner), an Opposition to respondents application for
registration. Contending that (1) neither the applicant nor his
predecessors-in-interest were in open, continuous,
exclusive and notorious possession and occupation of the
lot since June 12, 1945 or prior thereto, as required under
Section 48(b) of Commonwealth Act No. 141 (The Public
Land Act), as amended by Presidential Decree (P.D) No.
11
1073; (2) respondents muniments of title and/or tax
declarations and tax payment receipts do not appear to be
genuine and do not anyway constitute competent and
sufficient evidence of his bona fide acquisition of the lot in
the concept of an owner since June 12, 1945 or prior
thereto; (3) the claim of ownership in fee simple on the basis
of a Spanish title or grant can no longer be availed of by
respondent as he failed to file an appropriate application for
registration within six months from February 16, 1976, as
12
required under P.D. No. 892; and (4) the lot is part of the
public domain belonging to the Republic of the Philippines,
hence, not subject to private appropriation.
At the initial hearing of the application on April 4, 2001,
respondent offered and marked in evidence documents
proving compliance with jurisdictional requirements,
following which the MeTC issued an order of general default
13
against the whole world, except against the government.

1. Blueprint copy of the Conversion and

Subdivision Plan Swo-13-000465 of Lot 535 as
4
surveyed for Magdaleno Sarmiento, et al;
2. Photocopy of Geodetic Engineers Certificate;

dated July 16, 1988; and

After the conclusion of the testimonies of respondents

14
brother-attorney-in-fact Magdaleno and adjoining lot owner
15
Rodolfo Sta. Ana, the Department of Environment and
Natural Resources (DENR), through the Assistant Regional
Director for Legal Services and Public Affairs, filed its
16
Report dated April 16, 2001 reiterating respondents
claims as set forth in his application for registration.

The Land Registration Authority, through the Director of the

Department of Registration, also filed a report with the
MeTC with the information that it was not in a position to
verify whether the lot was already covered by a land patent
17
or a previously approved isolated survey.
18

Respondents formal offer of evidence did not merit

comment/opposition from petitioner which in fact waived the
19
presentation of evidence for the government.
20

By Decision of May 27, 2002, the MeTC granted

respondents application for registration. Thus it disposed:
WHEREFORE, premises considered and finding the
allegations in the application to have been sufficiently
established by the applicants evidence, this Court hereby
confirms the title of applicant Restituto Sarmiento, Filipino
citizen, of legal age, married to Betty Sarmiento and a
resident of No. 11, Guerrero Street, Wawa, Taguig, Metro
Manila over the subject parcel of agricultural land known as
Lot 535-D, MCadm-590-D, Taguig Cadastral Mapping under
Conversion and Subdivision Plan Swo-13-000465 situated
at Barangay Wawa, Municipality of Taguig, Metro Manila,
consisting of Two Thousand Six Hundred Sixty Four (2,664)
square meters and hereby order the registration thereof in
his name.
After the finality of this Decision and upon payment of the
corresponding taxes due on the said lot, let an order for the
issuance of decree of registration be issued.
SO ORDERED.

21

In granting respondents application, the MeTC found that

respondent and his predecessors-in-interest have been in
possession of the lot in the concept of an owner for more
than 30 years, viz:
The subject lot was a portion of the parcel of land previously
declared for taxation purposes in the name of its original
owner Florentina Sarmiento under Tax Declaration (T.D.)
No. 4995 (Exhibit "N"). Upon the death of Florentina
Sarmiento, a portion of said land was inherited by Placido

Sarmiento, the father of the herein applicant Restituto

Sarmiento, while the other portion went to Placidos [s]ister
Teodora Sarmiento. On July 16, 1988, Placido Sarmiento
transferred the portion of the parcel of land inherited by him
from Florentina Sarmiento to his children, namely: herein
applicant Restituto Sarmiento, Magdaleno Sarmiento and
Conigunda Sarmiento by virtue of a deed denominated as
"Kasulatan ng Pagkakaloob" (Exhibits "O" and "O-5"). (TSN,
June 16, 2001).
On April 24 and June 25, 1998, Magdaleno Sarmiento,
among others, caused the survey of the entire area of the
parcel of land x x x According to the said plan, the said
survey is inside alienable and disposable area, Project No.
27-B, L.C. Map No. 2623, certified on January 3, 1968 by
the Bureau of Forestry (Exhibit "K-2", supra).
The said property was being planted to rice, watermelons,
and other vegetables by Florentina Sarmiento and her
successors-in-interest themselves and by their hired helpers
for about fifty years (50) years already. It is not tenanted
and there are no other persons having a claim over the said
property since the Japanese occupation. The said parcel of
land is about two (2) kilometers away from the Laguna Lake
but it gets flooded for about two (2) months during the rainy
season and sometimes up to three (3) months if the town
proper (poblacion) of Taguig is itself underwater. (TSN,
June 6, 2001). x x x
Applicant Restituto Sarmiento and his predecessors-ininterest had been in possession of the subject parcel of land
continuously, uninterruptedly, openly, publicly, adversely
and in the concept of owners for more than thirty (30) years
22
now. x x x
Petitioner appealed to the Court of Appeals, faulting the
MeTC for granting the application despite respondents
failure to comply with the mandatory requirement of
23
submitting the original tracing cloth plan in evidence.
Petitioner advanced that according to the survey of the
Laguna Lake Development Authority (LLDA), the lot is
located below the reglementary lake elevation of 12.50
meters, hence, a part of the Laguna Lake bed which is

incapable of private appropriation.

24

25

By Decision of May 20, 2005, the appellate court held that

as the lot was sufficiently identified by the blue print copy of
the plan and the technical description, the presentation of
the original tracing cloth ceased to become indispensable
26
for the grant of the application.
The appellate court further held that petitioners claim that
the lot forms part of the Laguna Lake bed cannot be raised
for the first time on appeal, and even assuming that it was
properly raised, the purported ground survey of the LLDA
had no probative value since it was not a certified original
27
copy.
The appellate court thus affirmed the decision of the MeTC.
Petitioners motion for reconsideration having been denied
28
by Resolution of August 19, 2005, petitioner now comes
before this Court on a petition for review on certiorari.
It is well settled that no public land can be acquired by
private persons without any grant, express or implied, from
the government, and it is indispensable that the person
claiming title to public land should show that his title was
acquired from the State or any other mode of acquisition
29
recognized by law.
While respondent did not state in his application the
statutory basis of his application, it can reasonably be
inferred that he seeks the judicial confirmation or
30
legalization of his imperfect or incomplete title over the lot
which he claims to be a riceland.
Judicial confirmation of imperfect title is, under the Public
Land Act, one of the means by which public agricultural
31
lands may be disposed.
Section 48(b) of the Public Land Act, as amended by P.D.
32
1073, provides:
Section 48. The following-described citizens of the
Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but

whose titles have not been perfected or completed, may

apply to the Court of First Instance of the province where
the land is located for confirmation of their claims and the
issuance of a certificate of title thereafter, under the Land
Registration Act, to wit:
xxxx
(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 applications
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.
Under the above-quoted provision, an applicant for
confirmation of imperfect title must prove that (a) the land
forms part of the disposable and alienable agricultural lands
of the public domain; and (b) he has been in open,
continuous, exclusive, and notorious possession and
occupation of the land under a bona fide claim of ownership
33
either since time immemorial or since June 12, 1945.
To support its contention that the lot does not form part of
the disposable agricultural lands of the public domain,
petitioner submitted before the appellate court the technical
survey data and topographic map of the LLDA showing that
the lot is situated below the reglementary elevation of 12.50
meters. Since that was the first time petitioner raised the
issue, the appellate court correctly glossed over it, for
34
offending basic rules of fair play, justice, and due process.
In any event, an examination of what purports to be the
technical survey data of the LLDA shows that it is not a
certified original copy but a mere photocopy, the veracity
and genuineness of which cannot be ascertained by this
Court.
The absence or weakness of the evidence for petitioner

notwithstanding, respondent still bears the burden of

overcoming the presumption that the lot he seeks to register
forms part of the alienable agricultural land of the public
35
domain.
To discharge the onus, respondent relies on the blue print
copy of the conversion and subdivision plan approved by
the DENR Center which bears the notation of the surveyorgeodetic engineer that "this survey is inside the alienable
and disposable area, Project No. 27-B. L.C. Map No. 2623,
certified on January 3, 1968 by the Bureau of Forestry."
36

registered remains inalienable.

In the present case, petitioners cite a surveyor-geodetic
engineer's notation in Exhibit "E" indicating that the survey
was inside alienable and disposable land. Such notation does
not constitute a positive government act validly changing the
classification of the land in question. Verily, a mere surveyor
has no authority to reclassify lands of the public domain. By
relying solely on the said surveyor's assertion, petitioners
have not sufficiently proven that the land in question has
37
been declared alienable. (Citations omitted; Emphasis and
underscoring supplied)

Menguito v. Republic teaches, however, that reliance on

such a notation to prove that the lot is alienable is insufficient
and does not constitute incontrovertible evidence to
overcome the presumption that it remains part of the
inalienable public domain.

But even assuming that respondent has proven that the lot is
alienable, his application would still be denied for failure to
comply with the period of possession requirement.

To prove that the land in question formed part of the alienable

and disposable lands of the public domain, petitioners relied
on the printed words which read: "This survey plan is inside
Alienable and Disposable Land Area, Project No. 27-B as per
L.C. Map No. 2623, certified by the Bureau of Forestry on
January 3, 1968," appearing on Exhibit "E" (Survey Plan No.
Swo-13-000227).

Originally, Section 48(b) of the Public Land Act required

applicants to have been in possession and occupation of
lands applied for since July 26, 1894. The law was later
38
amended by Republic Act (RA) 1942 which provided for a
39
simple thirty-year prescriptive period.
RA 1942 has,
however, already been amended by P.D. 1073, approved on
January 25, 1977, which requires applicants to have been in
possession and occupation of the lands applied for since
June 12, 1945.1avvphi1

This proof is not sufficient. Section 2, Article XII of the 1987

Constitution, provides: "All lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife,
flora and fauna, and other natural resources are owned by
the State. . . ."
For the original registration of title, the applicant (petitioners
in this case) must overcome the presumption that the land
sought to be registered forms part of the public domain.
Unless public land is shown to have been reclassified or
alienated to a private person by the State, it remains part of
the inalienable public domain. Indeed, "occupation thereof in
the concept of owner, no matter how long, cannot ripen into
ownership and be registered as a title." To overcome such
presumption, incontrovertible evidence must be shown by the
applicant. Absent such evidence, the land sought to be

At the time respondent filed his application on November 29,

2000, he had only been in possession of the lot for more than
12 years, following his acquisition of ownership thereof from
40
Placido by Kasulatan ng Pagkakaloob dated July 16, 1988.
Respondent seeks to tack his possession with that of his
predecessors-in-interest, however.
From respondents evidence, his grandmother Florentina
(from whom his father allegedly inherited the lot which was in
turn donated to him) registered the lot for estate tax purposes
41
in 1948.
From an examination of this 1948 tax declaration, photocopy
42
of which was marked as Exhibit "N" by respondent, not only
does it bear no number or the number is illegible; the area of
the "palayero" (riceland) cannot be determined as what is

entered under the column "Area" is "1-25-48" which

apparently stands for June 25, 1948, the date of registration
for estate tax purposes. While this tax declaration names
Florentina as the owner, there is a notation after her printed
name reading deceased. And it names Lucio and Jose
Buenaflor as the administrators of the lot.
43

From the other tax declarations, Exhibits "N-1" up to "N-12"

inclusive, presented by respondent, it appears that Lucio and
Jose Buenaflor acted as the property administrators only until
February 17, 1966 when Tax Declaration No. 8842 (Exhibit
"N-2"), which was registered on January 14, 1966, was
cancelled by Tax Declaration No. 8952 (Exhibit "N-3")
whereon, for the first time, Placido and Teodoro Sarmiento
were named administrators of the lot. On March 30, 1966,
Tax Declaration No. 8952 was cancelled by Tax Declaration
No. 9631 (Exhibit "N-4") on which Placido appears as the
owner of Lot No. 535 of which the lot in question forms part.
To this Court, Tax Declaration No. 9631-Exhibit "N-4" does
not constitute competent proof of Placidos title over Lot 535.
For one, respondent failed to prove that Placido is an heir of
Florentina. For another, respondent failed to prove the metes
and bounds of the "palayero" allegedly owned by Florentina
and that the lot actually forms part thereof.
But even assuming arguendo that, as found by the MeTC,
Placido was an heir and inherited Lot 535 from Florentina,
respondent still failed to provide proof, nay allege, that
Florentina possessed Lot 535 since June 12, 1945 or earlier
under a bona fide claim of ownership.
WHEREFORE, the petition is GRANTED. The Decision and
Resolution of the Court of Appeals dated May 20, 2005 and
August 19, 2005, respectively, are REVERSED and SET
ASIDE. The application for registration filed by respondent,
Restituto Sarmiento, over Lot 535-D, with a total area of Two
Thousand Six Hundred Sixty Four (2,664) square meters
situated at Barangay Wawa, Taguig, Metro Manila is
DENIED.
SO ORDERED.

G.R. No. 166577

February 3, 2010
SPOUSES MORRIS CARPO and SOCORRO CARPO,
Petitioners,
vs.
AYALA LAND, INCORPORATED, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:

square meters;

In the instant petition for review on certiorari under Rule 45

of the Rules of Court, petitioners seek to set aside and
1
annul the Decision dated December 22, 2003 of the Court
of Appeals (CA) in CA-G.R. CV No. 61784, which reversed
2
and set aside the Summary Judgment dated December 22,
1998 of the Regional Trial Court (RTC) of Las Pias City,
Branch 255. Also subject of the present petition is the CA
3
Resolution dated December 16, 2004 which denied the
motion for reconsideration of the earlier decision.

(c) TCT No. T-4367 issued on May 18, 1988 in the

name of Ayala Corporation, covering a parcel of
land (Lot 2, plan Psu-47035) located in the Sitio of
May Kokak, Bo. of Almanza, Las Pias with an
area of 218,523 square meters; and

A summary of the facts, as culled from the records of the

case, follows:

(b) TCT No. 125945 issued on April 6, 1988 in the

name of Ayala Corporation, covering a parcel of
land (Lot 3, Plan Psu-80886) located in Bo. Tindig
na Manga, Las Pias with an area of 171,309
square meters;

(d) TCT No. T-4368 issued on May 18, 1988 in the

name of Ayala Corporation, covering a parcel of
land (Lot 3, plan Psu-47035) located in the Sitio of
May Kokak, Bo. of Almanza, Las Pias with an
area of 155,345 square meters.
No copy of TCT No. T-4366 was attached to the complaint.

On February 16, 1995, petitioner spouses Morris and

Socorro Carpo (Carpos) filed a Complaint for Quieting of
4
Title with the RTC of Makati City against Ayala
Corporation, Ayala Property Ventures Corporation (APVC),
and the Register of Deeds of Las Pias, docketed as Civil
Case No. 95-292.
In their Complaint, the Carpos claimed to be the owners of a
171,209-square meter parcel of land covered by Transfer
5
Certificate of Title (TCT) No. 296463 issued in their names.
They further alleged that Ayala Corporation was claiming to
have titles (specifically, TCT Nos. 125945, T-4366, T-4367
and T-4368) over the property covered by the Carpos TCT
No. 296463 and that Ayala Corporation had made such
property its equity contribution in APVC to be developed into
a residential subdivision. Attached as annexes to the
complaint were photocopies of:
(a) TCT No. 296463 issued on August 13, 1970 in
the name of the Carpos, covering a parcel of land
(Lot 3, plan Psu-56007) located in the Barrio of
Almanza, Las Pias with an area of 171,309

According to the complaint, TCT Nos. 125945, T-4366, T4367 and T-4368 and their derivatives "appear to have been
issued in the name of Ayala and purport to cover and
embrace the Carpos property or portion thereof duly
covered registered under the already indefeasible and
incontrovertible TCT [No.] 296463 are inherently invalid and
enforceable (sic) for not being the duly issued derivatives of
6
the Carpos title." The Carpos additionally applied for a
restraining order and writ of preliminary injunction to enjoin
Ayala Corporation and APVC from doing construction and
development works on the properties in purported violation
of the Carpos rights.
The complaint prayed that the trial court render judgment:
(1) canceling and declaring void TCT Nos. 125945, T-4366,
T-4367, T-4368 and all alleged derivatives thereof, issued in
the name of Ayala Corporation and/or APVC over the
properties or portion thereof embraced in the Carpos TCT
No. 296463 and issuing a writ of possession in favor of the
Carpos and/or ordering Ayala Corporation and APVC to

surrender to the Carpos the properties or portion thereof

being occupied by the said corporations under inherently
invalid or void titles; (2) declaring TCT No. 296463 issued in
their names as valid and the Carpos as the owners of the
property described therein "including the parcels of land
being claimed and occupied by Ayala [Corporation] and
APVC withou[t] valid and enforceable titles"; and (3)
ordering Ayala Corporation and APVC to pay jointly and
severally the amount of P100,000 as attorneys fees plus
7
costs of suit and litigation expenses.
On March 10, 1995, before defendants could file an answer,
petitioners filed an Amended Complaint, impleading
respondent Ayala Land, Incorporated (ALI) in lieu of Ayala
Corporation after purportedly verifying with the Register of
Deeds of Las Pias that the title to the subject property was
8
registered in the name of ALI and not Ayala Corporation.
On October 12, 1995 and January 12, 1996, ALI filed its
Answer with Counterclaims and Opposition to Application
9
for Restraining Order and Writ of Preliminary Injunction and
10
Pre-trial Brief with Motion to Admit Amended Answer,
respectively.
In its Amended Answer, ALI alleged that APVC no longer
exists having been merged with ALI in 1991. ALI pointed out
that the areas covered by TCT Nos. T-4366, T-4367, and T4368 do not overlap with the Carpos claimed property and
the dispute pertained only to the land covered by the
Carpos TCT No. 296463 and TCT No. T-5333 in the name
of Las Pias Ventures, Inc. (LPVI) which was derived from
TCT No. 125945 in the name of Ayala Corporation. It
appeared that Ayala Corporation contributed the property to
LPVI and LPVI had, in turn, also merged with ALI. Further,
ALI alleged that it is the true owner of the property covered
by TCT No. T-5333 as it traces back its title to Original
Certificate of Title (OCT) No. 242 issued in 1950 while the
Carpos title was derived from OCT No. 8575 issued only in
1970. ALI also claimed the Carpos complaint was barred by
res judicata in view of the 1941 decision of this Court in
11
Guico v. San Pedro which upheld the ownership of a
certain Eduardo Guico over the subject property as Lot 3, of
Psu-80886 over the claim of a certain Florentino Baltazar

who was asserting ownership of the same under his plan,

Psu-56007.
During the pendency of the case, ALI secured a title in its
own name, TCT No. T-41262, over the property previously
12
covered by TCT No. T-5333.
13

In the Order dated March 6, 1996, the Makati RTC ruled

that the present case was an action in rem and directed the
transfer of the case to the RTC of Las Pias where the
disputed property is located. The case was thereafter
assigned to Branch 255 of the Las Pias RTC and docketed
as Civil Case No. 96-0082.
On December 17, 1996, ALI filed a Motion for Summary
Judgment on the ground that there was allegedly no
genuine issue as to any material fact and the only issue for
the court to resolve was a purely legal one which of the
two (2) titles should be accorded priority. According to ALI,
the parties were relying on their respective TCTs, and since
ALI admittedly traces its title to OCT No. 242 which was
issued more than twenty (20) years earlier than the Carpos
predecessors title (OCT No. 8575), its title is, thus,
superior. Expectedly, the Carpos filed an opposition to the
motion for summary judgment, arguing that there were
"genuine issues and controversies to be litigated."
In an Order dated April 7, 1997, the RTC denied ALIs
motion for summary judgment. This denial was challenged
in a petition for certiorari with the CA in CA-G.R. SP No.
44243.
14

In a decision dated September 25, 1997, the CA granted

ALIs petition and ordered the RTC to render a summary
judgment. Both parties moved for reconsideration of the CA
Decision. ALI filed a motion for partial reconsideration,
entreating the CA itself to render the summary judgment in
the interest of judicial economy and on a claim that the sole
issue was legal. The Carpos, in their motion, insisted that
there were genuine issues in this case that must be
threshed out in a trial. Both motions were denied in the CA
15
Resolution dated January 12, 1998. 1avvphi1

Both parties elevated the matter to this Court in separate

petitions for review on certiorari. In G.R. No. 132259, ALI
assailed the CAs refusal to render a summary judgment,
while in G.R. No. 132440, the Carpos assailed the CAs
ruling that trial was unnecessary.
16

In separate minute Resolutions, the Court denied both

petitions. Both parties motions for reconsideration were
likewise denied.
Accordingly, the RTC rendered a Summary Judgment dated
December 22, 1998, finding the Carpos title superior to that
of ALI and ruling, thus:
Upon the other hand, this Court is not inclined to concur
with Ayalas claim of the validity of its TCT No. T-5333 and
alleged OCT No. 242 absent of any admission to that effect
by the plaintiffs in their complaint. A reading of the
defendants answer reveals that OCT No. 242 covers the
property surveyed under SWO, but the pleadings on file fail
to allege that the same was approved by the Director of the
Bureau of Lands, thereby justifying this court to be skeptical
of the validity of the issuance of OCT No. 242. In original
land registration cases, it is mandatory that the application
should be accompanied by a survey plan of the property
applied for registration, duly approved by the Director of the
Bureau of Lands. A survey plan without the approval of the
Director of the Bureau of Lands has the character of being
of dubious origin and it is not therefore worthy of being
accepted as evidence. The property being claimed by the
defendant ALI, allegedly registered under OCT No. 242, is
shown to have been surveyed under SWO and not bearing
the approval of the Director of the Bureau of Lands. Any title
issued emanating from a survey plan without the approval of
the Director of the Bureau of Lands is tainted with
irregularity and therefore void, as ruled in Republic Cement
Corporation vs. Court of Appeals, et al., 198 SCRA 734. In
the said case, the Supreme Court held: "That unless a
survey plan is duly approved by the Director of Lands the
same is of dubious value and is not acceptable as evidence.
Indubitably, therefore, the reported survey and its alleged
results are not entitled to credit and should be rejected."

The submission of the plan is a statutory requirement of

mandatory character and unless the plan and its technical
description are duly approved by the Director of Lands, the
same are not of much value (Republic vs. Vera, 120 SCRA
210). In another case, it was ruled that the Land
Registration Commission has no authority to approve
original survey plans (Director of Lands, et al. vs. Honorable
Salvador Reyes, et al., 68 SCRA 177).
Evidently, the SWO survey of the property which defendant
ALI claimed to have been originated from OCT No. 242 had
not been approved by the Director of the Bureau of Lands,
but was apparently prepared and approved by the then
Land Registration Commissioner and under the law, the
same is void.
It will also be noted that aside from the admissions made by
defendant ALI in its answer, it clearly appears in its title TCT
No. T-5333 that the date of survey was on July 28, 1930.
Plaintiffs property covered by TCT No. 296463 was
surveyed on January 4-6, 1927. This means that plaintiffs
predecessor-in-interest had claimed ownership of the
property ahead of that of defendant ALIs predecessor-ininterest. The principle of prior registration cannot be applied
in this case because the land previously surveyed cannot
anymore be the subject of another survey, and there is
already a record of a prior survey in the Bureau of Lands.
This is precisely the reason why the survey plan has to be
approved by the Director of the Bureau of Lands. This must
be the reason why the later survey in favor of Ayalas
predecessor-in-interest did not anymore bear the approval
of the Director of Lands because had it been submitted for
approval, the records of the Bureau of Lands will show that
an earlier survey of the same land had already been made
and approved by the Director of the Bureau of Lands.
Evidently, Ayalas claim of superiority of its title over that of
the plaintiffs cannot therefore be sustained. Be that as it
may, the fact that cannot be disputed on the basis of Ayalas
answer is its admission that SWO survey without the
approval of the Director of the Bureau of Lands was
submitted in the alleged registration proceedings, rendering
the decree and the title issued thereunder to be tainted with

irregularity and therefore void.

WHEREFORE, in the light of the foregoing and the
prevailing jurisprudence on the matter, judgment is hereby
rendered:
(a) Declaring TCT No. 296463 in the name of the
plaintiffs Spouses Morris G. Carpo and Socorro R.
Carpo as valid and legal, and superior to that of
defendant Ayalas TCT No. T-5333;
(b) Declaring TCT No. T-5333, TCT No. 125945,
TCT No. T-6055, TCT No. 4366, TCT No. 4367
and TCT No. 4368 and their derivatives as null and
void;
(c) Ordering the defendant Ayala Land, Inc. to pay
the sum of P100,000.00 as attorneys fees; and
(d) To pay the costs.

17

On January 5, 1999, ALI filed a notice of appeal but the

18
same was dismissed by the CA in a Resolution dated May
14, 1999 for failure to pay the full amount of docket fees. In
its motion for reconsideration, ALI pointed out that it paid the
full amount assessed by the cash clerk on duty at the RTC
Las Pias. The motion was also denied, prompting ALI to
file with this Court a petition for review docketed as G.R. No.
140162. Finding ALIs petition meritorious, the Court, in a
19
Decision dated November 22, 2000, reversed the CAs
dismissal of ALIs appeal and remanded the same to the CA
for further proceedings.
On December 22, 2003, the CA rendered the herein
challenged decision in favor of ALI, the dispositive portion of
which reads as follows:
FOR THE FOREGOING DISQUISITIONS, the instant
appeal is GRANTED, the assailed Summary Judgment of
the Regional Trial Court of Las Pias, Branch 255, dated
December 22, 1998, is hereby REVERSED and SET
ASIDE, and a new one is rendered as follows:
(1) TCT No. 41262, formerly TCT No. T-5333, in

the name of defendant-appellant Ayala Land,

Incorporated is hereby declared to be the VALID
title to the subject property;
(2) TCT No. 296463 issued in the name of
plaintiffs-appellees is declared to be NULL and
VOID;
(3) The concerned Register of Deeds is hereby
ORDERED to cancel plaintiffs-appellees TCT No.
296463, and any and all titles issued covering the
subject property, for being spurious and void, and
20
of no force and effect.
Carpos filed their motion for reconsideration but the same
was denied by the CA in its Resolution dated December 16,
2004. Hence, the instant petition for review filed by Socorro
21
Carpo and the heirs of Morris Carpo. The Petition
contained the following assignment of errors:
A THE COURT OF APPEALS ERRED IN
DECLARING THAT THE TITLE OF
RESPONDENT IS VALID EVEN WITHOUT THE
REQUISITE SURVEY PLAN APPROVED BY THE
DIRECTOR OF LANDS.
B. THE COURT OF APPEALS ERRED IN
DECLARING PETITIONERS GUILTY OF LACHES
AND PRESCRIPTION.
C. THE COURT OF APPEALS ERRED IN
DECLARING THAT THE RTC "RELIED HEAVILY"
ON AN ALLEGED "ADMISSION" BY
RESPONDENT OF THE VALIDITY OF THE TITLE
OF PETITIONERS OVER THE DISPUTED
PARCEL OF LAND.
D. THE COURT OF APPEALS ERRED IN
DECLARING THAT THERE IS RES JUDICATA
AGAINST PETITIONERS BASED ON THE CASE
OF GUICO V. SAN PEDRO, ET AL., 72 PHIL 415,
WITHOUT PROPER DETERMINATION OF
WHETHER THE FACTS IN SAID CASE ARE

DIRECTLY APPLICABLE TO THIS CASE AND

WHETHER THE ELEMENTS OF RES JUDICATA
22
ARE PRESENT.
Petitioners prayed that this Court render a decision: (a)
reversing and setting aside the CA Decision dated
December 22, 2003 and Resolution dated December 16,
2004; (b) reinstating and affirming in toto the RTCs
Summary Judgment dated December 22, 1998; or in the
alternative (c) remanding the case to the RTC for further
proceedings.
After a thorough review of the records, we deny the petition
and concur with the CA that the Summary Judgment
rendered by the trial court should be reversed and set aside.
Preliminary discussion regarding subject matter of the
controversy
At the outset, it should be noted that the trial court in its
Summary Judgment declared null and void (a) TCT No. T5333 (and its antecedent, TCT No. [125945] T-6055A)
covering a parcel of land with an area of 171,309 square
meters; (b) TCT No. T-4366 with a land area of 254,085
square meters; (c) TCT No. T-4367 with a land area of
218,523 square meters; and (d) TCT No. T-4368 with a land
area of 155,345 square meters, despite the lack of evidence
of identity of the properties described in TCT Nos. T-4366,
T-4367 and T-4368 with the property covered by the
Carpos TCT No. 296463 or any portion of said property
claimed by petitioners. This was grievous and palpable error
on the part of the trial court considering that the property
being claimed by the Carpos under their TCT No. 296463
had an area of only 171,309 square meters and the total
area of the properties in the titles invalidated by the trial
court was 799,262 square meters.
It must be emphasized that in CA-G.R. SP No. 44243,
involving the same parties, the CA ruled that:
On the other hand, defendant ALI, in its responsive pleading
did not deny the existence of a title in the name of the
plaintiffs/private respondents. Instead, it alleged:

"14. The parcel of land described in TCT No. 296463,

issued in the name of the plaintiffs, completely overlaps the
property covered by ALIs TCT No. T-5333. But TCT No. T296463 traces itself to OCT No. 8575 which was issued on
August 12, 1970, long after OCT No. 242 (the title from
which ALIs TCT No. T-5333 was derived) was issued on
May 9, 1950 (on the basis of Decree of Registration No.
2917, Record No. 43516). Hence, ALIs TCT No. T-5333 is
superior to TCT No. 296463. xxx."
This is an admission that the private respondents have a
title to the property in question, and that the property
described in private respondents TCT No. 296463
completely overlaps the title of petitioner ALI. This fact is
further substantiated by an affidavit of Jose Rizal Mercado,
a Geodetic Engineer who, after attesting to his
qualifications, competence and experience, declared under
oath:

indicates the area covered by the title of the plaintiffs and it

is clearly shown in this plan that plaintiffs claimed property
entirely overlaps ALIs property delineated in TCT No. T41262. Plaintiffs claimed property (Lot 3, PSU-56007) is in
fact identical to ALIs lot (Lot 3, PSU-80886).
9.4. The blue, pink and green lines on the Sketch Plan
indicate the boundaries of ALIs TCT Nos. 4366, 4367 and
4368, respectively, and it is clearly shown that these do not
overlap with plaintiffs claimed property."
The Sketch Plan attached thereto clearly indicates the
overlapping and identical boundaries between the private
respondents TCT No. 296463 and petitioners TCT No.
23
125945, (formerly TCT No. T-5333). In addition to the
affidavit of the Geodetic Engineer, the petitioner likewise
attached to its Motion for Summary Judgment copies of the
following titles:
xxxx

"9. In connection with the subject case, Affiant was

requested to find out, based on the technical descriptions in
their respective titles, if the lots described in the title of
plaintiffs, TCT No. 296463, overlaps the lots of ALI covered
by TCT No. 41262 (formerly, TCT No. T-5333 of LPVI, and,
more previously, TCT No. T (125945) 6055-A, in the name
of Ayala Corporation), TCT No. 4366, TCT No. 4367 and
TCT No. 4368, x x x.
9.1. To accomplish this task, Affiant resorted to the plotting
of the technical descriptions found in the plaintiffs and ALIs
respective titles. The standard operating procedure,
adopted by Affiant in this particular instance, in plotting
properties is to study the technical description in the titles
and at the same time, to get all the available survey plans
described in the titles for reference.
9.2. To evidence this plotting that Affiant conducted, Affiant
prepared a Sketch Plan reflecting Plaintiffs title vis-a-vis
ALIs title. Attached hereto as Annex "G" is an original copy
of the Sketch Plan prepared by the Affiant.
9.3. The orange-shaded portion on the Sketch Plan

In contrast, the private respondents never controverted the

petitioners allegation that their (private respondents) title,
TCT No. 296463 traces its origin to OCT No. 8575, issued
on August 12, 1970, while that of the petitioner has its origin
in OCT No. 242, issued on May 9, 1950. Moreover, the
private respondents attached no supporting document to its
Opposition to the Motion for Summary Judgment.
Thus, as matters stand, the requisites for the grant of
summary judgment appear to have been satisfied xxx.
xxxx
Since the existence of two titles over the same property, as
well as the fact of overlapping of the technical descriptions
of the two titles are admitted in the pleadings, and
substantiated by the supporting documents attached by the
defendant-movant (petitioner herein) to its Motion for
Summary Judgment, there is no genuine issue as to any
material fact. If at all, the sole issue is a legal one, to wit:
whose title (as to the conflicting ones) is superior and must
be upheld. This issue may be decided on the basis of the

affidavits and supporting documents submitted by the

parties, as well as the applicable law and jurisprudence on
the matter. In other words, there need not be a protracted
trial thereon, since all that the trial court should do is to
apply the law to the issue, taking into consideration the
documents attached by the parties in their respective
pleadings and/or submitted together with the motion or the
opposition thereto. The same is true with the other defenses
raised by the petitioner in its responsive pleading, to wit: res
judicata, prescription and laches which may likewise be
24
resolved without going to trial. (Emphasis and
underscoring supplied.)
The foregoing CA decision became final and executory after
the separate petitions for review filed with this Court by the
parties were denied with finality. The parties, and even the
trial court, were bound by the CAs factual finding therein
that the only lots whose technical descriptions overlap are
those covered by the Carpos TCT No. 296463 and ALIs
TCT No. T-5333 which later became TCT No. T-41262.
There was simply no basis for the trial court to invalidate all
the ALI titles mentioned in the complaint.
The incorrectness of this sweeping invalidation of ALI titles
in the Summary Judgment is even more evident in the case
of TCT No. T-4367 (Lot 2, plan Psu-47035) and TCT No. T4368 (Lot 3, plan Psu-47035). Petitioners claims with
respect to these properties are already barred by res
judicata. In Realty Sales Enterprise, Inc. v. Intermediate
25
Appellate Court, petitioner Morris Carpo already asserted
his purported ownership of these two properties based on a
transfer certificate of title with the same survey plan number
(Psu-56007) as TCT No. 296463. However, in Realty, his
claim was discredited by the Court when it held that Realty
Sales Enterprise, Inc. (Realty), ALIs predecessor in
26
interest, is the one with valid title to these properties. The
relevant portions of the Realty Decision are quoted here:
Two (2) adjacent parcels of land located in Almanza, Las
Pias, Metro Manila, having an aggregate area of 373,868
sq. m., situated in the vicinity of the Ayala Alabang Project
and BF Homes Paraaque are covered by three (3) distinct
sets of Torrens titles to wit:

1) TCT No. 20408 issued on May 29, 1975 in the name of

Realty Sales Enterprise, Inc., which was derived from OCT
No. 1609, issued on May 21, 1958, pursuant to Decree No.
N-63394 in LRC Cases Nos. 657, 758 and 976, GLRO
Record Nos. N-29882, N-33721 and N-43516, respectively.
2) TCT No. 303961 issued on October 13, 1970 in the name
of Morris G. Carpo, which was derived from OCT No. 8629,
issued on October 13, 1970 pursuant to decree No. N131349 in LRC Case No. N-11-M (N-6217), GLRO Record
No. N-32166.
3) TCTs Nos. 333982 and 333985, issued on July 27, 1971
in the name of Quezon City Development and Financing
Corporation, derived from OCT No. 8931 which was issued
on July 27, 1971 pursuant to LRC Case No. P-206 GLRO
Record No. N-31777.
On December 29, 1977, Morris Carpo filed a complaint with
the Court of First Instance of Rizal, Branch XXIII, presided
over by Judge Rizalina Bonifacio Vera (hereafter referred to
as Vera Court), for "declaration of nullity of Decree No. N63394 and TCT No. 20408." Named defendants were
Realty Sales Enterprise, Inc., Macondray Farms, Inc. and
the Commissioner of Land Registration. x x x.
xxxx
In the case at bar, it appears that it was Estanislao Mayuga,
father of Dominador Mayuga, predecessor-in-interest of
Realty, who originally filed on June 24, 1927 a registration
proceeding docketed as LRC Case No. 657, GLRO Record
No. N-29882 in the Court of First Instance of Rizal to
confirm his title over parcels of land described as Lots 1, 2
and 3, Plan Psu-47035. (Lots 2 and 3 are the subject of the
instant litigation among Carpo, Realty and QCDFC.) Case
No. 657 was jointly tried with two other cases, LRC Case
No. 976, GLRO Record No. 43516 filed by Eduardo Guico
and LRC Case No. 758, GLRO Record No. 33721 filed by
Florentino Baltazar, as the three cases involved identical
parcels of land, and identical applicants/oppositors.
xxxx
Carpo bought the disputed property from the Baltazars, the
original registered owners, by virtue of a deed executed
before Iluminada Figueroa, Notary Public of Manila dated

October 9, 1970. x x x.
xxxx
The Baltazars, predecessors-in-interest of Carpo are heirs
of Florentino Baltazar, an oppositor in the original
application filed by Estanislao Mayuga in 1927. As stated
earlier, the CFI-Rizal confirmed the title of Estanislao to Lots
1, 2 and 3 of Plan Psu-47035 "desestimando oposicion de
Florentino Baltazar . . . con respeto a dichos lotes . . ." As
such successors of Florentino, they could not pretend
ignorance of the land registration proceedings over the
disputed parcels of land earlier initiated by Eduardo Guico,
Florentino Baltazar and Estanislao Mayuga, as when as the
decisions rendered therein.
Moreover, it is not disputed that the title in the name of
Dominador Mayuga, from whom Realty derived its title, was
issued in 1958, or twelve years before the issuance of the
title in the name of the Baltazars in 1970.
In this jurisdiction, it is settled that "(t)he general rule is that
in the case of two certificates of title, purporting to include
the same land, the earlier in date prevails x x x. In
successive registrations, where more than one certificate is
issued in respect of a particular estate or interest in land,
the person claiming under the prior certificate is entitled to
the estate or interest; and that person is deemed to hold
under the prior certificate who is the holder of, or whose
claim is derived directly or indirectly from the person who
was the holder of the earliest certificate issued in respect
27
thereof x x x." (Emphasis and underscoring ours; citations
omitted.)
We now discuss each assignment of error raised in the
petition.

the CAs ruling on this point. It is the CAs view that the trial
courts pronouncement that OCT No. 242 was issued
without an approved survey plan was unwarranted in view
of the presumption of regularity that said title enjoys.
We cannot but agree with the CA on this point upon
perusing the following portion of the Summary Judgment:
Upon the other hand, this Court is not inclined to concur
with Ayalas claim of the validity of its TCT No. T-5333 and
alleged OCT No. 242 absent of any admission to that effect
by the plaintiffs in their complaint. A reading of the
defendants answer reveals that OCT No. 242 covers the
property surveyed under SWO, but the pleadings on file fail
to allege that the same was approved by the Director of the
Bureau of Lands, thereby justifying this court to be skeptical
of the validity of the issuance of OCT No. 242. In original
land registration cases, it is mandatory that the application
should be accompanied by a survey plan of the property
applied for registration, duly approved by the Director of the
Bureau of Lands. A survey plan without the approval of the
Director of the Bureau of Lands has the character of being
of dubious origin and it is not therefore worthy of being
accepted as evidence. The property being claimed by the
defendant ALI, allegedly registered under OCT No. 242, is
shown to have been surveyed under SWO and not bearing
the approval of the Director of the Bureau of Lands. Any title
issued emanating from a survey plan without the approval of
the Director of the Bureau of Lands is tainted with
irregularity and therefore void, as ruled in Republic Cement
Corporation vs. Court of Appeals, et al., 198 SCRA 734. In
the said case, the Supreme Court held: "That unless a
survey plan is duly approved by the Director of Lands the
same is of dubious value and is not acceptable as evidence.
Indubitably, therefore, the reported survey and its alleged
results are not entitled to credit and should be rejected."

First Assignment of Error

Petitioners alleged that the CA erred in declaring that the
title of respondent is valid even without the requisite survey
plan approved by the Director of the Bureau of Lands.
Petitioners clearly misunderstood or deliberately misread

The submission of the plan is a statutory requirement of

mandatory character and unless the plan and its technical
description are duly approved by the Director of Lands, the
same are not of much value (Republic vs. Vera, 120 SCRA
210). In another case, it was ruled that the Land
Registration Commission has no authority to approve

original survey plans (Director of Lands, et al. vs. Honorable

Salvador Reyes, et al., 68 SCRA 177).
Evidently, the SWO survey of the property which defendant
ALI claimed to have been originated from OCT No. 242 had
not been approved by the Director of the Bureau of Lands,
but was apparently prepared and approved by the then
Land Registration Commissioner and under the law, the
28
same is void.
To begin with, a perusal of the defendants answer or
amended answer would show that, contrary to the trial
courts allusions thereto, there is no admission on the part of
ALI that OCT No. 242 was issued without a survey plan that
was duly approved by the Director of the Bureau of Lands.
There is likewise no evidence on record to support the trial
courts finding that the survey plan submitted to support the
issuance of OCT No. 242 in the 1950 land registration
proceedings was approved only by the Land Registration
Commissioner and not by the Director of the Bureau of
Lands.
It would appear the trial court came to the conclusion that
OCT No. 242 was issued without a duly approved survey
plan simply because the notation "SWO" appeared in the
technical description of the said title which was attached to
the answer and due to ALIs failure to allege in its pleadings
that the survey plan submitted in support of the issuance of
OCT No. 242 was approved by the Director of the Bureau of
29
Lands.
It is incomprehensible how the trial court could conclude
that the survey plan mentioned in OCT No. 242 was
unapproved by the appropriate authority all from the
notation "SWO" which appeared beside the survey plan
number on the face of the title or from a failure to allege on
the part of ALI that a duly approved survey plan exists. We
quote with approval the discussion of the CA on this point:
Pursuant to the foregoing, the court a quo erred when, in
ruling that the validity of OCT No. 242 is dubious, it gave
emphasis to defendant-appellants failure to allege that the
survey plan of OCT No. 242 was duly approved by the

Director of the Bureau of Lands. It is admitted that a survey

plan is one of the requirements for the issuance of decrees
of registration, but upon the issuance of such decree, it can
most certainly be assumed that said requirement was
complied with by ALIs original predecessor-in-interest at the
time the latter sought original registration of the subject
property. Moreover, the land registration court must be
assumed to have carefully ascertained the propriety of
issuing a decree in favor of ALIs predecessor-in-interest,
under the presumption of regularity in the performance of
official functions by public officers. The court upon which the
law has conferred jurisdiction, is deemed to have all the
necessary powers to exercise such jurisdiction, and to have
exercised it effectively. This is as it should be, because
once a decree of registration is made under the Torrens
system, and the time has passed within which that decree
may be questioned the title is perfect and cannot later on be
questioned. There would be no end to litigation if every
litigant could, by repeated actions, compel a court to review
a decree previously issued by another court forty-five (45)
years ago. The very purpose of the Torrens system would
be destroyed if the same land may be subsequently brought
under a second action for registration, as what the court a
quo did when it faulted ALIs failure to allege that its
predecessor-in-interest submitted a survey plan approved
by the Director of the Bureau of Lands in the original land
registration case.
The Court need not emphasize that it is not for ALI to allege
in its pleadings, much less prove, that its predecessor-ininterest complied with the requirements for the original
registration of the subject property. A party dealing with a
registered land need not go beyond the Certificate of Title to
determine the true owner thereof so as to guard or protect his
or her interest. Hence, ALI was not required to go beyond
what appeared in the transfer certificate of title in the name
of its immediate transferor. It may rely solely, as it did, on the
correctness of the certificate of title issued for the subject
property and the law will in no way oblige it to go behind the
certificate of title to determine the condition of the property.
This is the fundamental nature of the Torrens System of land
registration, to give the public the right to rely upon the face
of a Torrens certificate of title and to dispense with the need

of inquiring further.

30

(Underscoring ours; citations omitted.)

It cannot be gainsaid that the issuance of OCT No. 242 was

a result of the registration decree of the Court of First
Instance of Rizal, pursuant to land registration proceedings
in Case No. 976. In the absence of proof to the contrary, OCT
No. 242 and its derivatives, including ALIs TCT No. T-41262,
enjoy the presumption of regularity and ALI need not allege
or prove that its title was regularly issued. That is precisely
the nature of such a presumption, it dispenses with proof.
Rule 131, Section 3 of the Rules of Court provides:
Section 3. Disputable presumptions. The following
presumptions are satisfactory if uncontradicted, but may be
contradicted and overcome by other evidence:
xxxx
(m) That official duty has been regularly performed;
(n) That a court, or judge acting as such, whether in the
Philippines or elsewhere, was acting in the lawful exercise of
jurisdiction;
(o) That all the matters within an issue raised in a case were
laid before the court and passed upon by it; and in like
manner that all matters within an issue raised in a dispute
submitted for arbitration were laid before the arbitrators and
passed upon by them; x x x.
Thus, we held in Herce, Jr. v. Municipality of Cabuyao,
31
Laguna :
In the absence of evidence to the contrary, the Ordinary
Decree Book, LRC (CLR) Rec. No. 6763, showing that
Decree No. 4244 was issued on March 3, 1911, is presumed
to have been regularly issued by the accountable public
officers who enjoy the legal presumption of regularity in the
performance of their functions. Thus, the proceedings that led
to the issuance of Decree No. 4244 in favor of the
Municipality of Cabuyao cannot be overturned without any
countervailing proof to the contrary. In the words of
32
Tichangco v. Enriquez:

To overturn this legal presumption carelessly more than

90 years since the termination of the case will not only
endanger judicial stability, but also violate the underlying
principle of the Torrens system. Indeed, to do so would
reduce the vaunted legal indefeasibility of Torrens titles to
meaningless verbiage. (Emphasis supplied.)
The presumption of regularity enjoyed by the registration
decree issued in Case No. 976 and OCT No. 242 includes
the presumption that all the requisites for the issuance of a
valid title had been complied with. ALI need not allege or
prove that a duly approved survey plan accompanied the
issuance of OCT No. 242 in 1950 because it is presumed. It
is the party who seeks to overcome the presumption who
would have the burden to present adequate and convincing
evidence to the contrary. This, petitioners did not even
attempt to do.
We cannot accept petitioners proposition that they did not
have the burden of proof of showing the irregularity of ALIs
title since the burden of proof purportedly did not shift to them
since no full-blown trial was conducted by the RTC.
This specious argument deserves scant credit. Rule 131,
Section 1 of the Rules of Court provides:
Section 1. Burden of proof. Burden of proof is the duty of
a party to present evidence on the facts in issue necessary
to establish his claim or defense by the amount of evidence
required by law.
With the filing of the complaint, petitioners should already
have alleged all the bases of their cause of action, particularly
their allegation that ALIs title is null and void and that such
title should be cancelled. However, a scrutiny of the
complaint would show that petitioners never alleged the
purported lack of an approved survey plan as a defect of ALIs
title. All that the complaint alleged is that ALIs titles should
be declared void for not being derivatives of the Carpos title.
Implicit in that allegation is that petitioners were relying solely
on the supposed priority of their own title over ALIs. It stands
to reason then that ALI did not have to allege in its Answer

that its mother title, OCT No. 242, was supported by a duly
approved survey plan when petitioners did not raise the same
as an issue in their complaint or in any other pleading filed
with the trial court.
Indubitably, in view of the CAs Decision in CA-G.R. SP No.
44243, this controversy has been reduced to the sole
substantive issue of which between the two titles, purporting
to cover the same property, deserves priority. This is hardly
a novel issue. As petitioners themselves are aware, in Realty,
it was held that:
In this jurisdiction, it is settled that "(t)he general rule is that
in the case of two certificates of title, purporting to include the
same land, the earlier in date prevails x x x. In successive
registrations, where more than one certificate is issued in
respect of a particular estate or interest in land, the person
claiming under the prior certificate is entitled to the estate or
interest; and that person is deemed to hold under the prior
certificate who is the holder of, or whose claim is derived
directly or indirectly from the person who was the holder of
33
the earliest certificate issued in respect thereof x x x."
(Emphasis supplied.)
34

In Degollacion v. Register of Deeds of Cavite, we held that

"[w]here two certificates of title purport to include the same
land, whether wholly or partly, the better approach is to trace
the original certificates from which the certificates of title were
derived."
In all, we find that the CA committed no reversible error when
it applied the principle "Primus Tempore, Portior Jure" (First
in Time, Stronger in Right) in this case and found that ALIs
title was the valid title having been derived from the earlier
OCT.
Second Assignment of Error
Petitioners contend that it is error on the part of the CA to rule
that their cause of action has been barred by prescription and
laches. According to them, since the OCT from which ALI
derived its title is void for want of a duly approved survey plan,
their cause of action did not prescribe. However, as

discussed above, the conclusion of the trial court that OCT

No. 242 is void was not sufficiently borne out by the evidence
on record. Verily, the premise upon which petitioners build
their theory of imprescriptibility of their action did not exist.
In sum, we find no reason to disturb the CAs finding that:
As previously emphasized, OCT No. 242 of ALIs
predecessor-in-interest was issued on May 7, 1950, or fortyfive (45) years before plaintiffs-appellees filed their complaint
on March 10, 1995. As such, it is the Courts firmly held view
that plaintiffs-appellees claim is barred not only by
prescription, but also by laches.

Aside from the fact that OCT No. 242 had become
incontrovertible after the lapse of one (1) year from the time
a decree of registration was issued, any action for
reconveyance that plaintiffs-appellees could have availed of
is also barred. Although plaintiffs-appellees complaint was
for quieting of title, it is in essence an action for reconveyance
based on an implied or constructive trust, considering that
plaintiffs-appellees were alleging in said complaint that there
was a serious mistake, if not fraud, in the issuance of OCT
No. 242 in favor of ALIs predecessor-in-interest. It is now
well-settled that an action for reconveyance, which is a legal
remedy granted to a landowner whose property has been
wrongfully or erroneously registered in anothers name, must
be filed within ten years from the issuance of the title, since
such issuance operates as a constructive notice. Since ALIs
title is traced to an OCT issued in 1950, the ten-year
prescriptive period expired in 1960.
By laches is meant the negligence or omission to assert a
right within a reasonable time, warranting a presumption that
the party entitled to assert it either has abandoned it or
declined to assert it. It does not involve mere lapse or
passage of time, but is principally an impediment to the
assertion or enforcement of a right, which has become under
the circumstances inequitable or unfair to permit. In the
instant case, plaintiffs-appellees, as well as their
predecessor-in-interest, have not shown that they have taken
judicial steps to nullify OCT No. 242, from which ALIs title
was derived, for forty-five (45) years. To allow them to do so

now, and if successful, would be clearly unjust and

inequitable to those who relied on the validity of said OCT,
the innocent purchasers for value, who are protected by the
precise provisions of P.D. 1529, thus:
"SECTION 32. Review of decree of registration; Innocent
purchaser for value The decree of registration shall not be
reopened or revised xxx subject, however, to the right of any
person xxx to file in the proper Court of First Instance a
petition for reopening and review of the decree of registration
not later than one year from and after the date of entry of such
decree of registration, but in no case shall such petition be
entertained by the court where an innocent purchaser for
value has acquired the land or an interest therein, whose
rights may be prejudiced. Whenever the phrase innocent
purchaser for value or an equivalent phrase occurs in this
Decree, it shall be deemed to include and innocent lessee,
35
mortgagee or other encumbrances for value."
Third Assignment of Error
The next assigned error involves the question of whether the
trial court, in rendering the Summary Judgment, indeed relied
heavily on the alleged admission made by ALI on the validity
of Carpos title, as declared by the CA. Specifically, the CA
stated as follows:
In its assailed decision, the court a quo relied heavily on the
alleged admission by ALI in it[s] Answer of the existence and
validity of plaintiffs-appellees title. We have read the
pertinent pleading and We find ALIs statement to be of no
moment.
Nowhere in ALIs statement was there an admission of the
validity of plaintiffs-appellees title. x x x.
The Court cannot comprehend where and how the court a
quo could have gotten the impression that ALI was admitting
not only the existence, but also the validity of plaintiffs36
appellees certificate of title. x x x.
An examination of the Summary Judgment of the trial court
would readily show that indeed the trial court relied on ALIs
supposed admission of the existence of Carpos title in ruling

which of the conflicting titles was valid. Pertinently, the trial

court merely declared:
The existence of plaintiffs TCT No. 296463 has been
admitted by defendant Ayala in its answer to have been
originated from OCT No. 8575 which was issued on August
12, 1970. It is very significant that defendant ALI admitted it
in its answer that OCT No. 8575 and plaintiffs TCT No.
296463 both originated from Decree No. 131141 issued on
October 15, 1969 in the name of Apolonio Sabater as Annex
"G" to defendant ALIs answer. This admission made by the
defendant in its answer is conclusive upon it. It cannot
therefore take position contrary to or inconsistent with its
answer, and the facts are to be taken as true (Westminister
High School vs. Sto. Domingo, et al., G.R. No. 12666 R-July
5, 1955; McDaniel vs. Apacible, 44 Phil. 248-255).
Upon the other hand, this Court is not inclined to concur with
Ayalas claim of the validity of its TCT No. T-5333 and alleged
OCT No. 242 absent of any admission to that effect by the
37
plaintiffs in their complaint. x x x.
Although the Summary Judgment did not expressly state that
ALI admitted the validity of Carpos title with its admission of
the said titles existence, that is the unmistakable import of
the trial courts statements that ALIs admission of the
existence of Carpos title "are conclusive upon it" and bars
ALI from taking a "position contrary to or inconsistent with its
answer" followed by the statement that the trial court is "not
inclined to concur with Ayalas claim of validity of its TCT No.
T-5333 and alleged OCT No. 242, absent of (sic) any
admission to that effect by the plaintiffs." This is yet another
non sequitur argument on the part of the trial court which the
CA correctly pointed out in its own Decision.
Fourth Assignment of Error
As to the issue of res judicata, the Court of Appeals ruled that
38
the decision in the case of Guico v. San Pedro was binding
on the Carpos as it proceeded to discuss, thus:
In Guico vs. San Pedro, the Supreme Court resolved the
conflicting claims over a tract of land situated in barrio Tindig

na Manga, Paraaque, Rizal, which was subdivided into

eleven (11) lots. The subject land was sought to be registered
by a certain Eduardo C. Guico on the basis of an
accompanying plan Psu-80886, which interestingly is also
the basis of ALIs TCT No. T-5333, now TCT No. 41262.
Guicos application was opposed by, among others,
Florentino Baltazar, on the basis of plan Psu 56007, under
which plaintiffs-appellees title was derived.
It appears that Lots 2 and 3 were adjudicated to Guico on the
basis of Psu-80886 (Lot 3 is the subject matter of the instant
case), Lot 10 in favor of Baltazar on the basis of Psu 56007,
under which plaintiffs-appellees title was based, and the rest
to the heirs of Narciso Mayuga. While Baltazar claimed Lot 3
on the basis of his Psu-56007, his claim was rejected and the
Lot was adjudicated to Guico on the basis of his Psu-80886.
It is clear, therefore, that whatever claim plaintiffs-appellees
have on the subject property on the basis of Lot 3 Psu-56007,
through their predecessor-in-interest, Florentino Baltazar, the
same had been clearly and finally denied by the Supreme
Court in Guico vs. San Pedro.
For res judicata to apply, four requisites must be met: (1) the
former judgment or order must be final; (2) it must be a
judgment or an order on the merits; (3) it must have been
rendered by a court having jurisdiction over the subject
matter and the parties; and (4) there must be, between the
first and the second actions, identity of parties, of subject
matter and of cause of action. Plaintiffs-appellees only have
objections with respect to the fourth requisite, offering the
lame excuse that it is not bound by such decision, there being
no identity of parties in Guico vs. San Pedro and the instant
39
case.
We agree with petitioners that it is not apparent from an
examination of Guico and the evidence on record that indeed
the predecessors-in-interest of ALI and the Carpos with
respect to the subject property are Eduardo Guico and
Florentino Baltazar, especially since the parties respective
OCTs were not issued in these persons names but rather a
certain Alberto Yaptinchay and Apolonio Sabater. It cannot
be categorically said that there was identity of parties

between the Guico case and the instant case. Clearly, one of
the elements of res judicata, i.e., that there must be, between
the first and the second actions, identity of parties, is lacking.
In any event, the CAs questioned Decision had sufficient
basis in fact and law even without relying on the Guico
case.1avvphi1
In conclusion, we find that the Court of Appeals committed no
reversible error in setting aside the patently erroneous
Summary Judgment of the trial court.
WHEREFORE, the petition is DENIED. The Court of Appeals
Decision dated December 22, 2003 and the Resolution dated
December 16, 2004 are hereby AFFIRMED.
SO ORDERED.

G.R. No. 102858 July 28, 1997

THE DIRECTOR OF LANDS, petitioner,
vs.
COURT OF APPEALS and TEODORO ABISTADO,
substituted by MARGARITA, MARISSA, MARIBEL,
ARNOLD and MARY ANN, all surnamed ABISTO,
respondents.
PANGANIBAN, J.:
Is newspaper publication of the notice of initial hearing in an
original land registration case mandatory or directory?
Statement of the Case
The Court of Appeals ruled that it was merely procedural
and that the failure to cause such publication did not deprive
the trial court of its authority to grant the application. But the
Solicitor General disagreed and thus filed this petition to set
1
aside the Decision promulgated on July 3, 1991 and the
2
subsequent Resolution promulgated on November 19,
3
1991 by Respondent Court of Appeals in CA-G.R. CV No.
23719. The dispositive portion of the challenged Decision
4
reads:
WHEREFORE, premises considered, the judgment
of dismissal appealed from is hereby set aside, and
a new one entered confirming the registration and
title of applicant, Teodoro Abistado, Filipino, a
resident of Barangay 7, Poblacion Mamburao,
Occidental Mindoro, now deceased and substituted
by Margarita, Marissa, Maribel, Arnold and Mary
Ann, all surnamed Abistado, represented by their
aunt, Miss Josefa Abistado, Filipinos, residents of
Poblacion Mamburao, Occidental Mindoro, to the
parcel of land covered under MSI (IV-A-8) 315-D
located in Poblacion Mamburao, Occidental
Mindoro.
The oppositions filed by the Republic of the
Philippines and private oppositor are hereby
dismissed for want of evidence.
Upon the finality of this decision and payment of the
corresponding taxes due on this land, let an order
for the issuance of a decree be issued.

The Facts
On December 8, 1986, Private Respondent Teodoro
Abistado filed a petition for original registration of his title over
648 square meters of land under Presidential Decree (PD)
5
No. 1529.
The application was docketed as Land
Registration Case (LRC) No. 86 and assigned to Branch 44
of the Regional Trial Court of Mamburao, Occidental
6
Mindoro. However, during the pendency of his petition,
applicant died. Hence, his heirs Margarita, Marissa,
Maribel, Arnold and Mary Ann, all surnamed Abistado
represented by their aunt Josefa Abistado, who was
appointed their guardian ad litem, were substituted as
applicants.
The land registration court in its decision dated June 13, 1989
dismissed the petition "for want of jurisdiction." However, it
found that the applicants through their predecessors-ininterest had been in open, continuous, exclusive and
peaceful possession of the subject land since 1938.
7

In dismissing the petition, the trial court reasoned:

. . . However, the Court noted that applicants failed
to comply with the provisions of Section 23 (1) of PD
1529, requiring the Applicants to publish the notice
of Initial Hearing (Exh. "E") in a newspaper of
general circulation in the Philippines. Exhibit "E"
was only published in the Official Gazette (Exhibits
"F" and "G"). Consequently, the Court is of the well
considered view that it has not legally acquired
jurisdiction over the instant application for want of
compliance with the mandatory provision requiring
publication of the notice of initial hearing in a
newspaper of general circulation.
The trial court also cited Ministry of Justice Opinion No. 48,
8
Series of 1982, which in its pertinent portion provides:
It bears emphasis that the publication requirement
under Section 23 [of PD 1529] has a two-fold
purpose; the first, which is mentioned in the
provision of the aforequoted provision refers to
publication in the Official Gazette, and is
jurisdictional; while the second, which is mentioned
in the opening clause of the same paragraph, refers

to publication not only in the Official Gazette but also

in a newspaper of general circulation, and is
procedural. Neither one nor the other is
dispensable. As to the first, publication in the Official
Gazette is indispensably necessary because
without it, the court would be powerless to assume
jurisdiction over a particular land registration case.
As to the second, publication of the notice of initial
hearing also in a newspaper of general circulation is
indispensably necessary as a requirement of
procedural due process; otherwise, any decision
that the court may promulgate in the case would be
legally infirm.
Unsatisfied, private respondents appealed to Respondent
Court of Appeals which, as earlier explained, set aside the
decision of the trial court and ordered the registration of the
title in the name of Teodoro Abistado.
The subsequent motion for reconsideration was denied in the
challenged CA Resolution dared November 19, 1991.
The Director of Lands represented by the Solicitor General
thus elevated this recourse to us. This Court notes that the
petitioner's counsel anchored his petition on Rule 65. This is
an error. His remedy should be based on Rule 45 because
he is appealing a final disposition of the Court of Appeals.
Hence, we shall treat his petition as one for review under Rule
9
45, and not for certiorari under Rule 65.
The Issue
Petitioner alleges that Respondent Court of Appeals
10
committed "grave abuse of discretion" in holding
. . . that publication of the petition for registration of
title in LRC Case No. 86 need not be published in a
newspaper of general circulation, and in not
dismissing LRC Case No. 86 for want of such
publication.
Petitioner points out that under Section 23 of PD 1529, the
notice of initial hearing shall be "published both in the Official

Gazette and in a newspaper of general circulation."

According to petitioner, publication in the Official Gazette is
"necessary to confer jurisdiction upon the trial court, and . . .
in . . . a newspaper of general circulation to comply with the
11
notice requirement of due process."
Private respondents, on the other hand, contend that failure
to comply with the requirement of publication in a newspaper
of general circulation is a mere "procedural defect." They add
that publication in the Official Gazette is sufficient to confer
12
jurisdiction.
In reversing the decision of the trial court, Respondent Court
13
of Appeals ruled:
. . . although the requirement of publication in the
Official Gazette and in a newspaper of general
circulation is couched in mandatory terms, it cannot
be gainsaid that the law also mandates with equal
force that publication in the Official Gazette shall be
sufficient to confer jurisdiction upon the court.
Further, Respondent Court found that the oppositors were
afforded the opportunity "to explain matters fully and present
14
their side." Thus, it justified its disposition in this wise:
. . . We do not see how the lack of compliance with
the required procedure prejudiced them in any way.
Moreover, the other requirements of: publication in
the Official Gazette, personal notice by mailing, and
posting at the site and other conspicuous places,
were complied with and these are sufficient to notify
any party who is minded to make any objection of
the application for registration.
The Court's Ruling
We find for petitioner.
Newspaper Publication Mandatory
The pertinent part of Section 23 of Presidential Decree No.
1529 requiring publication of the notice of initial hearing

reads as follows:

due process rationale behind the publication requirement.

Sec. 23. Notice of initial hearing, publication, etc.

The court shall, within five days from filing of the
application, issue an order setting the date and
hour of the initial hearing which shall not be earlier
than forty-five days nor later than ninety days from
the date of the order.
The public shall be given notice of initial hearing of
the application for land registration by means of (1)
publication; (2) mailing; and (3) posting.
1. By publication.
Upon receipt of the order of the court setting the
time for initial hearing, the Commissioner of Land
Registration shall cause a notice of initial hearing
to be published once in the Official Gazette and
once in a newspaper of general circulation in the
Philippines: Provided, however, that the publication
in the Official Gazette shall be sufficient to confer
jurisdiction upon the court. Said notice shall be
addressed to all persons appearing to have an
interest in the land involved including the adjoining
owners so far as known, and "to all whom it may
concern." Said notice shall also require all persons
concerned to appear in court at a certain date and
time to show cause why the prayer of said
application shall not be granted.
xxx xxx xxx
Admittedly, the above provision provides in clear and
categorical terms that publication in the Official Gazette
suffices to confer jurisdiction upon the land registration
court. However, the question boils down to whether, absent
any publication in a newspaper of general circulation, the
land registration court can validly confirm and register the
title of private respondents.
We answer this query in the negative. This answer is
impelled by the demands of statutory construction and the

The law used the term "shall" in prescribing the work to be

done by the Commissioner of Land Registration upon the
latter's receipt of the court order setting the time for initial
hearing. The said word denotes an imperative and thus
15
indicates the mandatory character of a statute. While
concededly such literal mandate is not an absolute rule in
statutory construction, as its import ultimately depends upon
its context in the entire provision, we hold that in the present
case the term must be understood in its normal mandatory
16
meaning. In Republic vs. Marasigan, the Court through
Mr. Justice Hilario G. Davide, Jr. held that Section 23 of PD
1529 requires notice of the initial hearing by means of (1)
publication, (2) mailing and (3) posting, all of which must be
complied with. "If the intention of the law were otherwise,
said section would not have stressed in detail the
requirements of mailing of notices to all persons named in
the petition who, per Section 15 of the Decree, include
owners of adjoining properties, and occupants of the land."
Indeed, if mailing of notices is essential, then by parity of
reasoning, publication in a newspaper of general circulation
is likewise imperative since the law included such
requirement in its detailed provision.
It should be noted further that land registration is a
17
proceeding in rem. Being in rem, such proceeding
requires constructive seizure of the land as against all
persons, including the state, who have rights to or interests
in the property. An in rem proceeding is validated essentially
through publication. This being so, the process must strictly
be complied with. Otherwise, persons who may be
interested or whose rights may be adversely affected would
be barred from contesting an application which they had no
knowledge of. As has been ruled, a party as an owner
seeking the inscription of realty in the land registration court
must prove by satisfactory and conclusive evidence not only
his ownership thereof but the identity of the same, for he is
in the same situation as one who institutes an action for
18
recovery of realty. He must prove his title against the
whole world. This task, which rests upon the applicant, can
best be achieved when all persons concerned nay, "the
whole world" who have rights to or interests in the subject

property are notified and effectively invited to come to court

and show cause why the application should not be granted.
The elementary norms of due process require that before
the claimed property is taken from concerned parties and
registered in the name of the applicant, said parties must be
given notice and opportunity to oppose.
It may be asked why publication in a newspaper of general
circulation should be deemed mandatory when the law
already requires notice by publication in the Official Gazette
as well as by mailing and posting, all of which have already
been complied with in the case at hand. The reason is due
process and the reality that the Official Gazette is not as
widely read and circulated as newspapers and is oftentimes
delayed in its circulation, such that the notices published
therein may not reach the interested parties on time, if at all.
Additionally, such parties may not be owners of neighboring
properties, and may in fact not own any other real estate. In
sum, the all-encompassing in rem nature of land registration
cases, the consequences of default orders issued against
the whole world and the objective of disseminating the
notice in as wide a manner as possible demand a
mandatory construction of the requirements for publication,
mailing and posting.
Admittedly, there was failure to comply with the explicit
publication requirement of the law. Private respondents did
not proffer any excuse; even if they had, it would not have
mattered because the statute itself allows no excuses.
Ineludibly, this Court has no authority to dispense with such
mandatory requirement. The law is unambiguous and its
rationale clear. Time and again, this Court has declared that
where the law speaks in clear and categorical language,
there is no room for interpretation, vacillation or
19
equivocation; there is room only for application. There is
no alternative. Thus, the application for land registration
filed by private respondents must be dismissed without
prejudice to reapplication in the future, after all the legal
requisites shall have been duly complied with.
WHEREFORE, the petition is GRANTED and the assailed
Decision and Resolution are REVERSED and SET ASIDE.
The application of private respondent for land registration is

DISMISSED without prejudice. No costs.

SO ORDERED.
Davide, Jr., Melo and Francisco, JJ., concur.
Narvasa, C.J., is on leave.

G.R. No. 171631

November 15, 2010
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
AVELINO R. DELA PAZ, ARSENIO R. DELA PAZ, JOSE
R. DELA PAZ, and GLICERIO R. DELA PAZ, represented
by JOSE R. DELA PAZ, Respondents.
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari under
Rule 45 of the Rules of Court seeking to set aside the
1
Decision of the Court of Appeals (CA), dated February 15,
2006, in CA-G.R. CV No. 84206, which affirmed the
2
Decision of the Regional Trial Court (RTC) of Pasig City,
Branch 167, in LRC Case No. N-11514, granting
respondents application for registration and confirmation of
title over a parcel of land located in Barangay Ibayo,
Napindan, Taguig, Metro Manila.
The factual milieu of this case is as follows:
On November 13, 2003, respondents Avelino R. dela Paz,
Arsenio R. dela Paz, Jose R. dela Paz, and Glicerio R. dela
Paz, represented by Jose R. dela Paz (Jose), filed with the
3
RTC of Pasig City an application for registration of land
under Presidential Decree No. 1529 (PD 1529) otherwise
known as the Property Registration Decree. The application
covered a parcel of land with an area of 25,825 square
meters, situated at Ibayo, Napindan, Taguig, Metro Manila,
described under survey Plan Ccn-00-000084, (Conversion
Consolidated plan of Lot Nos. 3212 and 3234, MCADM 590D, Taguig Cadastral Mapping). Together with their
application for registration, respondents submitted the
following documents: (1) Special power of attorney showing
that the respondents authorized Jose dela Paz to file the
application; (2) Conversion Consolidated plan of Lot Nos.
3212 and 3234, MCADM 590-D, Taguig Cadastral Mapping
(Ccn-00-000084) with the annotation that the survey is
inside L.C. Map No. 2623 Proj. No. 27-B classified as
alienable/disposable by the Bureau of Forest Development,
Quezon City on January 03, 1968; (3) Technical
Descriptions of Ccn-00-000084; (4) Geodetic Engineer's
Certificate; (5) Tax Declaration No. FL-018-01466; (6)

Salaysay ng Pagkakaloob dated June 18, 1987; (7)

Sinumpaang Pahayag sa Paglilipat sa Sarili ng mga Pagaari
ng Namatay dated March 10, 1979; (8) Certification that the
subject lots are not covered by any land patent or any public
land appilcation; and (9) Certification by the Office of the
Treasurer, Municipality of Taguig, Metro Manila, that the tax
on the real property for the year 2003 has been paid.

declarations and tax payments receipts of applicants, if any,

attached to or alleged in the application, do not constitute
competent and sufficient evidence of bona fide acquisition
of the land applied for; and (3) that the parcel of land
applied for is a portion of public domain belonging to the
Republic not subject to private appropriation. Except for the
Republic, there was no other oppositor to the application.

Respondents alleged that they acquired the subject

property, which is an agricultural land, by virtue of Salaysay
4
ng Pagkakaloob dated June 18, 1987, executed by their
parents Zosimo dela Paz and Ester dela Paz (Zosimo and
Ester), who earlier acquired the said property from their
deceased parent Alejandro dela Paz (Alejandro) by virtue of
a "Sinumpaang Pahayag sa Paglilipat sa Sarili ng mga Pag5
aari ng Namatay dated March 10, 1979. In their application,
respondents claimed that they are co-owners of the subject
parcel of land and they have been in continuous,
uninterrupted, open, public, adverse possession of the
same, in the concept of owner since they acquired it in
1987. Respondents further averred that by way of tacking of
possession, they, through their predecessors-in-interest
have been in open, public, adverse, continuous, and
uninterrupted possession of the same, in the concept of an
owner even before June 12, 1945, or for a period of more
than fifty (50) years since the filing of the application of
registration with the trial court. They maintained that the
subject property is classified as alienable and disposable
land of the public domain.

On May 5, 2004, the trial court issued an Order of General

6
Default against the whole world except as against the
Republic. Thereafter, respondents presented their evidence
in support of their application.

The case was set for initial hearing on April 30, 2004. On
said date, respondents presented documentary evidence to
prove compliance with the jurisdictional requirements of the
law.
Petitioner Republic of the Philippines (Republic), through
the Office of the Solicitor General (OSG), opposed the
application for registration on the following grounds, among
others: (1) that neither the applicants nor their
predecessors-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of the
land in question for a period of not less than thirty (30)
years; (2) that the muniments of title, and/or the tax

In its Decision dated November 17, 2004, the RTC granted

respondents' application for registration of the subject
property. The dispositive portion of the decision states:
WHEREFORE, affirming the order of general default hereto
entered, judgment is hereby rendered AFFIRMING and
CONFIRMING the title of AVELINO R. DELA PAZ, Arsenio
R. dela Paz, Jose R. dela Paz and Glicerio R. dela Paz, all
married and residents of and with postal address at No. 65
Ibayo, Napindan, Taguig, Metro Manila, over a parcel of
land described and bounded under Plan Ccn-00-000084
(consolidation of Lots No. 3212 and 3234, Mcadm-590-D,
Taguig, Cadastral Mapping, containing Twenty-Five
Thousand Eight Hundred Twenty-Five (25,825) Square
Meters, more or less, situated at Barangay Ibayo, Napindan,
Taguig, Metro Manila, under the operation of P.D. 1529,
otherwise known as the Property Registration Decree.
After the decision shall have been become final and
executory and, upon payment of all taxes and other charges
due on the land, the order for the issuance of a decree of
registration shall be accordingly undertaken.
SO ORDERED.

Aggrieved by the Decision, petitioner filed a Notice of

8
Appeal. The CA, in its Decision dated February 15, 2006,
dismissed the appeal and affirmed the decision of the RTC.
The CA ruled that respondents were able to show that they
have been in continuous, open, exclusive and notorious

possession of the subject property through themselves and

their predecessors-in-interest. The CA found that
respondents acquired the subject land from their
predecessors-in-interest, who have been in actual,
continuous, uninterrupted, public and adverse possession in
the concept of an owner since time immemorial. The CA,
likewise, held that respondents were able to present
sufficient evidence to establish that the subject property is
part of the alienable and disposable lands of the public
domain. Hence, the instant petition raising the following
grounds:
I
THE COURT OF APPEALS ERRED IN AFFIRMING THE
TRIAL COURT'S ORDER GRANTING RESPONDENTS'
APPLICATION FOR REGISTRATION OF THE SUBJECT
LOT CONSIDERING THAT THE EVIDENCE ON RECORD
FAILED TO ESTABLISH THAT RESPONDENTS HAVE
BEEN IN OPEN, CONTINUOUS, EXCLUSIVE AND
NOTORIOUS POSSESSION OF THE SUBJECT LOT IN
THE CONCEPT OF AN OWNER.

Regalian Doctrine.
In their Memorandum, respondents alleged that they were
able to present evidence of specific acts of ownership
showing open, notorious, continuous and adverse
possession and occupation in the concept of an owner of
the subject land. To prove their continuous and
uninterrupted possession of the subject land, they
presented several tax declarations, dated 1949, 1966, 1974,
1979, 1980, 1985, 1991, 1994 and 2000, issued in the
name of their predecessors-in-interest. In addition,
respondents presented a tax clearance issued by the
Treasurer's Office of the City of Taguig to show that they are
up to date in their payment of real property taxes.
Respondents maintain that the annotations appearing on
the survey plan of the subject land serves as sufficient proof
that the land is within the alienable and disposable portion
of the public domain. Finally, respondents assert that the
issues raised by the petitioner are questions of fact which
the Court should not consider in a petition for review under
Rule 45.
The petition is meritorious.

II
THE COURT OF APPEALS ERRED IN ORDERING THE
REGISTRATION OF THE SUBJECT LOT IN
RESPONDENTS' NAME CONSIDERING THAT NO
EVIDENCE WAS FORMALLY OFFERED TO PROVE
THAT THE SAME IS WITHIN THE ALIENABLE AND
9
DISPOSABLE AREA OF THE PUBLIC DOMAIN.
In its Memorandum, petitioner claims that the CA's findings
that respondents and their predecessors-in-interest have
been in open, uninterrupted, public, and adverse
possession in the concept of owners, for more than fifty
years or even before June 12, 1945, was unsubstantiated.
Respondents failed to show actual or constructive
possession and occupation over the subject land in the
concept of an owner. Respondents also failed to establish
that the subject property is within the alienable and
disposable portion of the public domain. The subject
property remained to be owned by the State under the

In petitions for review on certiorari under Rule 45 of the

Revised Rules of Court, this Court is limited to reviewing
only errors of law, not of fact, unless the factual findings
complained of are devoid of support by the evidence on
record, or the assailed judgment is based on a
10
misapprehension of facts. It is not the function of this
Court to analyze or weigh evidence all over again, unless
there is a showing that the findings of the lower court are
totally devoid of support or are glaringly erroneous as to
11
constitute palpable error or grave abuse of discretion.
In the present case, the records do not support the findings
made by the CA that the subject land is part of the alienable
and disposable portion of the public domain.
Section 14 (1) of PD 1529, otherwise known as the Property
Registration Decree provides:
SEC. 14. Who may apply. - The following persons may file

in the proper Court of First Instance an application for

registration of title to land, whether personally or through
their duly authorized representatives:
(1) 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.
From the foregoing, respondents need to prove that (1) the
land forms part of the alienable and disposable land of the
public domain; and (2) they, by themselves or through their
predecessors-in-interest, have been in open, continuous,
exclusive, and notorious possession and occupation of the
subject land under a bona fide claim of ownership from June
12
12, 1945 or earlier. These the respondents must prove by
13
no less than clear, positive and convincing evidence.
Under the Regalian doctrine, which is embodied in our
Constitution, all lands of the public domain belong to the
State, which is the source of any asserted right to any
ownership of land. All lands not appearing to be clearly
within private ownership are presumed to belong to the
State. Accordingly, public lands not shown to have been
reclassified or released as alienable agricultural land, or
alienated to a private person by the State, remain part of the
14
inalienable public domain. 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.
To overcome this presumption, incontrovertible evidence
must be established that the land subject of the application
15
(or claim) is alienable or disposable.
To support its contention that the land subject of the
application for registration is alienable, respondents
16
presented survey Plan Ccn-00-000084 (Conversion
Consolidated plan of Lot Nos. 3212 & 3234, MCADM 590-D,
Taguig Cadastral Mapping) prepared by Geodetic Engineer
Arnaldo C. Torres with the following annotation:

This survey is inside L.C. Map No. 2623 Proj. No. 27-B
clasified as alienable/disposable by the Bureau of Forest
Development, Quezon City on Jan. 03, 1968.
Respondents' reliance on the afore-mentioned annotation is
misplaced.
17

In Republic v. Sarmiento, the Court ruled that the notation

of the surveyor-geodetic engineer on the blue print copy of
the conversion and subdivision plan approved by the
Department of Environment and Natural Resources (DENR)
Center, that "this survey is inside the alienable and
disposable area, Project No. 27-B. L.C. Map No. 2623,
certified on January 3, 1968 by the Bureau of Forestry," is
insufficient and does not constitute incontrovertible evidence
to overcome the presumption that the land remains part of
the inalienable public domain.
Further, in Republic v. Tri-plus Corporation,
that:

18

the Court held

In the present case, the only evidence to prove the

character of the subject lands as required by law is the
notation appearing in the Advance Plan stating in effect that
the said properties are alienable and disposable. However,
this is hardly the kind of proof required by law. To prove that
the land subject of an application for registration is
alienable, an 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 statute. The applicant
may also secure a certification from the Government that
the lands applied for are alienable and disposable. In the
case at bar, while the Advance Plan bearing the notation
was certified by the Lands Management Services of the
DENR, the certification refers only to the technical
correctness of the survey plotted in the said plan and has
nothing to do whatsoever with the nature and character of
the property surveyed. Respondents failed to submit a
certification from the proper government agency to prove
that the lands subject for registration are indeed alienable
and disposable.

Furthermore, in Republic of the Philippines v. Rosila

19
Roche, the Court held that the applicant bears the burden
of proving the status of the land. In this connection, the
Court has held that he must present a certificate of land
classification status issued by the Community Environment
and Natural Resources Office (CENRO), or the Provincial
Environment and Natural Resources Office (PENRO) of the
DENR. He must also prove that the DENR Secretary had
approved the land classification and released the land as
alienable and disposable, and that it is within the approved
area per verification through survey by the CENRO or
PENRO. Further, the applicant must present a copy of the
original classification approved by the DENR Secretary and
certified as true copy by the legal custodian of the official
records. These facts must be established by the applicant to
prove that the land is alienable and disposable.
Clearly, the surveyor's annotation presented by respondents
is not the kind of proof required by law to prove that the
subject land falls within the alienable and disposable zone.
Respondents failed to submit a certification from the proper
government agency to establish that the subject land are
part of the alienable and disposable portion of the public
domain. In the absence of incontrovertible evidence to
prove that the subject property is already classified as
alienable and disposable, we must consider the same as
20
still inalienable public domain.
Anent respondents possession and occupation of the
subject property, a reading of the records failed to show that
the respondents by themselves or through their
predecessors-in-interest possessed and occupied the
subject land since June 12, 1945 or earlier.1avvphil
The evidence submitted by respondents to prove their
possession and occupation over the subject property
consists of the testimonies of Jose and Amado Geronimo
(Amado), the tenant of the adjacent lot. However, their
testimonies failed to establish respondents predecessorsin-interest' possession and occupation of subject property
since June 12, 1945 or earlier. Jose, who was born on
21
March 19, 1939, testified that since he attained the age of
reason he already knew that the land subject of this case

22

belonged to them. Amado testified that he was a tenant of

23
the land adjacent to the subject property since 1950, and
on about the same year, he knew that the respondents were
24
occupying the subject land.
Jose and Amado's testimonies consist merely of general
statements with no specific details as to when respondents'
predecessors-in-interest began actual occupancy of the
land subject of this case. While Jose testified that the
subject land was previously owned by their parents Zosimo
and Ester, who earlier inherited the property from their
parent Alejandro, no clear evidence was presented to show
Alejandro's mode of acquisition of ownership and that he
had been in possession of the same on or before June 12,
1945, the period of possession required by law. It is a rule
that general statements that are mere conclusions of law
and not factual proof of possession are unavailing and
25
cannot suffice. An applicant in a land registration case
cannot just harp on mere conclusions of law to embellish
the application but must impress thereto the facts and
circumstances evidencing the alleged ownership and
26
possession of the land.
Respondents earliest evidence can be traced back to a tax
declaration issued in the name of their predecessors-ininterest only in the year 1949. At best, respondents can only
prove possession since said date. What is required is open,
exclusive, continuous and notorious possession by
respondents and their predecessors-in-interest, under a
bona fide claim of ownership, since June 12, 1945 or
27
earlier. Respondents failed to explain why, despite their
claim that their predecessors-in interest have possessed the
subject properties in the concept of an owner even before
June 12, 1945, it was only in 1949 that their predecessorsin-interest started to declare the same for purposes of
taxation. Well settled is the rule that tax declarations and
receipts are not conclusive evidence of ownership or of the
right to possess land when not supported by any other
evidence. The fact that the disputed property may have
been declared for taxation purposes in the names of the
applicants for registration or of their predecessors-in-interest
does not necessarily prove ownership. They are merely
28
indicia of a claim of ownership.

The foregoing pieces of evidence, taken together, failed to

paint a clear picture that respondents by themselves or
through their predecessors-in-interest have been in open,
exclusive, continuous and notorious possession and
occupation of the subject land, under a bona fide claim of
ownership since June 12, 1945 or earlier.
Evidently, since respondents failed to prove that (1) the
subject property was classified as part of the disposable and
alienable land of the public domain; and (2) they and their
predecessors-in-interest have been in open, continuous,
exclusive, and notorious possession and occupation thereof
under a bonafide claim of ownership since June 12, 1945 or
earlier, their application for confirmation and registration of
the subject property under PD 1529 should be denied.
WHEREFORE, the petition is GRANTED. The Decision of
the Court of Appeals dated February 15, 2006, in CA-G.R.
CV No. 84206, affirming the Decision of the Regional Trial
Court of Pasig City, Branch 167, in LRC Case No. N-11514,
is REVERSED and SET ASIDE. The application for
registration and confirmation of title filed by respondents
Avelino R. dela Paz, Arsenio R. dela Paz, Jose R. dela Paz,
and Glicerio R. dela Paz, as represented by Jose R. dela
Paz, over a parcel of land, with a total area of twenty-five
thousand eight hundred twenty-five (25,825) square meters
situated at Barangay Ibayo, Napindan, Taguig, Metro
Manila, is DENIED.
SO ORDERED.

G.R. No. 108998 August 24, 1994

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE COURT OF APPEALS AND SPOUSES MARIO B.
LAPIA AND FLOR DE VEGA, respondents.
Byron V. Belarmino and Juan B. Belarmino for private
respondents.

the title and possession of herein applicants over

Lots 347 and 348, Ap-04-003755 in the names of
spouses Mario B. Lapia and Flor de Vega, all of
legal age, Filipino citizens by birth but now
Canadian citizens by naturalization and residing at
14 A. Mabini Street, San Pablo City and/or 2011170-124 Street, Edmonton, Alberta T5M-OK9,
Canada.

BIDIN, J.:
Can a foreign national apply for registration of title over a
parcel of land which he acquired by purchase while still a
citizen of the Philippines, from a vendor who has complied
with the requirements for registration under the Public Land
Act (CA 141)?

Once this Decision becomes final, let the

corresponding decree of registration be issued. In
the certificate of title to be issued, there shall be
annotated an easement of .265 meters road rightof-way.
SO ORDERED. (Rollo, p. 25)

The Republic would have us rule on the negative and asks

this Court to nullify the decision of the appellate court which
affirmed the judgment of the court a quo in granting the
application of respondent spouses for registration over the
lots in question.
On June 17, 1978, respondent spouses bought Lots 347
and 348, Cad. s38-D, as their residence with a total area of
91.77 sq. m. situated in San Pablo City, from one Cristeta
Dazo Belen (Rollo, p. 41). At the time of the purchase,
respondent spouses where then natural-born Filipino
citizens.
On February 5, 1987, the spouses filed an application for
registration of title of the two (2) parcels of land before the
Regional Trial Court of San Pablo City, Branch XXXI. This
time, however, they were no longer Filipino citizens and
have opted to embrace Canadian citizenship through
naturalization.
An opposition was filed by the Republic and after the parties
have presented their respective evidence, the court a quo
rendered a decision confirming private respondents' title to
the lots in question, the dispositive portion of which reads as
follows:
WHEREFORE, in view of the foregoing, this Court
hereby approves the said application and confirms

On appeal, respondent court affirmed the decision of the

trial court based on the following ratiocination:
In the present case, it is undisputed that both
applicants were still Filipino citizens when they
bought the land in controversy from its former
owner. For this reason, the prohibition against the
acquisition of private lands by aliens could not
apply. In justice and equity, they are the rightful
owners of the subject realty considering also that
they had paid for it quite a large sum of money.
Their purpose in initiating the instant action is
merely to confirm their title over the land, for, as
has been passed upon, they had been the owners
of the same since 1978. It ought to be pointed out
that registration is not a mode of acquiring
ownership. The Torrens System was not
established as a means for the acquisition of title to
private land. It is intended merely to confirm and
register the title which one may already have
(Municipality of Victorias vs. Court of Appeals, G.R.
No. L-31189, March 31, 1987). With particular
reference to the main issue at bar, the High Court
has ruled that title and ownership over lands within
the meaning and for the purposes of the
constitutional prohibition dates back to the time of

their purchase, not later. The fact that the

applicants-appellees are not Filipino citizens now
cannot be taken against them for they were not
disqualified from acquiring the land in question
(Bollozos vs. Yu Tieng Su, G.R. No. L-29442,
November 11, 1987). (Rollo, pp. 27-28)
Expectedly, respondent court's disposition did not merit
petitioner's approval, hence this present recourse, which
was belatedly filed.
Ordinarily, this petition would have been denied outright for
having been filed out of time had it not been for the
constitutional issue presented therein.
At the outset, petitioner submits that private respondents
have not acquired proprietary rights over the subject
properties before they acquired Canadian citizenship
through naturalization to justify the registration thereof in
their favor. It maintains that even privately owned
unregistered lands are presumed to be public lands under
the principle that lands of whatever classification belong to
the State under the Regalian doctrine. Thus, before the
issuance of the certificate of title, the occupant is not in the
jurisdical sense the true owner of the land since it still
pertains to the State. Petitioner further argued that it is only
when the court adjudicates the land to the applicant for
confirmation of title would the land become privately owned
land, for in the same proceeding, the court may declare it
public land, depending on the evidence.
As found by the trial court:
The evidence thus presented established that
applicants, by themselves and their predecessorsin-interest, had been in open, public, peaceful,
continuous, exclusive and notorious possession
and occupation of the two adjacent parcels of land
applied for registration of title under a bona-fide
claim of ownership long before June 12, 1945.
Such being the case, it is conclusively presumed
that all the conditions essential to the confirmation
of their title over the two adjacent parcels of land

are sought to be registered have been complied

with thereby entitling them to the issuance of the
corresponding certificate of title pursuant to the
provisions of Presidential Decree No. 1529,
otherwise known as the Property Registration
Decree. (Rollo, p. 26)
Respondent court echoed the court a quo's observation,
thus:
The land sought to be registered has been
declared to be within the alienable and disposable
zone established by the Bureau of Forest
Development (Exhibit "P"). The investigation
conducted by the Bureau of Lands, Natural
Resources District (IV-2) reveals that the disputed
realty had been occupied by the applicants "whose
house of strong materials stands thereon"; that it
had been declared for taxation purposes in the
name of applicants-spouses since 1979; that they
acquired the same by means of a public instrument
entitled "Kasulatan ng Bilihang Tuluyan" duly
executed by the vendor, Cristeta Dazo Belen, on
June 17, 1978 (Exhibits "I" and "J"); and that
applicants and their predecessors in interest had
been in possession of the land for more than 30
years prior to the filing of the application for
registration. But what is of great significance in the
instant case is the circumstance that at the time
the applicants purchased the subject lot in 1978,
both of them were Filipino citizens such that when
they filed their application for registration in 1987,
ownership over the land in dispute had already
passed to them. (Rollo, p., 27)
The Republic disagrees with the appellate court's concept of
possession and argues:
17. The Court of Appeals found that the land was
declared for taxation purposes in the name of
respondent spouses only since 1979. However, tax
declarations or reality tax payments of property are
not conclusive evidence of ownership. (citing

cases)
18. Then again, the appellate court found that
"applicants (respondents) and their predecessorsin-interest had been in possession of the land for
more than 30 years prior to the filing of the
application for registration." This is not, however,
the same as saying that respondents have been in
possession "since June 12, 1945." (PD No. 1073,
amending Sec. 48 [b], CA NO. 141; sec. also Sec.
14, PD No. 1529). So there is a void in
respondents' possession. They fall short of the
required possession since June 12, 1945 or prior
thereto. And, even if they needed only to prove
thirty (30) years possession prior to the filing of
their application (on February 5, 1987), they would
still be short of the required possession if the
starting point is 1979 when, according to the Court
of Appeals, the land was declared for taxation
purposes in their name. (Rollo, pp. 14-15)
The argument is myopic, to say the least. Following the
logic of petitioner, any transferee is thus foreclosed to apply
for registration of title over a parcel of land notwithstanding
the fact that the transferor, or his predecessor-in-interest
has been in open, notorious and exclusive possession
thereof for thirty (30) years or more. This is not, however,
what the law provides.
As petitioner itself argues, Section 48 of the Public Land Act
(CA 141) reads:
Sec. 48. The following-described citizens of the
Philippines, occupying lands of the public domain
or claiming interest therein, but whose titles have
not been perfected or completed, may apply to the
Court of First Instance (now Regional Trial Court)
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 xxx xxx

(b) Those who by themselves or through their

predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession
and occupation of 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. 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. (Emphasis supplied)
As amended by PD 1073:
Sec. 4. The provisions of Section 48(b) and
Section 48(c), Chapter VIII, of the Public Land Act
are hereby amended in the sense that these
provisions shall apply only to alienable and
disposable lands of the public domain which have
been in open, continuous, exclusive and notorious
possession and occupation by the applicant
himself or thru his predecessor-in-interest, under a
bona fide claim of acquisition or ownership, since
June 12, 1945.
It must be noted that with respect to possession and
occupation of the alienable and disposable lands of the
public domain, the law employs the terms "by themselves",
"the applicant himself or through his predecessor-ininterest". Thus, it matters not whether the vendee/applicant
has been in possession of the subject property for only a
day so long as the period and/or legal requirements for
confirmation of title has been complied with by his
predecessor-in-interest, the said period is tacked to his
possession. In the case at bar, respondents' predecessorsin-interest have been in open, continuous, exclusive and
notorious possession of the disputed land not only since
June 12, 1945, but even as early as 1937. Petitioner does
not deny this except that respondent spouses, in its
perception, were in possession of the land sought to be
registered only in 1978 and therefore short of the required

length of time. As aforesaid, the disputed parcels of land

were acquired by private respondents through their
predecessors-in-interest, who, in turn, have been in open
and continued possession thereof since 1937. Private
respondents stepped into the shoes of their predecessorsin-interest and by virtue thereof, acquired all the legal rights
necessary to confirm what could otherwise be deemed as
an imperfect title.
At this juncture, petitioner's reliance in Republic v.
Villanueva (114 SCRA 875 [1982]) deserves scant
consideration. There, it was held that before the issuance of
the certificate of title, the occupant is not in the juridical
sense the true owner of the land since it still pertains to the
State.
Suffice it to state that the ruling in Republic v. Villanueva
(supra), has already been abandoned in the 1986 case of
Director of Lands v. Intermediate Appellate Court (146
SCRA 509; and reiterated in Director of Lands v. Iglesia ni
Cristo, 200 SCRA 606 [1991]) where the Court, through
then Associate Justice, now Chief Justice Narvasa,
declared that:
(The weight of authority is) that open, exclusive
and undisputed possession of alienable public land
for the period prescribed by law creates the legal
fiction whereby the land, upon completion of the
requisite period ipso jure and without the need of
judicial or other sanction, ceases to be public land
and becomes private property. . . .
Herico in particular, appears to be squarely
affirmative:
. . . Secondly, under the provisions of
Republic Act
No. 1942, which the respondent Court
held to be inapplicable to the petitioner's
case, with the latter's proven occupation
and cultivation for more than 30 years
since 1914, by himself and by his
predecessors-in-interest, title over the

land has vested on petitioner so as to

segregate the land from the mass of
public land. Thereafter, it is no longer
disposable under the Public Land Act as
by free patent . . .
xxx xxx xxx
As interpreted in several cases, when the
conditions as specified in the foregoing
provision are complied with, the
possessor is deemed to have acquired,
by operation of law, a right to a grant, a
government grant, without the necessity
of a certificate of title being issued. The
land, therefore, ceases to be of the public
domain and beyond the authority of the
Director of Lands to dispose of. The
application for confirmation is mere
formality, the lack of which does not affect
the legal sufficiency of the title as would
be evidenced by the patent and the
Torrens title to be issued upon the
strength of said patent.
Nothing can more clearly demonstrate the logical
inevitability of considering possession of public
land which is of the character and duration
prescribed by the statute as the equivalent of an
express grant from the State than the dictum of the
statute itself (Section 48 [b]) that the possessor(s)
". . . shall be conclusively presumed to have
performed all the conditions essential to a
Government grant and shall be entitled to a
certificate of title ..." No proof being admissible to
overcome a conclusive presumption, confirmation
proceedings would, in truth be little more than a
formality, at the most limited to ascertaining
whether the possession claims is of the required
character and length of time; and registration
thereunder would not confer title, but simply
recognize a title already vested. The proceedings
would not originally convert the land from public to

private land, but only confirm such a conversion

already affected by operation of law from the
moment the required period of possession became
complete. As was so well put in Cario, ". . .(There
are indications that registration was expected from
all, but none sufficient to show that, for want of it,
ownership actually gained would be lost. The effect
of the proof, wherever made, was not to confer
title, but simply to establish it, as already conferred
by the decree, if not by earlier law. (Emphasis
supplied)
Subsequent cases have hewed to the above
pronouncement such that open, continuous and exclusive
possession for at least 30 years of alienable public land ipso
jure converts the same to private property (Director of Lands
v. IAC, 214 SCRA 604 [1992]; Pineda v. CA, 183 SCRA 602
[1990]). This means that occupation and cultivation for more
than 30 years by an applicant and his predecessors-ininterest, vest title on such applicant so as to segregate the
land from the mass of public and (National Power
Corporation v. CA, 218 SCRA 41 [1993]).
The Public Land Act requires that the applicant must prove
that (a) the land is alienable public land and (b) his
possession, in the concept above stated, must be either
since time immemorial or for the period prescribed in the
Public Land Act (Director of Lands v. Buyco, 216 SCRA 78
[1992]). 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 (National Power
Corporation v. CA, supra). As such, the land ceases to be a
part of the public domain and goes beyond the authority of
the Director of Lands to dispose of.
In other words, the Torrens system was not established as a
means for the acquisition of title to private land (Municipality
of Victorias v. CA, 149 SCRA 32 [1987]). It merely confirms,
but does not confer ownership. As could be gleaned from
the evidence adduced, private respondents were able to
establish the nature of possession of their predecessors-ininterest. Evidence was offered to prove that their

predecessors-in-interest had paid taxes on the subject land

and introduced improvements thereon (Exhibits "F" to "F9").
A certified true copy of the affidavit executed by Cristeta
Dazo and her sister Simplicia was also formally offered to
prove that the subject parcels of land were inherited by
vendor Cristeta Dazo from her father Pedro Dazo with the
conformity of her only sister Simplicia (Exhibit "G").
Likewise, a report from the Bureau of Lands was presented
in evidence together with a letter from the Bureau of Forest
Development, to prove that the questioned lots were part of
the alienable and disposable zone of the government and
that no forestry interest was affected (CA GR No. 28953,
Records, p. 33).
In the main, petitioner seeks to defeat respondents'
application for registration of title on the ground of foreign
nationality. Accordingly, the ruling in Director of Lands v.
Buyco (supra) supports petitioner's thesis.
We disagree.
In Buyco, the applicants therein were likewise foreign
nationals but were natural-born Filipino citizens at the time
of their supposed acquisition of the property. But this is
where the similarity ends. The applicants in Buyco sought to
register a large tract of land under the provisions of the
Land Registration Act, and in the alternative, under the
provisions of the Public Land Act. The land registration court
decided in favor of the applicants and was affirmed by the
appellate court on appeal. The Director of Lands brought
the matter before us on review and we reversed.
This Court, speaking through Justice Davide, Jr.,
stated:
As could be gleaned from the evidence adduced,
the private respondents do not rely on fee simple
ownership based on a Spanish grant or
possessory information title under Section 19 of
the Land Registration Act; the private respondents
did not present any proof that they or their
predecessors-in-interest derived title from an old
Spanish grant such as (a) the "titulo real" or royal

grant (b) the "concession especial" or especial

grant; (c) the "composicion con el estado" title or
adjustment title; (d) the "titulo de compra" or title by
purchase; and (e) the "informacion posesoria" or
possessory information title, which could become a
"titulo gratuito" or a gratuitous title (Director of
Forestry v. Muoz, 23 SCRA 1183 [1968]). The
primary basis of their claim is possession, by
themselves and their predecessors-in-interest,
since time immemorial.
If indeed private respondents and their
predecessors have been in possession since time
immemorial, the rulings of both courts could be
upheld for, as this Court stated in Oh Cho v.
Director of Lands (75 Phil. 890 [1946]):
. . . All lands that were not acquired from
the Government, either by purchase or by
grant, belong to the public domain. An
exception to the rule would be any land
that should have been in the possession
of an occupant and of his predecessors in
interest since time immemorial, for such
possession would justify the presumption
that the land had never been part of the
public domain or that if had been a private
property even before the Spanish
conquest (Cario v. Insular Government,
41 Phil 935 [1909]; 212 U.S. 449; 53 Law.
Ed., 594) The applicant does not come
under the exception, for the earliest
possession of the lot by his first
predecessor in interest began in 1880.
. . . alienable public land held by a
possessor, personally or through his
predecessors-in-interest, openly,
continuously and exclusively for the
prescribed statutory period (30 years
under the Public Land Act, as amended)
is converted to private property by the
mere lapse or completion of said period,
ipso jure. (Director of Lands v.

Intermediate Appellate Court, supra)

It is obvious from the foregoing rule that the applicant must
prove that (a) the land is alienable public land and (b) his
possession, in the concept above stated, must be either
since time immemorial, as ruled in both Cario and Susi, or
for the period prescribed in the Public Land Act. As to the
latter, this Court, in Gutierrez Hermanos v. Court of Appeals
(178 SCRA 37 [1989]), adopted the rule enunciated by the
Court of Appeals, per then Associate Justice Hugo R.
Gutierrez, Jr., . . ., that an applicant for registration under
Section 48 of the Public Land Act must secure a certification
from the Government that the lands which he claims to have
possessed as owner for more than thirty (30) years are
alienable and disposable. It is the burden of the applicant to
prove its positive averments.
In the instant case, private respondents offered no evidence
at all to prove that the property subject of the application is
an alienable and disposable land. On the contrary, the
entire property . . . was pasture land (and therefore
inalienable under the then 1973 Constitution).
. . . (P)rivate respondents' evidence miserably failed to
establish their imperfect title to the property in question.
Their allegation of possession since time immemorial, . . ., is
patently baseless. . . . When referring to possession,
specifically "immemorial possession," it means possession
of which no man living has seen the beginning, and the
existence of which he has learned from his elders (Susi v.
Razon, supra). Such possession was never present in the
case of private respondents. . . .
. . ., there does not even exist a reasonable basis for the
finding that the private respondents and their predecessorsin-interest possessed the land for more than eighty (80)
years, . . .
xxx xxx xxx
To this Court's mind, private respondents failed to prove that
(their predecessor-in-interest) had possessed the property
allegedly covered by Tax Declaration No. 15853 and made

the subject of both his last will and testament and the
project of partition of his estate among his heirs in such
manner as to remove the same from the public domain
under the Cario and Susi doctrines. Thus, (when the
predecessor-in-interest) died on 31 May 1937, he
transmitted no right whatsoever, with respect to the said
property, to his heirs. This being the case, his possession
cannot be tacked to that of the private respondents for the
latter's benefit pursuant to Section 48(b) of the Public Land
Act, the alternative ground relied upon in their application . .

Sec. 7. Save in cases of hereditary succession, no

private lands shall be transferred or conveyed
except to individuals, corporations, or associations
qualified to acquire or hold lands of the public
domain.

From the adoption of the 1987 Constitution up to the

present, no other law has been passed by the legislature on
the same subject. Thus, what governs the disposition of
private lands in favor of a natural-born Filipino citizen who
has lost his Philippine citizenship remains to be BP 185.

Sec. 8. Notwithstanding the provisions of Section 7

of this Article, a natural-born citizen of the
Philippines who has lost his Philippine citizenship
may be a transferee of private lands, subject to
limitations provided by law. (Emphasis supplied)

Even if private respondents were already Canadian citizens

at the time they applied for registration of the properties in
question, said properties as discussed above were already
private lands; consequently, there could be no legal
impediment for the registration thereof by respondents in
view of what the Constitution ordains. The parcels of land
sought to be registered no longer form part of the public
domain. They are already private in character since private
respondents' predecessors-in-interest have been in open,
continuous and exclusive possession and occupation
thereof under claim of ownership prior to June 12, 1945 or
since 1937. The law provides that a natural-born citizen of
the Philippines who has lost his Philippine citizenship may
be a transferee of a private land up to a maximum area of
1,000 sq.m., if urban, or one (1) hectare in case of rural
land, to be used by him as his residence (BP 185).

xxx xxx xxx

Considering that the private respondents became American
citizens before such filing, it goes without saying that they
had acquired no vested right, consisting of an imperfect title,
over the property before they lost their Philippine
citizenship. (Emphasis supplied)
Clearly, the application in Buyco were denied registration of
title not merely because they were American citizens at the
time of their application therefor. Respondents therein failed
to prove possession of their predecessor-in-interest since
time immemorial or possession in such a manner that the
property has been segregated from public domain; such that
at the time of their application, as American citizens, they
have acquired no vested rights over the parcel of land.
In the case at bar, private respondents were undoubtedly
natural-born Filipino citizens at the time of the acquisition of
the properties and by virtue thereof, acquired vested rights
thereon, tacking in the process, the possession in the
concept of owner and the prescribed period of time held by
their predecessors-in-interest under the Public Land Act. In
addition, private respondents have constructed a house of
strong materials on the contested property, now occupied
by respondent Lapias mother.
But what should not be missed in the disposition of this case
is the fact that the Constitution itself allows private
respondents to register the contested parcels of land in their
favor. Sections 7 and 8 of Article XII of the Constitution
contain the following pertinent provisions, to wit:

Section 8, Article XII of the 1987 Constitution above quoted

is similar to Section 15, Article XIV of the then 1973
Constitution which reads:
Sec. 15. Notwithstanding the provisions of Section
14 of this Article, a natural-born citizen of the
Philippines who has lost his citizenship may be a
transferee of private land, for use by him as his
residence, as the Batasang Pambansa may
provide.
Pursuant thereto, Batas Pambansa Blg. 185 was passed
into law, the relevant provision of which provides:
Sec. 2. Any natural-born citizen of the Philippines who has
lost his Philippine citizenship and who has the legal capacity
to enter into a contract under Philippine laws may be a
transferee of a private land up to a maximum area of one
thousand square meters, in the case of urban land, or one
hectare in the case of rural land, to be used by him as his
residence. In the case of married couples, one of them may
avail of the privilege herein granted; Provided, That if both
shall avail of the same, the total area acquired shall not
exceed the maximum herein fixed.
In case the transferee already owns urban or rural lands for
residential purposes, he shall still be entitled to be a
transferee of an additional urban or rural lands for
residential purposes which, when added to those already
owned by him, shall not exceed the maximum areas herein
authorized.

It is undisputed that private respondents, as vendees of a

private land, were natural-born citizens of the Philippines.
For the purpose of transfer and/or acquisition of a parcel of
residential land, it is not significant whether private
respondents are no longer Filipino citizens at the time they
purchased or registered the parcels of land in question.
What is important is that private respondents were formerly
natural-born citizens of the Philippines, and as transferees
of a private land, they could apply for registration in
accordance with the mandate of Section 8, Article XII of the
Constitution. Considering that private respondents were
able to prove the requisite period and character of
possession of their predecessors-in-interest over the subject
lots, their application for registration of title must perforce be
approved.
The dissenting opinion, however, states that the
requirements in BP 185, must also be complied with by
private respondents. Specifically, it refers to Section 6,
which provides:

Sec. 6. In addition to the requirements provided for

in other laws for the registration of titles to lands,
no private land shall be transferred under this Act,
unless the transferee shall submit to the register of
deeds of the province or city where the property is
located a sworn statement showing the date and
place of his birth; the names and addresses of his
parents, of his spouse and children, if any; the
area, the location and the mode of acquisition of
his landholdings in the Philippines, if any; his
intention to reside permanently in the Philippines;
the date he lost his Philippine citizenship and the
country of which he is presently a citizen; and such
other information as may be required under
Section 8 of this Act.
The Court is of the view that the requirements in Sec. 6 of
BP 185 do not apply in the instant case since said
requirements are primarily directed to the register of deeds
before whom compliance therewith is to be submitted.
Nowhere in the provision is it stated, much less implied, that
the requirements must likewise be submitted before the land
registration court prior to the approval of an application for
registration of title. An application for registration of title
before a land registration court should not be confused with
the issuance of a certificate of title by the register of deeds.
It is only when the judgment of the land registration court
approving the application for registration has become final
that a decree of registration is issued. And that is the time
when the requirements of Sec. 6, BP 185, before the
register of deeds should be complied with by the applicants.
This decree of registration is the one that is submitted to the
office of the register of deeds for issuance of the certificate
of title in favor of the applicant. Prior to the issuance of the
decree of registration, the register of deeds has no
participation in the approval of the application for
registration of title as the decree of registration is yet to be
issued.
WHEREFORE, the petition is DISMISSED and the decision
appealed from is hereby AFFIRMED.
SO ORDERED.

G.R. No. 159595

January 23, 2007
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
LOURDES ABIERA NILLAS, Respondent.
DECISION

also acquired by the Spouses Abierra through various

purchases they effected from the heirs of Eugenia between
the years 1975 to 1982. These purchases were evidenced
by three separate Deeds of Absolute Sale all in favor of the
4
Spouses Abierra.

TINGA, J.:

In turn, Nillas acquired Lot No. 771 from her parents through
a Deed of Quitclaim dated 30 June 1994. Despite these
multiple transfers, and the fact that the Abierra spouses
have been in open and continuous possession of the
subject property since the 1977 sale, no decree of
registration has ever been issued over Lot No. 771 despite
the rendition of the 1941 CFI Decision. Thus, Nillas sought
the revival of the 1941 Decision and the issuance of the
corresponding decree of registration for Lot No. 771. The
records do not precisely reveal why the decree was not
issued by the Director of Lands, though it does not escape
attention that the 1941 Decision was rendered a few months
before the commencement of the Japanese invasion of the
Philippines in December of 1941.

The central question raised in this Petition for Review is

whether prescription or laches may bar a petition to revive a
judgment in a land registration case. It is a hardly novel
issue, yet petitioner Republic of the Philippines (Republic)
pleads that the Court rule in a manner that would unsettle
precedent. We deny certiorari and instead affirm the
assailed rulings of the courts below.
The facts bear little elaboration. On 10 April 1997,
respondent Lourdes Abiera Nillas (Nillas) filed a Petition for
Revival of Judgment with the Regional Trial Court (RTC) of
Dumaguete City. It was alleged therein that on 17 July
1941, the then Court of First Instance (CFI) of Negros
Oriental rendered a Decision Adicional in Expediente
Cadastral No. 14, captioned as El Director De Terrenos
1
contra Esteban Abingayan y Otros. In the decision, the
CFI, acting as a cadastral court, adjudicated several lots,
together with the improvements thereon, in favor of named
oppositors who had established their title to their respective
lots and their continuous possession thereof since time
immemorial and ordered the Chief of the General Land
Registration Office, upon the finality of the decision, to issue
2
the corresponding decree of registration. Among these lots
was Lot No. 771 of the Sibulan Cadastre, which was
adjudicated to Eugenia Calingacion (married to Fausto
Estoras) and Engracia Calingacion, both residents of
3
Sibulan, Negros Oriental.
Nillas further alleged that her parents, Serapion and
Josefina A. Abierra, eventually acquired Lot No. 771 in its
entirety. By way of a Deed of Absolute Sale dated 7
November 1977, Engracia Calingacion sold her undivided
one-half (1/2) share over Lot No. 771 to the Spouses
Abierra, the parents of Nillas. On the other hand, the onehalf (1/2) share adjudicated to Eugenia Calingacion was

No responsive pleading was filed by the Office of the

Solicitor General (OSG), although it entered its appearance
on 13 May 1997 and simultaneously deputized the City
Prosecutor of Dumaguete City to appear whenever the case
5
was set for hearing and in all subsequent proceedings.
Trial on the merits ensued. The RTC heard the testimony of
Nillas and received her documentary evidence. No evidence
was apparently presented by the OSG. On 26 April 2000,
6
the RTC rendered a Decision finding merit in the petition
for revival of judgment, and ordering the revival of the 1941
Decision, as well as directing the Commissioner of the Land
Registration Authority (LRA) to issue the corresponding
decree of confirmation and registration based on the 1941
Decision.1avvphi1.net
The OSG appealed the RTC Decision to the Court of
Appeals, arguing in main that the right of action to revive
judgment had already prescribed. The OSG further argued
that at the very least, Nillas should have established that a
request for issuance of a decree of registration before the
Administrator of the LRA had been duly made. The appeal

was denied by the appellate court in its Decision dated 24

July 2003. In its Decision, the Court of Appeals reiterated
that the provisions of Section 6, Rule 39 of the Rules of
Court, which impose a prescriptive period for enforcement
of judgments by motion, refer to ordinary civil actions and
not to "special" proceedings such as land registration cases.
The Court of Appeals also noted that it would have been
especially onerous to require Nillas to first request the LRA
to comply with the 1941 decision considering that it had
been established that the original records in the 1941 case
had already been destroyed and could no longer be
reconstructed.
In the present petition, the OSG strongly argues that
contrary to the opinion of the Court of Appeals, the
principles of prescription and laches do apply to land
registration cases. The OSG notes that Article 1144 of the
Civil Code establishes that an action upon judgment must
be brought within ten years from the time the right of action
8
accrues. Further, Section 6 of Rule 39 of the 1997 Rules of
Civil Procedure establishes that a final and executory
judgment or order may be executed on motion within five (5)
years from the date of its entry, after which time it may be
enforced by action before it is barred by statute of
9
limitations. It bears noting that the Republic does not
challenge the authenticity of the 1941 Decision, or Nillas's
acquisition of the rights of the original awardees. Neither
does it seek to establish that the property is inalienable or
otherwise still belonged to the State.
The OSG also extensively relies on two cases, Shipside Inc.
10
11
v. Court of Appeals and Heirs of Lopez v. De Castro.
Shipside was cited since in that case, the Court dismissed
the action instituted by the Government seeking the revival
of judgment that declared a title null and void because the
judgment sought to be revived had become final more than
25 years before the action for revival was filed. In Shipside,
the Court relied on Article 1144 of the Civil Code and
Section 6, Rule 39 of the 1997 Rules of Civil Procedure in
declaring that extinctive prescription did lie. On the other
hand, Heirs of Lopez involved the double registration of the
same parcel of land, and the subsequent action by one set
of applicants for the issuance of the decree of registration in

their favor seven (7) years after the judgment had become
final. The Court dismissed the subsequent action, holding
that laches had set in, it in view of the petitioners' omission
to assert a right for nearly seven (7) years.
Despite the invocation by the OSG of these two cases,
there exists a more general but definite jurisprudential rule
that favors Nillas and bolsters the rulings of the lower
courts. The rule is that "neither laches nor the statute of
limitations applies to a decision in a land registration
12
case."
The most extensive explanation of this rule may be found in
13
Sta. Ana v. Menla, decided in 1961, wherein the Court
refuted an argument that a decision rendered in a land
registration case wherein the decree of registration
remained unissued after 26 years was already "final and
enforceable." The Court, through Justice Labrador,
explained:
We fail to understand the arguments of the appellant in
support of the assignment [of error], except insofar as it
supports his theory that after a decision in a land
registration case has become final, it may not be enforced
after the lapse of a period of 10 years, except by another
proceeding to enforce the judgment or decision. Authority
for this theory is the provision in the Rules of Court to the
effect that judgment may be enforced within 5 years by
motion, and after five years but within 10 years, by an action
(Sec. 6, Rule 39). This provision of the Rules refers to
civil actions and is not applicable to special
proceedings, such as a land registration case. This is
so because a party in a civil action must immediately
enforce a judgment that is secured as against the
adverse party, and his failure to act to enforce the same
within a reasonable time as provided in the Rules
makes the decision unenforceable against the losing
party. In special proceedings[,] the purpose is to
establish a status, condition or fact; in land registration
proceedings, the ownership by a person of a parcel of
land is sought to be established. After the ownership
has been proved and confirmed by judicial declaration,
no further proceeding to enforce said ownership is

necessary, except when the adverse or losing party had

been in possession of the land and the winning party
desires to oust him therefrom.
Furthermore, there is no provision in the Land Registration
Act similar to Sec. 6, Rule 39, regarding the execution of a
judgment in a civil action, except the proceedings to place
the winner in possession by virtue of a writ of possession.
The decision in a land registration case, unless the adverse
or losing party is in possession, becomes final without any
further action, upon the expiration of the period for
perfecting an appeal. x x x
x x x x There is nothing in the law that limits the period
within which the court may order or issue a decree. The
reason is xxx that the judgment is merely declaratory in
character and does not need to be asserted or enforced
against the adverse party. Furthermore, the issuance of
a decree is a ministerial duty both of the judge and of
the Land Registration Commission; failure of the court
or of the clerk to issue the decree for the reason that no
motion therefor has been filed can not prejudice the
owner, or the person in whom the land is ordered to be
14
registered.

inapplicability of the rules on prescription and laches to land

registration cases has been repeatedly affirmed. Apart from
the three (3) cases mentioned earlier, the Sta. Ana doctrine
was reiterated in another three (3) more cases later,
20
namely: Vda. de Barroga v. Albano, Cacho v. Court of
21
22
Appeals, and Paderes v. Court of Appeals. The doctrine
of stare decisis compels respect for settled jurisprudence,
especially absent any compelling argument to do otherwise.
Indeed, the apparent strategy employed by the Republic in
its present petition is to feign that the doctrine and the cases
that spawned and educed it never existed at all. Instead, it
is insisted that the Rules of Court, which provides for the
five (5)-year prescriptive period for execution of judgments,
is applicable to land registration cases either by analogy or
in a suppletory character and whenever practicable and
23
convenient. The Republic further observes that
Presidential Decree (PD) No. 1529 has no provision on
execution of final judgments; hence, the provisions of Rule
39 of the 1997 Rules of Civil Procedure should apply to land
registration proceedings.
We affirm Sta. Ana not out of simple reflex, but because we
recognize that the principle enunciated therein offers a
convincing refutation of the current arguments of the
Republic.

The doctrine that neither prescription nor laches may render

inefficacious a decision in a land registration case was
reiterated five (5) years after Sta. Ana, in Heirs of Cristobal
15
Marcos, etc., et al. v. De Banuvar, et al. In that case, it
was similarly argued that a prayer for the issuance of a
decree of registration filed in 1962 pursuant to a 1938
decision was, among others, barred by prescription and
laches. In rejecting the argument, the Court was content in
restating with approval the above-cited excerpts from Sta.
Ana. A similar tack was again adopted by the Court some
16
years later in Rodil v. Benedicto. These cases further
17
emphasized, citing Demoran v. Ibanez, etc., and Poras
18
and Manlapas and Tolentino v. Llorente, respectively, that
the right of the applicant or a subsequent purchaser to ask
for the issuance of a writ of possession of the land never
19
prescribes.

Rule 39, as invoked by the Republic, applies only to

ordinary civil actions, not to other or extraordinary
proceedings not expressly governed by the Rules of Civil
Procedure but by some other specific law or legal modality
such as land registration cases. Unlike in ordinary civil
actions governed by the Rules of Civil Procedure, the intent
of land registration proceedings is to establish ownership by
a person of a parcel of land, consistent with the purpose of
such extraordinary proceedings to declare by judicial fiat a
status, condition or fact. Hence, upon the finality of a
decision adjudicating such ownership, no further step is
required to effectuate the decision and a ministerial duty
exists alike on the part of the land registration court to order
the issuance of, and the LRA to issue, the decree of
registration.

Within the last 20 years, the Sta. Ana doctrine on the

The Republic observes that the Property Registration

Decree (PD No. 1529) does not contain any provision on

execution of final judgments; hence, the application of Rule
39 of the 1997 Rules of Civil Procedure in suppletory
fashion. Quite the contrary, it is precisely because PD No.
1529 does not specifically provide for execution of
judgments in the sense ordinarily understood and applied in
civil cases, the reason being there is no need for the
prevailing party to apply for a writ of execution in order to
obtain the title, that Rule 39 of the 1997 Rules of Civil
Procedure is not applicable to land registration cases in the
first place. Section 39 of PD No. 1529 reads:
SEC. 39. Preparation of Decree and Certificate of Title. After the judgment directing the registration of title to land
has become final, the court shall, within fifteen days from
entry of judgment, issue an order directing the
Commissioner to issue the corresponding decree of
registration and certificate of title. The clerk of court shall
send, within fifteen days from entry of judgment, certified
copies of the judgment and of the order of the court
directing the Commissioner to issue the corresponding
decree of registration and certificate of title, and a certificate
stating that the decision has not been amended,
reconsidered, nor appealed, and has become final.
Thereupon, the Commissioner shall cause to be prepared
the decree of registration as well as the original and
duplicate of the corresponding original certificate of title. The
original certificate of title shall be a true copy of the decree
of registration. The decree of registration shall be signed by
the Commissioner, entered and filed in the Land
Registration Commission. The original of the original
certificate of title shall also be signed by the Commissioner
and shall be sent, together with the owners duplicate
certificate, to the Register of Deeds of the city or province
where the property is situated for entry in his registration
book.
The provision lays down the procedure that interposes
between the rendition of the judgment and the issuance of
the certificate of title. No obligation whatsoever is imposed
by Section 39 on the prevailing applicant or oppositor even
as a precondition to the issuance of the title. The obligations
provided in the Section are levied on the land court (that is

to issue an order directing the Land Registration

Commissioner to issue in turn the corresponding decree of
registration), its clerk of court (that is to transmit copies of
the judgment and the order to the Commissioner), and the
Land Registration Commissioner (that is to cause the
preparation of the decree of registration and the transmittal
thereof to the Register of Deeds). All these obligations are
ministerial on the officers charged with their performance
and thus generally beyond discretion of amendment or
review.
The failure on the part of the administrative authorities to do
their part in the issuance of the decree of registration cannot
oust the prevailing party from ownership of the land. Neither
the failure of such applicant to follow up with said authorities
can. The ultimate goal of our land registration system is
geared towards the final and definitive determination of real
property ownership in the country, and the imposition of an
additional burden on the owner after the judgment in the
land registration case had attained finality would simply
frustrate such goal.
Clearly, the peculiar procedure provided in the Property
Registration Law from the time decisions in land registration
cases become final is complete in itself and does not
need to be filled in. From another perspective, the
judgment does not have to be executed by motion or
enforced by action within the purview of Rule 39 of the 1997
Rules of Civil Procedure.
Following these premises, it can even be posited that in
theory, there would have been no need for Nillas, or others
under similar circumstances, to file a petition for revival of
judgment, since revival of judgments is a procedure derived
from civil procedure and proceeds from the assumption that
the judgment is susceptible to prescription. The primary
recourse need not be with the courts, but with the LRA, with
whom the duty to issue the decree of registration remains. If
it is sufficiently established before that body that there is an
authentic standing judgment or order from a land
registration court that remains unimplemented, then there
should be no impediment to the issuance of the decree of
registration. However, the Court sees the practical value of

necessitating judicial recourse if a significant number of

years has passed since the promulgation of the land court's
unimplemented decision or order, as in this case. Even
though prescription should not be a cause to bar the
issuance of the decree of registration, a judicial evaluation
would allow for a thorough examination of the veracity of the
judgment or order sought to be effected, or a determination
of causes other than prescription or laches that might
preclude the issuance of the decree of registration.
What about the two cases cited by the Republic, Shipside
and Heirs of Lopez? Even though the Court applied the
doctrines of prescription and laches in those cases, it should
be observed that neither case was intended to overturn the
Sta. Ana doctrine, nor did they make any express
declaration to such effect. Moreover, both cases were
governed by their unique set of facts, quite distinct from the
general situation that marked both Sta. Ana and the present
case.
The judgment sought belatedly for enforcement in Shipside
did not arise from an original action for land registration, but
from a successful motion by the Republic seeking the
cancellation of title previously adjudicated to a private
landowner. While one might argue that such motion still
arose in a land registration case, we note that the
pronouncement therein that prescription barred the revival
of the order of cancellation was made in the course of
dispensing with an argument which was ultimately
peripheral to that case. Indeed, the portion of Shipside
dealing with the issue of prescription merely restated the
provisions in the Civil Code and the Rules of Civil Procedure
relating to prescription, followed by an observation that the
judgment sought to be revived attained finality 25 years
earlier. However, the Sta. Ana doctrine was not addressed,
and perhaps with good reason, as the significantly more
extensive rationale provided by the Court in barring the
revival of judgment was the fact that the State no longer
held interest in the subject property, having divested the
same to the Bases Conversion Development Authority prior
to the filing of the action for revival. Shipside expounds on
this point, and not on the applicability of the rules of
prescription.

Notably, Shipside has attained some measure of

prominence as precedent on still another point, relating to
its pronouncements relating to the proper execution of the
certification of non-forum shopping by a corporation. In
contrast, Shipside has not since been utilized by the Court
to employ the rules on prescription and laches on final
decisions in land registration cases. It is worth mentioning
that since Shipside was promulgated in 2001, the Court has
not hesitated in reaffirming the rule in Sta. Ana as recently
as in the middle of 2005 in the Paderes case.
We now turn to Heirs of Lopez, wherein the controlling
factual milieu proved even more unconventional than that in
Shipside. The property involved therein was the subject of
two separate applications for registration, one filed by
petitioners therein in 1959, the other by a different party in
1967. It was the latter who was first able to obtain a decree
24
of registration, this accomplished as early as 1968. On the
other hand, the petitioners were able to obtain a final
judgment in their favor only in 1979, by which time the
property had already been registered in the name of the
other claimant, thus obstructing the issuance of certificate of
title to the petitioners. The issues of prescription and laches
arose because the petitioners filed their action to enforce
the 1979 final judgment and the cancellation of the
competing title only in 1987, two (2) years beyond the five
(5)-year prescriptive period provided in the Rules of Civil
Procedure. The Court did characterize the petitioners as
guilty of laches for the delay in filing the action for the
execution of the judgment in their favor, and thus denied the
petition on that score.
Heirs of Lopez noted the settled rule that "when two
certificates of title are issued to different persons covering the
same land in whole or in part, the earlier in date must prevail
x x x," and indeed even if the petitioners therein were
somehow able to obtain a certificate of title pursuant to the
1979 judgment in their favor, such title could not have stood
in the face of the earlier title. The Court then correlated the
laches of the petitioners with their pattern of behavior in failing
to exercise due diligence to protect their interests over the
property, marked by their inability to oppose the other

application for registration or to seek enforcement of their

own judgment within the five (5) -year reglementary period.
Still, a close examination of Heirs of Lopez reveals an
unusual dilemma that negates its application as precedent to
the case at bar, or to detract from Sta. Ana as a general rule
for that matter. The execution of the judgment sought for
belated enforcement in Heirs of Lopez would have entailed
the disturbance of a different final judgment which had
already been executed and which was shielded by the legal
protection afforded by a Torrens title. In light of those
circumstances, there could not have been a "ministerial duty"
on the part of the registration authorities to effectuate the
judgment in favor of the petitioners in Heirs of Lopez. Neither
could it be said that their right of ownership as confirmed by
the judgment in their favor was indubitable, considering the
earlier decree of registration over the same property
accorded to a different party. The Sta. Ana doctrine rests
upon the general presumption that the final judgment, with
which the corresponding decree of registration is
homologous by legal design, has not been disturbed by
another ruling by a co-extensive or superior court. That
presumption obtains in this case as well. Unless that
presumption is overcome, there is no impediment to the
25
continued application of Sta. Ana as precedent.
We are not inclined to make any pronouncements on the
doctrinal viability of Shipside or Heirs of Lopez concerning the
applicability of the rules of prescription or laches in land
registration cases. Suffice it to say, those cases do not
operate to detract from the continued good standing of Sta.
Ana as a general precedent that neither prescription nor
laches bars the enforcement of a final judgment in a land
registration case, especially when the said judgment has not
been reversed or modified, whether deliberately or
inadvertently, by another final court ruling. This qualifier
stands not so much as a newly-carved exception to the
general rule as it does as an exercise in stating the obvious.
Finally, the Republic faults the Court of Appeals for
pronouncing that the 1941 Decision constituted res judicata
that barred subsequent attacks to the adjudicates title over
the subject property. The Republic submits that said decision

would operate as res judicata only after the decree of

registration was issued, which did not happen in this case.
We doubt that a final decisions status as res judicata is the
impelling ground for its very own execution; and indeed res
judicata is more often invoked as a defense or as a factor in
relation to a different case altogether. Still, this faulty
terminology aside, the Republics arguments on this point do
not dissuade from our central holding that the 1941 Decision
is still susceptible to effectuation by the standard decree of
registration notwithstanding the delay incurred by Nillas or
her predecessors-in-interest in seeking its effectuation and
the reasons for such delay, following the prostracted failure
of the then Land Registration Commissioner to issue the
decree of registration. In this case, all that Nillas needed to
prove was that she had duly acquired the rights of the original
adjudicates her predecessors-in-interest-in order to entitle
her to the decree of registration albeit still in the names of the
original prevailing parties who are her predecessors-in
interest. Both the trial court and the
Court of Appeals were satisfied that such fact was proven,
and the Republic does not offer any compelling argument to
dispute such proof.
WHEREFORE, the Petition is DENIED. No pronouncement
as to costs.
SO ORDERED.

G.R. No. 168913

March 14, 2007

ROLANDO TING, Petitioner,
vs.
HEIRS OF DIEGO LIRIO, namely: FLORA A. LIRIO,
AMELIA L. ROSKA, AURORA L. ABEJO, ALICIA L.
DUNQUE, ADELAIDA L. DAVID, EFREN A. LIRIO and
JOCELYN ANABELLE L. ALCOVER, Respondents.
DECISION
CARPIO MORALES, J.:
In a Decision of December 10, 1976 in Land Registration
Case (LRC) No. N-983, then Judge Alfredo Marigomen of
the then Court of First Instance of Cebu, Branch 7, granted
the application filed by the Spouses Diego Lirio and Flora
Atienza for registration of title to Lot No. 18281 (the lot) of
the Cebu Cadastral 12 Extension, Plan Rs-07-000787.
The decision in LRC No. N-983 became final and executory
on January 29, 1977. Judge Marigomen thereafter issued
an order of November 10, 1982 directing the Land
Registration Commission to issue the corresponding decree
of registration and the certificate of title in favor of the
spouses Lirio.
On February 12, 1997, Rolando Ting (petitioner) filed with
the Regional Trial Court (RTC) of Cebu an application for
registration of title to the same lot. The application was
1
docketed as LRC No. 1437-N.
The herein respondents, heirs of Diego Lirio, namely: Flora
A. Lirio, Amelia L. Roska, Aurora L. Abejo, Alicia L. Dunque,
Adelaida L. David, Efren A. Lirio and Jocelyn Anabelle L.
Alcover, who were afforded the opportunity to file an
opposition to petitioners application by Branch 21 of the
2
Cebu RTC, filed their Answer calling attention to the
December 10, 1976 decision in LRC No. N-983 which had
become final and executory on January 29, 1977 and which,
they argued, barred the filing of petitioners application on
the ground of res judicata.
After hearing the respective sides of the parties, Branch 21

of the Cebu RTC, on motion of respondents, dismissed

petitioners application on the ground of res judicata.
3
1vvphi1.nt
Hence, the present petition for review on certiorari which
raises the sole issue of whether the decision in LRC No. N983 constitutes res judicata in LRC No. 1437-N.
Petitioner argues that although the decision in LRC No. N983 had become final and executory on January 29, 1977,
no decree of registration has been issued by the Land
4
Registration Authority (LRA); it was only on July 26, 2003
that the "extinct" decision belatedly surfaced as basis of
5
respondents motion to dismiss LRC No. 1437-N; and as
no action for revival of the said decision was filed by
respondents after the lapse of the ten-year prescriptive
period, "the cause of action in the dormant judgment
6
pass[d] into extinction."
Petitioner thus concludes that an "extinct" judgment cannot
7
be the basis of res judicata.
The petition fails.
Section 30 of Presidential Decree No. 1529 or the Property
Registration Decree provides:
SEC. 30. When judgment becomes final; duty to cause
issuance of decree. The judgment rendered in a land
registration proceeding becomes final upon the expiration
8
of thirty days to be counted from the date of receipt of
notice of the judgment. An appeal may be taken from the
judgment of the court as in ordinary civil cases.
After judgment has become final and executory, it shall
devolve upon the court to forthwith issue an order in
accordance with Section 39 of this Decree to the
Commissioner for the issuance of the decree of registration
and the corresponding certificate of title in favor of the
person adjudged entitled to registration. (Emphasis
supplied)
In a registration proceeding instituted for the registration of a

private land, with or without opposition, the judgment of the

court confirming the title of the applicant or oppositor, as the
case may be, and ordering its registration in his name
constitutes, when final, res judicata against the whole
9
world. It becomes final when no appeal within the
reglementary period is taken from a judgment of
10
confirmation and registration.
The land registration proceedings being in rem, the land
registration courts approval in LRC No. N-983 of spouses
Diego Lirio and Flora Atienzas application for registration of
the lot settled its ownership, and is binding on the whole
world including petitioner.
Explaining his position that the December 10, 1976 Decision
in LRC No. N-983 had become "extinct," petitioner
advances that the LRA has not issued the decree of
registration, a certain Engr. Rafaela Belleza, Chief of the
Survey Assistance Section, Land Management Services,
Department of Environment and Natural Resources
(DENR), Region 7, Cebu City having claimed that the
survey of the Cebu Cadastral Extension is erroneous and all
resurvey within the Cebu Cadastral extension must first be
approved by the Land Management Services of
the DENR, Region 7, Cebu City before said resurvey may
be used in court; and that the spouses Lirio did not comply
with the said requirement for they instead submitted to the
11
court a mere special work order.
There is, however, no showing that the LRA credited the
alleged claim of Engineer Belleza and that it reported such
claim to the land registration court for appropriate action or
reconsideration of the decision which was its duty.
Petitioners insist that the duty of the respondent land
registration officials to issue the decree is purely ministerial.
It is ministerial in the sense that they act under the orders of
the court and the decree must be in conformity with the
decision of the court and with the data found in the record,
and they have no discretion in the matter. However, if they
are in doubt upon any point in relation to the
preparation and issuance of the decree, it is their duty

to refer the matter to the court. They act, in this respect,

as officials of the court and not as administrative
officials, and their act is the act of the court. They are
specifically called upon to "extend assistance to courts
in ordinary and cadastral land registration
12
proceedings." (Emphasis supplied)
As for petitioners claim that under Section 6, Rule 39 of the
Rules of Court reading:
SEC. 6. Execution by motion or by independent action. A
final and executory judgment or order may be executed on
motion within five (5) years from the date of its entry. After
the lapse of such time, and before it is barred by the statute
of limitations, a judgment may be enforced by action. The
revived judgment may also be enforced by motion within
five (5) years from the date of its entry and thereafter by
action before it is barred by the statute of limitations[,]
the December 10, 1976 decision became "extinct" in light of
the failure of respondents and/or of their predecessors-ininterest to execute the same within the prescriptive period,
the same does not lie.
13

Sta. Ana v. Menla, et al. enunciates the raison detre why

Section 6, Rule 39 does not apply in land registration
proceedings, viz:
THAT THE LOWER COURT ERRED IN ORDERING THAT
THE DECISION RENDERED IN THIS LAND
REGISTRATION CASE ON NOVEMBER 28, 1931 OR
TWENTY SIX YEARS AGO, HAS NOT YET BECOME
FINAL AND UNENFORCEABLE.
We fail to understand the arguments of the appellant in
support of the above assignment, except in so far as it
supports his theory that after a decision in a land
registration case has become final, it may not be enforced
after the lapse of a period of 10 years, except by another
proceeding to enforce the judgment or decision. Authority
for this theory is the provision in the Rules of Court to the
effect that judgment may be enforced within 5 years by
motion, and after five years but within 10 years, by an action

(Sec. 6, Rule 39.) This provision of the Rules refers to

civil actions and is not applicable to special
proceedings, such as a land registration case. This is
so because a party in a civil action must immediately
enforce a judgment that is secured as against the
adverse party, and his failure to act to enforce the same
within a reasonable time as provided in the Rules
makes the decision unenforceable against the losing
party. In special proceedings the purpose is to
establish a status, condition or fact; in land registration
proceedings, the
ownership by a person of a parcel of land is sought to
be established. After the ownership has been proved
and confirmed
by judicial declaration, no further proceeding to enforce
said ownership is necessary, except when the adverse
or losing party had been in possession of the land and
the winning party desires to oust him therefrom.
Furthermore, there is no provision in the Land Registration
Act similar to Sec. 6, Rule 39, regarding the execution of a
judgment in a civil action, except the proceedings to place
the winner in possession by virtue of a writ of possession.
The decision in a land registration case, unless the adverse
or losing party is in possession, becomes final without any
further action, upon the expiration of the period for
perfecting an appeal.
x x x x (Emphasis and underscoring supplied)
WHEREFORE, the petition is, in light of the foregoing
discussions, DENIED.
Costs against petitioner, Rolando Ting.
SO ORDERED.

G.R. No. 123346

March 31, 2009
MANOTOK REALTY, INC. and MANOTOK ESTATE
CORPORATION, Petitioners,
vs.
CLT REALTY DEVELOPMENT, CORPORATION,
Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 134385
March 31, 2009
ARANETA INSTITUTE OF AGRI-CULTURE, INC.,
Petitioner,
vs.
HEIRS OF JOSE B. DIMSON, REPRESENTED BY HIS
COMPULSORY HEIRS: HIS SURVIVING SPOUSE,
ROQUETA R. DIMSON AND THEIR CHILDREN, NORMA
AND CELSA TIRADO, ALSON AND VIRGINIA DIMSON,
LINDA AND CARLOS LAGMAN, LERMA AND RENE
POLICAR, AND ESPERANZA R. DIMSON; AND THE
REGISTER OF DEEDS OF MALABON, Respondents.
RESOLUTION
TINGA, J.:
1

In the Courts Resolution dated 14 December 2007, the

Court constituted a Special Division of the Court of Appeals
to hear the instant case on remand. The Special Division
was composed of three Associate Justices of the Court of
Appeals, with Justice Josefina Guevara-Salonga as
Chairperson; Justice Lucas Bersamin as Senior Member;
and Associate Justice Japar B. Dimaampao as Junior
Member. We instructed the Special Division to proceed as
follows:
The Special Division is tasked to hear and receive evidence,
conclude the proceedings and submit to this Court a report
on its findings and recommended conclusions within three
(3) months from finality of this Resolution.

back their claims of title to OCT No. 994 dated 3

May 1917?
ii. Whether the imputed flaws in the titles of the
Manotoks and Araneta, as recounted in the 2005
Decision, are borne by the evidence? Assuming
they are, are such flaws sufficient to defeat the
claims of title of the Manotoks and Araneta?
iii. Whether the factual and legal bases of 1966
Order of Judge Muoz-Palma and the 1970 Order
of Judge Sayo are true and valid. Assuming they
are, do these orders establish a superior right to
the subject properties in favor of the Dimsons and
CLT as opposed to the claims of Araneta and the
Manotoks?
iv. Whether any of the subject properties had been
the subject of expropriation proceedings at any
point since the issuance of OCT No. 994 on 3 May
1917, and if so what are those proceedings, what
are the titles acquired by the Government and
whether any of the parties is able to trace its title to
the title acquired by the Government through
expropriation.
v. Such other matters necessary and proper in
ascertaining which of the conflicting claims of title
should prevail.
WHEREFORE, the instant cases are hereby REMANDED
to the Special Division of the Court of Appeals for further
proceedings in accordance with Parts VI, VII and VIII of this
Resolution.
SO ORDERED.

In ascertaining which of the conflicting claims of title should

prevail, the Special Division is directed to make the
following determinations based on the evidence already on
record and such other evidence as may be presented at the
proceedings before it, to wit:
i. Which of the contending parties are able to trace

The Special Division proceeded to conduct hearings in

accordance with the Resolution. The parties to these cases,
namely CLT Realty Development Corporation (CLT),
Manotok Realty Inc. and Manotok Estate Corporation (the
Manotoks), the Heirs of Jose B. Dimson (Heirs of Dimson),
and Araneta Institute of Agriculture, Inc. (Araneta), were

directed by the Special Division to present their respective

evidence to the Court of Appeals. Thereafter, the Special
3
Division rendered a 70-page Report (Report) on 26
November 2008. The Special Division submitted the sealed
Report to this Court.
Before taking action on the Report itself, we dispose of a
preliminary matter. On February 17, 2009, the Manotoks
filed a motion beseeching that copies of the report be
furnished the parties "so that they may submit their
comments and objections thereon in accord with the
principle contained in Sec. 10, Rule 32 of the Rules of
Court." We deny the motion.
It is incorrect to presume that the earlier referral of these
cases to the Court of Appeals for reception of evidence was
strictly in accordance with Rule 32. Notably, Section 1 of
said Rule authorizes the referral of the case to a
commissioner "by written consent of both parties," whereas
in the cases at bar, the Court did not endeavor to secure the
consent of the parties before effectuating the remand to the
Court of Appeals. Nonetheless, our earlier advertence to
Rule 32 remains proper even if the adopted procedure does
not hew strictly to that Rule, owing to our power under
Section 6, Rule 135 to adopt any suitable process or mode
of proceeding which appears conformable to the spirit of the
Rules to carry into effect all auxiliary processes and other
means necessary to carry our jurisdiction into effect.
Moreover, furnishing the parties with copies of the Sealed
Report would not serve any useful purpose. It would only
delay the promulgation of the Courts action on the Sealed
Report and the adjudication of these cases. In any event,
the present Resolution quotes extensively from the sealed
Report and discusses its other substantive segments which
are not quoted.
The Report is a commendably exhaustive and pellucid
analysis of the issues referred to the Special Division. It is a
more than adequate basis for this Court to make the
following final dispositions in these cases.

I.
We adopt the succeeding recital of operative antecedents
made by the Special Division in its Report.
THE PROCEDURAL ANTECEDENTS
DIMSON v. ARANETACA-G.R. CV. NO. 41883 & CA-G.R.
SP No. 34819[SC-G.R. No. 134385]
On 18 December 1979, DIMSON filed with the then Court of
First Instance ["CFI"] of Rizal a complaint for Recovery of
Possession and Damages against ARANETA. On 7 May
1980, DIMSON amended his complaint and included Virgilio
L. Enriquez ["ENRIQUEZ"] as his co-plaintiff.
In said Amended Complaint, DIMSON claimed that he is the
absolute owner of a 50-hectare land located in Bo. Potrero,
Malabon, Metro Manila covered by TCT No. R-15169, [Lot
25-A-2] of the Caloocan Registry of Deeds. Allegedly,
DIMSON had transferred the subject property to ENRIQUEZ
by way of an absolute and irrevocable sale on 14 November
1979. Unfortunately though, DIMSON and ENRIQUEZ
discovered that the subject property was being occupied by
ARANETA wherein an "agricultural school house" is erected
and that despite repeated demands, the latter refused to
vacate the parcel of land and remove the improvements
thereon.
ARANETA, for its part, refuted said allegations and
countered that it is the absolute owner of the land being
claimed by DIMSON and that the real properties in the
Araneta Compound are "properly documented and validly
titled." It maintained that it had been in possession of the
subject parcel of land since 1974. For this reason, the
claims of DIMSON and ENRIQUEZ were allegedly barred
by prescription.
During the trial, counsel for ARANETA marked in evidence,
among others, certifications from the Land Registration
Commission attesting that TCTs Nos. 13574 and 26538,
covering the disputed property, are in the names of
ARANETA and Jose Rato, respectively. ARANETA also
offered TCT No. 7784 in evidence to prove that it is the

registered owner of the land described therein.

On 28 May 1993, the trial court rendered a Decision
upholding the title of DIMSON over the disputed property
xxx
Undaunted, ARANETA interposed an appeal to the Court of
Appeals, docketed as CA-G.R. CV No. 41883, which was
later consolidated with CA-GR. SP No. 34819 in view of the
inter-related issues of the two cases.
In its 30 May 1997 Decision, the Court of Appeals, in CAG.R. CV No. 41883, sustained the RTC Decision in favor of
DIMSON finding that the title of ARANETA to the disputed
land in a nullity. In CA-GR. SP No. 34819, the Court of
Appeals likewise invalidated the titles of ARANETA, relying
on the Supreme Court ruling in Metropolitan Waterworks
and Sewerage System v. Court of Appeals, which declared
null and void the certificates of title derived from OCT No.
994 registered on 3 may 1917. It was also held that
ARANETA failed to sufficiently show that the Order sought
to be nullified was obtained through extrinsic fraud that
would warrant the annulment thereof.
Dissatisfied still, ARANETA filed a Motion for
Reconsideration And/Or New Trial espousing therein as
basis for its entreaty the various letters from different
government agencies and Department order No. 137 of the
Department of Justice, among others.
On 16 July 1998, the various Motions of ARANETA were
denied by the Court of Appeals. Nonetheless, the Court
ordered DIMSON to maintain status quo until the finality of
the aforesaid judgment.
Consequently, ARANETA filed a petition before the
Supreme Court. Refuting the factual finding of the trial court
and the Court of Appeals, ARANETA contended that there
in only one OCT 994 covering the Maysilo Estate issued on
3 May 1917 pursuant to the Decree No. 36455 issued by
the Court of Land Registration on 19 April 1917 and added
that there were subsequent certifications issued by the
government officials, notably from the LRS, the DOJ

Committee Report and the Senate Committees Joint Report

which attested that there is only one OCT 994, that which
had been issued on 3 May 1917.1avvphi1
CLT v. MANOTOK
CA-G.R. CV. No. 45255[SC-G.R. No. 123346]
On 10 August 1992, CLT filed with the Regional Trial Court
["RTC"] A COMPLAINT FOR Annulment of Transfer
Certificates of Title, Recovery of Possession and Damages
against the MANOTOKS and the Registry of Deeds of Metro
Manila District II (Calookan City, Metro Manila)
["CALOOCAN RD"].
In its Complaint, CLT alleged that it is the registered owner
of Lot 26 of the Maysilo Estate located in Caloocan City and
covered by Transfer Certificate of Title No. T- 177013, a
derivative title of OCT No. 994. As a basis of its proprietary
claim, CLT averred that on 10 December 1988, it had
acquired Lot 26 from its former registered owner, Estelita I.
Hipolito ["HIPOLITO"], by virtue of a Deed of Sale with Real
Estate Mortgage. HIPOLITOs title was , in turn, a direct
transfer from DIMSON, the registered owner of TCT No.
15166, the latter having acquired the same by virtue of a
Court Order dated 13 June 1966 issued by the Court of First
Instance of Rizal in Civil Case No. 4557.
On the other hand, the MANOTOKS maintained the validity
of their titles, which were all derivatives of OCT No. 994
covering over twenty (20) parcels of land located over a
portion of Lot 26 in the Maysilo Estate. In substance, it was
contented that the title of CLT was an offspring of an
ineffective grant of an alleged undisputed portion of Lot 26
by way of attorneys fees to its predecessor-in- interest,
Jose B. Dimson. The MANOTOKS, in this connection,
further contended that the portion of Lot 26, subject of the
present controversy, had long been disposed of in favor of
Alejandro Ruiz and Mariano Leuterio and hence, there was
nothing more in said portion of Lot 26 that could have been
validly conveyed to Dimson.
Tracing the legitimacy of their certificates of titles, the
MANOTOKS alleged that TCT No. 4210, which cancelled

OCT No. 994, had been issued in the names of Alejandro

Ruiz and Mariano Leuterio on Sept ember 1918 by virtue of
an Escritura De Venta executed by Don Tomas Arguelles
and Don Enrique Lopes on 21 August 1918. TCT No. 4210
allegedly covered an approximate area of 19,565.43 square
meters of Lot 26. On even date, TCT No. 4211 was
transferred to Francisco Gonzales on the strength of an
Escritura de Venta dated 3 March 1920 for which TCT No.
T-5261, covering an area of 871,982 square meters was
issued in the name of one Francisco Gonzales, married to
Rufina Narciso.
Thereafter, TCT No. T-35485, canceling TCT No. T-5261,
was issued to Rufina Narcisa Vda. de Gonzales which was
later replaced with the names of Gonzales six (6) children.
The property was then subdivided and as a result of which,
seven (7) certificates of titles were issued, six (6),under the
names of each of the children while the remaining title was
held by all of them as co-owners.
Eventually, the properties covered by said seven certificates
of title were expropriated by the Republic of the Philippines.
These properties were then later subdivided by the National
Housing Authority ["NHA"], into seventy-seven (77) lots and
thereafter sold to qualified vendees. As it turned out, a
number of said vendees sold nineteen (19) of these lots to
Manotok Realty, Inc. while one (1) lot was purchased by the
Manotok Estate Corporation.
During the pre-trial conference, the trial court, upon
agreement of the parties, approved the creation of a
commission composed of three commissioners tasked to
resolve the conflict in their respective titles. Accordingly, the
created Commission convened on the matter in dispute.
On 8 October 1993, Ernesto Erive and Avelino San
Buenaventura submitted an exhaustive Joint Final Report
["THE MAJORITY REPORT"] finding that there were
inherent technical infirmities or defects on the face of TCT
No. 4211, from which the MANOTOKS derived their titles
(also on TCT No. 4210), TCT No. 5261 and TCT No. 35486.
Teodoro Victoriano submitted his Individual Final Report
["THE MINORITY REPORT"] dated 23 October 1993.

After the conduct of a hearing on these reports, the parties

filed their respective comments/objections thereto. Upon
order of the trial court, the parties filed their respective
memoranda.
Adopting the findings contained in the Majority Report, the
RTC, on 10 May 1994, rendered a Decision, in favor of CLT
and ordered, among others, the cancellation of the
certificates of title issued in the name of the MANOTOKS.
The MANOTOKS elevated the adverse RTC Decision on
appeal before the Court of Appeals. In its Decision dated 28
September 1995, the Court of Appeals affirmed the RTC
Decision, except as to the award of damages which was
deleted. The MANOTOKS then moved for reconsideration,
but said motion was denied by said appellate court in its
Resolution dated 8 January 1996. After the denial of their
Motion for Reconsideration, the MANOTOKS filed a Petition
for Review before the Supreme Court.
PROCEEDINGS BEFORE THE SUPREME COURT
Before the Supreme Court, the Petitioners for Review,
separately filed by the MANOTOKS, ARANETA and Sto.
Nio Kapitbahayan Association, Inc., ["STO. NIO"], were
consolidated.
Also submitted for consideration of the Supreme Court were
the report of the Fact Finding Committee dated 28 August
1997 and the Senate Committee Report No. 1031 dated 25
May 1998 which concluded that there was only one OCT
No. 994 issued, transcribed and registered on 3 May 1917.

and legal findings of the trial courts, which had heavily

hinged on the imputed flaws in said titles. Considering that
these trial court findings had been affirmed by the Court of
Appeals, the Supreme Court highlighted the fact that the
same were accorded the highest degree of respect and,
generally, should not be disturbed on appeal.
Emphasis was also made on the settled rule that because
the Supreme Court was not a trier of facts, it was not within
its function to review factual issues and examine, evaluate
or weigh the probative value of the evidence presented by
the parties.
THE SUPEME COURT RESOLUTION
Expectedly, the MANOTOKS and ARANETA filed their
respective Motions for Reconsideration of the Supreme
Court 2005 Decision.
Resolving said motions for reconsideration, with the Office
of the Solicitor General ["OSG"] intervening on behalf of the
Republic, the Supreme Court, in its Resolution of 14
December 2007 ["THE SUPREME CCOURT 2007
RESOLUTION"] reversed and nullified its 2005 Decision
and categorically invalidated OCT No. 994 dated 19 April
1917, which was the basis of the propriety claims of CLT
and DIMSON. However, the Supreme Court resolved to
remand the cases to this Special Division of the Court of
Appeals for reception of evidence.
To guide the proceedings before this Special Division of the
Court of Appeals, the Supreme Court made the following
binding conclusions:

THE SUPREME COURT DECISION

In its Decision dated 29 November 2005 ["THE SUPREME
COURT 2005 DECISION"], the Supreme Court, through its
Third Division, affirmed the RTC Decision and Resolutions
of the Court of Appeals, which declared the titles of CLT and
DIMSON as valid.
In invalidating the respective titles of the MANOTOKS and
ARANETA, the Supreme Court, in turn, relied on the factual

"First, there is only one OCT 994. As it appears on

the record, that mother title was received for
transcription by the Register of Deeds on 3 May
1917, and that should be the date which should be
reckoned as the ate of registration of the title. It
may also be acknowledged, as appears on the
title, that OCT No. 994 resulted from the issuance
of the decree of registration on (19)* April 1917,
although such dated cannot be considered as the

date of the title or the date when the title took

effect.
Second. Any title that traces its source to OCT No.
994 dated (19) April 1917 is void, for such mother
title is inexistent. The fact that the Dimson and CLT
titles made specific reference to an OCT No. 994
dated (19) April 1917 casts doubt on the validity of
such titles since they refer to an inexistent OCT.
This error alone is, in fact, sufficient to invalidate
the Dimson and CLT claims over the subject
property if singular reliance is placed by them on
the dates appearing on their respective titles.
Third. The decision of this Court in MWSS v. Court
of Appeals and Gonzaga v. Court of Appeals
cannot apply to the cases at bar, especially in
regard to their recognition of an OCT No. 994
dated 19 April 1917, a title which we now
acknowledge as inexistent. Neither could the
conclusions in MWSS or Gonzaga with respect to
an OCT No. 994 dated 19 April 1917 bind any
other case operating under the factual setting the
4
same as or similar to that at bar.
II.
The parties were afforded the opportunity to present their
evidence before the Special Division. The Report names the
evidence submitted to the Special Division for its evaluation:
CLT EVIDENCE
5

In its Offer of Evidence, CLT adopted the documentary

exhibits and testimonial evidence of witnesses submitted in
the case filed by CLT against STO. NIO in Civil Case No.
C-15491, ["CLT-STO NIO CASE"]. These pieces of
evidence include, among others, the Majority and Minority
Reports, the Formal Offer of Evidence in the presentation of
the evidence-in-chief and rebuttal evidence in the CLT-STO
NIO CASE consisting of various certificates of titles, plans
by geodetic engineer, tax declarations, chemistry report,
specimen signatures and letters of correspondence.

MANOTOKS EVIDENCE
The MANOTOKS sought admission of the following
evidence: Senate and DOJ Committee Reports; certificates
of title issued to them and their vendees/assignees, i.e.,
Republic of the Philippines, the Gonzalezes, Alejandro Ruiz
and Mariano Leuterio, Isabel Gil del Sola and Estelita
Hipolito; deeds of absolute sale; contracts to sell; tax
declarations and real property tax receipts; the Formal
Officer of Evidence of Philville Development & Housing
Corporation; ["PHILVILLE"], in Civil Case No. 15045; this
Court of Appeals Decision in CA-G.R. CV. No. 52606
between CLT and PHILVILLE; the Orders of Judge Palma
dated 13 June 1966 and 16 August 1966 in Case No. 4557
and the billing statements of SSHG Law Office. They also
submitted in evidence the Affidavits and Supplemental
Affidavits of Rosa R. Manotok and Luisa T. Padora;
Affidavits of Atty. Felix B. Lerio, Atty. Ma. P.G. Ongkiko and
Engineer Jose Marie P. Bernabe; a copy of a photograph of
BM No. 9; certified true copy of coordinates and reference
point of L.M. No. 1 and BM No. 1 to 10 of Piedad Estate and
6
TCT No. 177013 of CLT.
DIMSON EVIDENCE
7

In their Consolidated Formal Offer of Evidence, DIMSON

submitted the previous decisions and resolutions passed
relative to these cases, various certifications of different
government agencies, OCT 994, subdivision plan of Lot 25A-2, observations of Geodetic Engineer Reggie P. Garcia
showing the relative positions of properties within Lot 25-A;
the Novation of Contract/Deed of Sale and Mortgage dated
15 January 1948 between Rato, Don Salvador Araneta and
Araneta Institute of Agriculture; copies of various certificates
of titles to dispute some of the titles held by ARANETA;
several letter-requests and official receipts.
ARANETA EVIDENCE
ARANETA, in turn, offered in evidence various certificates
of title, specifically, OCT No. 994, TCT No. 8692; TCT No.
21857; TCT No. 26538; TCT No. 26539; TCT No. (7784)738 and TCT no. 13574. It also marked in evidence the

certified true copies of Decree No. 36577; the DOJ and

Senate Reports; letters of correspondence to the Land
Registration Commission and the Register of Deeds of
Malabon City; survey plans of Lot 25-A and TCT r-15169 of
Dimson and; the affidavit of Engineer Felino M. Cortez and
his curriculum vitae. ARANETA also offered the certified
true copy of TCT No. 6196 in the name of Victoneta, Inc.;
TCT No. 13574 in the name of ARANETA; certifications
issued by Atty. Josephine H. Ponciano, Acting Register of
Deeds of Malabon city-Navotas; certified true copy of Judge
Palmas Order dated 16 August 1966 in Case No. 4557;
Circular No. 17 (which pertains to the rules on reconstitution
of titles as of 19 February 1947) and its official receipt and;
89
the owners duplicate copy of OCT No. 994.
III.
We now turn to the evaluation of the evidence engaged in
by the Special Division. To repeat, the Special Division was
tasked to determine the following issues based on the
evidence:
i. Which of the contending parties are able to trace
back their claims to Original Certificate of Title
(OCT) No. 994 dated 3 May 1917:
ii. Whether the respective imputed flaws in the
titles of the Manotoks and Araneta, as recounted in
the Supreme Court 2005 Decision, are borne by
the evidence. Assuming they are, are such flaws
sufficient to defeat said claims?
iii. Whether the factual and legal bases of the 1966
Order of Judge Muoz-Palma and the 1970 Order
of Judge Sayo are true and valid. Assuming they
are, do these orders establish a superior right to
the subject properties in favor of the Dimsons and
CLT as opposed to the claims of the Araneta and
the Manotoks?
iv. Whether any of the subject properties had been
the subject of expropriation proceedings at any
point since the issuance of OCT No. 994 on 3 May

1917, and if so, what are those proceedings, what

are the titles acquired by the Government, and is
any of the parties able to trace its title acquired by
the government through expropriation?
v. Such other matters necessary and proper in
ascertaining which of the conflicting claims of title
should prevail.
The ultimate purpose of the inquiry undertaken by the Court
of Appeals was to ascertain which of the four groups of
claimants were entitled to claim ownership over the subject
properties to which they claimed title thereto. One set of
properties was disputed between CLT and the Manotoks,
while the other set was disputed between Araneta and the
Heirs of Dimson.
As can be gleaned from the Report, Jose Dimson was able
to obtain an order in 1977 issued by Judge Marcelino Sayo
of the Court of First Instance (CFI) of Caloocan City on the
basis of which he was able to register in his name
properties belonging to the Maysilo Estate. Judge Sayos
order in turn was sourced from a 1966 Order issued by
Judge (later Supreme Court Associate Justice) Cecilia
Muoz-Palma of the CFI of Rizal. Dimsons titles reflected,
10
as their mother title, OCT No. 994 dated 19 April 1917.
Among these properties was a fifty (50)-hectare property
covered by Transfer Certificate of Title (TCT) No. 151169,
which apparently overlapped with the property of Araneta
11
covered by TCT No. 13574 and 26538. Araneta was then
and still is in possession of the property. The Araneta titles
state, as their mother title, OCT No. 994 dated 3 May 1917.
Consequently, Dimson filed an action for recovery of
possession against Araneta.
Another property in Dimsons name, apparently taken from
Lot 26 of the Maysilo Estate, was later sold to Estelita
Hipolito, who in turn sold the same to CLT. Said property
was registered by CLT under TCT No. T-177013, which also
reflected, as its mother title, OCT No. 994 dated 19 April
12
1917. Said property claimed by CLT encroached on
property covered by titles in the name of the Manotoks. The
Manotoks traced their titles to TCT Nos. 4210 and 4211,

both issued in 1918 and both reflecting, as their mother title,

OCT No. 994 dated 3 May 1917.1avvphi1
It is evident that both the Heirs of Dimson and CLT had
primarily relied on the validity of OCT No. 994 dated 19 April
1917 as the basis of their claim of ownership. However, the
Court in its 2007 Resolution held that OCT No. 994 dated
19 April 1917 was inexistent. The proceedings before the
Special Division afforded the Heirs of Dimson and CLT alike
the opportunity to prove the validity of their respective
claims to title based on evidence other than claims to title
the inexistent 19 April 1917 OCT No. 994. Just as much
was observed by the Special Division:
Nonetheless, while the respective certificates of title of
DIMSON and CLT refer to OCT 994 issued on 19 April 1917
and that their previous postulations in the present
controversies had been anchored on the supposed validity
of their titles, that which emanated from OCT 994 of 19 April
1917, and conversely the invalidity of the 3 May 1917 OCT
994, the Supreme Court has yet again allowed them to
substantiate their claims on the basis of other evidentiary
proofs:
Otherwise stated, both DIMSON and CLT bear the onus of
proving in this special proceedings, by way of the evidence
already presented before and such other forms of evidence
that are not yet of record, that either there had only been an
error in the course of the transcription or registration of their
derivative titles, or that other factual and legal bases existed
to validate or substantiate their titles aside from the OCT
13
No. 994 issued on 19 April 1917.
Were they able to discharge such burden?
A.
We begin with the Heirs of Dimson. The Special Division
made it clear that the Heirs of Dimson were heavily reliant
on the OCT No. 994 dated 19 April 1917.
[DIMSON], on the strength of Judge Sayos Order dated 18
October dated 18 October 1977, was issued separate

certificates of title, i.e., TCT Nos. 15166, 15167, 15168 and

15169, covering portions of the Maysilo Estate. Pertinently,
with respect to TCT No. 15169 of DIMSON, which covers
Lot 25-A-2 of the said estate, the following were inscribed
on the face of the instrument.
"IT IS FURTHER CERTIFIED that said land was originally
registered on the 19th day of April in the year nineteen
hundred and seventeen in the Registration Book of the
Office of the Register of Deeds of Rizal, Volume NA page
NA , as Original Certificate of Title No. 994 pursuant to
Decree No. 36455 issued in L.R.C. Case No. 4429 Record
No. ______
This Certificate is a transfer from Original Certificate of Title
No. 994/NA, which is cancelled by virtue hereof in so far as
14
the above-described land is concerned.
From the above accounts, it is clear that the mother title of
TCT no. 15169, the certificate of title of DIMSON covering
the now disputed Lot 25-A-2, is OCT No. 994 registered on
19 April 1917. Manifestly, the certificate of title issued to
DIMSON, and as a matter of course, the derivative title later
issued to CLT, should both be voided inasmuch as the OCT
which they emanated had already been declared
15
inexistent.
The Special Division noted that the Heirs of Dimson did not
offer any explanation why their titles reflect the erroneous
date of 19 April 1917. At the same time, it rejected CLTs
explanation that the transcription of the erroneous date was
a "typographical error."
As can be gleaned from the records, both DIMSON and
their successor-in-interest CLT, had failed to present
evidence before this Court to prove that there had been a
mere typographical error in the transcription of their
respective titles with regard to the date of registration of
OCT No. 994. CLT specifically harps on this assertion that
there had only been a typographical error in the
16
transcription of its title. On the other hand, while DIMSON
had refused to categorically assert that there had been such
a typographical error causing the invalidity of their title, their

failure to proffer any reason or argument which would

otherwise justify why their title reflects 19 April 1917 and not
3 May 1917 leads this Court to conclude that they simply
had no basis to support their proprietary claim.
Thus, without proffering any plausible explanation as to
what led to the erroneous entry of the registration dated of
OCT 994, DIMSON are left without any recourse but to
substantiate their claim on the basis of other evidence not
presented during the proceedings below, which would
effectively prove that they had a valid proprietary claim over
the disputed properties. This is specifically true because
DIMSON had previously placed reliance on the MWSS
17
doctrine to prove the validity of their title.
Absent such explanation, the Heirs of Dimson were
particularly constrained to rely on the 1977 Order of Judge
Sayo, which was allegedly sourced from the 1966 Order of
Judge Muoz Palma. On that issue, the Special Division
made the following determinations:
It should be recalled that in their appellees brief in CAG.R.CV No. 41883, therein appellee Jose Dimson
specifically denied the falsity of TCT No. R-15169 alleging
that the contention "is already moot and can be determined
18
by a controlling decision." Jose Dimson expounded on his
reliance as follows:
"In Metropolitan Waterworks & Sewerage System (for
brevity MWSS) case, Jose B. Dimsons (as private
respondent) title TCT No. 15167 issued for Lot 28 on June
8, 1978 derived from OCT No. 994 registered on April 19,
1917, is overlapping with MWSS title TCT No. 41028 issued
on July 29, 1940 derived from the same OCT 994,
registered on May 3, 1917.
(Same facts in the case at bar; Jose B. Dimson (plaintiffappellee) title TCT No. R-15169 issued for Lot 25-A-2, on
June 8, 1978, is overlapping with defendant-appellants title
TCT Nos. 13574 and 21343, not derived from OCT No.
19
994."
So viewed, sans any proof of a mechanical error in the

transcription or annotation on their respective certificates of

title, the present inquiry then hinges on whether the Order
dated 13 June 1966 issued by then Judge Cecilia MuozPalma of the Court of First Instance of Rizal in Civil Case
No. 4557 ["PALMA ORDER"] and Judge Sayos Order
dated 18 October 1977 ["SAYOS 18 OCTOBER 1977
ORDER"], can be validated and authenticated. It is so since
the brunt of the proprietary claims of both DIMSON and CLT
has its roots on said Orders.
Perforce, in consideration of the foregoing, this leads Us to
the THIRD ISSUE as presented by the Supreme Court, to
wit:
"Whether the factual and legal bases of Palmas 13
June 1966 Order and Sayos 18 October 1977 Order are
true and valid. Assuming they are, do these orders
establish a superior right to the subject properties in
favor of the Dimsons and CLT as opposed to the claims
of Araneta and the Manotoks?"
As it is, in contending that their certificates of title could be
validly traced from the 3 May 1917 OCT No. 994, DIMSON
point out that their title was issued pursuant to a court order
issued by Judge Palma in Case No. 4557 and entered in the
memorandum of Encumbrance of OCT No. 994. DIMSON
also insist that TCT Nos. 8692, 21857 and 26538 were
mere microfilmed or certified copies and, therefore,
inadmissible. Lastly, DIMSON reiterated the flaws and
irregularities which voided the titles of the ARANETA in the
previous proceedings and focused on the burden of
ARANETA to present evidence to defeat their titles.
The foregoing contentions of DIMSON find to factual and
legal basis. As we see it, Sayos 18 October 1977 Order,
which apparently confirmed Palmas 13 June 1966 Order,
raised serious questions as to the validity of the manner by
which it was arrived at.
It is worthy to note that as early as 25 August 1981, counsel
for the ARANETA applied for a subpoena duces tecum
addressed to the Clerk of Court of CFI Pasig for the
production of the records of LRC Case No. 4557 for

purposes of determining the genuineness and authenticity

of the signature of Judge Palma and also of her Order
granting the confirmation. A certain Atty. Contreras, Officerin-Charge of the said court, appeared and manifested in
open court that the records pertaining to the petition for
Substitution of names of Bartolome Rivera, et al. could no
longer be located inasmuch as they had passed hands from
one court to another.
What is perplexing to this Court is not only the loss of the
entire records of Case No. 4557 but the admission of Judge
Sayo that he had not seen the original of the Palma Order.
Neither was the signature of Judge Palma on the Order duly
proven because all that was presented was an unsigned
duplicate copy with a stamped notation of "original signed."
Equally perplexing is that while CFI Pasig had a Case No.
4557 on file, said file pertained not to an LRC case but to a
20
simple civil case. Thus:
"Atty. Directo:
The purpose of this subpoena duces tecum is to present
your Honor the Order Order (sic) of Judge Palma in order to
determine the genuineness and authenticity of the signature
of Judge Palma in this court order and which order was a
basis of a petition in this court to be confirmed. That is the
reason why we want to see the genuineness of the
signature of Judge Palma.
COURT:
No signature of Judge Palma was presented in this court. it
was a duplicate copy not signed. There is a stamp only of
original signed.
Atty. Directo:
That is the reason why we want to see the original.
Court:
I did not see the original also. When the records of this case
was brought here, I checked the records, there were so

many pages missing and the pages were re-numbered but

then I saw the duplicate original and there is a certification
of a woman clerk of Court, Atty. Molo.

already been assigned and adjudicated to Bartolome Rivera

and his assignees, as a result of which there is no portion
that is left to be given to the herein supposed assignee Jose
Dimson."

subdivision plan duly certified by the Land Registration

Commission as correct and in accordance with previous
orders issued in this proceedings, said plan to be submitted
to this court for final approval.

However, We are reluctant to recognize the existence and

due execution of the Recall Order considering that its
original or even a certified true copy thereof had not been
submitted by either of the two parties relying on it despite
having been given numerous opportunities to do so.

Interestingly however, despite such requirement, DIMSON

did not submit Survey Plan LRC (GLRO) Rec. No. 4429
SWO-5268 which allegedly was the basis of the segregation
of the lands, if only to prove that the same had been duly
approved and certified correct by the Land Registration
Commission. What was submitted before the RTC and this
Court was only the Subdivision Plan of Lot 25-A-2 which
notably does not bear the stamp of approval of the LRC.
Even an inspection of the exhibit for CLT does not bear this
Survey Plan, which could have, at the very least, proven the
authenticity of the DIMSON title.

Atty. Directo:
That is the reason why we want to see this document, we
are surprised why it is missing.
Court:
We are surprised also. You better ask Judge Muoz Palma.
Atty. Contreras:
May I make of record that in verifying our records, we found
in our original vault LRC application no. N-4557 but the
applications were certain Feliciano Manuel and Maria Leao
involving Navotas property because I was wondering why
they have the same number. There should be only one.
Atty. Directo:
Aside from that, are there other cases of the same number?
Atty. Contreras:
No, there should be only number for a particular case; that
must be a petition after decree record.
Atty. Ignacio:
This 4557 is not an LRC Case, it is a simple civil case.
xxxxxx
Moreover, both the MANOTOKS and ARANETA insist that
Palmas 13 June 1966 Order had been recalled by a
subsequent Order dated 16 August 1966, ["RECALL
21
ORDER"], wherein the trial court dismissed the motion
filed by DIMSON on the courts findings that " x x x whatever
portion of the property covered by OCT 994 which has not
been disposed of by the previous registered owners have

Be that as it may, even if We are to consider that no Recall

Order was ever issued by then Judge Palma, the validity of
the DIMSON titles over the properties in the Maysilo Estate
becomes doubtful in light of the fact that the supposed
"share" went beyond what was actually due to Jose Dimson
under the Compromise Agreement with Rivera. It should be
recalled that Palmas 13 June 1966 Order approved only the
conveyance to Jose Dimson of "25% of whatever share of
Bartolome Rivera has over Lots 25, 26, 27, 28-B and 29 of
OCT 994 x x x subject to availability of undisposed portion
22
of the said lots."
In relation to this, We find it significant to note the
observations contained in the Senate Committee Report No.
1031 that, based on the assumption that the value of the
lots were equal, and "(C)onsidering that the share of Maria
de la Concepcion Vidal was only 1-189/1000 percent of the
Maysilo Estate, the Riveras who claimed to be the surviving
heirs of Vidal will inherit only 197, 405.26 square meters
(16,602,629.53 m2 x 1.1890%) or 19.7 hectares as their
23
share. Even if we are to base the 25% of Jose Dimson on
the 19.7 hectares allotted to the Riveras, it would appear
that Jose Dimson would only be entitled to more or less five
(5)hectares of the Maysilo Estate. Obviously, basing only on
TCT No. 15169 of Dimson which covered a land area of 50
24
hectares (500,000 square meters), it is undisputable that
the total properties eventually transferred to Jose Dimson
went over and beyond his supposed 25% share.
What is more, Palmas 13 June 1966 Order specifically
required that "x x x whatever title is to be issued herein in
favor of Jose Dimson, the same shall be based on a

Indeed, We find the absence of this piece of evidence as

crucial in proving the validity of the titles of DIMSON in view
of the allegation of contending parties that since the survey
plan upon which the land titles were based contained the
notation "SWO," meaning that the subdivision plan was only
a product of a "special work order," the same could not have
passed the LRC. Neither was it duly certified by the said
25
office.
In addition, the Special Division took note of other
irregularities attending Dimsons TCT No. R-15169.
[Firstly], OCT No. 994 showed that Lot 25-A of the Maysilo
Estate was originally surveyed on "September 8-27, 1911,
October 4-21 and November 17-18, 1911." Yet, in said TCT
No. R-15169, the date of the original survey is reflected as
26
"Sept. 8-27, 1911" and nothing more. The variation in date
is revealing considering that DIMSONs titles are all direct
transfers from OCT No. 994 and, as such, would have
faithfully adopted the mother lots data. Unfortunately, no
explanation for the variance was ever offered.
Equally worthy of consideration is the fact that TCT No.
15169 indicates that not only was the date of original
registration inexistent, but the remarks thereon tend to
prove that OCT No. 994 had not been presented prior to the

issuance of the said transfer certificate. This manifest from

the notations "NA" on the face of DIMSONs title meaning,
"not available." It bears emphasizing that the issuance of a
transfer certificate of title to the purchaser without the
production of the owners duplicate is illegal (Rodriguez v.
Llorente, 49 Phil. 826) and does not confer any right to the
purchaser (Philippine National Bank vs. Fernandez, 61 Phil.
448 [1935]). The Registrar of Deeds must, therefore, deny
registration of any deed or voluntary instrument if the
owners duplicate is not presented in connection therewith.
(Director of Lands vs. Addison, 40 Phil. 19 [1926]; Hodges
27
vs. Treasurer of the Phil. 50 Phil. 16 [1927].
In has also been held that, in cases where transfer
certificates of title emanating from one common original
certificate of title were issued on different dates to different
persons or entities covering the same land, it would be safe
to conclude that the transfer certificate issued at an earlier
date along the line should prevail, barring anomaly in the
28
process of registration. Thus, "(w)here two certificates
purport to include the same land, the earlier in date prevails.
X x x. In successive registration, where more than one
certificate is issued in respect of a particular estate or
interest in land, the person is deemed to hold under the
prior certificate who is the holder or whose claim is derived
directly from the person who was the holder of the earliest
29
certificate issued in respect thereof. x x x"
xxx
Still another indication of irregularity of the DIMSON title
over Lot No. 25-A is that the issuance of the Sayo Order
allegedly confirming the Palma Order was in itself suspect.
Gleaning from the records, DIMSON filed the Motion only on
10 October 1977, or eleven (11) years after obtaining the
supposed sanction for the issuance of titles in this name.
Besides, what was lodged by Jose Dimson before the sala
of then Judge Palma was not a simple land registration case
wherein the only purpose of Jose Dimson was to establish
his ownership over the subject parcels of land, but, as
reflected in the Palma Order, the subject of the case was
the confirmation of Jose Dimsons claim over the purported
rights of Rivera in the disputed properties. The case did not

partake of the nature of a registration proceeding and thus,

evidently did not observe the requirements in land
registration cases. Unlike in a land registration case,
therefore, Jose Dimson needed to file an action before
Judge Sayo to seek "confirmation" of Palmas Order dated
13 June 1966.
So viewed the general rule proscribing the application of
laches or the statute of limitations in land registration
30
cases, as well as Section 6, Rule 39 of the Rules of Court,
in relation to its provisions on revival of judgment applies
only to ordinary civil actions and not to other or
extraordinary proceedings such as land registration cases,
is clearly not applicable in the present case. The legal
consequences of laches as committed by DIMSON and
their failure to observe the provisions of Rule 39 should,
therefore, find application in this case and thus, the
confirmation of DIMSONs title, if any, should fail.
Parenthetically, the allegations of DIMSON would further
show that they derive the validity of their certificates of title
from the decreased Jose Dimsons 25% share in the alleged
hereditary rights of Bartolome Rivera ["RIVERA"] as an
alleged grandson of Maria Concepcion Vidal ["VIDAL"].
However, the records of these cases would somehow
negate the rights of Rivera to claim from Vidal. The
Verification Report of the Land Registration
Commission dated 3 August 1981 showed that Rivera was
65 years old on 17 May 1963 (as gathered from the records
31
of Civil Case Nos. 4429 and 4496). It can thus be deduced
that, if Rivera was already 65 years old in 1963, then he
must have been born around 1898. On the other hand, Vidal
was only nine (9) years in 1912; hence, she could have
been born only on 1905. This alone creates an unexplained
anomalous, if not ridiculous, situation wherein Vidal,
Riveras alleged grandmother, was seven (7) years younger
than her alleged grandson. Serious doubts existed as to
whether Rivera was in fact an heir of Vidal, for him to claim
32
a share in the disputed portions of the Maysilo Estate.
These findings are consonant with the observations raised
by Justice Renato Corona in his Concurring and Dissenting

Opinion on our 2007 Resolution. To wit:

TCT No. T-177013 covers Lot 26 of the Maysilo
Estate with an area of 891,547.43 sq. m. It was a
transfer from TCT No. R-17994 issued in the name
of Estelita I. Hipolito. On the other hand, TCT No.
R-17994 was a transfer from TCT No. R-15166 in
the name of Jose B. Dimson which, in turn, was
supposedly a direct transfer from OCT No. 994
registered on April 19, 1917.
Annotations at the back of Hipolito's title revealed
that Hipolito acquired ownership by virtue of a
court order dated October 18, 1977 approving the
compromise agreement which admitted the sale
made by Dimson in her favor on September 2,
1976. Dimson supposedly acquired ownership by
virtue of the order dated June 13, 1966 of the CFI
of Rizal, Branch 1 in Civil Case No. 4557 awarding
him, as his attorney's fees, 25% of whatever
remained of Lots 25-A, 26, 27, 28 and 29 that were
undisposed of in the intestate estate of the
decedent Maria de la Concepcion Vidal, one of the
registered owners of the properties covered by
OCT No. 994. This order was confirmed by the CFI
of Caloocan in a decision dated October 13, 1977
and order dated October 18, 1977 in SP Case No.
C-732.
However, an examination of the annotation on
OCT No. 994, particularly the following entries,
showed:
AP-6665/0-994 Venta: Queda cancelado el
presente Certificado en cuanto a una extencion
superficial de 3,052.93 metros cuadrados y
16,512.50 metros cuadrados, y descrita en el lote
no. 26, vendida a favor de Alejandro Ruiz y
Mariano P Leuterio, el primer casado con
Deogracias Quinones el Segundo con Josefa
Garcia y se ha expedido el certificado de Titulo No;
4210, pagina 163 Libro T-22.

Fecha del instrumento Agosto 29, 1918

Fecha de la inscripcion September 9, 1918
10.50 AM
AP-6665/0-994 Venta: Queda cancelado el
presente Certficado el cuanto a una extencion
superficial de 871,982.00 metros cuadrados,
descrita en el lote no. 26, vendida a favor de
Alejandro Ruiz y Mariano P. Leuterio, el primer
casado con Deogracias Quinones el segundo con
Josefa Garcia y se ha expedido el certificado de
Titulo No 4211, pagina 164, Libro T-22.
Fecha del instrumento Agosto 25, 1918
Fecha de la inscripcion September 9, 1918
10:50- AM
Based on the description of Lot No. 26 in OCT No.
994, it has an area of 891,547.43 sq. m. which
corresponds to the total area sold in 1918 pursuant
to the above-cited entries. Inasmuch as, at the time
the order of the CFI of Rizal was made on June 13,
1966, no portion of Lot No. 26 remained
undisposed of, there was nothing for the heirs of
Maria de la Concepcion Vidal to convey to Dimson.
Consequently, Dimson had nothing to convey to
Hipolito who, by logic, could not transmit anything
to CLT.

brushed aside by the trial and appellate courts.

The circumstances called for the need to preserve
and protect the integrity of the Torrens system.
However, the trial and appellate courts simply
33
disregarded them.
The Court thus adopts these findings of the Special Division
on the validity of Jose Dimsons titles, which he obtained
consequent to the 1977 Order of Judge Sayo.
Consequently, we cannot give due legal recognition to any
and all titles supposedly covering the Maysilo Estate
obtained by Dimson upon the authority of either the
purported 1966 Order of Judge Muoz-Palma or the 1977
Order of Judge Sayo.
B.
Indubitably, as between the titles of ARANETA and the
MANOTOKS and their predecessors-in-interest, on one
hand, and those of DIMSON, on the other, the titles held by
ARANETA and the MANOTOKS must prevail considering
that their titles were issued much earlier than the titles of the
latter.
Our findings regarding the titles of Jose Dimson necessarily
affect and even invalidate the claims of all persons who
seek to derive ownership from the Dimson titles. These
include CLT, which acquired the properties they laid claim
on from Estelita Hipolito who in turn acquired the same from
Jose Dimson. Just as much was concluded by the Special
Division as it evaluated CLTs claims.

Moreover, subdivision plan Psd-288152 covering

Lot No. 26 of the Maysilo Estate described in
Hipolito's certificate of title was not approved by the
chief of the Registered Land Division as it
appeared to be entirely within Pcs-1828, Psd-5079,
Psd-5080 and Psd-15345 of TCT Nos. 4210 and
4211. How Hipolito was able to secure TCT No. R17994 was therefore perplexing, to say the least.

For its part, CLT contended that even at the trial

court level, it maintained that there was only one
OCT No. 994 from where its claim emanates. It
argued that its case against the MANOTOKS,
including that of STO. NIO, was never decided
based on the doctrines laid down in Metropolitan
Waterworks and Sewerage System v. Court of
34
Appeals and Heirs of Gonzaga v. Court of
35
Appeals.

All these significant facts were conveniently

Before this Special Division, CLT insists that the

MANOTOKS failed to submit "new" competent

evidence and, therefore, dwelling on the alleged
flaws of the MANOTOKs titles, "the findings and
conclusions of the court-appointed commissioners
as adopted by the trial court, then upheld by the
Honorable Court in its Decision dated 28
September 1995 and finally affirmed in the
Supreme Courts Decision dated 29 November
2005, therefore stand, as there is no reason to
disturb them."
Furthermore, CLT contends that the Orders of
Judge Palma and Judge Sayo are no longer open
to attack in view of their finality. Lastly, CLT asserts
that the properties covered by the MANOTOKS
titles and those covered by the expropriation
proceedings did not property pertain to and were
different from Lot 26 owned by CLT. Thus, it
maintains that the MANOTOKS cannot use as
basis for the validity of their titles the expropriation
undertaken by the Government as a means of
staking their claims.
To restate, CLT claims the 891,547.43 square
36
meters of land covered by TCT No. T-177013
located in Malabon, Caloocan City and designated
as "Lot 26, Maysilo Estate, LRC Swo-5268." TCT
No. T-177013 shows that its mother titles is OCT
No. 994 registered on 19 April 1917. Tracing said
claim, Estelita Hipoloto executed a Deed of Sale
with Real Estate Mortgage in favor of CLT on 10
December 1988. By virtue of this transfer,
37
Hipolitos TCT No. R-17994 was cancelled and in
lieu thereof, CLTs TCT No. 223677/R-17994 of
TCT No. R-17994. Hipolito, on the other hand, was
a transferee of the deceased Dimson who was
allegedly the registered owner of the subject land
on the basis of TCT No. 15166.
In view of the foregoing disquisitions, invalidating
the titles of DIMSON, the title of CLT should also
be declared a nullity inasmuch as the nullity of the
titles of DIMSON necessarily upended CLTs

propriety claims. As earlier highlighted, CLT had

anchored its claim on the strength of Hipolitos title
and that of DIMSONs TCT No. 15166.
Remarkably and curiously though, TCT No. 15166
was never presented in evidence for purposes of
tracing the validity of titles of CLT. On this basis
alone, the present remand proceedings remain
damning to CLTs claim of ownership.
Moreover, considering that the land title of CLT
carried annotations identical to those of DIMSON
and consequently included the defects in
DIMSONs title, the fact that whatever
typographical errors were not at anytime cured by
subsequent compliance with the administrative
requirements or subjected to administrative
correction bolsters the invalidity of the CLT title due
to its complete and sole dependence on the void
38
DIMSON title.
IV.
The task of the Special Division was not limited to assessing
the claims of the Heirs of Dimson and CLT. We likewise
tasked the Special Division to ascertain as well the validity
of the titles held by the Manotoks and Araneta, titles which
had been annulled by the courts below. Facially, these titles
of the Manotoks and Araneta reflect, as their valid mother
title, OCT No. 994 dated 3 May 1917. Nonetheless,
particular issues were raised as to the validity of the
Manotok and Araneta titles independent of their reliance on
the 3 May 1917 OCT No. 994 vis--vis the inexistent 19
April 1917 OCT No. 994.
A.
We begin by evaluating the Araneta titles. The Special
Division quoted the observations of the trial court, which
upheld Dimsons claim over that of Araneta, citing the
following perceived flaws of TCT Nos. 26538 and 26539,
from which Araneta derived its titles, thus:
Let us now examine TCT 26538 and TCT 26539 both in the

name of Jose Ma. Rato from where defendant was said to

have acquired TCT 13574 and TCT 7784 now TCT 21343 in
the name of Araneta and the other documents related
thereto:
1) Perusal of TCT 26538 shows that its Decree No.
and Record No. are both 4429. In the same vein,
TCT 26539 also shows that it has Decree No. 4429
and Record No. 4429.
However, Decree No. 4429 was issued by the
Court of First Instance, Province of Isabela (Exhibit
I) and Record No. 4429, issued for Ordinary Land
Registration Case, was issued on March 31, 1911
in CLR No. 5898, Laguna (Exhibit 8, 8-A Bartolome
Rivera et al.)
How then could TCT No. 26538 and TCT No.
26539 both have Decree No. 4429 and Record No.
4429, which were issued in Court of First Instance,
Province of Isabela and issued in Laguna,
respectively.
2) TCT no. 26538 and TCT No. 26539 in the name
of Jose Ma. Rato are not annotated in the Original
Certificate of Title 994, where they were said to
have originated.
3) The Escritura de Incorporacion de Philippine
Land Improvement Company (Exhibit I) executed
on April 8, 1925 was only registered and was
stamped received by the Office of the Securities
and Exchange Commission only April 29, 1953
when the Deed of Sale & Mortgage was executed
on August 23, 1947 (Exh. 5 defendant) and the
Novation of Contract, Deed of Sale and Mortgage
executed on November 13, 1947 (Exh. M0. So,
that when Philippine Land Improvement was
allegedly given a special power of attorney by Jose
Ma. Rato to represent him in the execution of the
said two (2) documents, the said Philippine Land
Improvement Company has not yet been duly
registered.

4) TCT 26538 and 26538 and TCT 26539 both in

the name of Jose Ma. Rato, both cancel 21857
which was never presented in Court if only to have
a clear tracing back of the titles of defendant
Araneta.
5) If the subject matter of the Deed of Sale &
Mortgage (Exhibit 5 defendant) is TCT 26539, why
is it that TCT 13574 of defendant Araneta cancels
TCT 6196 instead of TCT 26539. That was never
explained. TCT 6196 was not even presented in
Court.
6) How come TCT 26538 of Jose Ma. Rato with an
area of 593,606.90 was cancelled by TCT 7784
with an area of only 390,282 sq.m.
7) How was defendant Araneta able to have TCT
7784 issued in its name, when the registration of
the document entitled Novation of Contract, Deed
of Sale & Mortgage (Exhibit M) was
suspended/denied (Exhibit N) and no title was
received by the Register of Deeds of Pasig at the
time the said document was filed in the said Office
on March 4, 1948 (Exhibit N and N-1).
Under Sec. 55 of Land Registration Act (Act No.
496) now Sec. 53 of Presidential Decree No. 1529,
no new certificate of title shall be entered, no
memorandum shall be made upon any certificate
of title by the register of deeds, in pursuance of any
deed or other voluntary instrument, unless the
owners duplicate certificate is presented for such
endorsement.
8) The sale by Jose Ma. Rato in favor of defendant
Araneta is not reflected on the Memorandum of
Encumbrances of TCT 26538 (Exhibit 7-defendant)
meaning that TCT 26538 still exists and intact
except for the encumbrances annotated in the
Memorandum of Encumbrances affecting the said
title (Exhibits 16, 16-A and 16-N David & Santos)

9) In the encumbrances annotated at the back of

TCT 26539 (Exhibit 4-defendant) there appears
under entry No. 450 T 6196 Victoneta,
Incorporated covering parcel of land canceling said
title (TCT 26539) and TCT 6196 was issued ( x x x)
which could have referred to the Deed (sic) of Sale
and Mortgage of 8-23-47 (Exhibit 5-defendant)
entered before Entry 5170 T-8692 Convenio
Philippine Land Improvement Company, with Date
of Instrument: 1-10-29, and Date of Inscription: 921-29.
In TCT 26838 this Entry 5170 T-8692 Convenio Philippine
Land Improvement Company (Exhibit 16-J-1) appears, but
the document, Novation of Contract, Deed of Sale &
Mortgage dated November 13, 1947 (Exhibit M) does not
appear.
Entry marked Exhibit 16-J-1 on TCT 26538 shows only the
extent of the value of P42,000.00 invested by Jose Ma.
Rato in the Philippine Land Improvement Company. Said
entry was also entered on TCT 26539.
The Court also wonders why it would seem that all the
documents presented by defendant Araneta are not in
possession of said defendant, for according to witness
Zacarias Quintan, the real estate officer of the said
defendant Araneta since 1970, his knowledge of the land
now in possession of defendant Araneta was acquired by
him from all its documents marked in evidence which were
obtained only lately when they needed for presentation
3940
before this Court.

ARANETA further expounded on the nullity of the Palma

and Sayo Orders which was the basis of DIMSONs titles.
The documentary exhibits it proffered traced its certificates
of title to OCT No. 994 registered on 3 May 1917. From the
titles submitted, its predecessor-in-interest was Jose Ma.
Rato y Tuazon ["RATO"], one of the co-heirs named in OCT
No. 994, who was allotted the share of nine and five
hundred twelve one thousandths (9-512/1000) percent
41
share of the Maysilo Estate. For this reason, to ascertain
the legitimacy of the derivative title of ARANETA, the origin
and authenticity of the title of RATO need to be reassessed.
Verily, attesting to RATOs share on the property, Entry No.
12343/O-994 of the Owners Duplicate Copy of OCT no.
994, records the following:
"12343/O-994 Auto: Jose Rato y Tuason - - - Queda
cancelado el presente seartificado en cuanto a una
estension superficial de 1,405,725.90 metro Cuadrados
mas o menos descrita en el Lote No. 25-A-3, an virtud del
auto dictado por el Juzgado de Primera Instancia de Riza,
de fecha 28 de Julio de 1924, y que en au lugar se had
expedido el Certificados de Titulo No. 8692, folio 492 del
Tomo T-35 del Libro de Certicadads de Transferencia.
Date of Instrument Julio 28, 1924.

As for the proprietary claim of ARANETA, it maintains that it

has established by direct evidence that its titles were validly
derived from OCT No. 994 dated 3 May 1917. With regard
to the imputed flaws, it asseverates that these were
unfounded and thus, labored to refute all of them.

Focusing on TCT No. 21857 issued on 23 May 1932, this

46
certificate of title issued in RATOs name, cancelled TCT
47
No. 8692 with respect to the property it covers. On its
48
face, TCT No. 21857, was a derivative of OCT No. 994
registered on 3 May 1917. It covers Lot No. 25 A-3-C of
subdivision plan Psd-6589, being a portion of Lot No. 25-A3, G.L.R.O Record No. 4429. Thereafter, TCT No. 21857
49
50
was cancelled by TCT No. 26538 and TCT No. 26539
which were both issued in the name of Jose Ma. Rato y
Tuazon on 17 September 1934.
With respect to TCT No. 26539, the certificate of title
showed that it covered a parcel of land designated as
Section No. 2 of the subdivision plan Psd-10114, being a
portion of Lot 25-A-3-C having an approximate area of
51
581,872 square meters. Thereafter, TCT No. 26539 was
52
cancelled by TCT No. 6196 whose registered owner
appears to be a certain Victoneta, Inc. This parcel of land
has an area of 581,872 square meters designated as
section No. 2 of subdivision plan Psd-10114, being a portion
of Lot 25-A-3-C.

Date of Inscription Agosto 1, 1024 10:19 a.m.

SGD. GLICERIO OPINION, Register of deeds
Agosto 19, 1924

The Special Division then proceeded to analyze these

factual contentions, and ultimately concluded that the
Araneta claim to title was wholly valid. We adopt in full the
following factual findings of the Special Division, thus:

45

reflected under Entry No. 14517.T-8692, the parcel of

land covered under this certificate of title was subdivided
into five (5) lots under subdivision plan Psd-6599 as per
Order of the court of First Instance of Rizal. Consequently,
TCT Nos. 21855, 21856, 21857, 21858 and 21859 were
issued.

42

In accordance with the decree, RATO was issued on 1

43
August 1924, TCT No. 8692 which covers "Lote No. 25 A3 del plano del subdivision, parte del Lote No. 25-A, plano
Psu-(not legible), "Hacienda de Maysilo," situado en el
44
Munisipio de Caloocan, Provincia del Rizal x x x." The
parcel of land covers an approximate area of "UN MILLION
CUATROCIENTOS CINCO MIL SETECIENTOS
VEINTICINCO metros cuadrados con NOVENTA
decimetros cuadrados (1,405,725.90) mas o menos." As

As shown on its face, TCT No. 6196 issued on 18 October

1947 in the name of Victoneta, Inc. and its mother title were
traced from OCT No. 994 registered on 3 May 1917. Later,
TCT No. 6196 was cancelled, and in lieu thereof, TCT No.
13574 was issued in favor of Araneta Institute of Agriculture
53
on 20 May 1949. It covers a parcel of land designated as
section No. 2 of subdivision plan Psd-10114, being a portion
of Lot 25-A-3-C. It has an aggregate area of 581,872 square
meters.
On the other hand, appearing under Entry No. 16086/T-No.
13574 of TCT No. 6196 is the following:
"Entry No. 16086/T-No. 13574 SALE in favor of the

ARANETA INSTITUTE OF AGRICULTURE, vendee:

Conveying the property described in this certificate of title
which is hereby cancelled and issuing in lieu thereof
Transfer Certificate of Title No. 13574, page 74, Book T-345
in the name of the vendee. (Doc. No. 149, page 98, Book II,
S. of 1949 of Notary Public for Manila, Hospicio B. Bias).
Date of Instrument May 18, 1949
Date of the Inscription May 30, 1949 at 11:00
54
a.m.
55

TCT No. 26538 in turn showed on its face that it covers a

parcel of land designated as Section 1 of subdivision plan
Psd-10114 being a portion of Lot 25-A-3-C having an area
56
of 592,606.90 square meters.
On 4 March 1948, TCT No. 26538 was cancelled by TCT
No. 7784, which was issued in favor of Araneta Institute of
Agriculture. TCT No. 7784 covers four (4) parcels of land
57
with an aggregate area of 390,282 square meters. It would
appear from the records of CA-G.R. SP No. 34819
consolidated with CA-G.R. CV No. 41883 that TCT No.
58
7784 was eventually cancelled by TCT No. 21343. As per
attachment of ARANETA in its Answer dated 6 march 1980
filed in Civil Case No. 8050, a mere copy of TCT No. 21343
showed that it covers a parcel of land designated as Lot 6-B
of the subdivision plan Psd-24962 being a portion of Lot 6,
described as plan Psd-21943, G.L.R.O. Record No. 4429
59
with an approximate area of 333,377 square meters.
However, for reasons unknown, a copy of TCT No. 21343,
whether original or certified true copy thereof, was not
submitted before this Court.
In summation, ARANETA had shown that RATO, as one of
the co-owners of the property covered by OCT NO. 994,
was assigned Lot No. 25-A-3. His evidence of ownership is
reflected on TCT No. 8692 issued in his name. RATO held
title to these parcels of land even after its subdivision in the
1930s. Further subdividing the property, RATO was again
issued TCT No. 21857, and later TCT Nos. 26538 and
26539, still covering Lot No. 25 A-3-C. In all his certificates
of title, including those that ultimately passed ownership to

ARANETA, the designation of the lot as either belonging to

or portions of Lot 25-A-3 was retained, thereby proving
identity of the land.
More importantly, the documentary trail of land titles showed
that all of them were derived from OCT No. 994 registered
on 3 May 1917. For purposes of tracing ARANETAs titles to
Oct No. 994, it would appear that the evidence presented
ultimately shows a direct link of TCT Nos. 7784 and 13574
to said mother title. Suffice it to state, the origin and
legitimacy of the proprietary claim of ARANETA had been
well substantiated by the evidence on record and on this
note, said titles deserve validation.
Under the guidelines set, we shall now proceed to evaluate
the imputed flaws which had been the previous bases of the
trial court in invalidating ARANETAs titles.
One of the flaws observed on the titles of ARANETAs
predecessor-in-interest was that TCT No. 26538 and TCT
No. 26539 in Ratos name refer to Decree No. 4429 and
Record No. 4429, as basis of their issuance. This is being
questioned inasmuch as Decree No. 4429 refers to a
decree issued by the CFI of Isabela while Record No. 4429
was issued for ordinary Land Registration Case No. 31
March 1911 in CLR No. 5898 of Laguna.
Explaining this discrepancy, ARANETA insisted that the
same was a mere typographical error and did not have any
effect on the validity of their title. It further contended that
the number "4429" was the case number of Decree No.
36455 and was used interchangeably as the record number.
This Court finds that the incorrect entry with respect to the
Decree and Record Number appearing on the title of
ARANETAs predecessor-in-interest cannot, by itself,
invalidate the titles of ARANETAs predecessors-in-interest
and ultimately, that of ARANETA. To the mind of this Court,
the incorrect entries alluded to would not have the effect of
rendering the previous titles void sans any strong showing
of fraudulent or intentional wrongdoing on the part of the
person making such entries. Fraud is never presumed but
60
must be established by clear and convincing evidence.

The strongest suspicion cannot sway judgment or overcome

the presumption of regularity. The sea of suspicion has no
shore, and the court that embarks upon it is without rudder
61
or compass.
62

The Supreme Court, in Encinas v. National Bookstore, Inc.

acknowledged that certain defects on a certificate of title,
specifically, the interchanging of numbers, may occur and "it
is certainly believable that such variance in the copying of
entries could be merely a typographical or clerical error." In
such cases, citing with approval the decision of the
appellate court, the technical description in the title should
63
prevail over the record number.

Thus, what is of utmost importance is that the designation

and the technical description of the land, as stated on the
face of the title, had not been shown to be erroneous or
otherwise inconsistent with the source of titles. In
ARANETAs case, all the titles pertaining to Lot No. 25 had
been verified to be an offshoot of Decree No. 36455 and are
all located in Tinajeros, Malabon. At any rate, despite the
incorrect entries on the title, the properties, covered by the
subject certificates of title can still be determined with
sufficient certainty.
It was also opined that TCT No. 26538 and TCT No. 26539
in the name of RATO had not been annotated on OCT No.
994 from which said titles had supposedly originated. It
should be stressed that what partially cancelled OCT No.
994 with respect to this subject lot were not TCT Nos.
26538 and 26539 but TCT No. 8692 issued on 1 August
1924. In fact, TCT Nos. 26538 and 26539 are not even the
immediate predecessors of OCT No. 994 but were mere
derivatives of TCT No. 21857. Logically therefore, these two
certificates of title could not have been annotated on OCT
No. 994, they not being the preceding titles.
In any case, a perusal of OCT No. 994 shows an entry,
which pertains to Jose Ma. Rato but, on account of the
physical condition of the copy submitted to this Court, the
64
entry remains illegible for us to make a definite conclusion.
On the other hand, Entry No. 12343/O-994 found on the
Owners Duplicate Copy of OCT No. 994 specifically

recorded the issuance of TCT No. 8692 over Lot No. 25-A65
3.
The other flaws noted on ARANETAs certificates of title
pertained to its failure to present TCT Nos. 21857, 6196 and
21343. As we have discussed, ARANETA offered in
evidence a certified microfilm copy of TCT No. 21857 and a
certified true copy of TCT No. 6196 marked as Exhibits 5A1A and 19-A1A, respectively. However, it failed to submit a
copy of said TCT No. 21343. Be that as it may, we will not
hasten to declare void TCT No. 7784 as a consequence of
such omission, especially so since TCT No. 21343 appears
to be a mere derivative of TCT No. 7784. Given that the
validity of TCT No. 7784 had been preponderantly proven in
these proceedings, the authenticity of said title must be
sustained. Besides, ARANETAs failure to submit TCT No.
21343 had never been put into issue in these proceedings.
With respect to the difference in the area of more than
200,0000 square meters between TCT No. 7784 and TCT
No. 26538, we find that the trial court failed to consider the
several conveyances of portions of TCT No. 26538 before
they finally passed on to ARANETA. Thus, on the
Memorandum of Encumbrance of TCT No. 26538, it is
apparent that portions of this piece of land had been sold to
various individuals before the same were transferred to
ARANETA on 4 march 1948. Naturally, since the subject
land had been partially cancelled with respect to the portion
disposed of, it could not be expected that the area of TCT
No. 26538 will remain the same at the time of its transfer to
ARANETA. Even assuming that the entire area covered by
TCT No. 26538 had been disposed of, this fact alone,
cannot lend us to conclude that the conveyance was
irregular. An anomaly exists if the area covered under the
derivative title will be much more than its predecessor-ininterest. Evidently, this is not so in the case before us.
The trial court, relying on Exhibit "N", further asserted that
ARANETA should not have been issued TCT No. 7784
considering that the registration of the Novation of Contract,
deed of Sale & Mortgage was suspended/denied and no
title was received by the Register of Deeds of Pasig at the
time the said document was filed in the said Office on march

4, 1948. A perusal of Exhibit "N" submitted before the trial

court, shows that the suspension or denial was merely
conditional considering that the person seeking registration
had give days within which to correct the defects before final
denial thereof. As we see it, the Notice merely contained a
warning regarding the denial of the registration of the
voluntary deed but, in no way, did it affect the vested rights
of ARANETA to be land. The fact that the title to the land
was subsequently issued free from any notation of the
alluded defect creates a reasonable presumption that
ARANETA was in fact able to comply with the condition
imposed. This is especially true since the notice itself
contained a note, "Just Completed," written across the face
of the letter.
Records also reveal the RTCs observation with regard to
Aranetas failure to disprove the result of the plotting made
on the subject land (Exhibit K) to the effect that TCT 26538
overlaps portion of TCT 15159 and TCT 26539 also
overlaps the other portion of said TCT R-15169. The trial
court further noted that "TCT R-15169 (Jose Dimson) and
TCT 26539 (Jose Rato) and TCT 21343 (Araneta) are
overlapping each other within Lot 25-A. That portion of TCT
R-15169 (Jose Dimson) along bearing distance points to 17
to 18 to 19 to 20 to 21 to 1 and 2 shaded in yellow color in
66
the Plan is not covered by TCT 21343 (Araneta)."
Scrutinizing Exhibit "K," it becomes apparent that the said
evidence relied upon was only a private survey conducted
by Geodetic Engineer Reggie P. Garcia which had not been
duly approved by the Bureau of Lands and was based only
67
on photocopies of relevant land titles. What is more, said
geodetic engineer also failed to adequately explain his
observations, approach and manner of plotting the relative
68
positions of the lots. From all indications, the conclusions
reached by said geodetic engineer were anchored on
unfounded generalizations.
Another defect cited on ARANETAs title was the absence
of any entry on the Memorandum of Encumbrances of TCT
No. 26538 of the alleged sale between RATO and
ARANETA. As pointed out by ARANETA, the copy of TCT
No. 26538 submitted to the trial court contained entries only

up to the year 1947, thus, explaining the (1) lack of entry

with regard to the issuance of TCT No. 7784 in favor of
ARANETA considering that the same was issued a year
later and; (2) entry pertaining to Convenio Philippine Land
Improvement Company which was entered way back on 21
August 1929.
Nonetheless, it still cannot be denied that Rato and
ARANETA together with Don Salvador Araneta, entered into
a voluntary agreement with the intention of transferring the
ownership of the subject property. Moreover, no conclusion
should have been reached regarding the total cancellation
of TCT No. 26538 inasmuch as TCT No. 7784 cancelled the
former certificate of title to the extent only of Three Hundred
Ninety Thousand Two Hundred Eighty Two (390,282)
square meters.
Notably also, with the evident intent to discredit and refute
the title of ARANETA, DIMSON submitted TCT Nos.
69
70
26538 and 21857, which are both derivatives of OCT
No. 994 registered on 3 May 1917 and cover parcels of land
located in Malabon, Rizal. However, these certificates of title
reflect different registered owners and designation of the
land covered.
Pertinently, Exhibit "M-Dimson" relating to TCT No. 26538,
registered on 12 June 1952, points to one Angela Bautista
de Alvarez as the registered owner of a 240 square meter of
land designated as Lot No. 19, Block 14 of the subdivision
plan Psd-5254 being a portion of Lot No. 7-A-1-A. This
certificate of title cancels TCT No. 14112/T-348 and refers
to a certain TCT No. 30473 on the inscriptions.
Exhibit "N-Dimson," on the other hand, pertaining to TCT
No. 21857 was issued on 30 March 1951 to one Angela I.
Tuason de Perez married to Antonio Perez. This certificate
of Title covers a parcel of land described as Lot No. 21,
Block 16 of the consolidation and subdivision plan Pcs-140,
G.L.R.O. Record No. 4429. It ahs an area of 436 square
meters and cancels TCT No. 21856.
71

Exhibit "Q-Dimson" consisting of TCT No. 8692 covers two

parcels of land designated as Lot Nos. 1 and 2 of Block No.

44 of the consolidation Subdivision Plan Pcs-188 with a total

area of 3,372 square meters. It was issued to Gregorio
Araneta, Incorporated on 7 May 1948. This certificate of title
cancelled TCT No. 46118.
Comparing these titles to those of the ARANETA, it is
apparent that no identity of the land could be found. The
Supreme Court, in the case of Alonso v. Cebu City Country
72
Club, Inc. agreeing with the Court of Appeals dissertation
in said case, ruled that there is nothing fraudulent for a
certificate of title to bear the same number as another title to
another land. On this score, the Supreme Court elucidated
as follows:
"On the question that TCT No. RT-1310 (T-1151) bears the
same number as another title to another land, we agree with
the Court of Appeals that there is nothing fraudulent with the
fact that Cebu Country Club, Inc.s reconstituted title bears
the same number as the title of another parcel of land. This
came about because under General Land Registration
Office (GLRO) Circular No. 17, dated February 19, 1947,
and Republic Act No. 26 and Circular No. 6, RD 3, dated
August 5, 1946, which were in force at the time the title was
reconstituted on July 26, 1946, the titles issued before the
inauguration of the Philippine Republic were numbered
consecutively and the titles issued after the inauguration
were numbered also consecutively starting with No. 1, so
that eventually, the titles issued before the inauguration
were duplicated by titles issued after the inauguration of the
Philippine Republic x x x."
Parenthetically, in their Motion for Partial Reconsideration of
this Courts Resolution dated 30 October 2008, DIMSON
objected to the admissibility of Exhibits 4-A1A to 7-A1A on
the ground that ARANETA failed to submit the original
copies of these certificates of title and contended that the
"originals" contain different "contents" from their own
73
Exhibits M, N and Q. The fact that the entries contained in
ARANETAs pieces of evidence are different from that of
DIMSONs do not automatically make ARANETAs exhibits
inferior replications or a confirmation of their falsity.
Interestingly, the objection regarding the non-submission of
the "original copy" had not been raised by DIMSON in their

Comments/Objections to Consolidated Formal Offer of

74
Evidence (Of Araneta Institute of Agriculture, Inc.). In any
case, we find the objections unwarranted considering that
certified true copies or certified microfilm copies of Exhibits
4-A1A to 7-A1A had been submitted by ARANETA in these
proceedings.
Lastly, on the alleged non-registration of Philippine Land
Improvement Company at the time the special power of
attorney was executed by Jose Ma. Rato to represent him in
the execution of the deed of conveyances, the same only
proves that Philippine Land Improvement Company was not
yet registered and this does not go as far as proving the
existence or non-existence of the company at which time it
was executed. In effect, the company was not precluded to
enter into contracts and be bound by them but it will do so at
the risk of the adverse effects of non-registration under the
law.
Ultimately, the question of whether the aforesaid certificates
of title constitute as clouds on ARANETAs titles are not for
this Court to rule upon for purposes of the present remand.
Needless to state, it is not for the Heirs of Dimson to rely on
the weakness of ARANETAs titles and profit from it. Rather,
they should have focused on the strength of their own titles
since it is not within our office to decide in whose hands the
contested lands should go, our task being merely to trace
back the parties claims to OCT No. 994 dated 3 May
75
1917.
There is no question that the Araneta titles were derived
from OCT No. 994 dated 3 May 1917, particularly from the
share of Jose Ma. Rato y Tuazon, one of the co-heirs
named in OCT No. 994. The Special Division correctly
assessed, among others, the reference to Decree No. 4429
and Record No. 4429 in some of the antecedent titles of
76
Araneta as mere clerical errors that could not have
invalidated said titles, "4429" being the case number of
Decree No. 36455, and the designation and the technical
description of the land on those titles not having been
shown to be erroneous or variant with the source title. The
Special Division also correctly considered that the trial court
had failed to take into account the several conveyances of

TCT No. 26538 before it was ultimately transferred to

Araneta in 1948, which explain the difference in area
between TCT No. 7784 and TCT No. 26538. The imputed
overlap of TCT No. 26538 and TCT No. 26539 with the titles
held by Dimson was based on a private survey which had
not been duly approved by the Bureau of Lands. The
alleged absence of any entry on the Memorandum of
Encumbrances of TCT No. 26538 of the sale of the property
between Rato and Araneta did not, according to the Special
Division, discount the fact that Rato and Araneta entered
into a voluntary agreement with the intention of transferring
the ownership of the subject property. Finally, the Special
Division noted that the titles derived from OCT No. 994,
which Dimson had submitted as evidence to discredit the
Araneta claim, pertain to properties wholly different from
those covered by the Araneta titles.
There is no cause to dispute the factual findings and
conclusions of the Special Division on the validity of the
Araneta titles, and we affirm the same.
B.
It appears that the claim to title of the Manotoks is
somewhat more controversial. The Special Division did not
discount the fact that there could have been flaws in some
of the intervening titles between the 3 May 1917 OCT No.
994 and the present titles of the Manotoks. However, the
significant event was the expropriation proceedings
undertaken by the Republic of the Philippines sometime in
1947. At least some of the titles in the name of the
Manotoks were sourced from the titles issued to and
subsequently distributed by the Republic. The Special
Division explained the milieu in full:
VALIDITY OF THE MANOTOK TITLES
The notation under Entry No. 6655/O-994, found
on page 17 of OCT 994 of the Owners Duplicate
Copy, shows that Lot No. 26 had been a subject of
sale in favor of Alejandro Ruiz and Mariano P.
77
Leuterio. The notations reads:

"Ap. 6655/O-994 Venta: Queda Cancelado el

presente Certificado en cuanto a una extension
superficial de 3,052.93 Metros cuadrados y
16,512.50 metros Cuadrados y descrita en elLote
No. 26 vendida a favor de Alejandro Ruis y
Mariano P. Leuterio, el primar casado con
Diogracias Quinones y el Segundo con Josefa
Garcia y se be expedido el Certificado de Titulo
No. 4210, Pagina 163, Libro T-22.

married to Maria P. Gutierrez, Consuelo Susana Gonzales y

Narciso married to Alfonso D. Prescilla; Juana Francisco
Gonzales y Narciso married to Fortunato de Leon; Maria
Clara Gonzales y Narciso married to Delfin Hilario;
Francisco Felipe Gonzales y Narciso married to Pilar
Narciso, and Concepcion Andrea Gonzales y Narciso
married to Melquiades M. Virata, Jr.

various vendees. Eighteen (18) lots were obtained by MRI

from the years 1965 to 1974, while it acquired the lot
covered by TCT No. 165119 in 1988. On the other hand,
MEC acquired from PhilVille Development Housing
Corporation Lot No. 19-B by virtue of Deed of Exchange
executed in its favor for which, TCT No. 232568 was issue
don 9 May 1991.

Appearing on the "Memorandum" of TCT No. 5261

79
is NOTA: Ap 2111 which reads as follows:

The 20 certificates of titles were traced by the MANOTOKS,

as follows:

"A/2111 Adjudicado el torreno descrito en este

certificado de titulo, a Rufina Narciso Vda. de
Gonzales, a cuenta de la participacion de osia esta
en (not legible) los tienes de la eseledad de
genanciales. Habida entre la misma y el finado
Francisco J. Gonzales, per una orden del Hon.
Fernando Jugo, Juez del Juzgado de Primera
Instancia de Manila Sala II, dienada el 20 de
Septiembre de 19 (not legible), en el Expidiente de
intestado del nombrado Francisco J. Gonzales,
No. 49034, se cancela el presente certificado de
tituto y se expide otre a hombre decha Rufina
Narciso, con (not legible) No. 35486, folio 86,
Tomo T-168 del libro de transferencias, archivando
se la copia de dicha orden da que se ha heche
referencia en al Legajo T-No. 35486.

1) TCT No. 7528 registered in the name of MRI

covers Lot No. 2 of consolidation-subdivision plan
(LRC) Pcs-1828 which has an area of 4,988
square meters. MRI purchased this lot from one
Basilio Caina who was issued TCT No. 7526 which
cancelled TCT Nos. 36657-62 registered in the
83
name of the Republic of the Philippines.

Date of the Instrument Aug. 29, 1918

Date of Inscription Sept. 9, 1918 10:50 a.m.
(GD) L. GARDUNIO, Register of Deeds"
"Ap. 6665/O-994-Venta: Queda Cancelado el
presente Cerficiado en cuanto a una extension
superficial de 871,982.00 metros cuadrados,
descrita en el Lote No. 26, vendida a favor de
Alejandro Ruiz y Mariano P. Leuterio, el primar
casado con Deogracias Quinones y el Segundo
con Josefa Garcia y se be expedido el Certificado
de Titulo No. 4211, Pagina 164, Libro T-No. 22.
Date of Instrument Aug. 21, 1918
Date of Inscription Sept. 9, 1918 10:50 a.m.
(SGD) TEODORO GONZALES,
(SGD.) L. GARDUNIO, Register of Deeds"
Registrado de Titulos."
As a result, TCT No. 4211 was cancelled by TCT No. 5261
which was issued in the name of Francisco Gonzales.
Inscribed on the "Memorandum of the Incumbrances
Affecting the Property Described in this Certificate" was the
sale executed in favor of
Francisco Gonzales dated 3 March 1920. Thus, on 6 April
1920, TCT No. 5261 was issued in the name of Francisco
78
Gonzales.
On 22 August 1938, TCT No. 5261 was cancelled by TCT
No. 35486 in the names of Jose Gonzales y Narciso

The property was later subdivided into seven lots in

80
accordance with subdivision plan Psd-21154. Partitioning
the lots among the co-owners, TCT No. 35486 was
eventually cancelled and in lieu thereof six (6) certificates of
81
titles were individually issued to Francisco Gonzaless six
(6) children, specifically, TCT Nos. 1368-1373 while TCT
82
No. 1374 was issued in favor of all the children.
As previously mentioned, the properties covered by TCT
Nos. 1368-1374 were expropriated by the Republic of the
Philippines and were eventually subdivided and sold to

2) TCT No. 7762, covering Lot 1-C, was obtained

by MRI from one Narcisa Buenaventura. The
Parcel of land has an approximate area of 2,876
square meters. Buenaventuras ownership was
84
evidenced by TCT No. 7525, deriving the same
85
from TCT No. 36657-63.
3) TCT No. 8012 in the name of MRI covers Lot
No. 12-1 having an area of 20,000 square
86
meters. This certificate of title was traced from
one Filemon Custodio who held TCT No. 7792.
Custodio was in turn a transferee of Guillermo
Rivera, the latter having been issued TCT No.
7760 by virtue of sale between him and then
Peoples Homesite and Housing Corporation
["PHHC"]. The latter title eventually cancelled TCT
87
No. 36557-63 of the Republic.
4) TCT No. 9866 issued to MRI covers Lot No. 21
and has an approximate area of 23,979 square
meters. MRIs certificate of title was derived from
TCT No. 9854 registered in the name of Filemon
Custodio, a transferee of Jose Dionisio, who was
issued TCT No. 9853. Dionisios title in turn

cancelled the Republics TCT No. 36657-63.

88

5) TCT No. 21107 issued to MRI covers Lot 22

with an approximate area of 2,557 square meters.
MRI acquired the same by virtue of sale between
him and Francisco Custodio, holder of TCT No.
21040. Francisco Custodio was a transferee of
Lorenzo Caina, registered owner of TCT No.
21039 as evidenced by a Deed of Sale between
Caina and the PHHC, the latters certificate of title
89
canceling TCT No. 36557-63 of the Republic.
6) TCT No. 21485 was issued to MRI by virtue of
sale between it and Francisco Custodio, registered
owner of TCT No. 21484. The certificate of title
covers Lot 20 with an approximate area of 25,276
square meters Custodio was in turn a transferee of
Lorenzo Caina, the latter being the registered
owner of TCT No. 21013 by reason of sale
90
between him and PHHC. Under Entry No.
6277/T-21485, it would appear that portions of the
property covered under TCT No. 21485 and TCT
No. 232568 had been subject of an expropriation
proceedings to which the Manotok Estate
Corporation, et al. interposed no objections subject
91
to the payment of just compensation.
92

93

7) TCT Nos. 26405 and 26406, both registered

in the name of MRI, cancelled TCT Nos. 9773 and
9774, respectively. TCT Nos. 9773 and 9774 were
registered in the names of Romulo, Rosalina,
Lucila, Felix and Emilia all surnamed Jacinto,
[JACINTOS"], before the same were transferred to
MRI by reason of sale in favor of the latter. The
JACINTOS certificates of title were in turn derived
from TCT Nos. 8014 and 8015 issued in the name
94
of Filemon Custodio Both TCT Nos. 8014 and
8015 cancelled TCT 7792/T-39. However, for
purposes of tracing TCT No. 7792/T-39 to the
Republics certificate of titles, this certificate of title
was not submitted in evidence.
8) TCT No. 26407

95

issued to MRI was traced back

to the title of Lourdes Mercado Cloribel who was

the registered owner of TCT No. 8404 by virtue of
sale between the two, thereby transferring
ownership to MRI. On the fact of TCT No. 8404, it
would show that it cancelled TCT No. 8013/T41 but
there is no showing in whose name TCT No. 8013
was registered and what certificate of title it
cancelled.
96

9) TCT No. 33904 of MRI cancelled TCT No.

8017 of Filemon Custodio by virtue of sale
97
between the latter and MRI. We note that TCT
No. 8017 cancelled TCT No. 7792/T-39 but there is
no showing whether the same could be traced
back to the Republics certificates of title.
10) TCT No. 34255, covering Lot No. 11-Bm, Psd75797 with an area of 11,000 square meters,
reflects MRI as the registered owner. This
certificate of title cancels TCT No. 36557-63 of the
98
Republic.
99

11) TCT No. 254875 bears MRI as the registered

owner of Lot 55-A with an area of approximately
1,910 square meters. This certificate of title
cancelled TCT No. 41956 which covers Lot 55,
also registered in the name of MRI. It would appear
that MRI acquired the lot covered under TCT No.
41956 from one Joaquin Caina who was the
registered owner of TCT No. 25715 being a
100
vendee of PHHC.
101

12) TCT No. 53268 of MRI covered Lot No. 15,

which was purchased by MRI from one Maria V.
Villacorta who held TCT No. 53155. Villacorta in
turn acquired the same land from one Eufrocina
Mackay whose TCT No. 7827 was eventually
102
cancelled by Villacortas land title. It would
appear that TCT No. 7827 cancelled TCT No.
7826/T-40 but there is no trace to whom the latter
title was registered and what certificate of title it
cancelled.

13) TCT No. 55897 shows MRI as the registered

owner of Lot 3 of the consolidation-subdivision plan
(LRC) Pcs-1828 of the Maysilo Estate covering an
area of more or less 20,531 square meters. This
certificate of title cancelled TCT No. 53122 in the
names of MRI (19,531 square meters) and one
Silvestre Domingo (1,000 square meters). TCT No.
53122 in turn cancelled TCT No. 21347 registered
in the names of Jesus Hipona (19,531 square
meters) and Silvestre Domingo (1,000 square
meters). Notably, TCT No. 21347 cancelled TCT
No. 21315/T-107 but there is no indication to whom
TCT No. 21315 was registered and what certificate
103
of title it cancelled.
14) TCT No. C-17272 reflects MRI as the
registered owner of Lot 6-C which has an
approximate area of 27,850 square meters. MRIs
certificate of title cancelled TCT No. C-17234
registered in the names of MRI (27,750 square
meters), Roberto S. David (3,0000 square meters)
and Jose Madulid (500 square meters). It would
appear that TCT No. C-17234 cancelled TCT No.
53124 registered in the names of MRI, Spouses
Priscila and Antonio Sebastian and Jose
104
Madulid. MRI also submitted in evidence a Deed
of Partition between itself, Roberto David and
Madulid thereby subdividing the property into Lots
6-A, 6-B and 6-C as per subdivision plan (LRC)
105
Psd-277091. Again, we note that TCT No.
53124 cancelled TCT No. 21350/T-107 but the
records are bereft of any indication what certificate
of title it cancelled and to whom the same was
registered.
15) TCT No. C-35267, covering Lot 56-B of
subdivision plan (LRC) Psd-292683 with an
approximate area of 9,707 square meters, was a
by-product of TCT No. 25146, also registered in
the name of MRI, after the same was subdivided
into two lots, namely, Lot Nos. 56-A and 56-B. TCT
No. 25146 cancelled TCT No. 25145 registered in
the name of Quirino Labing-isa by virtue of sale in

favor of MRI. In turn, TCT No. 21545 cancelled

106
TCT Nos. (36557) 12836 to (36563) 12842.
16) TCT No. T-121428, registered in the name of
MRI covers Lot No. 5-C of subdivision plan (LRC)
psd-315272 which has an approximate area of
4,650 square meters. It was previously registered
in the names of MRI (4,650 square meters),
Ricardo Cruz (941 square meters) and Conchita
Umali (1,000 square meters) under TCT No. 53123
by order of the Court of First Instance of Rizal,
Caloocan City, Branch XII and as per agreement of
the parties in Civil Case No. C-424. TCT No.
53123 in turn cancelled TCT No. 21346 whose
registered owners were Conchita Umali (1,000
square meters), Ricardo Cruz (941 square meters)
107
and Jesus Hipona (4,650 square meters). Like
some of the other titles, TCT No. 21346 cancelled
TCT No. 21316 but there is no trace of this latter
certificate of title.
17) TCT No. 163902, registered in the name of
MRI, covers Lot No. 4-B-2 and has an area of
more or less 6,354 square meters and a byproduct of TCT No. 9022, also in the name of MRI,
after the same was subdivided under subdivision
plan (LRC) Psd-334454. TCT No. 9022, in turn,
cancelled TCT No. 8994/T-45 registered in the
name of Filemon S. Custodio whose ownership
thereon was transferred to MRI by virtue of a
108
voluntary sale. TCT No. 8894 cancelled TCT No.
8846/T-45 but this latter certificate of title was not
submitted in evidence for purposes of tracing back
to the Republics title.
109

18) TCT No. 165119 was issued to MRI by

virtue of a Deed of Sale between Spouses
Francisca Labing-isa and Juan Ignacio [SPOUSES
IGNACIO] and MRI, as a result of which, TCT No.
C-36960 of the SPOUSES IGNACIO was
110
cancelled. It would appear that TCT No. C39690 cancelled TCT No. 35266/T-173 but TCT
No. 35266/T-173 was not submitted in evidence.

19) TCT No. T-232568 of the Manotok Estate

Corporation, covering Lot No. 19-B of subdivision
plan Psd-13011152 with an area of 23,206 square
meters, was derived from the certificate of title held
by PhiVille Development and Housing Corporation
under TCT No. 197357. MEC acquired the subject
parcel of land by virtue of Deed of Exchange
111
between it and PHILVILLE DATED 9 May 1991.
TCT No. 197357 cancelled TCT No. 195730/T-974
but there is no trace what certificate of title the
latter title cancelled.
By and large, all the certificates of title submitted by the
MANOTOKS, including their derivative titles, were all traced
to OCT No. 994 registered on 3 May 1917. Likewise, they
declared all the lots covered by such titles for taxation
purposes. Without doubt, MRI had successfully traced back
some of their certificates of title to the valid OCT No. 994,
they having acquired the lots from some of the vendees of
the PHHC after the same were expropriated by the Republic
from the Gonzalezes.
The fact that these lots were subjected to expropriation
proceedings sometime in 1947 under Commonwealth Act
No. 539 for resale to tenants is beyond question, as also
enunciated by the Supreme Court in Republic of the
Philippines v. Jose Leon Gonzales, et al. To bolster this
fact, paragraph "r" of the Majority Report noted that the
seven properties covered by TCT Nos. 1368 to 1374 were
expropriated by the Republic from the Gonzalezes.
The fact that these lots were subjected to expropriation
proceedings sometime in 1947 under Commonwealth Act
No. 539 for resale to tenants is beyond question, as also
enunciated by the Supreme Court in Republic of the
Philippines vs. Jose Leon Gonzaels, et al. To bolster this
fact, paragraph "r" of the Majority Report noted that the
seven properties covered by TCT Nos. 1368 to 1374 were
expropriated by the Peoples Homesite and Housing
Corporation which were later consolidated and subdivided
into 77 lots for resale to tenants. No sign of protest was ever
112
raised by CLT on this point.

The fact of expropriation is extremely significant, for titles

acquired by the State by way of expropriation are deemed
cleansed of whatever previous flaws may have attended
these titles. As Justice Vitug explained in Republic v. Court
113
of Appeals, and then Associate Justice (now Chief
114
Justice) Puno reiterated in Reyes v. NHA: "In an rem
proceeding, condemnation acts upon the property. After
condemnation, the paramount title is in the public under a
new and independent title; thus, by giving notice to all
claimants to a disputed title, condemnation proceedings
provide a judicial process for securing better title against all
the world than may be obtained by voluntary
115
conveyance." This doctrine was derived from the opinion
of then Chief Judge (now U.S. Supreme Court Justice)
116
Stephen Breyer in Cadorette v. U.S., which in turn cited
the pronouncement of the U.S. Supreme Court in U.S. v.
117
Carmack that "[b]y giving notice to all claimants to a
disputed title, condemnation proceedings provide a judicial
process for securing better title against all the world than
118
may be obtained by voluntary conveyance."
In annulling the Manotok titles, focus was laid on the alleged
defects of TCT No. 4211 issued in September of 1918.
However, TCT No. 4211 was issued decades before the
property was expropriated. Thus, any and all defects that
may have attended that particular title would have been
purged when the property covered by it was subsequently
acquired by the State through eminent domain. The Special
Division noted as much:
As it is, the validity of most of MRIs certificates of title
should be upheld because they were derived from the
Republics valid certificates of title. In fact, some of the
MANOTOKS titles can be traced back to the Governments
titles as a result of the expropriation in 1947.
Relevantly, the titles of the Republic, as the predecessor-ininterest of the MANOTOKS, are presumed valid by virtue of
their acquisition resulting from the exercise of its inherent
power of eminent domain that need not be granted even by
the fundamental law. Thus, the alleged flaws concerning the
certificates of title issued previous to the exercise of the
State of its inherent power did not affect or render invalid

the subsequent transfers after the forced sale. Indeed, when

land has been acquired for public use in fee simple
unconditionally, either by the exercise of eminent domain or
by purchase, the former owner retains no rights in the land,
and the public use may be abandoned, or the land may be
devoted to a different use, without any impairment of the
estate or title acquired or any reversion to the former
119
owner.
The Special Division also took exception to the majority
report of the Commissioners (Majority Report) who had
been tasked by the trial court to examine the validity of the
Manotok titles. The Majority Report
had arrived at several conclusions with respect to the TCTs
120
from which the Manotok titles were derived. The Special
Division, however, concluded that such report was in fact
tainted by the fact that it was determined "outside the scope
of the issues framed and agreed upon by the parties." To
wit:
In meeting the issue, the MANOTOKS disproved the
"opinion" with regard to the alleged defects of their titles
inasmuch as the majority report submitted before the trial
court was made outside the scope of the tasks which the
trial court confined them to perform. The MANOTOKS also
argued that before this proceeding on remand, CLT failed to
introduce evidence of such flaws neither were the
concerned geodetic engineers presented as witnesses.
Moreover, the MANOTOKS further maintained that CLT
failed to submit any factual or legal bases to prove the
authenticity and validity of the Palma and Sayo Orders.
They insisted that the Palma Order was a void one for being
conditional and having resulted to the issuance of "duplicate
certificates of land title."
With respect to the imputed flaws on the MANOTOKS titles
which were based on the Majority Report, we find that the
bases of the alleged defects proceeded from unreliable
sources thus, tainting the veracity of the said report.
The records of the case between CLT and the MANOTOKS
reveal that the parties approved the creation of a

commission to resolve only these two issues, to wit:

"x x x
These issues to be resolved by the 3 Commissioners are as
follows:
1) Whether or not the property covered by the
Transfer Certificates of Title of defendants pertain
to or involve Lot No. 26 of the Maysilo Estate
presently titled in the name of the plaintiff; and
2) Whether or not the property covered by the title
of the plaintiff and the property covered by the titles
121
of the defendants overlap.
Scrutinizing the Majority Report upon which the trial courts
conclusions were based, it would appear that the findings
therein were outside the scope of the issues framed and
agreed upon by the parties. Specifically, the deductions with
regard to the technical infirmities and defects of TCT Nos.
4211, 4210, 5261 and 35486 do not involve the question of
whether or not the subject properties were identified as Lot
No. 26 of the Maysilo estate or whether there was
overlapping of titles. Records bear out that the MANOTOKS
took exception to the procedure taken citing therein the
"ultra vires" acts of the two Commissioners.
In addition, the majority report focused on the alleged flaws
and inherent technical defects of TCT Nos. 4211, 5261 and
35486, ranging from the language of the technical
descriptions, absence of subdivision plan, lot number and
survey plan. Evidently, these defects go only as far as the
certificates of title issued prior to those of the Republic.
Remarkably, no specific flaw was found on the
MANOTOKS titles indicating any irregularity on their
issuance. In fact, the Commissioners who signed the
majority report even concluded that only TCT Nos. 4211,
122
4210, 5261, 35486, 1368 thru 1324 (sic) were irregularly
and questionably issued without any reference to the
123
MANOTOKS certificates of title. Otherwise stated, the
imputed flaws affect only those certificates of title issued
prior to those registered in the name of the Republic. No

flaw had been specifically identified or established in the

proceedings below, which would taint the titles held by the
MANOTOKS in so far as the regularity of their issuance is
124
concerned.
At the same time, the Special Division was not prepared to
uphold the validity of all of the Manotok titles. It took issue
with the particular titles which could not be retraced to the
titles acquired by the Republic of the Philippines by way of
expropriation.
Although the MANOTOKS had traced their title from the
vendees of PHHC, there are, however, some certificates of
title which could not be traced back to the titles previously
held by the Republic specifically, MRIs TCT Nos. 26405
and 26406, 26407, 33904, 53268, 55897, C-17272, T121428, 163903, 165119 and MECs TCT No. T-232568. As
to these certificates of title, the MANOTOKS failed to make
any specific reference to the preceding certificates of title
which they cancelled and to whose names they were
subsequently transferred and registered. Thus, we find no
125
sufficient basis to make a conclusion as to their origins.
V.
The Special Division supplied the following precise and
concise summary of its conclusions:
In prcis, the factual milieu of the present controversy and
the evidence on record clearly establish the failure of
DIMSON and CLT to substantiate their titles and overcome
the onus of proving that said titles are derivatives of OCT
994 registered on 3 May 1917, and not 19 April 1917, as
what is reflected in their titles. In contrast, the MANOTOKS
and ARANETA, both of which had consistently anchored
their proprietary claims on OCT No. 994 registered on 3
May 1917, have, in this remand proceeding, been able to
support their claims of ownership over the respective
portions of the Maysilo Estate. Except in the case of the
MANOTOKS which had failed to substantiate the validity of
some of their certificates of title, the MANOTOKS and
ARANETA presented evidence proving the identity, the
extent and the origin of their titles.

Answering the issues assigned by the Supreme Court

relative to the tenability of the respective imputed flaws in
the titles of the MANOTOKS and ARANETA and whether
such flaws are sufficient to defeat said claims, this Court
finds that, as discussed above, such flaws are
inconsequential and ineffectual in invalidating the
MANOTOKS and ARANETA titles.
Significantly, since the respective certificates of title of
herein contending parties are contradictory to each other
and stand to refute the validity of their opposing titles, it
cannot be gainsaid that said certificates of title have
correspondingly been subjected to dispute on the basis of
separate and distinct imputed flaws. Still, the crucial
difference between the imputed flaws allegedly tainting said
contending titles, DIMSON and CLT on one hand, and the
MANOTOKS and ARANETA, on the other, is that the
imputed flaws purportedly beleaguering the respective
certificates of title of the MANOTOKS and ARANETA relate
to the mechanical and technical aspect of the transcription
of their titles and are therefore inconsequential to the import
and validity thereof. Said imputed flaws do not depart from
the fact that the predecessors-in-interest of the MANOTOKS
and ARANETA had been clothed with the right of ownership
over the disputed portions of the Maysilo Estate.
On the other hand, the flaws attending the titles of DIMSON
and CLT primarily stem from infirmities attending or
otherwise affecting the very crux of their claim of ownership.
Having derived their titles from RIVERA, whose title is
questionable and dubious to the core, DIMSON and CLT
cannot rightly insist on the validity of their titles. Such flaws
are hard to overcome as they delve into the substance of
their proprietary claims. As stated, DIMSON and CLT
miserably failed to overcome their onus and instead opted
to hap on the supposed flaws of the adverse parties. For
these reasons, the titles of DIMSON and CLT should be
declared a nullity.

following conclusions as to the status of the original title and

its subsequent conveyances:
1. As categorically declared by the Supreme Court,
there is only one OCT 994, the registration date of
which had already been decisively settled as 3
May 1917 and not 19 April 1917. OCT 994 which
reflects the date of 19 April 1917 as its registration
date is null and void.
2. In view thereof and in addition to other grounds
we have already discussed, the certificates of title
of the deceased Jose Dimson and his successorin-interest, CLT, having been traced back to OCT
994 dated 19 April 1917, are NULL and VOID and
thus vest no legal right or claim in favor of
DIMSON and CLT.
3. The 13 June 1966 Palma Order and the 18
October 1977 Sayo Order, on which DIMSON and
CLT anchor the validity of their respective titles, do
not substantiate their proprietary claims. While the
existence of said Orders are admitted, the legal
import thereof nonetheless fails to confer a
semblance of legality on the titles of DIMSON and
consequently, of CLT, more so, a superior right to
defeat the titles of the MANOTOKS and
ARANETA, respectively.
4. Portions of Lot No. 26 pertinent to this
controversy, particularly that being disputed by the
MANOTOKs and CLT, were expropriated by the
Republic of the Philippines sometime in 1947
under Commonwealth Act No. 539 for resale to
tenants. The MANOTOKS, thus as successor-ininterest of the Republic, were able to establish that
some of their certificates of title had indeed
originated or were derived from said expropriated
parcels of land.

xxx
From the foregoing evaluation and in conformity with the
Supreme Court 2007 Resolution, this Court arrived at the

5. The evidence on record confirm that the

certificates of title covering the land being claimed
by ARANETA were derived from OCT NO. 994

registered on 3 May 1917 thereby ultimately

showing a direct link of TCT Nos. 7784 and 13574
to said mother title. By reason of which, that is
either belonging to or portions of Lot 25-A-3 as
previously owned by RATO, had been well
substantiated and proven to be superior to that of
DIMSON.
6. For reasons above-stated and in view of the
established rights of ownership of both the
MANOTOKS and ARANETA over the contested
properties, we find that the imputed flaws on their
titles cannot defeat the valid claims of the
MANOTOKS and ARANETA over the disputed
126
portions of the Maysilo Estate.
Inasmuch as we agree with the factual findings and
evaluation of the Special Division, we likewise adopt the
above conclusions. As we earlier stated, it was incumbent
on the Heirs of Dimson and/or CLT to establish their claim
to title for reasons other than the fact that OCT No. 994
dated 19 April 1917 is extant. They failed to do so. It should
be noted that the instant cases arose from separate actions
filed by Jose Dimson and CLT seeking the recovery of
possession and/or annulment of title against Araneta and
the Manotok Group. Thus, the burden of evidence was on
Dimson and CLT to establish the strength of their respective
claims of ownership, and not merely to rely upon whatever
weaknesses in the claims of the Manotoks and Araneta for
their causes of action to prosper. The well-settled legal
principle in actions for annulment or reconveyance of title is
that a party seeking it should establish not merely by a
preponderance of evidence but by clear and convincing
127
evidence that the land sought to be reconveyed is his. In
an action to recover, the property must be identified, and the
plaintiff must rely on the strength of his title and not on the
128
weakness of the defendant's claim.
We now proceed to tackle the recommendations submitted
by the Special Division. They are as follows:

RECOMMENDATIONS
Apropos to said conclusions, this Court hereby respectfully
makes the following recommendations regarding the validity
of the conflicting proprietary claims as interposed by the
herein contending parties:
1. To declare with finality that the certificates of title
of DIMSON and CLT including other derivative
titles issued to their successors-in-interest, if any,
are NULL and VOID, thus invalidating their legal
claims over the subject parcels of land.
2. To declare LEGAL and VALID the proprietary
claims the MANOTOKS over the parcels of land
covered by the following certificates of title:
a) TCT No. 7528 registered in the name
of MRI covers Lot No. 2 of consolidationsubdivision plan (LRC) Pcs-1828 which
has an area of 4,988 square meters.
b) TCT No. 7762 covering Lot 1-C, with
an approximate area of 2,287 square
meters.
c) TCT No. 8012 covering Lot No. 12-1
having an area of 20,000 square meters.
d) TCT No. 9866 covering Lot No. 21 and
has an approximate area of 23,979
square meters.
e) TCT No. 21107 covering Lot 22 with an
approximate area of 2,557 square meters.
f) TCT No. 21485 covering Lot 20 with an
approximate area of 25,276 square
meters.
g) TCT No. 34255 covering Lot No. 11Bm, Psd-75797 with an area of 11,000
square meters.

h) TCT No. 254875 covering Lot 55-A

with an area of approximately 1,910
square meters.
i) TCT No. C-35267 covering Lot 56-B of
subdivision plan (LRC) Psd-292683 with
an approximate area of 9,707 square
meters.
With regard to the following certificates of title,
namely:
3.A. MANOTOK REALTY INC.
a) TCT No. 26405 covering Lot No. 12-E
with an area of 1,0000 square meters.
b) TCT No. 26406 covering Lot No. 12-F
with an area of 1,000 square meters.
c) TCT No. 26407 covering Lot No. 12-B
with an area of 1,000 square meters.
d) TCT No. 33904 covering Lot No. 12-H
with an area of 1,802 square meters.
e) TCT No. 53268 covering Lot No. 15
purchased by MRI from one Maria V.
Villacorta with an approximate area of
3,163 square meters.

which has an approximate area of 4,650

square meters.
i) TCT No. 163902 covering Lot No. 4-B-2
with an area of more or less 6,354 square
meters allegedly a by-product of TCT No.
9022, which in turn, cancelled TCT No.
8994/T-45 registered in the name of
Filemon S Custodio.
j) TCT No. 165119 which allegedly
cancelled TCT No. C-36960 of the
SPOUSES IGNACIO by virtue of a Deed
of Sale between said Spouses and MRI.
3.B. MANOTOK ESTATE CORPORATION
a) TCT No. T-232568 covering Lot No. 19-B of
subdivision plan Psd-13011152 with an area of
23,206 square meters.
The foregoing certificates of title (3.A and 3.B),
failing to make specific references to the particular
certificates of title which they cancelled and in
whose name they were registered, may be
declared NULL and VOID, or in the alternative,
subject the same to further technical verification.
4. To declare LEGAL and VALID the title of ARANETA
respecting parcels of land covered by the following
certificates of title:

f) TCT No. 55897 covering Lot 3 of

consolidation-subdivision plan (LRC) Pcs1828 of the Maysilo Estate covering an
area of more or less 20,531 square
meters.

a) TCT No. 13574 covering a parcel of land

designated as Section No. 2 of subdivision plan
Psd-10114, being a portion of Lot 25-A-3-C with an
aggregate area of 581,872 square meters;

g) TCT No. C-17272 covering Lot 6-C

which has an approximate area of 27,850
square meters.

b) TCT No. 7784 covering four (4) parcels of land

with an aggregate area of 390,383 square
129
meters.

h) TCT No. T-121428 covering Lot No. 5C of subdivision plan (LRC) psd-315278,

The first, second and fourth recommendations are well

taken as they logically arise from the facts and conclusions,

as determined by the Special Division, which this Court

adopts.
The third recommendation that eleven (11) of the titles
held by the Manotoks be declared null and void or subjected
to further technical verification warrants some analysis.
The Court has verified that the titles mentioned in the third
recommendation do not, as stated by the Special Division,
sufficiently indicate that they could be traced back to the
titles acquired by the Republic when it expropriated portions
of the Maysilo Estate in the 1940s. On the other hand, the
Manotok titles that were affirmed by the Special Division are
traceable to the titles of the Republic and thus have
benefited, as they should, from the cleansing effect the
expropriation had on whatever flaws that attached to the
previous titles. However, although the Special Division did
not concede the same benefit to the other Manotok titles
named in the third recommendation, at the same time it did
not conclude that such titles were false or fraudulently
acquired. Absent such a finding, we are disinclined to take
the ultimate step of annulling those titles.
Said titles have as their origin what we have acknowledged
to be a valid mother title OCT No. 994 dated 3 May 1917.
This is in stark contrast with the titles of CLT, the oppositors
to the Manotoks, which all advert to an inexistent mother
title. On their face, the Manotok titles do not reflect any error
or fraud, and certainly the Special Division do not point to
any such flaw in these titles. Nothing on the face of the titles
gives cause for the Court to annul the same.
It is worth mentioning that the Special Division refused to
adopt the Majority Report earlier rendered in the case
between the Manotoks and CLT, said report having
exhaustively listed the perceived flaws in the antecedent
TCTs from which the Manotoks derived their claim. The
Special Division concluded that such findings had been
reached by the Commissioners in excess of their original
mandate and, thus, ultra vires. Assuming that such flaws
were extant, they existed on the titles and anteceded the
expropriation of the properties by the Government. As
stated earlier, such expropriation would have cleansed the

titles of the prior flaws. But even if the Manotok titles

enumerated in the third recommendation could not be
sourced from the titles acquired by the Republic through
expropriation, still the rejection of the Majority Report
signifies that the flaws adverted to therein could not form the
basis for the annulment of the titles involved. Indeed, the
Special Divisions rejection of the Majority Report further
diminishes any ground to annul the Manotok titles referred
to in the third recommendation.
Yet, the Court is cognizant that the inability to trace the
Manotok titles specified in the third recommendation to
those titles acquired by the Government through
expropriation puts such titles in doubt somehow. In addition,
the Court is aware that the ground utilized by the Special
Division in rejecting the Majority Report that the
determinations were made outside the scope of the issues
framed and agreed upon by the parties -- does not
categorically refute the technical findings made therein.
Those circumstances, while insufficient for now to annul the
Manotoks titles listed in the third recommendation, should
be sufficiently made public.
Hence, in lieu of annulling the Manotok titles per the Special
Divisions third recommendation, the Court deems it
sufficient to require the Registers of Deeds concerned to
annotate this Resolution on said titles so as to sufficiently
notify the public of their unclear status, more particularly the
inability of the Manotoks to trace the titles without any gap
back to OCT No. 994 issued on 3 May 1917. If there should
be any cause for the annulment of those titles from a proper
partys end, then let the proper case be instituted before the
appropriate court.
WHEREFORE, the Court hereby adopts the Report of the
Special Division and issues the following reliefs:
1) The certificates of title of the DIMSONs and CLT
including other derivative titles issued to their
successors-in-interest, if any, are declared NULL
and VOID, thus invalidating their legal claims over
the subject parcels of land;

2. The proprietary claims of the MANOTOKS over

the parcels of land covered by the following
certificates of title are declared LEGAL and VALID,
to wit:
a) TCT No. 7528 registered in the name
of MRI covers Lot No. 2 of consolidationsubdivision plan (LRC) Pcs-1828 which
has an area of 4,988 square meters.
b) TCT No. 7762 covering Lot 1-C, with
an approximate area of 2,287 square
meters.
c) TCT No. 8012 covering Lot No. 12-1
having an area of 20,000 square meters.
d) TCT No. 9866 covering Lot No. 21 and
having an approximate area of 23,979
square meters.
e) TCT No. 21107 covering Lot 22 with an
approximate area of 2,557 square meters.
f) TCT No. 21485 covering Lot 20 with an
approximate area of 25,276 square
meters.
g) TCT No. 34255 covering Lot No. 11Bm, Psd-75797 with an area of 11,000
square meters.
h) TCT No. 254875 covering Lot 55-A
with an area of approximately 1,910
square meters.
i) TCT No. C-35267 covering Lot 56-B of
subdivision plan (LRC) Psd-292683 with
an approximate area of 9,707 square
meters.
3) The following certificates of titles in the name of
ARANETA are hereby declared LEGAL and

VALID, to wit:

C of subdivision plan (LRC) psd-315278,

which has an approximate area of 4,650
square meters;

a) TCT No. 13574 covering a parcel of

land designated as Section No. 2 of
subdivision plan Psd-10114, being a
portion of Lot 25-A-3-C with an aggregate
area of 581,872 square meters;

i) TCT No. 163902 covering Lot No. 4-B-2

with an area of more or less 6,354 square
meters allegedly a by-product of TCT No.
9022, which in turn, cancelled TCT No.
8994/T-45 registered in the name of
Filemon S. Custodio;

b) TCT No. 7784 covering four (4) parcels

of land with an aggregate area of 390,383
square meters.

j) TCT No. 165119 which allegedly

cancelled TCT No. C-36960 of the
SPOUSES IGNACIO by virtue of a Deed
of Sale between said spouses and MRI;

4) On the following titles in the name of Manotok

Realty, Inc. or Manotok Estate Corporation, to wit:
a) TCT No. 26405 covering Lot No. 12-E
with an area of 1,0000 square meters;

k) TCT No. T-232568 covering Lot No.

19-B of subdivision plan Psd-13011152
with an area of 23,206 square meters.

b) TCT No. 26406 covering Lot No. 12-F

with an area of 1,000 square meters;
c) TCT No. 26407 covering Lot No. 12-B
with an area of 1,000 square meters;
d) TCT No. 33904 covering Lot No. 12-H
with an area of 1,802 square meters;
e) TCT No. 53268 covering Lot No. 15
purchased by MRI from one Maria V.
Villacorta with an approximate area of
3,163 square meters;

the Registers of Deeds concerned are ordered to annotate

that as determined in the foregoing Resolution, the
registered owners of the said titles "failed to make any
specific reference to the preceding certificates of title which
they cancelled and to whose names they were subsequently
transferred and registered," thereby leading the Supreme
Court "to find no sufficient basis to make a conclusion as to
130
their origins."
Costs against private respondents.
SO ORDERED.

f) TCT No. 55897 covering Lot 3 of

consolidation-subdivision plan (LRC) Pcs1828 of the Maysilo Estate covering an
area of more or less 20,531 square
meters;
g) TCT No. C-17272 covering Lot 6-C
which has an approximate area of 27,850
square meters;
h) TCT No. T-121428 covering Lot No. 5-

G.R. No. 142549

March 9, 2010
FIDELA R. ANGELES, Petitioner,
vs.
The SECRETARY OF JUSTICE, THE ADMINISTRATOR,
LAND REGISTRATION AUTHORITY, THE REGISTER OF
DEEDS OF QUEZON CITY, and SENATOR TEOFISTO T.
GUINGONA, JR., Respondents.
DECISION

Concepcion Vidal, and alleging that they are entitled to

inherit her proportional share in the parcels of land located
in Quezon City and in the municipalities of Caloocan and
Malabon, Province of Rizal, commenced a special civil
action for partition and accounting of the property otherwise
known as Maysilo Estate covered by OCT No. 994,
allegedly registered on April 19, 1917 with the Registry of
Deeds of Caloocan City. This was docketed as Civil Case
No. C-424 in the RTC of Caloocan City, Branch 120.

LEONARDO-DE CASTRO, J.:

The property involved in this case is covered by Original
Certificate of Title (OCT) No. 994, which encompasses One
Thousand Three Hundred Forty-Two (1,342) hectares of the
Maysilo Estate, previously described by this Court En Banc
as a "vast tract of land [that] stretches over three cities,
comprising an area larger than the sovereign states of
1
Monaco and the Vatican." What we have before us now is
touted as "one of the biggest and most extensive land2
grabbing incidents in recent history."
The existence of several cases already decided by this
Court dealing with this infamous estate has made the job of
deciding this particular petition easy, on one hand, as there
are cases squarely on point and at the outset, applicable;
but complicated, on the other hand, as such applicability
must be determined with thoroughness and accuracy to
come up with a just, equitable, and fair conclusion to a
controversy that has now lasted for almost forty-five (45)
years.
Submitted for Decision is a petition for mandamus seeking
respondents Secretary of Justice, the Administrator of the
Land Registration Authority (LRA), and the Register of
3
Deeds of Quezon City to comply with the Order dated
January 8, 1998 issued by the Regional Trial Court (RTC) of
Caloocan City in Civil Case No. C-424, entitled Bartolome
Rivera, et al. v. Isabel Gil de Sola, et al. (the RTC Order),
which was issued a Certificate of Finality on March 12,
1998.
On May 3, 1965, petitioner, together with other individuals,
all of them claiming to be the heirs of a certain Maria de la

Some of said alleged heirs were able to procure Transfer

Certificates of Title (TCTs) over portions of the Maysilo
Estate. They also had led this Court to believe that OCT No.
994 was registered twice, thus, in Metropolitan Waterworks
4
and Sewerage Systems (MWSS) v. Court of Appeals,
5
reiterated in Heirs of Luis J. Gonzaga v. Court Of Appeals,
the Court held that OCT No. 994 dated April 19, 1917, and
not May 3, 1917, was the valid title by virtue of the prior
registration rule.
In the RTC Order sought to be implemented, Judge Jaime
D. Discaya granted the partition and accounting prayed for
by plaintiffs in that case; directed the respective Registers of
Deeds of Caloocan City and Quezon City to issue transfer
certificates of title in the names of all the co-owners,
including petitioner, for twelve (12) parcels of land with an
aggregate area of One Hundred Five Thousand and Nine
Hundred Sixty-Nine square meters (105,969 sq. m.), more
or less; and ordered that said parcels of land be sold,
subject to the confirmation of the Court, and the proceeds
be divided among the plaintiffs in proportion to their
respective interests in the property.
The dispositive portion of said Order reads as follows:
WHEREFORE, premises considered, the recommendation
of the Commissioners in their Joint Commissioners Report
dated October 21, 1997 and Supplemental Commissioners
Report dated December 30, 1997 that the following lots with
transfer certificates of title to be issued by the Register of
Deeds of Caloocan City in the names of all co-owners be
sold and the proceeds thereof divided among themselves in
proportion to their respective interest in the property, is

approved.
The Register of Deeds of Caloocan City and of Quezon City
are hereby directed to issue transfer certificates of title in
the names of all the co-owners for the following lots,
namely:
xxxx
Any sale of above-mentioned lots shall be subject to
confirmation by this Court pursuant to Section 11, Rule 69
6
of the Rules of Civil Procedure.
Petitioner alleges that the respective Registers of Deeds of
Caloocan City and Quezon City refused to comply with the
RTC Order because they were still awaiting word from the
LRA Administrator before proceeding. Counsel for petitioner
then requested the LRA Administrator to direct said
Registers of Deeds to comply with the Order.
The LRA Administrator, Mr. Alfredo R. Enriquez, sent
7
counsel for petitioner a letter-reply dated March 27, 2000,
8
with two attachments: 1) the 1st Indorsement dated
September 22, 1997 (the 1st Indorsement) issued by then
Department of Justice (DOJ) Secretary Teofisto T.
Guingona, Jr. (respondent Guingona), and 2) LRA Circular
9
No. 97-11 issued to all Registers of Deeds. The letter-reply
reads in part:
We regret to inform you that your request cannot be granted
in view of the directive of the Department of Justice in its 1st
Indorsement dated 22 September 1997, copy enclosed, as
a result of the inquiry conducted by the Composite FactFinding Committee (created under DOJ Department Order
No. 137) finding that there is only one OCT No. 994 which
was issued by the Rizal Register of Deeds on 3 May 1917
(and not on 19 April 1919) pursuant to Decree No. 36455 in
Land Registration Case No. 4429. Pursuant to this DOJ
directive, this Authority issued LRA Circular No. 97-11 to all
Registers of Deeds, copy attached, stating the following:
xxxx

In compliance with the DOJ directive, this Authority, in its

1st Indorsement dated 27 March 1998, x x x had
recommended to the Office of the Solicitor General the filing
of an appropriate pleading relative to the said Order dated 8
January 1998.
The findings of the DOJ on OCT No. 994 are in fact
sustained by the Senate Committee on Justice and Human
Rights and Urban Planning in its Senate Committee Report
10
No. 1031 dated 25 May 1998 x x x. (Emphasis ours.)
The LRA Administrator likewise wrote that in Senate
Committee Report No. 1031 dated May 25, 1998, the
Senate Committees on Justice and Human Rights and
Urban Planning came up with the following findings:
i. There is only one Original Certificate of Title
(OCT) No. 994 and this was issued or registered
on May 3, 1917[.]
ii. The [OCT] No. 994 dated April 19, 1917 is nonexistent. It was a fabrication perpetrated by Mr.
Norberto Vasquez, Jr., former Deputy Registrar of
Deeds of Caloocan City.
iii. The alleged surviving heirs could not have been
the true and legal heirs of the late Maria de la
Concepcion Vidal as government findings showed
the physical and genetic impossibility of such
relationship[.]
iv. Mr. Norberto Vasquez, Jr., former Deputy
Registrar of Deeds of Caloocan City, acted
maliciously, fraudulently and in bad faith, by
issuing "certifications" and/or written statements to
the effect that OCT No. 994 was issued or
registered on April 19, 1917 when in truth and in
fact it was issued or registered on May 3, 1917.
v. Atty. Yolanda O. Alfonso, Registrar of Deeds of
Caloocan City, likewise acted maliciously,
fraudulently and in bad faith, when she signed the
TCTs issued in the name of Eleuteria Rivera which

bear a wrong date of the registration of OCT No.

994. Malice was evident because she had
previously issued certificates of title in the names
of other individuals which were derived from OCT
No. 994 dated May 3, 1917 and she had in fact
questioned the falsity of April 19, 1917 as the
11
correct date of the registration of OCT No. 994.
(Underscoring in the original.)
The letter-reply further stated that OCT No. 994 was intact
and was being kept in the LRA "to prevent its alteration and
tampering." We quote the last portion of said letter-reply:
As found by the Senate Committees, the mess caused by
the former Register of Deeds and Deputy Register of Deeds
in making it appear that OCT No. 994 was issued in 19 April
1917, thus giving the wrong impression that there were two
(2) OCT No. 994, resulted in the double, if not multiple,
issuance of transfer certificates of title covering the
subdivided portions of the Maysilo Estate, including the
parcels of land mentioned in the subject Order dated 8
January 1998. Our Authority, as the protector of the integrity
of the Torrens title is mandated to prevent anomalous titling
of real properties and put a stop to further erode the
confidence of the public in the Torrens system of land
registration.
With due respect, the Order dated 8 January 1998 which
directs the issuance of transfer certificates of title as direct
transfer from OCT No. 994, suffers from certain
deficiencies, to wit: OCT No. 994 had long been cancelled
totally by the issuance of various certificates of title in the
names of different persons; and that the plan and
descriptions of the lands were not based on a subdivision
plan duly approved by the proper government agency but
merely sketch plans, in violation of Section 50 of PD 1529.
Obviously, compliance with the Order will result to
duplication of certificates of title covering land previously
registered in the names of other persons. Besides, in
MWSS vs. CA, the Supreme Court did not declare the nullity
of the certificates of title which emanated from OCT No. 994
issued on 3 May 1917. It merely invalidates the title of
MWSS and recognizes as valid the title of Jose B. Dimson.

There was no such declaration as to the various transfer

certificates of title emanating from OCT No. 994. Under the
law, there must be a separate action in court for the
declaration of nullity of certificates of title pursuant to the
due process clause of the Constitution.
As observed by the Supreme Court in Republic vs. Court of
Appeals (94 SCRA 874), "there are too many fake titles
being peddled around and it behooves every official of the
government whose functions concern the issuance of legal
titles to see to it that this plague that has made a mockery of
the Torrens system is eradicated right now through their
loyalty, devotion, honesty and integrity, in the interest of our
12
country and people at large."
Petitioner avers that respondent Guingona, in issuing the
13
1st Indorsement, made a substantive modification of the
ruling made by this Court in MWSS v. Court of Appeals and
Heirs of Luis Gonzaga v. Court of Appeals. She further
avers that "[n]ot even the Secretary of Justice has the power
or authority to set aside or alter an established ruling made
by the highest Court of the land." According to petitioner,
respondent Guingona claimed to have made his own finding
that there is only one OCT No. 994 which was issued by the
Register of Deeds of Rizal on May 3, 1917, and not on April
19, 1917, and this finding is a reversal of the decisions of
this Court on "what is the valid OCT No. 994." Petitioner
contends that "[t]he rule is well settled that once a decision
becomes final[,] the Court can no longer amend, modify,
much less set aside the same" and that respondent
Guingona usurped judicial functions and did a prohibited act
14
which rendered the Order of no effect.
Petitioner claims that respondent Guingona was the one
who caused the issuance by the LRA Administrator of
Circular No. 97-11 dated October 3, 1997, which had the
same legal effect on other cases similarly situated without
hearing or notice to the parties-in-interest, and that this was
contemptuous and contumacious and calls for
15
"condemnation and reproof of the highest degree."
Petitioner alleges that compliance with a final judicial order
is a purely ministerial duty, that she and her co-plaintiffs in

Civil Case No. C-424 cannot avail of the benefits granted to

them by the Order, and that she has no "plain, speedy and
adequate remedy in the ordinary course of law, other than
this action."
16

In his Comment, respondent Guingona raises the following

grounds for denial of the petition:
1. Petitioner has no cause of action against
respondent Guingona in that the latter is no longer
the Secretary of Justice.
2. The issuance of the 1st Indorsement dated
September 22, 1997 was pursuant to the report
dated August 27, 1997 made by the committee
created by Department Order No. 137 dated April
23, 1997 after conducting an independent factfinding investigation. It did not in any way alter or
modify any judgment of this Honorable Court.
3. Petitioner was not denied due process as her
rights, if any, under the Order dated January 18,
1998 were not yet in existence at the time the 1st
Indorsement was issued.
4. Mandamus is not the appropriate remedy to
17
enforce claims of damages.
Respondent Guingona contends that he was no longer the
Secretary of Justice, therefore, he did not anymore possess
the mandatory duties being compelled to be performed in
this case by way of a writ of mandamus; he had no more
duty resulting from the said position and could not perform
an act that pertained to said duty, even if he wanted to; and
since he did not have the powers and duties of the
Secretary of Justice, he was therefore not a real party-ininterest in this case.
Respondent Guingona avers that he was prompted to issue
DOJ Department Order No. 137 dated April 13, 1997
creating a committee due to several complaints received by
the Office of the Secretary of Justice in February 1997.
Among others, the complaints prayed for the investigation of

certain actions taken by the LRA officials and personnel in

connection with transactions involving the Maysilo Estate.
According to him, the committee was tasked for the purpose
of initiating a fact-finding inquiry:
"(1) to ascertain the circumstances surrounding the
issuance of original Certificate(s) of Title (OCT) No. 994 of
the Registry of Deeds of Rizal purporting to cover a mass of
land encompassing Malabon, Caloocan City and Quezon
City as well as the issuance and regularity of Transfer
Certificates of Titles (TCTs) derived therefrom; (2) in the
event of a finding of the irregular issuance of any such
[TCTs], (a) to determine the involvement of and to
recommend the actions to be taken against person(s)
and/or officials and employees of this Department or its
agencies who may appear to have participated therein, and
(b) to recommend the administrative and/or judicial actions,
if any, that may directly be undertaken by this Department,
the Office of the Solicitor General, the Land Registration
Authority, and other units and attached agencies of this
Department, with respect to such irregularly issued Transfer
Certificates of Title, taking into account the final decisions of
18
the courts affecting the Maysilo Estate."
Respondent Guingona contends that it can be gleaned from
the purpose of the creation of the committee that its factfinding investigation was merely administrative to formulate
and recommend policies, procedures and courses of action
which the DOJ, the LRA, the Office of the Solicitor General
and other agencies of the DOJ can adopt with regard to the
problem of the proliferation of fake land titles, including
those that relate to the Maysilo Estate. He alleges that
based on this committees report dated August 27, 1997, he
issued the subject 1st Indorsement which spelled out the
policies, procedures, and courses of action which the LRA,
an agency under the DOJ, must follow not only with respect
to OCT No. 994 and its derivative titles covering the Maysilo
Estate but to all other original or transfer certificates of title
as well. He contends that the 1st Indorsement was merely
an administrative issuance of the DOJ; thus, it could not be
said that it altered or supplanted any judgment of this Court.
Respondent Guingona further states that the 1st

Indorsement dated September 22, 1997 was issued long

before the Order dated January 18, 1998, thus it could not
be said that petitioner was denied due process as her rights
and interests were non-existent at that time. Furthermore,
respondent Guingona alleges that petitioner was accorded
due process when the LRA Administrator gave an
opportunity to petitioners counsel to present petitioners
case to the LRA legal staff. Respondent Guingona claims
that such opportunity to be heard satisfies the requirements
of due process, as the essence of due process is simply the
19
opportunity to be heard.
With regard to the claim for damages, respondent Guingona
argues that it is a factual issue which the petitioner must
prove in the course of a trial where petitioners claim for
damages can be fully litigated. This Honorable Court,
however, is not a trier of facts. Such being the case, it is
inappropriate for petitioner to include in her petition for
mandamus a claim for damages the amount of which she
did not even specify. As it is, such claim should be denied
by this Honorable Court. There is also no showing that
petitioner paid the required docket fees for her claims for
damages. On this score alone, such a claim should be
20
outrightly dismissed.
21

In her Reply, petitioner contends that former DOJ

Secretary Guingona has to be named as private respondent
because he was the cause of public respondents failure to
comply with their ministerial duty. A private respondent is
"the person interested in sustaining the proceedings in the
court; and it shall be the duty of such private respondent to
appear and defend, both in his own behalf and in behalf of
the public respondents affected by the proceedings x x x."
He is not charged with any improper act, but he is a
necessary party as the grant of relief prayed for by petitioner
22
shall require private respondents active participation.
Anent private respondents argument that the 1st
Indorsement did not in any way alter or modify any
judgment of this Honorable Court, petitioner counters that
the 1st Indorsement and "pertinent acts of private
respondent x x x resulted in the altering or supplanting of a
judgment of this Court." The complaints praying that an

investigation be conducted on the irregular issuance of titles

in the Maysilo Estate were made to the private respondent
by parties who held titles derived from OCT No. 994 on May
3, 1917, after the Supreme Court had rendered its decision
in MWSS v. Court of Appeals and Heirs of Gonzaga v.
Court of Appeals.
Petitioner argues that contrary to private respondents claim,
she is entitled to file a petition for mandamus as she and her
co-plaintiffs in Civil Case No. C-424 has been suffering from
damages and losses incapable of quantification, because of
the wrongful act of the respondents. Petitioner cites the
following provisions of the Rules of Court in support of her
argument:
RULE 65
xxxx
SECTION 9. Service and enforcement of order or judgment.
A certified copy of the judgment rendered in accordance
with the last preceding section shall be served upon the
court, quasi-judicial agency, tribunal, corporation, board,
officer or person concerned in such manner as the court
may direct, and disobedience thereto shall be punished as
contempt. An execution may issue for any damages or
costs awarded in accordance with Section 1 of Rule 39.
RULE 39
SECTION 1. Execution upon final judgments or orders.
Execution shall issue as a matter of right, on motion, upon a
judgment or order that disposes of the action or proceeding
upon the expiration of the period to appeal therefrom if no
appeal has been duly perfected.
If the appeal has been duly perfected and finally resolved,
the execution may forthwith be applied for in the court of
origin, on motion of the judgment obligee, submitting
therewith certified true copies of the judgment or judgments
or final order or orders sought to be enforced and of the
entry thereof, with notice to the adverse party.

The appellate court may, on motion in the same case, when

the interest of justice so requires, direct the court of origin to
issue the writ of execution.
Petitioner avers that private respondent seemed to assume
a function that did not belong to the Executive Department,
because he had caused the issuance of an LRA Circular
that forbade compliance with a court order that had already
become final and executory. Petitioner likewise avers that
the doctrine of separation of powers called for each branch
of government to be left alone to discharge its functions
23
within its jurisdiction, as it saw fit.
Public respondents Secretary of Justice, the Administrator
of the Land Registration Authority, and the Register of
24
Deeds of Quezon City filed their Comment on November
16, 2000. Public respondents claim that petitioner and her
co-plaintiffs are not the rightful owners of the property
subject of said complaint for partition. Their allegation in the
complaint that they are the heirs and successors-in-interest
of the late Maria de la Concepcion Vidal, co-owner of the
parcels of land described in OCT No. 994, and are therefore
entitled to the proportionate share, ownership, and
possession of the parcels of land described in paragraphs
XI to XV of the complaint, is an untrue statement made with
intent to deceive. This is because the findings embodied in
the Report of the Fact Finding Committee created by the
DOJ, which are the result of the joint undertaking of the
Department proper, the Office of the Solicitor General, and
the LRA, support the conclusion that petitioner and her coplaintiffs are not entitled to the issuance of new transfer
25
certificates of title in their names.
Public respondents claim the following as facts:
The DOJ Report became the subject of [a] Senate
investigation. On May 25, 1998, the Honorable Senate of
the Tenth Congress of the Republic of the Philippines
reached the conclusion that petitioner and her co-plaintiffs
are not and cannot be true heirs of the late Maria de la
Concepcion Vidal (par. 3, p. 33, Senate Report). x x x.
As early as 1917, subject property of the instant case had

already been partitioned and divided among the true

owners, namely, Gonzalo Tuason y Patino, Jose Rato y
Tuason, Luis Vidal y Tuason, Concepcion Vidal y Tuason,
Pedro Baos, Maria de la Concepcion Vidal, Trinidad
Jurado, Bernardino Hernandez, Esperanza Tuason Chua
Jap, Isabel Tuason Chua, Juan Jose Tuason de la Paz,
Maria Teresa Tuason y de la Paz, Mariano Severo Tuason
y de la Paz, Demetrio Asuncion Tuason y de la Paz,
Augusto Hoberto Tuason y de la Paz, Maria Soterrana
Tuason y de la Paz, Benito Legarda y de la Paz, Consuelo
Legarda y de la Paz, Rita Legarda y de la Paz, Benito
Legarda y Tuason, Emilia Tuason y Patio, Maria Rocha de
Despujols, Sofia OFarrell y Patio, German Franco y
Gonzales, Concepcion Franco y Gonzales, Domingo Franco
y Gonzales, Guillerma Ferrer y Tuason, Vicente Ferrer y
Tuason, Josefa Tuason vda. de Flores, and heirs of Filemon
Tuazon in proportion to their respective shares, as
evidenced by the document entitled PROYECTO DE
PARTICION DE LA HACIENDA DE MAYSILO (PARTITION
PLAN OF HACIENDA MAYSILO) consisting of fifty-two (52)
pages which is attached as Annex "D", and its faithful
translation into English consisting of forty-nine (49) pages
attached as Annex "E", and both made integral parts hereof.
As a result of said partition, transfer certificates of titles
covering the same subject parcels of land were legally
issued in the names of above-enumerated true owners.
The Register of Deeds of Quezon City and Caloocan City,
through the undersigned counsel, filed the aforestated
Motion for Reconsideration of the questioned Order of the
lower court.
The resolution of said motion and other incidents in related
cases pending before the lower court has been held in
abeyance to await the resolution by higher courts of other
26
cases involving the Maysilo Estate.
We are thus faced with the issue of whether public
respondents unlawfully neglected to perform their duties by
their refusal to issue the questioned transfer certificates of
title to petitioner and her co-plaintiffs (in Civil Case No. C424) or have unlawfully excluded petitioner from the use

and enjoyment of whatever claimed right, as would warrant

the issuance of a writ of mandamus against said public
respondents.
Considering the factual background and recent
jurisprudence related to this controversy as will be
discussed below, we find that it was not unlawful for public
respondents to refuse compliance with the RTC Order, and
the act being requested of them is not their ministerial duty;
hence, mandamus does not lie and the petition must be
dismissed.
Rule 65 of the 1997 Rules of Civil Procedure provides:
SECTION 3. Petition for mandamus. When any tribunal,
corporation, board, officer or person unlawfully neglects the
performance of an act which the law specifically enjoins as
a duty resulting from an office, trust, or station, or unlawfully
excludes another from the use and enjoyment of a right or
office to which such other is entitled, and there is no other
plain, speedy and adequate remedy in the ordinary course
of law, the 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, immediately or at some other time to be
specified by the court, to do the act required to be done to
protect the rights of the petitioner, and to pay the damages
sustained by the petitioner by reason of the wrongful acts of
the respondent.
It is settled that mandamus is employed to compel the
performance, when refused, of a ministerial duty, but not to
compel the performance of a discretionary duty. Mandamus
will not issue to enforce a right which is in substantial
27
dispute or to which a substantial doubt exists. It is
nonetheless likewise available to compel action, when
refused, in matters involving judgment and discretion, but
not to direct the exercise of judgment or discretion in a
particular way or the retraction or reversal of an action
28
already taken in the exercise of either.
Therefore, we must look into the alleged right of petitioner
and see if compliance with the RTC Order is compellable by

mandamus; or, in the alternative, find out if substantial

doubt exists to justify public respondents refusal to comply
with said Order. Did public respondents have sufficient legal
basis to refuse to grant petitioners request?
In this regard, we find our discussion in Laburada v. Land
29
Registration Authority instructive, to wit:
That the LRA hesitates in issuing a decree of registration is
understandable. Rather than a sign of negligence or
nonfeasance in the performance of its duty, the LRA's
reaction is reasonable, even imperative. Considering the
probable duplication of titles over the same parcel of land,
such issuance may contravene the policy and the purpose,
and thereby destroy the integrity, of the Torrens system of
registration.
xxxx
x x x Likewise, the writ of mandamus can be awarded only
when the petitioners' legal right to the performance of the
particular act which is sought to be compelled is clear and
complete. Under Rule 65 of the Rules of Court, a clear legal
right is a right which is indubitably granted by law or is
inferable as a matter of law. If the right is clear and the case
is meritorious, objections raising merely technical questions
will be disregarded. But where the right sought to be
enforced is in substantial doubt or dispute, as in this case,
30
mandamus cannot issue. (Emphasis ours.)
As can be gleaned from the above discussion, the issuance
by the LRA officials of a decree of registration is not a purely
ministerial duty in cases where they find that such would
result to the double titling of the same parcel of land. In the
same vein, we find that in this case, which involves the
issuance of transfer certificates of title, the Register of
Deeds cannot be compelled by mandamus to comply with
the RTC Order since there were existing transfer certificates
of title covering the subject parcels of land and there was
reason to question the rights of those requesting for the
issuance of the TCTs. Neither could respondent LRA
Administrator be mandated by the Court to require the
Register of Deeds to comply with said Order, for we find

merit in the explanations of respondent LRA Administrator in

his letter-reply that cites the 1st Indorsement issued by
respondent Guingona, LRA Circular No. 97-11, and Senate
Committee Report No. 1031, as reasons for his refusal to
31
grant petitioners request. There was, therefore, sufficient
basis for public respondents to refuse to comply with the
RTC Order, given the finding, contained in the cited
documents, that OCT No. 994 dated April 19, 1917, on
which petitioner and her co-plaintiffs in the civil case clearly
anchored their rights, did not exist.
It is important to emphasize at this point that in the recent
case resolved by this Court En Banc in 2007, entitled
Manotok Realty, Inc. v. CLT Realty Development
32
Corporation (the 2007 Manotok case), as well as the
33
succeeding resolution in the same case dated March 31,
2009 (the 2009 Manotok case), the controversy surrounding
the Maysilo Estate and the question of the existence of
another OCT No. 994 have been finally laid to rest. All other
cases involving said estate and OCT No. 994, such as the
case at bar, are bound by the findings and conclusions set
forth in said resolutions.
As stated earlier, petitioner anchors her claim on previous
34
cases decided by this Court which have held that there are
two existing OCT No. 994, dated differently, and the one
from which she and her co-plaintiffs (in Civil Case No. C424) derived their rights was dated earlier, hence, was the
superior title. Regrettably, petitioners claim no longer has a
leg to stand on. As we held in the 2007 Manotok case:
The determinative test to resolve whether the prior decision
of this Court should be affirmed or set aside is whether or
not the titles invoked by the respondents are valid. If these
titles are sourced from the so-called OCT No. 994 dated 17
April 1917, then such titles are void or otherwise should not
be recognized by this Court. Since the true basic factual
predicate concerning OCT No. 994 which is that there is
only one such OCT differs from that expressed in the
MWSS and Gonzaga decisions, said rulings have become
virtually functus officio except on the basis of the "law of the
case" doctrine, and can no longer be relied upon as
35
precedents.

Specifically, petitioner cannot anymore insist that OCT No.

994 allegedly issued on April 19, 1917 validly and actually
exists, given the following conclusions made by this Court in
the 2007 Manotok case:
First, there is only one OCT No. 994. As it appears on the
record, that mother title was received for transcription by the
Register of Deeds on 3 May 1917, and that should be the
date which should be reckoned as the date of registration of
the title. It may also be acknowledged, as appears on the
title, that OCT No. 994 resulted from the issuance of the
decree of registration on [19] April 1917, although such date
cannot be considered as the date of the title or the date
when the title took effect.

Appeals upon the initiative of the parties. x x x The reports

cannot conclusively supersede or overturn judicial
decisions, but if admissible they may be taken into account
as evidence on the same level as the other pieces of
evidence submitted by the parties. The fact that they were
rendered by the DOJ and the Senate should not, in itself,
persuade the courts to accept them without inquiry. The
facts and arguments presented in the reports must still
undergo judicial scrutiny and analysis, and certainly the
courts will have the discretion to accept or reject them.

Third. The decisions of this Court in MWSS v. Court of

Appeals and Gonzaga v. Court of Appeals cannot apply to
the cases at bar, especially in regard to their recognition of
an OCT No. 994 dated 19 April 1917, a title which we now
acknowledge as inexistent. Neither could the conclusions in
MWSS or Gonzaga with respect to an OCT No. 994 dated
19 April 1917 bind any other case operating under the
36
factual setting the same as or similar to that at bar.
(Emphases supplied.)1avvphi1
To be sure, this Court did not merely rely on the DOJ and
Senate reports regarding OCT No. 994. In the 2007
Manotok case, this Court constituted a Special Division of
the Court of Appeals to hear the cases on remand,
declaring as follows:
Since this Court is not a trier of fact[s], we are not prepared
to adopt the findings made by the DOJ and the Senate, or
even consider whether these are admissible as evidence,
though such questions may be considered by the Court of

The requirements under Rule 65 for the issuance of the writ

of mandamus not having been proven by petitioner to exist,
we dismiss the petition for lack of merit.
WHEREFORE, premises considered, the petition is hereby
DISMISSED.
SO ORDERED.

There are many factual questions looming over the

properties that could only be threshed out in the remand to
the Court of Appeals. x x x.
xxxx

Second. Any title that traces its source to OCT No. 994
dated [19] April 1917 is void, for such mother title is
inexistent. The fact that the Dimson and CLT titles made
specific reference to an OCT No. 994 dated [19] April 1917
casts doubt on the validity of such titles since they refer to
an inexistent OCT. x x x.

second, albeit earlier registered, OCT No. 994, does not

exist.

The Special Division is tasked to hear and receive evidence,

conclude the proceedings and submit to this Court a report
on its findings and recommended conclusions within three
37
(3) months from finality of this Resolution.
Thus, in the 2009 Manotok case, this Court evaluated the
evidence engaged in by said Special Division, and adopted
the latters conclusions as to the status of the original title
and its subsequent conveyances. This case affirmed the
earlier finding that "there is only one OCT No. 994, the
registration date of which had already been decisively
settled as 3 May 1917 and not 19 April 1917" and
categorically concluded that "OCT No. 994 which reflects
the date of 19 April 1917 as its registration date is null and
void."
In the case at bar, petitioner is the last surviving co-plaintiff
in Civil Case No. C-424 originally filed on May 3, 1965. The
records bear several attempts of different individuals to
represent her as counsel, a matter that could be attributed
to her advanced age and potential access to a vast sum of
money, should she get a favorable decision from this case.
It appears, however, that the partition and accounting of a
portion of the Maysilo Estate that she and her co-plaintiffs
prayed for can no longer prosper because of the conclusive
findings quoted above that the very basis of their claim, a

G.R. No. 83609 October 26, 1989

DIRECTOR OF LANDS, petitioner,
vs.
COURT OF APPEALS, IBARRA BISNAR and AMELIA
BISNAR, respondents.
Ibarra L. Bisnar for himself and for and in behalf of coprivate respondent Amelia Bisnar.
GRIO-AQUINO, J.:
Petitioner Director of Lands, through the Solicitor General,
seeks a review of the decision dated May 27, 1988, of the
Court of Appeals in CA-G.R. CV No. 66426, entitled "Ibarra
Bisnar, et al. vs. Director of Lands," affirming in toto the
decision of the Court of First Instance of Capiz, granting the
private respondents' application for confirmation and
registration of their title to two (2) parcels of land in LRC
Cad. Rec. 1256.
In their joint application for registration of title to two (2)
parcels of land filed on July 20,1976, the applicants Ibarra
and Amelia Bisnar claimed to be the owners in fee simple of
Lots 866 and 870 of the Pilar Cadastre Plan AP-06-000869,
respectively containing an area of 28 hectares (284,424 sq.
m.) and 34 hectares (345,385 sq. m.) situated in barrio Gen.
Hizon, Municipality of President Roxas, Province of Capiz
(p. 14, Rollo). The applicants alleged that they inherited
those parcels of land (p. 41, Rollo) and they had been
paying the taxes thereon (p. 40, Rollo).
On December 16,1976, the Director of Lands and the
Director of the Bureau of Forest Development, opposed the
application on the grounds that:
1. Neither the applicants nor their predecessors-ininterest possess sufficient title to acquire
ownership in fee simple of the land or lots applied
for, the same not having been acquired by any of
the various types of title issued by the Spanish
Government, such as, (1) 'titulo real' or royal grant,
(2) the 'concession especial' or special grant, (3)
the 'composicion con el estado titulo' or adjustment
title, (4) the 'titulo de compra 'or title by purchase,
and (5) the 'informacion possessoria' or

possessory information under the Royal Decree of

13 February 1894, or any other recognized mode
of acquisition of title over realty under pertinent
applicable laws.
2. Neither the applicants nor their predecessors-ininterest have been in open, continuous, exclusive
and notorious possession and occupation of the
land in question for at least thirty (30) years
immediately preceding the filing of the application.
3. The properties in question are a portion of the
public domain belonging to the Republic of the
Philippines, not subject to private appropriation,
(pp. 17-19, Record on Appeal). (pp. 14-15, Rollo.)
On February 24,1977, the applicants filed an amended
application, which was approved on March 14, 1977, and
included the following allegation:
Should the Land Registration Act invoked be not
applicable to the case, they hereby apply for the
benefits of Chapter 8, Commonwealth Act 141, as
amended, as they and their predecessors-ininterest have been in possession of the land as
owners for more than fifty (50) years. (p. 16, Rollo.)
After hearing, the trial court ordered the registration of the
title of the lots in the names of the applicants, herein private
respondents. It found that applicants and their
predecessors- in-interest have been in open, public,
continuous, peaceful and adverse possession of the subject
parcels of land under bona fide claims of ownership for
more than eighty (80) years (not only 30) prior to the filing of
the application for registration, introduced improvements on
the lands by planting coconuts, bamboos and other plants,
and converted a part of the land into productive fishponds
(p. 68, Rollo).
On appeal, the Appellate Court affirmed the trial court's
decision. It held that the classification of the lots as
timberland by the Director of Forestry cannot prevail in the
absence of proof that the said lots are indeed more valuable

as forest land than as agricultural land, citing as authority

the case of Ankron vs. Government of the Philippine Islands
(40 Phil. 10). In this petition, the government alleges that:
1. the classification or reclassification of public
lands into alienable or disposable agricultural land,
mineral land or forest land is a prerogative of the
Executive Department of the government and not
of the courts;
2. that possession of forest lands, no matter how
long, cannot ripen into private ownership; and
3. that an applicant for registration of title has the
burden of proving that he meets the requirements
of Section 48 of Com. Act No. 141, as amended.
(p. 19, Rollo.)
The principal issue in this appeal is whether the lots in
question may be registered under Section 48 (b) of CA 141,
as amended.
The petition is impressed with merit.
In the case of Bureau of Forestry vs. Court of Appeals, 153
SCRA 351, we ruled:
As provided for under Section 6 of Commonwealth
Act 141, which was lifted from Act 2874, the
classification or reclassification of public lands into
alienable or disposable, mineral or forest lands is
now a prerogative of the Executive Department of
the government and not the courts. With these
rules, there should be no more room for doubt that
it is not the court which determines the
classification of lands of the public domain into
agricultural, forest or mineral but the Executive
Branch of the government, through the Office of
the President. Hence, it was grave error and/or
abuse of discretion for respondent court to ignore
the uncontroverted facts that (1) the disputed area
is within a timberland block, and (2) as certified to
by the then Director of Forestry, the area is needed

for forest purposes. (pp. 21-22, Rollo.)

It bears emphasizing that a positive act of the government is
needed to declassify land which is classified as forest and to
convert it into alienable or disposable land for agricultural or
other purposes (Republic vs. Animas, 56 SCRA 499).
Unless and until the land classified as forest is released in
an official proclamation to that effect so that it may form part
of the disposable agricultural lands of the public domain, the
rules on confirmation of imperfect title do not apply
(Amunategui vs. Director of Forestry, 126 SCRA 69;
Director of Lands vs. Court of Appeals, 129 SCRA 689;
Director of Lands vs. Court of Appeals, 133 SCRA 701;
Republic vs. Court of Appeals, 148 SCRA 480; Vallarta vs.
Intermediate Appellate Court, 151 SCRA 679).
Thus, possession of forest lands, however long, cannot
ripen into private ownership (Vano vs. Government, 41 Phil.
161 [1920]; Adorable vs. Director of Forestry, 107 Phil. 401
[1960]). A parcel of forest land is within the exclusive
jurisdiction of the Bureau of Forestry and beyond the power
and jurisdiction of the cadastral court to register under the
Torrens System (Republic vs. Court of Appeals, 89 SCRA
648; Republic vs. Vera, 120 SCRA 210 [1983]; Director of
Lands vs. Court of Appeals, 129 SCRA 689 [1984]).
Section 48 (b) of Commonwealth Act No. 141, as amended,
applies exclusively to public agricultural land. Forest lands
or areas covered with forests are excluded (p. 26, Rollo).
We reiterate our ruling in Amunategui that:
In confirmation of imperfect title cases, the
applicant shoulders the burden of proving that he
meets the requirements of Section 48,
Commonwealth Act No. 141, as amended by
Republic Act 1942. He must overcome the
presumption that the land he is applying for is part
of the public domain but that he has an interest
therein sufficient to warrant registration in his name
because of an imperfect title such as those derived
from old Spanish grants or that he has had
continuous, open and notorious possession and
occupation of agricultural lands of the public

domain under a bona fide claim of acquisition of

ownership for at least thirty (30) years preceding
the filing of his application. (Heirs of Amunategui
vs. Director of Forestry, 126 SCRA 69.)
WHEREFORE, the appealed decision is reversed and set
aside. The application for registration in LRC Cad. Rec.
1256 of the former Court of First Instance, is hereby
dismissed without costs.
SO ORDERED.

G.R. No. 155450

August 6, 2008
REPUBLIC OF THE PHILIPPINES represented by the
Regional Executive Director, Department of
Environment and Natural Resources, Regional Office
No. 2, petitioners,
vs.
COURT OF APPEALS, HEIRS OF ANTONIO CARAG
AND VICTORIA TURINGAN, THE REGISTER OF DEEDS
OF CAGAYAN, and the COURT OF FIRST INSTANCE OF
CAGAYAN, respondents.
DECISION
CARPIO, J.:
The Case
1

This is a petition for review of the 21 May 2001 and 25

3
September 2002 Resolutions of the Court of Appeals in
CA-G.R. SP No. 47965. The
21 May 2001 Resolution dismissed petitioner Republic of
the Philippines (petitioner) amended complaint for
reversion, annulment of decree, cancellation and
declaration of nullity of titles. The 25 September 2002
Resolution denied petitioners motion for reconsideration.
The Facts
On 2 June 1930, the then Court of First Instance of
4
Cagayan (trial court) issued Decree No. 381928 in favor of
spouses Antonio Carag and Victoria Turingan (spouses
Carag), predecessors-in-interest of private respondents
Heirs of Antonio Carag and Victoria Turingan (private
respondents), covering a parcel of land identified as Lot No.
2472, Cad. 151, containing an area of 7,047,673 square
meters (subject property), situated in Tuguegarao,
Cagayan. On 19 July 1938, pursuant to said Decree, the
Register of Deeds of Cagayan issued Original Certificate of
5
Title No. 11585 (OCT No. 11585) in the name of spouses
Carag.
On 2 July 1952, OCT No. 11585 was cancelled to discharge
the encumbrance expressly stated in Decree No. 381928.

Two transfer certificates of title were issued: Transfer

6
Certificate of Title No. T-1277, issued in the name of the
Province of Cagayan, covering Lot 2472-B consisting of
100,000 square meters and Transfer Certificate of Title No.
7
T-1278, issued in the name of the private respondents,
covering Lot 2472-A consisting of 6,997,921 square meters.
On 19 May 1994, Bienvenida Taguiam Vda. De Dayag and
others filed with the Regional Office No. 2 of the Department
of Environment and Natural Resources (DENR),
Tuguegarao, Cagayan, a letter-petition requesting the
DENR to initiate the filing of an action for the annulment of
Decree No. 381928 on the ground that the trial court did not
have jurisdiction to adjudicate a portion of the subject
property which was allegedly still classified as timber land at
the time of the issuance of Decree No. 381928.
The Regional Executive Director of the DENR created an
investigating team to conduct ground verification and ocular
inspection of the subject property.

disposable on 22 February 1982."

In a Memorandum dated 9 September 1996, the Legal
Division of the Land Management Bureau recommended to
the Director of Lands that an action for the cancellation of
OCT No. 11585, as well as its derivative titles, be filed with
the proper court. The Director of Lands approved the
recommendation.
On 10 June 1998, or 68 years after the issuance of
Decree No. 381928, petitioner filed with the Court of
Appeals a complaint for annulment of judgment,
9
cancellation and declaration of nullity of titles on the ground
that in 1930 the trial court had no jurisdiction to adjudicate a
portion of the subject property, which portion consists of
2,640,000 square meters (disputed portion). The disputed
portion was allegedly still classified as timber land at the
time of issuance of Decree No. 381928 and, therefore, was
not alienable and disposable until 22 February 1982 when
the disputed portion was classified as alienable and
disposable.

The investigating team reported that:

A) The portion of Lot 2472 Cad-151 as shown in
the Plan prepared for spouses Carag, and covered
under LC Project 3-L of Tuguegarao, Cagayan,
was found to be still within the timberland area at
the time of the issuance of the Decree and O.C.T.
of the spouses Antonio Carag and Victoria
Turingan, and the same was only released as
alienable and disposable on February 22, 1982, as
certified by USEC Jose G. Solis of the NAMRIA on
27 May 1994.
B) Petitioner Bienvenida Taguiam Vda. De Dayag
and others have possessed and occupied by
themselves and thru their predecessors-in-interest
the portion of Lot 2472 Cad-151, covered by LC
Project 3-L of LC Map 2999, since time
8
immemorial.
Thus, the investigating team claimed that "a portion of Lot
2472 Cad-151" was "only released as alienable and

On 19 October 1998, private respondents filed a motion to

10
dismiss. Private respondents alleged that petitioner failed
to comply with Rule 47 of the Rules of Court because the
real ground for the complaint was mistake, not lack of
jurisdiction, and that petitioner, as a party in the original
proceedings, could have availed of the ordinary remedies of
new trial, appeal, petition for relief or other appropriate
remedies but failed to do so. Private respondents added
that petitioner did not attach to the complaint a certified true
copy of the decision sought to be annulled. Private
respondents also maintained that the complaint was barred
by the doctrines of res judicata and law of the case and by
11
Section 38 of Act No. 496. Private respondents also stated
that not all the heirs of spouses Carag were brought before
the Court of Appeals for an effective resolution of the case.
Finally, private respondents claimed that the real party in
interest was not petitioner but a certain Alfonso Bassig, who
12
had an ax to grind against private respondents.
On 3 March 1999, petitioner filed an amended complaint for
reversion, annulment of decree, cancellation and

declaration of nullity of titles.

13

The Ruling of the Court of Appeals

On 21 May 2001, the Court of Appeals dismissed the
complaint because of lack of jurisdiction over the subject
matter of the case. The Court of Appeals declared:
The rule is clear that such judgments, final orders
and resolutions in civil actions which this court may
annul are those which the "ordinary remedies of
new trial, appeal, petition for relief or other
appropriate remedies are no longer available." The
Amended Complaint contains no such allegations
which are jurisdictional neither can such
circumstances be divined from its allegations.
Furthermore, such actions for Annulment may be
based only on two (2) grounds: extrinsic fraud and
lack of jurisdiction. Neither ground is alleged in the
Amended Complaint which is for
Reversion/Annulment of Decree, Cancellation and
Declaration of Nullity of Titles. It merely alleges
that around 2,640,000 square meters of timberland
area within Lot 2472 Cad. 151, had been
erroneously included in the title of the Spouses
Antonio Carag and Victoria Turingan under Decree
No. 381928 and O.C.T. No. 11585 issued on June
2, 1930 and July 19, 1938, respectively; that
hence, such adjudication and/or Decree and Title
covering a timberland area is null and void ab initio
under the provisions of the 1935, 1973 and 1987
Constitutions.
Finally, it is clear that the issues raised in the Amended
Complaint as well as those in the Motion to dismiss are
factual in nature and should be threshed out in the proper
trial court in accordance with Section 101 of the Public Land
14
Act. (Citations omitted)
Petitioner filed a motion for reconsideration. In its 25
September 2002 Resolution, the Court of Appeals denied
the motion for reconsideration.

Hence, this petition.

allege either of the grounds of extrinsic fraud or lack of

15
jurisdiction in the complaint for annulment of decree.
The Issues

Petitioner raises the following issues:

1. Whether the allegations of the complaint clearly
stated that the ordinary remedies of new trial,
appeal, petition for relief and other appropriate
remedies are no longer available;
2. Whether the amended complaint clearly alleged
the ground of lack of jurisdiction;
3. Whether the Court of Appeals may try the
factual issues raised in the amended complaint
and in the motion to dismiss;
4. Whether the then Court of First Instance of
Cagayan had jurisdiction to adjudicate a tract of
timberland in favor of respondent spouses Antonio
Carag and Victoria Turingan;

We find otherwise. In its complaint and amended complaint,

petitioner stated:
11. In view of the fact that in 1930 or in 1938, only
the Executive Branch of the Government had the
authority and power to declassify or reclassify land
of the public domain, the Court did not,
therefore, have the power and authority to
adjudicate in favor of the spouses Antonio
Carag and Victoria Turingan the said tract of
timberland, portion of the Lot 2472 Cad-151, at
the time of the issuance of the Decree and the
Original Certificate of Title of the said spouses;
and such adjudication and/or Decree and Title
issued covering the timberland area is null and
void ab initio considering the provisions of the
1935, 1973 and 1987 Philippine constitution.
xxxx

5. Whether the fact that the Director of Lands was

a party to the original proceedings changed the
nature of the land and granted jurisdiction to the
then Court of First Instance over the land;
6. Whether the doctrine of res judicata applies in
this case; and
7. Whether Section 38 of Act No. 496 is applicable
in this case.
The Ruling of the Court
While the Court of Appeals erred in dismissing the
complaint on procedural grounds, we will still deny the
petition because the complaint for annulment of decree has
no merit.
Petitioner Complied with Rule 47 of the Rules of Court
First, the Court of Appeals ruled that petitioner failed to

15. The issuance of Decree No. 381928 and

O.C.T. No. 11585 in the name of spouses Antonio
Carag and Victoria Turingan, and all the derivative
titles thereto in the name of the Heirs and said
spouses, specifically with respect to the inclusion
thereto of timberland area, by the then Court of
First Instance (now the Regional Trial Court), and
the Register of Deeds of Cagayan is patently illegal
and erroneous for the reason that said Court
and/or the Register of Deeds of Cagayan did
not have any authority or jurisdiction to decree
or adjudicate the said timberland area of Lot
2472 Cad-151, consequently, the same are null
and void ab initio, and of no force and effect
16
whatsoever. (Emphasis supplied; citations
omitted)
Petitioner clearly alleged in the complaint and amended
complaint that it was seeking to annul Decree No. 381928
on the ground of the trial courts lack of jurisdiction over the

subject land, specifically over the disputed portion, which

petitioner maintained was classified as timber land and was
not alienable and disposable.
Second, the Court of Appeals also dismissed the complaint
on the ground of petitioners failure to allege that the
"ordinary remedies of new trial, appeal, petition for relief or
other appropriate remedies are no longer available."
17

In Ancheta v. Ancheta, we ruled:

In a case where a petition for annulment of
judgment or final order of the RTC filed under Rule
47 of the Rules of Court is grounded on lack of
jurisdiction over the person of the
defendant/respondent or over the nature or subject
of the action, the petitioner need not allege in the
petition that the ordinary remedy of new trial or
reconsideration of the final order or judgment or
appeal therefrom are no longer available through
no fault of her own. This is so because a judgment
rendered or final order issued by the RTC without
jurisdiction is null and void and may be assailed
any time either collaterally or in a direct action or
by resisting such judgment or final order in any
action or proceeding whenever it is invoked, unless
18
barred by laches.
Since petitioners complaint is grounded on lack of
jurisdiction over the subject of the action, petitioner need not
allege that the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies are no
longer available through no fault of petitioner.
Third, the Court of Appeals ruled that the issues raised in
petitioners complaint were factual in nature and should be
threshed out in the proper trial court in accordance with
19
Section 101 of the Public Land Act.
Section 6, Rule 47 of the Rules of Court provides:
SEC. 6. Procedure. - The procedure in ordinary
civil cases shall be observed. Should a trial be
necessary, the reception of evidence may be
referred to a member of the court or a judge of a

Regional Trial Court.

Therefore, the Court of Appeals may try the factual issues
raised in the complaint for the complete and proper
determination of the case.
However, instead of remanding the complaint to the Court of
Appeals for further proceedings, we shall decide the case
on the merits.
Complaint for Annulment of Decree Has No Merit
Petitioner contends that the trial court had no jurisdiction to
adjudicate to spouses Carag the disputed portion of the
subject property. Petitioner claims that the disputed portion
was still classified as timber land, and thus not alienable
and disposable, when Decree No. 381928 was issued in
1930. In effect, petitioner admits that the adjacent 4,407,673
square meters of the subject property, outside of the
disputed portion, were alienable and disposable in 1930.
Petitioner argues that in 1930 or in 1938, only the Executive
Branch of the Government, not the trial courts, had the
power to declassify or reclassify lands of the public domain.
Lack of jurisdiction, as a ground for annulment of judgment,
refers to either lack of jurisdiction over the person of the
20
defending party or over the subject matter of the claim.
Jurisdiction over the subject matter is conferred by law and
is determined by the statute in force at the time of the filing
21
of the action.
Under the Spanish regime, all Crown lands were per se
22
alienable. In Aldecoa v. Insular Government, we ruled:
From the language of the foregoing provisions of
law, it is deduced that, with the exception of those
comprised within the mineral and timber zone, all
lands owned by the State or by the sovereign
nation are public in character, and per se
alienable and, provided they are not destined to
the use of the public in general or reserved by the
Government in accordance with law, they may be
23
acquired by any private or juridical person x x x

(Emphasis supplied)
Thus, unless specifically declared as mineral or forest zone,
or reserved by the State for some public purpose in
accordance with law, all Crown lands were deemed
alienable.
In this case, petitioner has not alleged that the disputed
portion had been declared as mineral or forest zone, or
reserved for some public purpose in accordance with law,
during the Spanish regime or thereafter. The land
24
classification maps petitioner attached to the complaint
also do not show that in 1930 the disputed portion was part
of the forest zone or reserved for some public purpose. The
certification of the National Mapping and Resources
Information Authority, dated 27 May 1994, contained no
statement that the disputed portion was declared and
25
classified as timber land.
The law prevailing when Decree No. 381928 was issued in
26
1930 was Act No. 2874, which provides:
SECTION 6. The Governor-General, upon the
recommendation of the Secretary of Agriculture
and Natural Resources, shall from time to time
classify the lands of the public domain into (a) Alienable or disposable
(b) Timber and
(c) Mineral lands
and may at any time and in a like manner transfer
such lands from one class to another, for the
purposes of their government and disposition.
Petitioner has not alleged that the Governor-General had
declared the disputed portion of the subject property timber
or mineral land pursuant to Section 6 of Act No. 2874.
It is true that Section 8 of Act No. 2874 opens to disposition
only those lands which have been declared alienable or
disposable. Section 8 provides:
SECTION 8. Only those lands shall be declared
open to disposition or concession which have been

officially delimited and classified and, when

practicable, surveyed, and which have not been
reserved for public or quasi-public uses, not
appropriated by the Government, nor in any
manner become private property, nor those on
which a private right authorized and recognized
by this Act or any other valid law may be
claimed, or which, having been reserved or
appropriated, have ceased to be so. However, the
Governor-General may, for reasons of public
interest, declare lands of the public domain open to
disposition before the same have had their
boundaries established or been surveyed, or may,
for the same reasons, suspend their concession or
disposition by proclamation duly published or by
Act of the Legislature. (Emphasis supplied)
However, Section 8 provides that lands which are already
private lands, as well as lands on which a private claim may
be made under any law, are not covered by the
classification requirement in Section 8 for purposes of
disposition. This exclusion in Section 8 recognizes that
during the Spanish regime, Crown lands were per se
alienable unless falling under timber or mineral zones, or
otherwise reserved for some public purpose in accordance
with law.
Clearly, with respect to lands excluded from the
classification requirement in Section 8, trial courts had
jurisdiction to adjudicate these lands to private parties.
Petitioner has not alleged that the disputed portion had not
become private property prior to the enactment of Act No.
2874. Neither has petitioner alleged that the disputed
portion was not land on which a private right may be
claimed under any existing law at that time.
27

In Republic of the Philippines v. Court of Appeals, the

Republic sought to annul the judgment of the Court of First
Instance (CFI) of Rizal, sitting as a land registration court,
because when the application for land registration was filed
in 1927 the land was alleged to be unclassified forest land.
The Republic also alleged that the CFI of Rizal had no
jurisdiction to determine whether the land applied for was

forest or agricultural land since the authority to classify

lands was then vested in the Director of Lands as provided
28
in Act Nos. 926 and 2874. The Court ruled:
We are inclined to agree with the respondent that it
is legally doubtful if the authority of the Governor
General to declare lands as alienable and
disposable would apply to lands that have become
private property or lands that have been impressed
with a private right authorized and recognized by
Act 2874 or any valid law. By express declaration
of Section 45 (b) of Act 2874 which is quoted
above, those who 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 July 26, 1894 may file an
application with the Court of First Instance of the
province where the land is located for confirmation
of their claims and these applicants shall be
conclusively presumed to have performed all the
conditions essential to a government grant and
shall be entitled to a certificate of title. When the
land registration court issued a decision for the
issuance of a decree which was the basis of an
original certificate of title to the land, the court
had already made a determination that the land
was agricultural and that the applicant had
proven that he was in open and exclusive
possession of the subject land for the
prescribed number of years. It was the land
registration court which had the jurisdiction to
determine whether the land applied for was
agricultural, forest or timber taking into
account the proof or evidence in each
particular case. (Emphasis supplied)
As with this case, when the trial court issued the decision for
the issuance of Decree No. 381928 in 1930, the trial court
had jurisdiction to determine whether the subject property,
including the disputed portion, applied for was agricultural,
timber or mineral land. The trial court determined that the
land was agricultural and that spouses Carag proved that

they were entitled to the decree and a certificate of title. The

government, which was a party in the original proceedings
in the trial court as required by law, did not appeal the
decision of the trial court declaring the subject land as
agricultural. Since the trial court had jurisdiction over the
subject matter of the action, its decision rendered in 1930,
or 78 years ago, is now final and beyond review.
The finality of the trial courts decision is further recognized
in Section 1, Article XII of the 1935 Constitution which
provides:
SECTION 1. All agricultural, timber, and mineral
lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of
potential energy, and other natural resources of the
Philippines belong to the State, and their
disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines, or to
corporations or associations at least sixty per
centum of the capital of which is owned by such
citizens, subject to any existing right, grant,
lease, or concession at the time of the
inauguration of the Government established
under this Constitution. (Emphasis supplied)
Thus, even as the 1935 Constitution declared that all
agricultural, timber and mineral lands of the public domain
belong to the State, it recognized that these lands were
"subject to any existing right, grant, lease or
concession at the time of the inauguration of the
29
Government established under this Constitution."
When the Commonwealth Government was established
under the 1935 Constitution, spouses Carag had already an
existing right to the subject land, including the disputed
portion, pursuant to Decree No. 381928 issued in 1930 by
the trial court.
WHEREFORE, we DENY the petition. We DISMISS
petitioner Republic of the Philippines complaint for reversion,
annulment of decree, cancellation and declaration of nullity
of titles for lack of merit.
SO ORDERED.

G.R. No. 167707

October 8, 2008
THE SECRETARY OF THE DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES, THE
REGIONAL EXECUTIVE DIRECTOR, DENR-REGION VI,
REGIONAL TECHNICAL DIRECTOR FOR LANDS,
LANDS MANAGEMENT BUREAU, REGION VI
PROVINCIAL ENVIRONMENT AND NATURAL
RESOURCES OFFICER OF KALIBO, AKLAN, REGISTER
OF DEEDS, DIRECTOR OF LAND REGISTRATION
AUTHORITY, DEPARTMENT OF TOURISM SECRETARY,
DIRECTOR OF PHILIPPINE TOURISM AUTHORITY,
petitioners,
vs.
MAYOR JOSE S. YAP, LIBERTAD TALAPIAN, MILA Y.
SUMNDAD, and ANICETO YAP, in their behalf and in
behalf of all those similarly situated, respondents.
x-------------------------------------------------x
G.R. No. G.R. No. 173775
October 8, 2008
DR. ORLANDO SACAY and WILFREDO GELITO, joined
by THE LANDOWNERS OF BORACAY SIMILARLY
SITUATED NAMED IN A LIST, ANNEX "A" OF THIS
PETITION, petitioners,
vs.
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.
DECISION
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.
1
167707, a petition for review on certiorari of the Decision of
2
the Court of Appeals (CA) affirming that 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. 10645">[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
4
island is also home to 12,003 inhabitants who live in the
5
bone-shaped islands three barangays.
On April 14, 1976, the Department of Environment and
Natural Resources (DENR) approved the National
Reservation Survey of Boracay
6

Island, which identified several lots as being occupied or

7
claimed by named persons.
On November 10, 1978, then President Ferdinand Marcos
8
issued Proclamation No. 1801 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
9
Circular 3-82 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
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
10
paid realty taxes on them.
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
11
(PD) No. 705 or the Revised Forestry Code, 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
12
occupying for tax purposes.
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
13
respective memoranda.
14

The RTC took judicial notice that certain parcels of land in

Boracay Island, more particularly Lots 1 and 30, Plan PSU5344, 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
15
5262 filed before the RTC of Kalibo, Aklan. The titles were
issued on

as part of the forest reserve.

22

The OSG moved for reconsideration but its motion was

23
denied. 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
24
decision of the lower court.
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.

16

August 7, 1933.

RTC and CA Dispositions

On July 14, 1999, the RTC rendered a decision in favor of
respondents-claimants, with a fallo reading:

Again, the OSG sought reconsideration but it was similarly

25
denied. Hence, the present petition under Rule 45.
G.R. No. 173775

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.

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
18
not be the subject of disposition. The Circular itself
19
recognized private ownership of lands. The trial court cited
20
21
Sections 87 and 53 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

On May 22, 2006, during the pendency of G.R. No. 167707,

President Gloria Macapagal-Arroyo issued Proclamation
26
No. 1064 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
27
28
29
Sacay, Wilfredo Gelito, and other landowners in
Boracay filed with this Court an original petition for
prohibition, mandamus, and nullification of Proclamation No.
30
1064. 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
31
internationally renowned first class resorts on their lots.

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
32
Act. 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 petitionersclaimants 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
33
Island.
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
34
to their occupied lands in Boracay Island.
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?

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.

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?

Private claimants rely on three (3) laws and executive acts

in their bid for judicial confirmation of imperfect title, namely:
36
(a) Philippine Bill of 1902 in relation to Act No. 926, later
amended and/or superseded by Act No. 2874 and CA No.
37
38
141; (b) Proclamation No. 1801 issued by then President
39
Marcos; and (c) Proclamation No. 1064 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.

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
35
BORACAY? (Underscoring supplied)
In capsule, the main issue is whether private claimants
(respondents-claimants in G.R. No. 167707 and petitionersclaimants in G.R. No. 173775) have a right to secure titles
over their occupied portions in Boracay. The twin petitions

Our Ruling
Regalian Doctrine and power of the executive to
reclassify lands of the public domain

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
40
into agricultural, forest or timber. 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
41
as may be provided by law, giving the government great
42
leeway for classification. Then the 1987 Constitution
reverted to the 1935 Constitution classification with one
43
addition: national parks. Of these, only agricultural lands
44
may be alienated. 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
45
the conservation of such patrimony. The doctrine has
been consistently adopted under the 1935, 1973, and 1987
46
Constitutions.

All lands not otherwise appearing to be clearly within private

47
ownership are presumed to belong to the State. Thus, all
lands that have not been acquired from the government,
either by purchase or by grant, belong to the State as part of
48
the inalienable public domain. 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
49
would be ordinary acts of ownership.
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
50
Philippines passed to the Spanish Crown. 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
51
public domain."
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
52
as well as possessory claims.
53

The Royal Decree of 1894 or the Maura Law 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
54
conditions which were set forth in said decree. Under
Section 393 of the Maura Law, an informacion posesoria or
55
possessory information title, 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
56
possession which must be actual, public, and adverse,
57
from the date of its inscription. However, possessory
information title had to be perfected one year after the
promulgation of the Maura Law, or until April 17, 1895.
58
Otherwise, the lands would revert to the State.

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
59
information title. >
The first law governing the disposition of public lands in the
Philippines under American rule was embodied in the
60
Philippine Bill of 1902. 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
61
or forest lands. The act provided for, among others, the
disposal of mineral lands by means of absolute grant
62
(freehold system) and by lease (leasehold system). It also
provided the definition by exclusion of "agricultural public
63
lands." Interpreting the meaning of "agricultural lands"
under the Philippine Bill of 1902, the Court declared in Mapa
64
v. Insular Government:
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
65
or mineral lands. x x x (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.
66
This is known as the Torrens system.
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
67
lands of the public domain. 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

68
confirmation of imperfect title.

under the Torrens system as well as unregistered lands,

79
including chattel mortgages.

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,
69
or since July 26, 1894, was required.

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
80
as an official proclamation, declassifying inalienable public
land into disposable land for agricultural or other
81
purposes. In fact, Section 8 of CA No. 141 limits alienable
or disposable lands only to those lands which have been
82
"officially delimited and classified."

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
70
the public domain other than timber and mineral lands,
71
and privately owned lands which reverted to the State.
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
72
(RA) No. 1942, which provided for a simple thirty-year
prescriptive period for judicial confirmation of imperfect title.
73
The provision was last amended by PD No. 1073, which
now provides for possession and occupation of the land
74
applied for since June 12, 1945, or earlier.
75

The issuance of PD No. 892 on February 16, 1976

discontinued the use of Spanish titles as evidence in land
76
registration proceedings. 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,
77
the recording of all unregistered lands 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
78
registration of property. It governs registration of lands

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
83
disposable. To overcome this presumption,
incontrovertible evidence must be established that the land
subject of the application (or claim) is alienable or
84
disposable. 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
85
investigators; and a legislative act or a statute. 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
86
disposable.
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 well-nigh 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.

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.
88
Government of the Philippine Islands (1919) and De
89
Aldecoa v. The Insular Government (1909). 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
90
contrary is shown."
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
91
of the evidence. This was the Courts ruling in Heirs of the
Late Spouses Pedro S. Palanca and Soterranea Rafols Vda.
92
De Palanca v. Republic, 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
93
preponderance of the evidence.
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
94
agricultural lands until the contrary is shown."
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 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,
95
supra) (Emphasis ours)
Since 1919, courts were no longer free to determine the
classification of lands from the facts of each case, except
96
those that have already became private lands. 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
96public lands into alienable or disposable, mineral or forest.
a
Since then, courts no longer had the authority, whether
express or implied, to determine the classification of lands of
97
the public domain.
Here, private claimants, unlike the Heirs of Ciriaco Tirol who
98
were issued their title in 1933, 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.
99

We note that the RTC decision in G.R. No. 167707

100
mentioned Krivenko v. Register of Deeds of Manila, 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
101
102
Government,
De Aldecoa v. The Insular Government,
103
and Ankron v. Government of the Philippine Islands.
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
104
alien, Krivenko was prohibited by the 1935 Constitution
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
105
Aldecoa. 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
106
requisite period of ten (10) years under Act No. 926 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

107

Collado v. Court of Appeals. Collado, citing the separate

opinion of now Chief Justice Reynato S. Puno in Cruz v.
107-a
Secretary of Environment and Natural Resources,
ruled:
"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
108
disposable. (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
109
DENR and the National Mapping and Resource
110
Information Authority 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
111
multi-million peso beach resorts on the island; 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
112
Constitution 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
113
underbrushes. The discussion in Heirs of Amunategui v.
114
Director of Forestry 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
115
imperfect title do not apply. (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
116
a legal status, a classification for legal purposes. 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. 3117
82 to "private lands" and "areas declared as alienable
118
and disposable" 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:
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.

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.
120
141 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
121
alienable or disposable, timber and mineral lands.
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
122
have no authority to do so. Absent such classification, the
land remains unclassified until released and rendered open
123
to disposition.
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 15-meter
buffer zone on each side of the center line of roads and
trails, which are reserved for right of way and which shall
form part of the area reserved for forest land 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
124
Soterranea Rafols v. Republic, 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
125
released and rendered open to disposition.
(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
126
agree with the opinion of the Department of Justice 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
Forestry Code, which have not been previously
determined, or classified, as needed for forest
purposes in accordance with the provisions of the
127
Revised Forestry Code.

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
128
alienable and disposable land of the public domain.

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.

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.

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.

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
129
the wording of the law itself. Where the land is not
alienable and disposable, possession of the land, no matter
130
how long, cannot confer ownership or possessory rights.
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 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.

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
131
132
title, such as by homestead or sales patent, 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
133
land laws. There is one such bill 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.

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.

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.
134
Munoz:
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 destruction to property
crops, livestock, houses, and highways not to
mention precious human lives. Indeed, the
foregoing observations should be written down in a
135
lumbermans decalogue.
WHEREFORE, judgment is rendered as follows:
1. The petition for certiorari in G.R. No. 167707 is
GRANTED and the Court of Appeals Decision in CA-G.R.
CV No. 71118 REVERSED AND SET ASIDE.
2. The petition for certiorari in G.R. No. 173775 is
DISMISSED for lack of merit.
SO ORDERED.

G.R. No. 154953

June 26, 2008
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
T.A.N. PROPERTIES, INC., respondent.
DECISION
CARPIO, J.:
The Case
1

Before the Court is a petition for review assailing the 21

2
August 2002 Decision of the Court of Appeals in CA-G.R.
CV No. 66658. The Court of Appeals affirmed in toto the 16
3
December 1999 Decision of the Regional Trial Court of
Tanauan, Batangas, Branch 6 (trial court) in Land
Registration Case No. T-635.
The Antecedent Facts
This case originated from an Application for Original
Registration of Title filed by T.A.N. Properties, Inc. covering
Lot 10705-B of the subdivision plan Csd-04-019741 which is
a portion of the consolidated Lot 10705, Cad-424, Sto.
Tomas Cadastre. The land, with an area of 564,007 square
meters, or 56.4007 hectares, is located at San Bartolome,
Sto. Tomas, Batangas.
On 31 August 1999, the trial court set the case for initial
hearing at 9:30 a.m. on 11 November 1999. The Notice of
Initial Hearing was published in the Official Gazette, 20
September 1999 issue, Volume 95, No. 38, pages 6793 to
4
6794, and in the 18 October 1999 issue of Peoples Journal
5
Taliba, a newspaper of general circulation in the
Philippines. The Notice of Initial Hearing was also posted in
a conspicuous place on the bulletin board of the Municipal
Building of Sto. Tomas, Batangas, as well as in a
6
conspicuous place on the land. All adjoining owners and all
government agencies and offices concerned were notified of
7
the initial hearing.
On 11 November 1999, when the trial court called the case
for initial hearing, there was no oppositor other than the
Opposition dated 7 October 1999 of the Republic of the
Philippines represented by the Director of Lands (petitioner).

On 15 November 1999, the trial court issued an Order of

General Default against the whole world except as against
petitioner.
During the hearing on 19 November 1999, Ceferino
Carandang (Carandang) appeared as oppositor. The trial
court gave Carandang until 29 November 1999 within which
9
to file his written opposition. Carandang failed to file his
written opposition and to appear in the succeeding hearings.
10
In an Order dated 13 December 1999, the trial court
reinstated the Order of General Default.
During the hearings conducted on 13 and 14 December
1999, respondent presented three witnesses: Anthony
Dimayuga Torres (Torres), respondents Operations
Manager and its authorized representative in the case;
Primitivo Evangelista (Evangelista), a 72-year old resident
of San Bartolome, Sto. Tomas, Batangas since birth; and
Regalado Marquez, Records Officer II of the Land
Registration Authority (LRA), Quezon City.

years or more. The trial court ruled that the facts showed
that respondents predecessors-in-interest possessed the
land in the concept of an owner prior to 12 June 1945,
which possession converted the land to private property.
The dispositive portion of the trial courts Decision reads:
WHEREFORE, and upon previous confirmation of
the Order of General Default, the Court hereby
adjudicates and decrees Lot 10705-B, identical to
Lot 13637, Cad-424, Sto. Tomas Cadastre, on plan
Csd-04-019741, situated in Barangay of San
Bartolome, Municipality of Sto. Tomas, Province of
Batangas, with an area of 564,007 square meters,
in favor of and in the name of T.A.N. Properties,
Inc., a domestic corporation duly organized and
existing under Philippine laws with principal office
th
at 19 Floor, PDCP Bank Building, 8737 Paseo de
Roxas, Makati City.
Once this Decision shall have become final, let the
corresponding decree of registration be issued.

The testimonies of respondents witnesses showed that

Prospero Dimayuga (Kabesang Puroy) had peaceful,
adverse, open, and continuous possession of the land in the
concept of an owner since 1942. Upon his death, Kabesang
Puroy was succeeded by his son Antonio Dimayuga
(Antonio). On 27 September 1960, Antonio executed a
Deed of Donation covering the land in favor of one of his
children, Fortunato Dimayuga (Fortunato). Later, however,
Antonio gave Fortunato another piece of land. Hence, on 26
April 1961, Antonio executed a Partial Revocation of
Donation, and the land was adjudicated to one of Antonios
11
children, Prospero Dimayuga (Porting). On 8 August 1997,
Porting sold the land to respondent.

Petitioner appealed from the trial courts Decision. Petitioner

alleged that the trial court erred in granting the application
for registration absent clear evidence that the applicant and
its predecessors-in-interest have complied with the period of
possession and occupation as required by law. Petitioner
alleged that the testimonies of Evangelista and Torres are
general in nature. Considering the area involved, petitioner
argued that additional witnesses should have been
presented to corroborate Evangelistas testimony.

The Ruling of the Trial Court

The Ruling of the Court of Appeals

In its 16 December 1999 Decision, the trial court

adjudicated the land in favor of respondent.

In its 21 August 2002 Decision, the Court of Appeals

affirmed in toto the trial courts Decision.

The trial court ruled that a juridical person or a corporation

could apply for registration of land provided such entity and
its predecessors-in-interest have possessed the land for 30

The Court of Appeals ruled that Evangelistas knowledge of

the possession and occupation of the land stemmed not
only from the fact that he worked there for three years but

SO ORDERED.

12

also because he and Kabesang Puroy were practically

neighbors. On Evangelistas failure to mention the name of
his uncle who continuously worked on the land, the Court of
Appeals ruled that Evangelista should not be faulted as he
was not asked to name his uncle when he testified. The
Court of Appeals also ruled that at the outset, Evangelista
disclaimed knowledge of Fortunatos relation to Kabesang
Puroy, but this did not affect Evangelistas statement that
Fortunato took over the possession and cultivation of the
land after Kabesang Puroys death. The Court of Appeals
further ruled that the events regarding the acquisition and
disposition of the land became public knowledge because
San Bartolome was a small community. On the matter of
additional witnesses, the Court of Appeals ruled that
petitioner failed to cite any law requiring the corroboration of
the sole witness testimony.

1. Whether the land is alienable and disposable;

The Court of Appeals further ruled that Torres was a

competent witness since he was only testifying on the fact
that he had caused the filing of the application for
registration and that respondent acquired the land from
Porting.

Petitioner argues that anyone who applies for registration

has the burden of overcoming the presumption that the land
forms part of the public domain. Petitioner insists that
respondent failed to prove that the land is no longer part of
the public domain.

Petitioner comes to this Court assailing the Court of

Appeals Decision. Petitioner raises the following grounds in
its Memorandum:

The well-entrenched rule is that all lands not appearing to

be clearly of private dominion presumably belong to the
14
State. The onus to overturn, by incontrovertible evidence,
the presumption that the land subject of an application for
registration is alienable and disposable rests with the
15
applicant.

The Court of Appeals erred on a question of law in allowing

the grant of title to applicant corporation despite the
following:
1. Absence of showing that it or its predecessorsin-interest had open, continuous, exclusive, and
notorious possession and occupation in the
concept of an owner since 12 June 1945 or earlier;
and
2. Disqualification of applicant corporation to
13
acquire the subject tract of land.
The Issues
The issues may be summarized as follows:

2. Whether respondent or its predecessors-in-interest had

open, continuous, exclusive, and notorious possession and
occupation of the land in the concept of an owner since
June 1945 or earlier; and
3. Whether respondent is qualified to apply for registration
of the land under the Public Land Act.
The Ruling of this Court
The petition has merit.
Respondent Failed to Prove
that the Land is Alienable and Disposable

In this case, respondent submitted two certifications issued

by the Department of Environment and Natural Resources
(DENR). The 3 June 1997 Certification by the Community
Environment and Natural Resources Offices (CENRO),
16
Batangas City, certified that "lot 10705, Cad-424, Sto.
Tomas Cadastre situated at Barangay San Bartolome, Sto.
Tomas, Batangas with an area of 596,116 square meters
falls within the ALIENABLE AND DISPOSABLE ZONE
under Project No. 30, Land Classification Map No. 582
17
certified [on] 31 December 1925." The second certification
in the form of a memorandum to the trial court, which was
issued by the Regional Technical Director, Forest
Management Services of the DENR (FMS-DENR), stated

"that the subject area falls within an alienable and

disposable land, Project No. 30 of Sto. Tomas, Batangas
certified on Dec. 31, 1925 per LC No. 582."
The certifications are not sufficient. DENR Administrative
18
Order (DAO) No. 20, dated 30 May 1988, delineated the
functions and authorities of the offices within the DENR.
Under DAO No. 20, series of 1988, the CENRO issues
certificates of land classification status for areas below 50
hectares. The Provincial Environment and Natural
Resources Offices (PENRO) issues certificate of land
classification status for lands covering over 50 hectares.
19
DAO No. 38, dated 19 April 1990, amended DAO No. 20,
series of 1988. DAO No. 38, series of 1990 retained the
authority of the CENRO to issue certificates of land
classification status for areas below 50 hectares, as well as
the authority of the PENRO to issue certificates of land
20
classification status for lands covering over 50 hectares. In
this case, respondent applied for registration of Lot 10705B. The area covered by Lot 10705-B is over 50 hectares
(564,007 square meters). The CENRO certificate covered
the entire Lot 10705 with an area of 596,116 square meters
which, as per DAO No. 38, series of 1990, is beyond the
authority of the CENRO to certify as alienable and
disposable.
The Regional Technical Director, FMS-DENR, has no
authority under DAO Nos. 20 and 38 to issue certificates of
land classification. Under DAO No. 20, the Regional
Technical Director, FMS-DENR:
1. Issues original and renewal of ordinary minor
products (OM) permits except rattan;
2. Approves renewal of resaw/mini-sawmill
permits;
3. Approves renewal of special use permits
covering over five hectares for public infrastructure
projects; and
4. Issues renewal of certificates of registration for
logs, poles, piles, and lumber dealers.

Under DAO No. 38, the Regional Technical Director, FMSDENR:

1. Issues original and renewal of ordinary minor
[products] (OM) permits except rattan;
2. Issues renewal of certificate of registration for
logs, poles, and piles and lumber dealers;
3. Approves renewal of resaw/mini-sawmill
permits;
4. Issues public gratuitous permits for 20 to 50
cubic meters within calamity declared areas for
public infrastructure projects; and
5. Approves original and renewal of special use
permits covering over five hectares for public
infrastructure projects.
Hence, the certification issued by the Regional Technical
Director, FMS-DENR, in the form of a memorandum to the
trial court, has no probative value.
Further, it is not enough for the 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 for land
registration must present a copy of the original classification
approved by the DENR Secretary and certified as a true
copy by the legal custodian of the official records. These
facts must be established to prove that the land is alienable
and disposable. Respondent failed to do so because the
certifications presented by respondent do not, by
themselves, prove that the land is alienable and disposable.
Only Torres, respondents Operations Manager, identified
the certifications submitted by respondent. The government
officials who issued the certifications were not presented

before the trial court to testify on their contents. The trial

court should not have accepted the contents of the
certifications as proof of the facts stated therein. Even if the
certifications are presumed duly issued and admissible in
evidence, they have no probative value in establishing that
the land is alienable and disposable.
Public documents are defined under Section 19, Rule 132 of
the Revised Rules on Evidence as follows:
(a) The written official acts, or records of the official
acts of the sovereign authority, official bodies and
tribunals, and public officers, whether of the
Philippines, or of a foreign country;
(b) Documents acknowledged before a notary
public except last wills and testaments; and
(c) Public records, kept in the Philippines, of
private documents required by law to be entered
therein.
Applying Section 24 of Rule 132, the record of public
documents referred to in Section 19(a), when admissible for
any purpose, may be evidenced by an official publication
thereof or by a copy attested by the officer having legal
custody of the record, or by his deputy x x x. The
CENRO is not the official repository or legal custodian of the
issuances of the DENR Secretary declaring public lands as
alienable and disposable. The CENRO should have
21
attached an official publication of the DENR Secretarys
issuance declaring the land alienable and disposable.
Section 23, Rule 132 of the Revised Rules on Evidence
provides:
Sec. 23. Public documents as evidence.
Documents consisting of entries in public records
made in the performance of a duty by a public
officer are prima facie evidence of the facts stated
therein. All other public documents are evidence,
even against a third person, of the fact which gave
rise to their execution and of the date of the latter.

The CENRO and Regional Technical Director, FMS-DENR,

certifications do not fall within the class of public documents
contemplated in the first sentence of Section 23 of Rule
132. The certifications do not reflect "entries in public
records made in the performance of a duty by a public
22
officer," such as entries made by the Civil Registrar in the
books of registries, or by a ship captain in the ships
23
logbook. The certifications are not the certified copies or
authenticated reproductions of original official records in the
legal custody of a government office. The certifications are
24
not even records of public documents. The certifications
are conclusions unsupported by adequate proof, and thus
25
have no probative value. Certainly, the certifications
cannot be considered prima facie evidence of the facts
stated therein.
The CENRO and Regional Technical Director, FMS-DENR,
certifications do not prove that Lot 10705-B falls within the
alienable and disposable land as proclaimed by the DENR
Secretary. Such government certifications do not, by their
26
mere issuance, prove the facts stated therein. Such
government certifications may fall under the class of
documents contemplated in the second sentence of Section
23 of Rule 132. As such, the certifications are prima facie
evidence of their due execution and date of issuance but
they do not constitute prima facie evidence of the facts
stated therein.
The Court has also ruled that a document or writing
admitted as part of the testimony of a witness does not
27
constitute proof of the facts stated therein. Here, Torres, a
private individual and respondents representative, identified
the certifications but the government officials who issued the
certifications did not testify on the contents of the
certifications. As such, the certifications cannot be given
28
probative value. The contents of the certifications are
hearsay because Torres was incompetent to testify on the
29
veracity of the contents of the certifications. Torres did not
prepare the certifications, he was not an officer of CENRO
or FMS-DENR, and he did not conduct any verification
survey whether the land falls within the area classified by
the DENR Secretary as alienable and disposable.

Petitioner also points out the discrepancy as to when the

land allegedly became alienable and disposable. The DENR
Secretary certified that based on Land Classification Map
No. 582, the land became alienable and disposable on 31
December 1925. However, the certificate on the blue print
plan states that it became alienable and disposable on 31
December 1985.

whole world was a general conclusion of law rather than

factual evidence of possession of title. Petitioner alleges
that respondent failed to establish that its predecessors-ininterest had held the land openly, continuously, and
exclusively for at least 30 years after it was declared
alienable and disposable.
We agree with petitioner.

We agree with petitioner that while the certifications

submitted by respondent show that under the Land
Classification Map No. 582, the land became alienable and
disposable on 31 December 1925, the blue print plan states
that it became alienable and disposable on 31 December
1985. Respondent alleged that "the blue print plan merely
serves to prove the precise location and the metes and
bounds of the land described therein x x x and does not in
any way certify the nature and classification of the land
30
involved." It is true that the notation by a surveyorgeodetic engineer on the survey plan that the land formed
part of the alienable and disposable land of the public
31
domain is not sufficient proof of the lands classification.
However, respondent should have at least presented proof
that would explain the discrepancy in the dates of
classification. Marquez, LRA Records Officer II, testified that
the documents submitted to the court consisting of the
tracing cloth plan, the technical description of Lot 10705-B,
the approved subdivision plan, and the Geodetic Engineers
certification were faithful reproductions of the original
documents in the LRA office. He did not explain the
discrepancy in the dates. Neither was the Geodetic
Engineer presented to explain why the date of classification
on the blue print plan was different from the other
certifications submitted by respondent.
There was No Open, Continuous, Exclusive, and
Notorious
Possession and Occupation in the Concept of an Owner
Petitioner alleges that the trial courts reliance on the
testimonies of Evangelista and Torres was misplaced.
Petitioner alleges that Evangelistas statement that the
possession of respondents predecessors-in-interest was
open, public, continuous, peaceful, and adverse to the

Evangelista testified that Kabesang Puroy had been in

possession of the land before 1945. Yet, Evangelista only
worked on the land for three years. Evangelista testified that
his family owned a lot near Kabesang Puroys land. The
Court of Appeals took note of this and ruled that
Evangelistas knowledge of Kabesang Puroys possession
of the land stemmed "not only from the fact that he had
worked thereat but more so that they were practically
32
neighbors." The Court of Appeals observed:
In a small community such as that of San
Bartolome, Sto. Tomas, Batangas, it is not difficult
to understand that people in the said community
knows each and everyone. And, because of such
familiarity with each other, news or events
regarding the acquisition or disposition for that
matter, of a vast tract of land spreads like wildfire,
thus, the reason why such an event became of
33
public knowledge to them.
Evangelista testified that Kabesang Puroy was succeeded
by Fortunato. However, he admitted that he did not know
the exact relationship between Kabesang Puroy and
Fortunato, which is rather unusual for neighbors in a small
community. He did not also know the relationship between
Fortunato and Porting. In fact, Evangelistas testimony is
contrary to the factual finding of the trial court that
Kabesang Puroy was succeeded by his son Antonio, not by
Fortunato who was one of Antonios children. Antonio was
not even mentioned in Evangelistas testimony.
The Court of Appeals ruled that there is no law that requires
that the testimony of a single witness needs corroboration.
However, in this case, we find Evangelistas uncorroborated

testimony insufficient to prove that respondents

predecessors-in-interest had been in possession of the land
in the concept of an owner for more than 30 years. We
cannot consider the testimony of Torres as sufficient
corroboration. Torres testified primarily on the fact of
respondents acquisition of the land. While he claimed to be
related to the Dimayugas, his knowledge of their possession
of the land was hearsay. He did not even tell the trial court
where he obtained his information.
The tax declarations presented were only for the years
starting 1955. While tax declarations are not conclusive
evidence of ownership, they constitute proof of claim of
34
ownership. Respondent did not present any credible
explanation why the realty taxes were only paid starting
1955 considering the claim that the Dimayugas were
allegedly in possession of the land before 1945. The
payment of the realty taxes starting 1955 gives rise to the
presumption that the Dimayugas claimed ownership or
possession of the land only in that year.
Land Application by a Corporation
Petitioner asserts that respondent, a private corporation,
cannot apply for registration of the land of the public domain
in this case.
We agree with petitioner.
Section 3, Article XII of the 1987 Constitution provides:
Sec. 3. Lands of the public domain are classified
into agricultural, forest or timber, mineral lands,
and national parks. Agricultural lands of the public
domain may be further classified by law according
to the uses to which they may be devoted.
Alienable lands of the public domain shall be
limited to agricultural lands. Private corporations or
associations may not hold such alienable lands of
the public domain except by lease, for a period not
exceeding twenty-five years, renewable for not
more than twenty-five years, and not to exceed
one thousand hectares in area. Citizens of the

Philippines may lease not more than five hundred

hectares, or acquire not more than twelve hectares
thereof by purchase, homestead or grant.
Taking into account the requirements of
conservation, ecology, and development, and
subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands
of the public domain which may be acquired,
developed, held, or leased and the conditions
therefor.
The 1987 Constitution absolutely prohibits private
corporations from acquiring any kind of alienable land of the
35
public domain. In Chavez v. Public Estates Authority, the
Court traced the law on disposition of lands of the public
domain. Under the 1935 Constitution, there was no
prohibition against private corporations from acquiring
agricultural land. The 1973 Constitution limited the
alienation of lands of the public domain to individuals who
were citizens of the Philippines. Under the 1973
Constitution, private corporations, even if wholly owned by
Filipino citizens, were no longer allowed to acquire alienable
lands of the public domain. The present 1987 Constitution
continues the prohibition against private corporations from
36
acquiring any kind of alienable land of the public domain.
The Court explained in Chavez:
The 1987 Constitution continues the State policy in
the 1973 Constitution banning private corporations
from acquiring any kind of alienable land of the
public domain. Like the 1973 Constitution, the
1987 Constitution allows private corporations to
hold alienable lands of the public domain only
through lease. x x x x
[I]f the constitutional intent is to prevent huge
landholdings, the Constitution could have simply
limited the size of alienable lands of the public
domain that corporations could acquire. The
Constitution could have followed the limitations on
individuals, who could acquire not more than 24
hectares of alienable lands of the public domain

under the 1973 Constitution, and not more than 12

hectares under the 1987 Constitution.
If the constitutional intent is to encourage
economic family-size farms, placing the land in the
name of a corporation would be more effective in
preventing the break-up of farmlands. If the
farmland is registered in the name of a corporation,
upon the death of the owner, his heirs would inherit
shares in the corporation instead of subdivided
parcels of the farmland. This would prevent the
continuing break-up of farmlands into smaller and
smaller plots from one generation to the next.
In actual practice, the constitutional ban
strengthens the constitutional limitation on
individuals from acquiring more than the allowed
area of alienable lands of the public domain.
Without the constitutional ban, individuals who
already acquired the maximum area of alienable
lands of the public domain could easily set up
corporations to acquire more alienable public
lands. An individual could own as many
corporations as his means would allow him. An
individual could even hide his ownership of a
corporation by putting his nominees as
stockholders of the corporation. The corporation is
a convenient vehicle to circumvent the
constitutional limitation on acquisition by
individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987
Constitutions, is to transfer ownership of only a
limited area of alienable land of the public domain
to a qualified individual. This constitutional intent is
safeguarded by the provision prohibiting
corporations from acquiring alienable lands of the
public domain, since the vehicle to circumvent the
constitutional intent is removed. The available
alienable public lands are gradually decreasing in
the face of an ever-growing population. The most
effective way to insure faithful adherence to this
constitutional intent is to grant or sell alienable

lands of the public domain only to individuals. This,

it would seem, is the practical benefit arising from
37
the constitutional ban.
38

In Director of Lands v. IAC, the Court allowed the land

registration proceeding filed by Acme Plywood & Veneer
Co., Inc. (Acme) for five parcels of land with an area of
481,390 square meters, or 48.139 hectares, which Acme
acquired from members of the Dumagat tribe. The issue in
that case was whether the title could be confirmed in favor
of Acme when the proceeding was instituted after the
effectivity of the 1973 Constitution which prohibited private
corporations or associations from holding alienable lands of
the public domain except by lease not to exceed 1,000
hectares. The Court ruled that the land was already
private land when Acme acquired it from its owners in
1962, and thus Acme acquired a registrable title. Under the
1935 Constitution, private corporations could acquire public
agricultural lands not exceeding 1,024 hectares while
39
individuals could acquire not more than 144 hectares.
In Director of Lands, the Court further ruled that open,
exclusive, and undisputed possession of alienable land for
the period prescribed by law created the legal fiction
whereby the land, upon completion of the requisite period,
ipso jure and without the need of judicial or other sanction
ceases to be public land and becomes private property. The
Court ruled:
Nothing can more clearly demonstrate the logical
inevitability of considering possession of public
land which is of the character and duration
prescribed by statute as the equivalent of an
express grant from the State than the dictum of the
statute itself that the possessor(s) "x x x shall be
conclusively presumed to have performed all the
conditions essential to a Government grant and
shall be entitled to a certificate of title x x x." No
proof being admissible to overcome a conclusive
presumption, confirmation proceedings would, in
truth be little more than a formality, at the most
limited to ascertaining whether the possession
claimed is of the required character and length of

time; and registration thereunder would not confer

title, but simply recognize a title already vested.
The proceedings would not originally convert the
land from public to private land, but only confirm
such a conversion already effected by operation of
law from the moment the required period of
possession became complete.

above rulings, the parcels of land in question had

already been converted to private ownership
through
acquisitive
prescription
by
the
predecessors-in-interest of TCMC when the latter
purchased them in 1979. All that was needed was
the confirmation of the titles of the previous owners
or predecessors-in-interest of TCMC.

x x x [A]lienable public land held by a possessor,

personally or through his predecessors-in-interest,
openly, continuously and exclusively for the
prescribed statutory period of (30 years under The
Public Land Act, as amended) is converted to
private property by the mere lapse or completion of
said period, ipso jure. Following that rule and on
the basis of the undisputed facts, the land subject
of this appeal was already private property at
the time it was acquired from the Infiels by
Acme. Acme thereby acquired a registrable
title, there being at the time no prohibition against
said corporations holding or owning private land. x
40
x x. (Emphasis supplied)

Being already private land when TCMC bought

them in 1979, the prohibition in the 1973
Constitution
against
corporations
acquiring
alienable lands of the public domain except through
lease (Article XIV, Section 11, 1973 Constitution)
did not apply to them for they were no longer
alienable lands of the public domain but private
property.

Director of Lands is not applicable to the present case. In

Director of Lands, the "land x x x was already private
property at the time it was acquired x x x by Acme." In
this case, respondent acquired the land on 8 August 1997
from Porting, who, along with his predecessors-in-interest,
has not shown to have been, as of that date, in open,
continuous, and adverse possession of the land for 30 years
since 12 June 1945. In short, when respondent acquired the
land from Porting, the land was not yet private property.
For Director of Lands to apply and enable a corporation to file
for registration of alienable and disposable land, the
corporation must have acquired the land when its transferor
had already a vested right to a judicial confirmation of title to
the land by virtue of his open, continuous and adverse
possession of the land in the concept of an owner for at least
30 years since 12 June 1945. Thus, in Natividad v. Court of
41
Appeals, the Court declared:
Under the facts of this case and pursuant to the

What is determinative for the doctrine in Director of Lands to

apply is for the corporate applicant for land registration to
establish that when it acquired the land, the same was
already private land by operation of law because the statutory
acquisitive prescriptive period of 30 years had already
lapsed. The length of possession of the land by the
corporation cannot be tacked on to complete the statutory 30
years acquisitive prescriptive period. Only an individual can
avail of such acquisitive prescription since both the 1973 and
1987 Constitutions prohibit corporations from acquiring lands
of the public domain.
Admittedly, a corporation can at present still apply for original
registration of land under the doctrine in Director of Lands.
42
Republic Act No. 9176 (RA 9176) further amended the
43
Public Land Act and extended the period for the filing of
applications for judicial confirmation of imperfect and
incomplete titles to alienable and disposable lands of the
public domain until 31 December 2020. Thus:
Sec. 2. Section 47, Chapter VIII of the same Act, as
amended, is hereby further amended to read as
follows:
Sec. 47. The persons specified in the next following
section are hereby granted time, not to extend

beyond December 31, 2020 within which to avail of

the benefits of this Chapter: Provided, That this
period shall apply only where the area applied for
does not exceed twelve (12) hectares: Provided,
further, That the several periods of time designated
by the President in accordance with Section Fortyfive of this Act shall apply also to the lands
comprised in the provisions of this Chapter, but this
Section shall not be construed as prohibiting any of
said persons from acting under this Chapter at any
time prior to the period fixed by the President.
Sec. 3. All pending applications filed before the
effectivity of this amendatory Act shall be treated as
having been filed in accordance with the provisions
of this Act.
Under RA 9176, the application for judicial confirmation is
limited only to 12 hectares, consistent with Section 3, Article
XII of the 1987 Constitution that a private individual may only
acquire not more than 12 hectares of alienable and
disposable land. Hence, respondent, as successor-ininterest of an individual owner of the land, cannot apply for
registration of land in excess of 12 hectares. Since
respondent applied for 56.4007 hectares, the application for
the excess area of 44.4007 hectares is contrary to law, and
thus void ab initio. In applying for land registration, a private
corporation cannot have any right higher than its
predecessor-in-interest from whom it derived its right. This
assumes, of course, that the corporation acquired the land,
not exceeding 12 hectares, when the land had already
become private land by operation of law. In the present case,
respondent has failed to prove that any portion of the land
was already private land when respondent acquired it from
Porting in 1997.
WHEREFORE, we SET ASIDE the 21 August 2002 Decision
of the Court of Appeals in CA-G.R. CV No. 66658 and the 16
December 1999 Decision of the Regional Trial Court of
Tanauan, Batangas, Branch 6 in Land Registration Case No.
T-635. We DENY the application for registration filed by
T.A.N. Properties, Inc.
SO ORDERED.

DECISION
For this Court's resolution is a petition for review on
certiorari dated January 14, 2011 filed by petitioner Central
Mindanao University (CMU), seeking to reverse and set
aside the Decision' dated December 30, 2010 of the Court
of Appeals (CA), which annulled the Decision dated
December
3
22, 1971, the Amended Decision dated October 7, 1972 and
the Second
4
Amended Decision dated September 12, 1974 rendered by
the then Court of
First Instance (CF!), 15th Judicial District, Branch II of
Bukidnon and annulled the Decrees No. N-154065, N154066 and N-154067 issued in favor of petitioner and the
Original Certificate of Title (OCT) No. 0-160, OCT No. 0-161
and OCT No. 0-162 registered in petitioner's name on
January 29, 1975.

G.R. No. L-28021 December 15, 1977

JULIAN SANTULAN substituted by his children named
PATROCINIO, ADORACION, ARTURO, CONSTANCIA,
and PEPITA, all surnamed SANTULAN and minor
grandchildren, JOCELYN, ROSAURO and ROBERTO, all
surnamed SANTULAN assisted by their guardian ad
litem, PATROCINIO SANTULAN petitioners-appellants,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF
AGRICULTURE AND NATURAL RESOURCES, THE
DIRECTOR OF LANDS, and ANTONIO LUSIN,
substituted by his Heirs named TEODOSIA BALANZA
(widow) and Children LEOPOLDO, ARMANDO.
ALFONSO, EMILIANO, MAGDALENA, ERLINDA and
ESTRELLA (ESTER), all surnamed LUSIN, and Heirs of
CAROLINA LUSIN-LUCERO named MANOLITO
LUCERO and MARIO LUCERO, respondents-appellees.
AQUINO, J.
This case is about the lease of a parcel of foreshore land of
the public domain with an area of about four and one-half
hectares located at Barrio Kaingin, Kawit, Cavite abutting on
Bacoor Bay and the Ankaw Creek.
It is protracted controversy that has been pending for more
than thirty years between the rival claimants Julian Santulan
plan and Antonio Lusin, who have been succeeded by their
heirs.
Santulan claimed that foreshore land was an extension of
his land, Lot No. 986 of the Kawit cadastre, with an area of
17,301 square meters, registered in his name in 1937 under
Original Certificate of Title No. 6 which was issued by virtue
of a free patent. The northern boundary of Lot No. 986 is
Bacoor (Manila) Bay (Exh. A). The said foreshore land was
allegedly formed by soil deposits accumulated by the
alluvial action of the sea.

application, F.L.A. No. V 562, to lease for five years for

agricultural purposes an area of 36,120 square meters of
the said foreshore land (Exh. F).
On that same date, December 29, 1942, Santulan, pursuant
to Act No. 3077 and Lands Administrative Order No. 8-3,
filed with the Bureau of Lands an application for a revocable
permit to occupy the said land. He indicated therein that he
would use the land for 11 capiz beds and oyster beds, the
planting of bakawan and pagatpat and later to be developed
into a fishpond" (Exh. G).
Seven years later, or on December 22, 1949, Santulan filed
with the Bureau of Fisheries an application for an ordinary
fishpond permit or lease of the said foreshore land (Special
Use Permit, pp. A. No. 5114, Exh. H).
At the instance of the Director of Fisheries, the Director of
Forestry investigated the condition of the said foreshore
land. The latter in his first indorsement dated June 19, 1950
found that it was swampy "and not an improved fishpond as
alleged by Antonio Lusin" and that it is within the disposable
areas for agricultural purposes under the jurisdiction of the
Bureau of Lands (Exh. L-1).
The chief of the division of commercial fisheries sent a letter
to Lusin dated April 28, 1950 apprising him that he was
reported to have illegally entered the area covered by
Santulan's fishpond permit application and directing him to
refrain from introducing improvements, with the warning that
court proceedings would be taken against him (Exh. J).
On January 12, 1951 an attorney, acting for the Director of
Lands wrote the following letter to Lusin advising him to
vacate the disputed land and maintain the status quo:
Mr. Antonio Lusin
Caigin, Kawit, Cavite
S i r:

On December 5, 1942 Santulan caused the said land to be

surveyed. The survey plan was approved by the Director of
Lands in 1944 (Exh. B). On December 29, 1942 Santulan,
pursuant to Lands Administrative Order No. 7-1, filed an

We have been informed that the area which is

presently controverted by and between you and
Julian Santulan, under the applications noted

above, was recently entered by you and some

companion and that you are destroying the dikes
and other improvements previously constructed
thereon by said Julian Santulan.
If this information is true, and inasmuch as you are
aware that the controversy is still pending final
adjudgment in this Office, is desired that you take
proper advice and leave the area and its existing
improvements in status quo in order to avoid
possible confusion of rights which ma delay the
final disposition of the area in question.
You are advised further that the acts imputed to
you may make you liable to prosecution and
punishment under the law; and that whatever
improvements you may make for yourself in the
premises will not legally accrue to your benefit, nor
will they serve as basis for a claim to preferential
rights. (Paragraphing supplied, Exh, J-1).
Santulan declared the said foreshore land in his name for
tax purposes. Tax Declaration No. 2923, which took effect in
1948 and which cancelled Tax Declaration No. 13816 also
in Santulan's name, shows that the land was assessed at
P460. He paid the realty taxes due on the said land for the
years 1945-46, 1948-55 and 195760 (Exh. C, D and E, el
seq.).
On the other hand, Antonio Lusin in 1942 and 1945 (he died
in 1962) filed with the Bureau of Lands applications for a
revocable-permit and lease of a foreshore land,
respectively, for the purpose of producing salt on the said
land. He claimed that he had been in the continuous and
exclusive possession of the land since 1920, when it was
still under water, and that he had used it as a site of his fish
corrals.
He allegedly converted two hectares of the said land into a
fishpond. The entire area was enclosed with mud dikes and
provided with a concrete sluice gate and another sluice gate
made of wood On the northern part of the land bordering the
bay were bamboo stakes placed at close intervals to serve

as water breakers to protect the mud dikes from being

washed away by the action of the sea. Lusin introduced the
alleged improvements from 1951 to 1953.

Lusin asked for a reinvestigation of the case. His request

was granted. The Department ordered a reinvestigation on
May 12, 1953.

The 1942 foreshore lease applications of Santulan and

Lusin gave rise to Bureau of Lands Conflict No. 8 (N). The
Director of Lands in his decision in that case dated February
1, 1951 found that the disputed land is foreshore land
covered and uncovered by the flow and ebb of the ordinary
tides that it is an extension of Santulan's Lot No. 986 and it
was formerly a part of the sea; that Santulan was the first to
enter the land and to make dikes thereon, and that Lusin
entered the land later and made dikes also (Exh. K made a
part hereof for reference as Annex A).

After receipt of the report of reinvestigation, the

Undersecretary of Agriculture and Natural Resources, by
authority of the Secretary, in his order of December 14,
1954, reaffirmed the rejection of Lusin's revocable permit
and foreshore lease applications but ordered Santulan to
reimburse to Lusin the appraised value of his improvements
(Exh. O made a part hereof for reference as Annex E).

The Director ruled that the disputed foreshore land was

subject "to reparian rights which may he invoked by
Santulan as owner of the upland in accordance with section
32 of Lands Administrative Order No. 7-1" (Exh. K). Hence
the Director rejected Lusin's application for a foreshore
lease and for a revocable permit and gave due course to
Santulan's foreshore lease application.
Lusin filed a motion for reconsideration. The Director in his
order of October 19, 1951 denied that motion. lie found that
Lusin was a possessor in bad faith: that it is not true that
Lusin had improved and possessed the said foreshore land
for twenty years, that the disputed area is covered by water,
two to three feet deep during ordinary tides and is exposed
land after the ebb of the tides, and that Lusin's alleged
possession and improvements could not nullify Santulan's
preferential right to lease the land by reason of his riparian
rights. The Director ordered Lusin to vacate the land within
sixty days from notice (Exh. L made a part hereof for
reference as Annex B).
Lusin appealed to the Acting Secretary of Agriculture and
Natural Resources who in his decision of October 13, 1952
dismissed the appeal and affirmed the Director's 1951
decision (Exh. M made a part hereof for reference as Annex
C). Lusin's motion for reconsideration was denied in the
Secretary's order of February 28, 1953 (Exh. N made a part
hereof for reference as Annex D).

Lusin appealed to the President of the Philippines after his

motion for reconsideration was denied in the
Undersecretary's order of May 19, 1955 (Exh. OO made a
part hereof for reference as Annex F).
Executive Secretary Juan C. Pajo, by authority of the
President, held in his decision of April 10, 1958 that section
32 of Lands Administrative Order No. 7-1 (promulgated by
the Secretary of Agriculture and Natural Resources on April
30, 1936 pursuant to Acts Nos. 2874 and 3038) was
"rendered obsolete" by section 67 of the Public Land Law
which took effect on December 1, 1936 (Exh. P made a part
hereof for reference as Annex G).
On the basis of the foregoing ruling and since the record is
silent as to whether or not the land in question has been
declared by the President as not necessary for the public
service and as open to disposition (Sec. 61, Public Land
Law), the Executive Secretary sustained Lusin's appeal and
reversed the orders of the Director of Lands and the
Secretary of Agriculture and Natural Resources in favor of
Santulan. Secretary Pajo decided the case in the alternative
as follows:
On the assumption that the land in question has
been declared open for disposition and is not
necessary for the public service, this Office directs
that an oral bidding for the leasing thereof to
interested parties pursuant to the provisions of
Section 67 of Commonwealth Act .No. 141 be
conducted and the contract of lease awarded to

the highest bidder whoever shall be the highest

bidder, if other than the appellant, shall be required
to pay to the appellant the appraised value of the
improvements introduced by him on the land to be
determined by that Department.
If the land in question has not been so declared,
this Office directs that a revocable permit under
Section 68 of Commonwealth Act No. 141 be Id to
the appellant requiring him to pay permit fees since
the year 1951.
Accordingly, the orders and decisions of that
Department and the Bureau of Lands are hereby
revoked.
Santulan's case was distinguished from that of Gonzalo
Monzon whose Lot No. 987 adjoins Santulan's Lot No. 986.
Executive Secretary Fred Ruiz Castro (now Chief Justice) in
his decision of May 10, 1954 upheld the preferential right of
Monzon to lease the foreshore land north of his lot, which
foreshore land is adjacent to the foreshore land now in
dispute in this case (Exh. Q made a part hereof for
reference as Annex H).
Santulan's motion for reconsideration was denied in the
letter of the Acting Executive Secretary dated August 20,
1959 (Exh. W).
On October 22, 1959 Santulan filed in the Court of First
Instance of Cavite a petition for certiorari wherein he alleged
that the Executive Secretary committed a grave abuse of
discretion in misinterpreting certain provisions of Act No.
2874, Commonwealth Act No. 141, and Lands
Administrative Order No. 7-1.
In the lower court the parties agreed that the case Involves
only a question of law. On August 18. 1961 the lower court
dismissed the petition and affirmed the Executive
Secretary's decision. Santulan appealed to the Court of
Appeals which in its resolution of July 21, 1967 elevated the
record to this Court on the ground that Santulan in his brief
raised only the legal questions of whether the Public Land

Law repealed section 32 of Lands Administrative Order No.

7 1 and whether the Executive Secretary's decision is
"legally sound and correct" (CA-G. R. No. 30708-R).

517, 65 C. J. S. 143, note 84). Strictly speaking, "riparian"

refers to rivers. A riparian owner is a person who owns land
situated on the bank of a river.

It should be emphasized that. as found by tile investigators

of the Bureau of Lands, Santulan was the prior possessor of
the foreshore land in question. lie had it surveyed in 1942.
The survey plan Psu-115357) was approved by the Director
of Lands in 1944. Santulan paid the realty taxes on that land
.
It should further be underscored that the regulations pie him
a preferential right to lease the land as a riparian owner.
Lands Administrative Order No. 7-1 dated April 30. 1936.
which was issued by the Secretary of Agriculture and
Natural Resources upon the recommendation of the
Director of Lands for the disposition of alienable lands of the
public domain, provides:

But in paragraphs 32 and 4, the term "riparian owner"

embraces not only the owners of lands on the banks of
rivers but also the littoral owners, meaning the owners of
lands bordering the shore of the sea or lake or other tidal
waters. The littoral is the coastal region including both the
land along the coast and the water near the coast or the
shore zone between the high and low watermarks.

32. Preference of the Reparian Owner The

owner of the property adjoining foreshore lands,
marshy lands or lands covered with water
bordering upon shores or banks of navigable lakes
or rivers, shall be given preference to apply for
such lands adjoining his property as may not be
needed for the public service, subject to the laws
and regulations governing lands of this nature,
provided that he applies therefor within sixty (60)
days from the date he receives a communication
from the Director of Lands advising him of his
preferential right.
Paragraph 32 quoted above is a substantial copy of
paragraph 4 of Lands Administrative Order No. 8-3 dated
April 20, 1936, which was promulgated by the Secretary of
Agriculture and Natural Resources upon the
recommendation of the Director of Lands for issuance of
temporary permits of occupation and use of agricultural
lands of the public domain.
The word "riparian" in paragraphs 32 and 4 of the
departmental regulations is used in a broad sense as
referring to any property having a water frontage (Shepard's
Point Land Co. vs. Atlantic Hotel, 44 S. E. 39, 45, 132 N. C.

Therefore, on the basis of paragraphs 32 and 4 of the said

administrative regulations, Santulan or his heirs Should be
allowed to leased or occupy the said foreshore land.
But the Executive Secretary ruled that paragraph 32 was
rendered obsolete by Commonwealth Act No. 141 or, as
held by the trial court, Lands Administrative Order No. 7-1
was repealed by the Public Land Law. Is that conclusion
correct? We hold that it is wrong.
It is true that Lands Administrative Orders Nos. 7-1 and 8-3
were issued when the 1919 Public Land Act was in force or
before the present Public Land Law took effect on
December 1, 1936. But that circumstance would not
necessarily mean that the said departmental regulations are
not good under the 1936 Public Land Law.
In rationalizing the alleged repeal of paragraph 32, the
Executive Secretary cited the following provisions of Act No.
2874, the 1919 Public Land Act (15 Public Land laws 24):
SEC. 64. The lease or sale shall be adjudicated to
the highest bidder; and if there is no bidder besides
the applicant, it shall be adjudicated to him. The
provisions of section twenty-seven of this Act shall
be applied wherever applicable. If all or part of the
lots remain unleased or unsold the Director of
Lands Shall from time to time announce in the
Offcial Gazette or otherwise the lease or sale of
those lots if necessary . (Section 27 refers to
sealed bidding).

The Executive Secretary held that the above-quoted section

64 was by the for provisions of on wealth Act No. 141 which
took effect on December 1, 1936:
SEC. 67. The lease or sale shall be made through
oral bidding-, and ajudication shall be made to the
highest bidder. However, where m 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 wherever
applicable. If all or Dart of the lots remain unleased
or unsold. the Director of Lands shall from time to
time announce in the Official Gazzate, or in any
other newspapers of general circulation, the lease
or sale of those lots, if necessary. (Section 26, like
section 27 of Act No. 2874, refers to sealed
bidding).
The Executive Secretary noted that under section 64 of Act
No. 2874 sealed bidding was the general rule of procedure
in an award of a lease of foreshore land and that the t is
entitled to equal the bid of the highest bidder. On the other
hand, under 67, oral bidding is the general rule.
Hence, the Executive Secretary assumed that, while under
section 64 of the 1919 old Public Land Act, the fact that the
applicant has a preferential right to lease foreshore land
was a crucial factor it is thus under section 67 of the 1936
Public Land Law because in oral bidding the appellant is not
entitled to equal the bid of the highest bidder.
The Executive Secretary concluded that, because the
preferential right of the applicant to lease foreshore land
was immaterial under 67 of the present Public Land Law,
paragraph 32 of Lands Administrative Order No. 7-1, which
gives such preference. had become "idle and useless".
That conclusion is wrong because it is based on the
erroneous hypothesis that section 64 of the 1919 Public
Land Act is different from section 67 of the 1936 Public
Land Law. They are not different. The truth is that section

64 was amended by Act No. 3517 which took effect on

February 4, 1919 (24 Public Laws 416). Section 64, as thus
amended, is substantially the same as section 67 of the
1936 Public Land Law.
That fact was overlooked by the Executive Secretary.
Hence, his conclusion, that paragraph 32 of Lands
Administrative Order No. 71 was repealed or rendered
obsolete by section 67 of the present Public Land Law, is
wrong because its premise is wrong.
In other words, paragraph 32 of Lands Administrative Order
No. 7-1, issued on April 30, 1936, was promulgated under
section 64 of the old Public Land Law, as amended. And
since the amended section 64 was substantially reproduced
in section 67 of the 1936 Public Land Law, it is glaringly
incorrect to say that section 67 rendered obsolete the said
paragraph 32. Paragraph 32 is still in force and is good
under the existing Public Land Law.
The foregoing discussion reveals that the Executive
Summary's rationalization of the alleged repeal of paragraph
32 of Lands Administrative Order No. 7-1 (identical to
paragraph 4 of Lands Administrative Order No. 8-3) is not
only deficient in clarity and cogency but is predicated on the
false assumption that section 64 of the 1919 Public Land
Act is different from section 67 of the present Public Land
Law. Consequently, the aforementioned decision of
Executive Secretary Juan C. Pajo under review bas to be
set aside.
This case is governed by the precedent established in the
case of Gonzalo Monzon, which, as already noted, is similar
to this cm since the foreshore land involved in the Monzon
case is adjacent to the foreshore land involved in this case.
In the Monzon case, the Office of the President, applying
the oft-cited paragraph 32 of Lands Administrative Order
No. 7-1 held that Monzon, the littoral owner of the registered
land abutting upon the foreshore land, has the preferential
right to lease the foreshore land,
The location of the lots of Santulan and Monzon and the

foreshore lands abutting thereon is shown in the following

sketch bawd on the plan, Psu-115357 (Exh. B):

Government, 10 Phil. 522, 40 Phil. 1094, 1100, 221 U.S.

623, 55 L. Ed. 884).

Manila Bay or Bacoor Bay

The reason for that preferential right is the same as the

justification for giving accretions to the riparian owner, which
Psu- 1 15358
is that accretion compensates the riparian owner for the
Forshore land
diminutions which his land suffers by reason of the
leased to
destructive force of the waters (Cortes vs. City of Manila, 10
Gonzalo Monzon Phil. 567). So, in the case of littoral lands, he who loses by
the encroachments of the sea should gain by its recession
(Banks vs. Ogden 2 Wall. 57, 67, 17 L. Ed. 818, 821).
Lot no. 987
Belonging to
That preferential right is recognized in American
Gonzalo Monzon jurisprudence where the rule is that the owner of the land
adjacent to navigable waters has certain riparian or littoral
Considering that the foreshore land abutting upon
rights of a proprietary nature not possessed by the general
Santolan's lot is in the same situation as the foreshore land
public which rights are incident to the ownership of the
abutting upon Monzon's lot, there is no reason why
banks or the uplands: riparian as respects the waters of a
Santulan should not enjoy, with respect to the disputed
river and littoral as to sea waters or the waters of a lake (65
foreshore land, the rights given to Monzon over the
C.J. S. 143-145).
foreshore land adjacent to his lot.
It may be mentioned that the Director of Lands stated in his
Now, then, is there any justification for giving to the littoral
manifestation of October 26, 1977 that Lands Administrative
owner the preferential right to lease the foreshore land
Orders Nos. 7-1 and 8-3 are still in force and have not been
abutting on his land?
superseded by any later regulations and that the directive of
the President of the Philippines to the Director of Lands
That rule in paragraph 32 is in consonance with article 4 of
dated May 24, 1966, stopping the grant of foreshore leases
the Spanish Law of Waters of 1866 which provides that,
all along Manila Bay, towards Cavite and Bataan, has not
while lands added to the shores by accretions and alluvial
rendered the instant case moot and academic "because the
deposits caused by the action of the sea form part of the
foreshore lease application involved is pending award."
public domain, such lands, "when they are no longer
washed by the waters of the sea and are not necessary for
In view of the foregoing considerations, the trial court's
purposes of public utility, or for the establishment of special
decision and the decision of the Executive Secretary dated
industries, or for the coast guard service", shall be declared
April 10, 1958 are reversed and set aside and the order of
by the Government "to be the property of the owner of the
the Undersecretary of Agriculture and Natural Resources
estates adjacent thereto and as increment thereof" (cited in
dated December 14, 1954 and the orders of the Director of
Ignacio vs. Director of Lands, 108 Phil. 335, 338).
Lands dated February I and October 19, 1951 are affirmed.
Disputed Area
Psu-1 15357
Foreshore land
claimed by
Julian Santulan
and
Antonio Lusin
Lot No. 986
Belonging to
Julian Santulan

In other words, article 4 recognizes the preferential right of

the littoral owner (riparian according to paragraph 32) to the
foreshore land formed by accretions or alluvial deposits due
to the action of the sea (Ker & Co. vs. Cauden 6 Phil. 732,
736, 223 U.S. 268, 56 L. Ed. 432, 435; Jover vs. Insular

The lease application of Julian Santulan mentioned in the

order of February 1, 1951 should be recorded in the names
of his heirs and the obligation to make reimbursement
mentioned in the dispositive part of the Undersecretary's
order should now devolve upon the heirs of Santolan. The

reimbursement should be made to the heirs of the late

Antonio Lusin The obligation to vacate the disputed land, as
required in the Director's order of October 19, 1951
devolves upon the heirs of Lusin Costs in both instances
against respondent heirs of Lusin (As amended by
Resolution of February 17, 1977.
SO ORDERED.

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

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
HON. COURT OF APPEALS and ISABEL LASTIMADO,
respondents.
Eduardo G. Makalintal for private respondent.
MELENCIO-HERRERA, J.:
This is a Petition for Review (Appeal) by certiorari filed by
the Republic of the Philippines from the Decision of the
Court of Appeals promulgated on September 30, 1974 in
CA-G.R. No. Sp-01504 denying the State's Petition for
certiorari and Mandamus.
Briefly, the facts of the case are as follows:
Private respondent, Isabel Lastimado, filed on September
11, 1967, in the Court of First Instance of Bataan, Branch I,
a Petition for the reopening of cadastral proceedings over a
portion of Lot No. 626 of the Mariveles Cadastre, consisting
of 971.0569 hectares, pursuant to Republic Act No. 931, as
amended by Republic Act No. 2061, docketed as Cad. Case
No. 19, LRC Cad. Rec. No. 1097. In the absence of any
opposition, whether from the Government or from private
individuals, private respondent was allowed to present her
evidence ex-parte. On October 14, 1967, the trial Court
rendered a Decision granting the Petition and adjudicating
the land in favor of private respondent. The trial Court
issued an order for the issuance of a decree of registration
on November 20, 1967, and on November 21, 1967, the
Land Registration Commission issued Decree No. N117573 in favor of private respondent. Eventually, Original
Certificate of Title No. N-144 was also issued in her favor.
Private respondent thereafter subdivided the land into ten
lots, and the corresponding titles. Transfer Certificates of
Title Nos. 18905 to 18914 inclusive, were issued by the
Register of Deeds.
On June 3, 1968, or within one year from the entry of the
decree of registration, petitioner filed a Petition for Review
pursuant to Sec. 38, Act No. 496, on the ground of fraud
alleging that during the period of alleged adverse

possession by private respondent, said parcel of land was

part of the U.S. Military Reservation in Bataan. which was
formally turned over to the Republic of the Philippines only
on December 22, 1965, and that the same is inside the
public forest of Mariveles, Bataan and, therefore, not subject
to disposition or acquisition under the Public Land Law.
Respondent field an Opposition thereto, which was
considered by the trial Court, as a Motion to Dismiss, and
on December 20,1968, said Court (Judge Tito V. Tizon,
presiding) issued an Order dismissing the Petition for
Review mainly on the ground that the Solicitor General had
failed to file opposition to the original Petition for reopening
of the cadastral proceedings and was, therefore, estopped
from questioning the decree of registration ordered issued
therein. On January 28, 1969, petitioner moved for
reconsideration, which was denied by the trial Court in its
Order dated May 20, 1969, for lack of merit.
Petitioner seasonably filed a Notice of Appeal and a Record
on Appeal, which was objected to by private respondent. On
July 15, 1972, or three years later, * the trial Court (Judge
Abraham P. Vera, presiding) refused to give due course to
the appeal. Petitioner filed a Motion for Reconsideration but
the trial Court denied it in its Order of October 14, 1972 on
the ground that the proper remedy of petitioner was a
certiorari petition, not an ordinary appeal, and that the Order
sought to be appealed from had long become final and
executory as petitioner's Motion for Reconsideration was
pro-forma and did not suspend the running of the
reglementary period of appeal.
On November 9, 1972, petitioner filed a Petition for certiorari
and mandamus with the Court of Appeals claiming that the
trial Court gravely abused its discretion, amounting to lack
of jurisdiction when, without the benefit of hearing, it
summarily dismissed the Petition for Review; and since said
Petition raised certain issues of fact which cannot be
decided except in a trial on the merits, the dismissal of the
Petition on the basis of private respondent's Opposition,
considered as a Motion to Dismiss, constituted a denial of
due process of law. Petitioner then prayed that the Order of
the trial Court, dated December 20, 1968 dismissing the
Petition for Review, be declared null and void, and that said

trial Court be directed to give due course to the Petition for

Review; or, in the alternative, to give due course to
petitioner's appeal.
On September 30, 1974, the Court of Appeals upheld the
trial Court's dismissal of the Petition for Review stating:
... We cannot find any allegation in the petition for
review which shows that private respondent had
committed fraud against petitioner. Its
representations and officials were duly notified of
private respondent's petition for reopening and
registration of title in her name. In said petition, the
technical descriptions of the portion of Lot No. 626
of the Mariveles (Bataan) Cadastre, subject-matter
of the petition were expressly stated, the
boundaries, specifically delineated. The alleged
ground that the land forms part of a forest land
exists at the time petitioner was duly notified of
said petition. Failure to file opposition is in effect,
an admission that the petition is actually not part of
a forest land. Indubitably, therefore, no justifiable
reason exists for the annulment of the Order, dated
December 20, 1968 (Annex D-Petition) of the lower
court dismissing herein petitioner's petition for
review of the decree issued in favor of private
1
respondent Lastimado.
The Court of Appeals then disposed as follows:
WHEREFORE, finding that the respondent Judge
has not committed any grave abuse of discretion
amounting to lack of jurisdiction in the issuance of
an Order, dated December 20, 1968 (Annex DPetition) dismissing herein petitioner's petition for
review, the present petition for review is hereby
denied.
The issuance of the writ of mandamus as prayed
for in the petition is no longer necessary as this
Court, in the exercise of its appellate jurisdiction
and authority to supervise orderly administration of
justice, has already resolved on the merits the
question whether or not the dismissal of the

petition for review had been done with grave abuse

2
of discretion amounting to lack of jurisdiction.
From this Decision, petitioner filed the present Petition for
Review (Appeal) by certiorari assigning the following errors
to the Court of Appeals and to the trial Court:
1. The Lower Court as well as the Court of Appeals
erred in finding that there can be possession, even
for the purpose of claiming title, of land which at
the time of possession is subject to a military
reservation.
2. The Lower Court as well as the Court of Appeals
erred in finding that such land which is subject to a
government reservation, may appropriately be the
subject of cadastral proceedings, and hence. also
of a petition to reopen cadastral proceedings.
3. The Lower Court as well as the Court of Appeals
erred in finding that a parcel of land which is part of
the public forest is susceptible of occupation and
registration in favor of private individual.
4. The Lower Court as well as the Court of Appeals
erred in not finding that the Republic of the
Philippines is not estopped from questioning the
decree of registration and the title issued pursuant
thereto in favor of respondent Lastimado over the
parcel of land in question.
5. The Lower Court erred in dismissing the petition
for review of the Republic of the Philippines.
6. The Court of Appeals erred in denying
Petitioner's petition for certiorari and mandamus.
Section 38 of the Land Registration Act (Act 496) provides:
Section 38. Decree of registration, and remedies
after entry of decree.
If the court after hearing finds that the applicant or

adverse claimant has title as stated in his

application or adverse claim and proper for
registration, a decree of confirmation and
registration shall be entered. Every decree of
registration shall bind the land, and quiet title
thereto. subject only to the exceptions stated in the
following section. It shall be conclusive upon and
against all persons, including the Insular
Government and all the branches thereof, whether
mentioned by name in the application, notice of
citation, or included in the general description "To
all whom it may concern". Such decree shall not be
opened by reason of the absence, infancy, or other
disability of any person affect thereby, nor by any
proceeding in any court for reversing judgments or
decrees; subject, however, to the right of any
person deprived of land or of any estate or interest
therein by decree of registration obtained by fraud
to file in the competent Court of First Instance a
petition for review within one year after entry of the
decree provided no innocent purchaser for value
3
has acquired an interest. ...
The essential elements for the allowance of the reopening
or review of a decree are: a) that the petitioner has a real
and dominical right; b) that he has been deprived thereof; c)
through fraud; d) that the petition is filed within one year
from the issuance of the decree; and e) that the property
4
has not as yet been transferred to an innocent purchaser.
However, for fraud to justify the review of a decree, it must
be extrinsic or collateral and the facts upon which it is based
have not been controverted or resolved in the case where
5
the judgment sought to be annulled was rendered. The
following ruling spells out the difference between extrinsic
and intrinsic fraud:
Extrinsic or collateral fraud, as distinguished from
intrinsic fraud, connotes any fraudulent scheme
executed by a prevailing litigant "outside the trial of
a case against the defeated party, or his agents,
attorneys or witnesses, whereby said defeated
party is prevented from presenting fully and fairly

his side of the case." But intrinsic fraud takes the

form of "acts of a party in a litigation during the trial
such as the use of forged instruments or perjured
testimony, which did not affect the present action
of the case, but did prevent a fair and just
6
determination of the case.
The fraud is one that affects and goes into the jurisdiction of
7
the Court.
In its Petition for Review filed before the trial Court,
petitioner alleged that fraud was committed by private
respondent when she misrepresented that she and her
predecessors-in-interest had been in possession of the land
publicly, peacefully, exclusively and adversely against the
whole world as owner for more than forty years when, in
fact, the subject land was in. side the former U.S. Military
Reservation, which was formally turned over to the Republic
of the Philippines only on December 22, 1965, and that she
likewise contended that her rights, as derived from the
original and primitive occupants of the land in question, are
capable of judicial confirmation under existing laws, when
the truth is, said parcel of land is within the public forest of
Mariveles, Bataan, and is not subject to disposition or
acquisition by private persons under the Public Land Law.
The trial Court ruled, and was upheld by the Court of
Appeals, that no fraud was committed by private
respondent, which deprived petitioner of its day in Court as
there was no showing that she was aware of the facts
alleged by the Government, so that she could not have
suppressed them with intent to deceive. The trial Court also
noted that petitioner had failed to file an opposition to the
reopening of the cadastral proceedings despite notices sent
not only to the Solicitor General as required by Republic Act
No. 931. but to the Bureau of Lands and the Bureau of
Forestry as well. It then concluded that "the remedy granted
by section 38 of the Land Registration Act is designed to
give relief to victims of fraud, not to those who are victims of
their own neglect, inaction or carelessness, especially when
no attempt is ever made to excuse or justify the neglect."
With the foregoing as the essential basis, the trial Court
dismissed the Petition for Review.

We find reversible error. Although there was an agreement

by the parties to submit for resolution the Opposition to the
Petition for Review, which was treated as a motion to
dismiss, the trial Court, in the exercise of sound judicial
discretion, should not have dismissed the Petition outright
but should have afforded petitioner an opportunity to
present evidence in support of the facts alleged to constitute
actual and extrinsic fraud committed by private respondent.
8
Thus, in the case of Republic vs. Sioson, et al., it was held
that "the action of the lower Court in denying the petition for
review of a decree of registration filed within one year from
entry of the d without hearing the evidence in support of the
allegation and claim that actual and extrinsic fraud upon
which the petition is predicated, is held to be in error,
because the lower Court should have afforded the petitioner
an opportunity to prove it."
If the allegation of petitioner that the land in question was
inside the military reservation at the time it was claimed is
true, then, it cannot be the object of any cadastral p nor can
9
it be the object of reopening under Republic Act No. 931.
Similarly, if the land in question, indeed forms part of the
public forest, then, possession thereof, however long,
cannot convert it into private property as it is within the
exclusive jurisdiction of the Bureau of Forestry and beyond
the power and jurisdiction of the Cadastral Court to register
10
under the Torrens System.
Even assuming that the government agencies can be
faulted for inaction and neglect (although the Solicitor
General claims that it received no notice), yet, the same
cannot operate to bar action by the State as it cannot be
11
estopped by the mistake or error of its officials or agents.
Further, we cannot lose sight of the cardinal consideration
that "the State as persona in law is the juridical entity, which
is the source of any asserted right to ownership in land"
under basic Constitutional Precepts, and that it is moreover
12
charged with the conservation of such patrimony.
WHEREFORE, the Decision of the Court of Appeals dated
September 30, 1974, dismissing the Petition for certiorari
and mandamus filed before it, as well as the Order of the
Court of First Instance of Bataan (Branch I) dated

December 20, 1968, dismissing the Petition for Review, are

hereby set aside and the records of this case hereby ed to
the latter Court for further proceedings to enable petitioner
to present evidence in support of its Petition for Review.
No pronouncement as to costs.
SO ORDERED.

G.R. No. 133250

July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,
vs.PUBLIC ESTATES AUTHORITY and AMARI
COASTAL BAY DEVELOPMENT CORPORATION,
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ
of preliminary injunction and a temporary restraining order.
The petition seeks to compel the Public Estates Authority
("PEA" for brevity) to disclose all facts on PEA's then ongoing renegotiations with Amari Coastal Bay and
Development Corporation ("AMARI" for brevity) to reclaim
portions of Manila Bay. The petition further seeks to enjoin
PEA from signing a new agreement with AMARI involving
such reclamation.
The Facts
On November 20, 1973, the government, through the
Commissioner of Public Highways, signed a contract with
the Construction and Development Corporation of the
Philippines ("CDCP" for brevity) to reclaim certain foreshore
and offshore areas of Manila Bay. The contract also
included the construction of Phases I and II of the ManilaCavite Coastal Road. CDCP obligated itself to carry out all
the works in consideration of fifty percent of the total
reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos
issued Presidential Decree No. 1084 creating PEA. PD No.
1084 tasked PEA "to reclaim land, including foreshore and
submerged areas," and "to develop, improve, acquire, x x x
1
lease and sell any and all kinds of lands." On the same
date, then President Marcos issued Presidential Decree No.
1085 transferring to PEA the "lands reclaimed in the
2
foreshore and offshore of the Manila Bay" under the
Manila-Cavite Coastal Road and Reclamation Project
(MCCRRP).
On December 29, 1981, then President Marcos issued a
memorandum directing PEA to amend its contract with
CDCP, so that "[A]ll future works in MCCRRP x x x shall be
funded and owned by PEA." Accordingly, PEA and CDCP

executed a Memorandum of Agreement dated December

29, 1981, which stated:
"(i) CDCP shall undertake all reclamation,
construction, and such other works in the
MCCRRP as may be agreed upon by the parties,
to be paid according to progress of works on a unit
price/lump sum basis for items of work to be
agreed upon, subject to price escalation, retention
and other terms and conditions provided for in
Presidential Decree No. 1594. All the financing
required for such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development
rights and hereby agrees to cede and transfer in
favor of PEA, all of the rights, title, interest and
participation of CDCP in and to all the areas of
land reclaimed by CDCP in the MCCRRP as of
December 30, 1981 which have not yet been sold,
transferred or otherwise disposed of by CDCP as
of said date, which areas consist of approximately
Ninety-Nine Thousand Four Hundred Seventy
Three (99,473) square meters in the Financial
Center Area covered by land pledge No. 5 and
approximately Three Million Three Hundred Eighty
Two Thousand Eight Hundred Eighty Eight
(3,382,888) square meters of reclaimed areas at
varying elevations above Mean Low Water Level
located outside the Financial Center Area and the
3
First Neighborhood Unit."
On January 19, 1988, then President Corazon C. Aquino
issued Special Patent No. 3517, granting and transferring to
PEA "the parcels of land so reclaimed under the ManilaCavite Coastal Road and Reclamation Project (MCCRRP)
containing a total area of one million nine hundred fifteen
thousand eight hundred ninety four (1,915,894) square
meters." Subsequently, on April 9, 1988, the Register of
Deeds of the Municipality of Paraaque issued Transfer
Certificates of Title Nos. 7309, 7311, and 7312, in the name
of PEA, covering the three reclaimed islands known as the

"Freedom Islands" located at the southern portion of the

Manila-Cavite Coastal Road, Paraaque City. The Freedom
Islands have a total land area of One Million Five Hundred
Seventy Eight Thousand Four Hundred and Forty One
(1,578,441) square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture
Agreement ("JVA" for brevity) with AMARI, a private
corporation, to develop the Freedom Islands. The JVA also
required the reclamation of an additional 250 hectares of
submerged areas surrounding these islands to complete the
configuration in the Master Development Plan of the
Southern Reclamation Project-MCCRRP. PEA and AMARI
entered into the JVA through negotiation without public
4
bidding. On April 28, 1995, the Board of Directors of PEA,
5
in its Resolution No. 1245, confirmed the JVA. On June 8,
1995, then President Fidel V. Ramos, through then
6
Executive Secretary Ruben Torres, approved the JVA.
On November 29, 1996, then Senate President Ernesto
Maceda delivered a privilege speech in the Senate and
denounced the JVA as the "grandmother of all scams." As a
result, the Senate Committee on Government Corporations
and Public Enterprises, and the Committee on
Accountability of Public Officers and Investigations,
conducted a joint investigation. The Senate Committees
reported the results of their investigation in Senate
7
Committee Report No. 560 dated September 16, 1997.
Among the conclusions of their report are: (1) the reclaimed
lands PEA seeks to transfer to AMARI under the JVA are
lands of the public domain which the government has not
classified as alienable lands and therefore PEA cannot
alienate these lands; (2) the certificates of title covering the
Freedom Islands are thus void, and (3) the JVA itself is
illegal.
On December 5, 1997, then President Fidel V. Ramos
issued Presidential Administrative Order No. 365 creating a
Legal Task Force to conduct a study on the legality of the
JVA in view of Senate Committee Report No. 560. The
members of the Legal Task Force were the Secretary of
8
9
Justice, the Chief Presidential Legal Counsel, and the
10
Government Corporate Counsel. The Legal Task Force

upheld the legality of the JVA, contrary to the conclusions

11
reached by the Senate Committees.
On April 4 and 5, 1998, the Philippine Daily Inquirer and
Today published reports that there were on-going
renegotiations between PEA and AMARI under an order
issued by then President Fidel V. Ramos. According to
these reports, PEA Director Nestor Kalaw, PEA Chairman
Arsenio Yulo and retired Navy Officer Sergio Cruz
composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court
a Petition for Prohibition with Application for the Issuance of
a Temporary Restraining Order and Preliminary Injunction
docketed as G.R. No. 132994 seeking to nullify the JVA.
The Court dismissed the petition "for unwarranted disregard
of judicial hierarchy, without prejudice to the refiling of the
12
case before the proper court."
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner"
for brevity) as a taxpayer, filed the instant Petition for
Mandamus with Prayer for the Issuance of a Writ of
Preliminary Injunction and Temporary Restraining Order.
Petitioner contends the government stands to lose billions of
pesos in the sale by PEA of the reclaimed lands to AMARI.
Petitioner prays that PEA publicly disclose the terms of any
renegotiation of the JVA, invoking Section 28, Article II, and
Section 7, Article III, of the 1987 Constitution on the right of
the people to information on matters of public concern.
Petitioner assails the sale to AMARI of lands of the public
domain as a blatant violation of Section 3, Article XII of the
1987 Constitution prohibiting the sale of alienable lands of
the public domain to private corporations. Finally, petitioner
asserts that he seeks to enjoin the loss of billions of pesos
in properties of the State that are of public dominion.
13

After several motions for extension of time, PEA and

AMARI filed their Comments on October 19, 1998 and June
25, 1998, respectively. Meanwhile, on December 28, 1998,
petitioner filed an Omnibus Motion: (a) to require PEA to
submit the terms of the renegotiated PEA-AMARI contract;
(b) for issuance of a temporary restraining order; and (c) to
set the case for hearing on oral argument. Petitioner filed a

Reiterative Motion for Issuance of a TRO dated May 26,

1999, which the Court denied in a Resolution dated June
22, 1999.
In a Resolution dated March 23, 1999, the Court gave due
course to the petition and required the parties to file their
respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended
Joint Venture Agreement ("Amended JVA," for brevity). On
May 28, 1999, the Office of the President under the
administration of then President Joseph E. Estrada
approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of
the President, petitioner now prays that on "constitutional
and statutory grounds the renegotiated contract be declared
14
null and void."
The Issues
The issues raised by petitioner, PEA
follows:

15

and AMARI

16

are as

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN

THE PETITION ARE MOOT AND ACADEMIC BECAUSE
OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR
FAILING TO OBSERVE THE PRINCIPLE GOVERNING
THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR
NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO
BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO
INFORMATION INCLUDES OFFICIAL INFORMATION ON
ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;

VI. WHETHER THE STIPULATIONS IN THE AMENDED

JOINT VENTURE AGREEMENT FOR THE TRANSFER TO
AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO
BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION;
AND
VII. WHETHER THE COURT IS THE PROPER FORUM
FOR RAISING THE ISSUE OF WHETHER THE AMENDED
JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in
the petition are moot and academic because of
subsequent events.
The petition prays that PEA publicly disclose the "terms and
conditions of the on-going negotiations for a new
agreement." The petition also prays that the Court enjoin
PEA from "privately entering into, perfecting and/or
executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and
academic because AMARI furnished petitioner on June 21,
1999 a copy of the signed Amended JVA containing the
terms and conditions agreed upon in the renegotiations.
Thus, PEA has satisfied petitioner's prayer for a public
disclosure of the renegotiations. Likewise, petitioner's prayer
to enjoin the signing of the Amended JVA is now moot
because PEA and AMARI have already signed the
Amended JVA on March 30, 1999. Moreover, the Office of
the President has approved the Amended JVA on May 28,
1999.
Petitioner counters that PEA and AMARI cannot avoid the
constitutional issue by simply fast-tracking the signing and
approval of the Amended JVA before the Court could act on
the issue. Presidential approval does not resolve the
constitutional issue or remove it from the ambit of judicial
review.
We rule that the signing of the Amended JVA by PEA and

AMARI and its approval by the President cannot operate to

moot the petition and divest the Court of its jurisdiction. PEA
and AMARI have still to implement the Amended JVA. The
prayer to enjoin the signing of the Amended JVA on
constitutional grounds necessarily includes preventing its
implementation if in the meantime PEA and AMARI have
signed one in violation of the Constitution. Petitioner's
principal basis in assailing the renegotiation of the JVA is its
violation of Section 3, Article XII of the Constitution, which
prohibits the government from alienating lands of the public
domain to private corporations. If the Amended JVA indeed
violates the Constitution, it is the duty of the Court to enjoin
its implementation, and if already implemented, to annul the
effects of such unconstitutional contract.

to acquire from PEA, a public corporation, reclaimed lands

and submerged areas for non-agricultural purposes by
purchase under PD No. 1084 (charter of PEA) and Title III
of CA No. 141. Certain undertakings by AMARI under the
Amended JVA constitute the consideration for the purchase.
Neither AMARI nor PEA can claim judicial confirmation of
their titles because the lands covered by the Amended JVA
are newly reclaimed or still to be reclaimed. Judicial
confirmation of imperfect title requires open, continuous,
exclusive and notorious occupation of agricultural lands of
the public domain for at least thirty years since June 12,
1945 or earlier. Besides, the deadline for filing applications
for judicial confirmation of imperfect title expired on
20
December 31, 1987.

The Amended JVA is not an ordinary commercial contract

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

Lastly, there is a need to resolve immediately the

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

Also, the instant petition is a case of first impression. All

previous decisions of the Court involving Section 3, Article
XII of the 1987 Constitution, or its counterpart provision in
18
the 1973 Constitution, covered agricultural lands sold to
private corporations which acquired the lands from private
parties. The transferors of the private corporations claimed
or could claim the right to judicial confirmation of their
19
imperfect titles under Title II of Commonwealth Act. 141
("CA No. 141" for brevity). In the instant case, AMARI seeks

Second issue: whether the petition merits dismissal for

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

Third issue: whether the petition merits dismissal for

non-exhaustion of administrative remedies.
PEA faults petitioner for seeking judicial intervention in
compelling PEA to disclose publicly certain information
without first asking PEA the needed information. PEA claims
petitioner's direct resort to the Court violates the principle of
exhaustion of administrative remedies. It also violates the
rule that mandamus may issue only if there is no other plain,
speedy and adequate remedy in the ordinary course of law.
23

PEA distinguishes the instant case from Taada v. Tuvera

where the Court granted the petition for mandamus even if
the petitioners there did not initially demand from the Office
of the President the publication of the presidential decrees.
PEA points out that in Taada, the Executive Department
had an affirmative statutory duty under Article 2 of the
24
25
Civil Code and Section 1 of Commonwealth Act No. 638
to publish the presidential decrees. There was, therefore, no
need for the petitioners in Taada to make an initial demand
from the Office of the President. In the instant case, PEA
claims it has no affirmative statutory duty to disclose publicly
information about its renegotiation of the JVA. Thus, PEA
asserts that the Court must apply the principle of exhaustion
of administrative remedies to the instant case in view of the
failure of petitioner here to demand initially from PEA the
needed information.
The original JVA sought to dispose to AMARI public lands
held by PEA, a government corporation. Under Section 79
26
of the Government Auditing Code, the disposition of
government lands to private parties requires public bidding.
PEA was under a positive legal duty to disclose to the
public the terms and conditions for the sale of its lands.
The law obligated PEA to make this public disclosure even
without demand from petitioner or from anyone. PEA failed
to make this public disclosure because the original JVA, like
the Amended JVA, was the result of a negotiated contract,
not of a public bidding. Considering that PEA had an
affirmative statutory duty to make the public disclosure, and
was even in breach of this legal duty, petitioner had the right
to seek direct judicial intervention.

matters of transcendental importance to the public, thus Moreover, and this alone is determinative of this issue, the
principle of exhaustion of administrative remedies does not
apply when the issue involved is a purely legal or
27
constitutional question. The principal issue in the instant
case is the capacity of AMARI to acquire lands held by PEA
in view of the constitutional ban prohibiting the alienation of
lands of the public domain to private corporations. We rule
that the principle of exhaustion of administrative remedies
does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to
bring this suit
PEA argues that petitioner has no standing to institute
mandamus proceedings to enforce his constitutional right to
information without a showing that PEA refused to perform
an affirmative duty imposed on PEA by the Constitution.
PEA also claims that petitioner has not shown that he will
suffer any concrete injury because of the signing or
implementation of the Amended JVA. Thus, there is no
actual controversy requiring the exercise of the power of
judicial review.
The petitioner has standing to bring this taxpayer's suit
because the petition seeks to compel PEA to comply with its
constitutional duties. There are two constitutional issues
involved here. First is the right of citizens to information on
matters of public concern. Second is the application of a
constitutional provision intended to insure the equitable
distribution of alienable lands of the public domain among
Filipino citizens. The thrust of the first issue is to compel
PEA to disclose publicly information on the sale of
government lands worth billions of pesos, information which
the Constitution and statutory law mandate PEA to disclose.
The thrust of the second issue is to prevent PEA from
alienating hundreds of hectares of alienable lands of the
public domain in violation of the Constitution, compelling
PEA to comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental
28
importance to the public. In Chavez v. PCGG, the Court
upheld the right of a citizen to bring a taxpayer's suit on

"Besides, petitioner emphasizes, the matter of

recovering the ill-gotten wealth of the Marcoses is
an issue of 'transcendental importance to the
public.' He asserts that ordinary taxpayers have a
right to initiate and prosecute actions questioning
the validity of acts or orders of government
agencies or instrumentalities, if the issues raised
are of 'paramount public interest,' and if they
'immediately affect the social, economic and moral
well being of the people.'
Moreover, the mere fact that he is a citizen
satisfies the requirement of personal interest, when
the proceeding involves the assertion of a public
right, such as in this case. He invokes several
decisions of this Court which have set aside the
procedural matter of locus standi, when the subject
of the case involved public interest.

Legaspi v. Civil Service Commission, while

reiterating Taada, further declared that 'when a
mandamus proceeding involves the assertion of a
public right, the requirement of personal interest is
satisfied by the mere fact that petitioner is a citizen
and, therefore, part of the general 'public' which
possesses the right.'
Further, in Albano v. Reyes, we said that while
expenditure of public funds may not have been
involved under the questioned contract for the
development, management and operation of the
Manila International Container Terminal, 'public
interest [was] definitely involved considering the
important role [of the subject contract] . . . in the
economic development of the country and the
magnitude of the financial consideration involved.'
We concluded that, as a consequence, the
disclosure provision in the Constitution would
constitute sufficient authority for upholding the
petitioner's standing.

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

Similarly, the instant petition is anchored on the right

of the people to information and access to official
records, documents and papers a right
guaranteed under Section 7, Article III of the 1987
Constitution. Petitioner, a former solicitor general, is
a Filipino citizen. Because of the satisfaction of the
two basic requisites laid down by decisional law to
sustain petitioner's legal standing, i.e. (1) the
enforcement of a public right (2) espoused by a
Filipino citizen, we rule that the petition at bar should
be allowed."
We rule that since the instant petition, brought by a citizen,
involves the enforcement of constitutional rights - to
information and to the equitable diffusion of natural resources
- matters of transcendental public importance, the petitioner
has the requisite locus standi.
Fifth issue: whether the constitutional right to
information includes official information on on-going
negotiations before a final agreement.

As explained by the Court in Valmonte v. Belmonte, Jr.

Section 7, Article III of the Constitution explains the people's
right to information on matters of public concern in this
manner:
"Sec. 7. The right of the people to information on
matters of public concern shall be recognized.
Access to official records, and to documents,
and papers pertaining to official acts,
transactions, or decisions, as well as to
government research data used as basis for policy
development, shall be afforded the citizen, subject
to such limitations as may be provided by law."
(Emphasis supplied)
The State policy of full transparency in all transactions
involving public interest reinforces the people's right to
information on matters of public concern. This State policy is
expressed in Section 28, Article II of the Constitution, thus:
"Sec. 28. Subject to reasonable conditions
prescribed by law, the State adopts and
implements a policy of full public disclosure of
all its transactions involving public interest."
(Emphasis supplied)
These twin provisions of the Constitution seek to promote
transparency in policy-making and in the operations of the
government, as well as provide the people sufficient
information to exercise effectively other constitutional rights.
These twin provisions are essential to the exercise of
freedom of expression. If the government does not disclose
its official acts, transactions and decisions to citizens,
whatever citizens say, even if expressed without any
restraint, will be speculative and amount to nothing. These
twin provisions are also essential to hold public officials "at
29
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.

30

"An essential element of these freedoms is to keep

open a continuing dialogue or process of
communication between the government and the
people. It is in the interest of the State that the
channels for free political discussion be maintained
to the end that the government may perceive and
be responsive to the people's will. Yet, this open
dialogue can be effective only to the extent that the
citizenry is informed and thus able to formulate its
will intelligently. Only when the participants in the
discussion are aware of the issues and have
access to information relating thereto can such
bear fruit."
31

PEA asserts, citing Chavez v. PCGG, that in cases of ongoing negotiations the right to information is limited to
"definite propositions of the government." PEA maintains
the right does not include access to "intra-agency or interagency recommendations or communications during the
stage when common assertions are still in the process of
being formulated or are in the 'exploratory stage'."
Also, AMARI contends that petitioner cannot invoke the right
at the pre-decisional stage or before the closing of the
transaction. To support its contention, AMARI cites the
following discussion in the 1986 Constitutional Commission:
"Mr. Suarez. And when we say 'transactions' which
should
be
distinguished
from
contracts,
agreements, or treaties or whatever, does the
Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to
the contract itself?
Mr. Ople: The 'transactions' used here, I
suppose is generic and therefore, it can cover
both steps leading to a contract and already a
consummated contract, Mr. Presiding Officer.
Mr. Suarez: This contemplates inclusion of
negotiations leading to the consummation of

the transaction.
Mr. Ople: Yes, subject only to reasonable
safeguards on the national interest.
Mr. Suarez: Thank you."

32

(Emphasis supplied)

AMARI argues there must first be a consummated contract

before petitioner can invoke the right. Requiring government
officials to reveal their deliberations at the pre-decisional
stage will degrade the quality of decision-making in
government agencies. Government officials will hesitate to
express their real sentiments during deliberations if there is
immediate public dissemination of their discussions, putting
them under all kinds of pressure before they decide.
We must first distinguish between information the law on
public bidding requires PEA to disclose publicly, and
information the constitutional right to information requires
PEA to release to the public. Before the consummation of
the contract, PEA must, on its own and without demand
from anyone, disclose to the public matters relating to the
disposition of its property. These include the size, location,
technical description and nature of the property being
disposed of, the terms and conditions of the disposition, the
parties qualified to bid, the minimum price and similar
information. PEA must prepare all these data and disclose
them to the public at the start of the disposition process,
long before the consummation of the contract, because the
Government Auditing Code requires public bidding. If PEA
fails to make this disclosure, any citizen can demand from
PEA this information at any time during the bidding process.
Information, however, on on-going evaluation or review of
bids or proposals being undertaken by the bidding or review
committee is not immediately accessible under the right to
information. While the evaluation or review is still on-going,
there are no "official acts, transactions, or decisions" on the
bids or proposals. However, once the committee makes its
official recommendation, there arises a "definite
proposition" on the part of the government. From this
moment, the public's right to information attaches, and any
citizen can access all the non-proprietary information

leading to such definite proposition. In Chavez v. PCGG,

the Court ruled as follows:

33

"Considering the intent of the framers of the

Constitution, we believe that it is incumbent upon
the PCGG and its officers, as well as other
government representatives, to disclose sufficient
public information on any proposed settlement they
have decided to take up with the ostensible owners
and holders of ill-gotten wealth. Such information,
though, must pertain to definite propositions of
the government, not necessarily to intra-agency
or inter-agency recommendations or
communications during the stage when common
assertions are still in the process of being
formulated or are in the "exploratory" stage. There
is need, of course, to observe the same restrictions
on disclosure of information in general, as
discussed earlier such as on matters involving
national security, diplomatic or foreign relations,
intelligence and other classified information."
(Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the
1986 Constitutional Commission understood that the right to
information "contemplates inclusion of negotiations
leading to the consummation of the transaction."
Certainly, a consummated contract is not a requirement for
the exercise of the right to information. Otherwise, the
people can never exercise the right if no contract is
consummated, and if one is consummated, it may be too
late for the public to expose its defects.1wphi1.nt
Requiring a consummated contract will keep the public in
the dark until the contract, which may be grossly
disadvantageous to the government or even illegal,
becomes a fait accompli. This negates the State policy of
full transparency on matters of public concern, a situation
which the framers of the Constitution could not have
intended. Such a requirement will prevent the citizenry from
participating in the public discussion of any proposed
contract, effectively truncating a basic right enshrined in the
Bill of Rights. We can allow neither an emasculation of a

constitutional right, nor a retreat by the State of its avowed

"policy of full disclosure of all its transactions involving
public interest."
The right covers three categories of information which are
"matters of public concern," namely: (1) official records; (2)
documents and papers pertaining to official acts,
transactions and decisions; and (3) government research
data used in formulating policies. The first category refers to
any document that is part of the public records in the
custody of government agencies or officials. The second
category refers to documents and papers recording,
evidencing, establishing, confirming, supporting, justifying or
explaining official acts, transactions or decisions of
government agencies or officials. The third category refers
to research data, whether raw, collated or processed,
owned by the government and used in formulating
government policies.
The information that petitioner may access on the
renegotiation of the JVA includes evaluation reports,
recommendations, legal and expert opinions, minutes of
meetings, terms of reference and other documents attached
to such reports or minutes, all relating to the JVA. However,
the right to information does not compel PEA to prepare
lists, abstracts, summaries and the like relating to the
34
renegotiation of the JVA. The right only affords access to
records, documents and papers, which means the
opportunity to inspect and copy them. One who exercises
the right must copy the records, documents and papers at
his expense. The exercise of the right is also subject to
reasonable regulations to protect the integrity of the public
records and to minimize disruption to government
operations, like rules specifying when and how to conduct
35
the inspection and copying.
The right to information, however, does not extend to
matters recognized as privileged information under the
36
separation of powers. The right does not also apply to
information on military and diplomatic secrets, information
affecting national security, and information on investigations
of crimes by law enforcement agencies before the
prosecution of the accused, which courts have long

37

recognized as confidential. The right may also be subject

to other limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by
petitioner is privileged information rooted in the separation
of powers. The information does not cover Presidential
conversations, correspondences, or discussions during
closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate
38
courts, or executive sessions of either house of Congress,
are recognized as confidential. This kind of information
cannot be pried open by a co-equal branch of government.
A frank exchange of exploratory ideas and assessments,
free from the glare of publicity and pressure by interested
parties, is essential to protect the independence of decisionmaking of those tasked to exercise Presidential, Legislative
39
and Judicial power. This is not the situation in the instant
case.
We rule, therefore, that the constitutional right to information
includes official information on on-going negotiations
before a final contract. The information, however, must
constitute definite propositions by the government and
should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar
40
matters affecting national security and public order.
Congress has also prescribed other limitations on the right
41
to information in several legislations.
Sixth issue: whether stipulations in the Amended JVA
for the transfer to AMARI of lands, reclaimed or to be
reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and
submerged areas is rooted in the Regalian doctrine which
holds that the State owns all lands and waters of the public
domain. Upon the Spanish conquest of the Philippines,
ownership of all "lands, territories and possessions" in the
42
Philippines passed to the Spanish Crown. The King, as
the sovereign ruler and representative of the people,
acquired and owned all lands and territories in the

Philippines except those he disposed of by grant or sale to

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

consequence of works constructed by the State, or

by the provinces, pueblos or private persons, with
proper permission, shall become the property of
the party constructing such works, unless
otherwise provided by the terms of the grant of
authority."
Under the Spanish Law of Waters, land reclaimed from the
sea belonged to the party undertaking the reclamation,
provided the government issued the necessary permit and
did not reserve ownership of the reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of
public dominion as follows:

classification of property of public dominion into private

property, to wit:
"Art. 341. Property of public dominion, when no
longer devoted to public use or to the defense of
the territory, shall become a part of the private
property of the State."
This provision, however, was not self-executing. The
legislature, or the executive department pursuant to law,
must declare the property no longer needed for public use
or territorial defense before the government could lease or
45
alienate the property to private parties.
Act No. 1654 of the Philippine Commission

The Spanish Law of Waters of 1866 was the first statutory

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

"Art. 339. Property of public dominion is

1. That devoted to public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, riverbanks, shores,
roadsteads, and that of a similar character;
2. That belonging exclusively to the State which,
without being of general public use, is employed in
some public service, or in the development of the
national wealth, such as walls, fortresses, and
other works for the defense of the territory, and
mines, until granted to private individuals."

The Spanish Law of Waters of 1866 and the Civil Code

of 1889

Property devoted to public use referred to property open for

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

Under the Spanish Law of Waters of 1866, the shores,

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

Property of public dominion referred not only to property

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

"Article 5. Lands reclaimed from the sea in

Article 341 of the Civil Code of 1889 governed the re-

On May 8, 1907, the Philippine Commission enacted Act

No. 1654 which regulated the lease of reclaimed and
foreshore lands. The salient provisions of this law were as
follows:
"Section 1. The control and disposition of the
foreshore as defined in existing law, and the title
to all Government or public lands made or
reclaimed by the Government by dredging or
filling or otherwise throughout the Philippine
Islands, shall be retained by the Government
without prejudice to vested rights and without
prejudice to rights conceded to the City of Manila in
the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall
cause all Government or public lands made or
reclaimed by the Government by dredging or filling
or otherwise to be divided into lots or blocks, with
the necessary streets and alleyways located
thereon, and shall cause plats and plans of such
surveys to be prepared and filed with the Bureau of
Lands.
(b) Upon completion of such plats and plans the
Governor-General shall give notice to the
public that such parts of the lands so made or

reclaimed as are not needed for public

purposes will be leased for commercial and
business purposes, x x x.

(a) Alienable or disposable,

xxx

(c) Mineral lands, x x x.

(e) The leases above provided for shall be

disposed of to the highest and best bidder
therefore, subject to such regulations and
safeguards as the Governor-General may by
executive order prescribe." (Emphasis supplied)

Sec. 7. For the purposes of the government and

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

Act No. 1654 mandated that the government should retain

title to all lands reclaimed by the government. The Act
also vested in the government control and disposition of
foreshore lands. Private parties could lease lands reclaimed
by the government only if these lands were no longer
needed for public purpose. Act No. 1654 mandated public
bidding in the lease of government reclaimed lands. Act
No. 1654 made government reclaimed lands sui generis in
that unlike other public lands which the government could
sell to private parties, these reclaimed lands were available
only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the
Spanish Law of Waters of 1866. Act No. 1654 did not
prohibit private parties from reclaiming parts of the sea
under Section 5 of the Spanish Law of Waters. Lands
reclaimed from the sea by private parties with government
permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted
46
Act No. 2874, the Public Land Act. The salient provisions
of Act No. 2874, on reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the
recommendation of the Secretary of
Agriculture and Natural Resources, shall from
time to time classify the lands of the public
domain into

(b) Timber, and

Sec. 8. Only those lands shall be declared open

to disposition or concession which have been
officially delimited or classified x x x.

and (c) of section fifty-six shall be disposed of

to private parties by lease only and not
otherwise, as soon as the Governor-General,
upon recommendation by the Secretary of
Agriculture and Natural Resources, shall
declare that the same are not necessary for the
public service and are open to disposition
under this chapter. The lands included in class
(d) may be disposed of by sale or lease under
the provisions of this Act." (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General
to "classify lands of the public domain into x x x alienable or
47
disposable" lands. Section 7 of the Act empowered the
Governor-General to "declare what lands are open to
disposition or concession." Section 8 of the Act limited
alienable or disposable lands only to those lands which
have been "officially delimited and classified."

xxx
Sec. 55. Any tract of land of the public domain
which, being neither timber nor mineral land, shall
be classified as suitable for residential purposes
or for commercial, industrial, or other
productive purposes other than agricultural
purposes, and shall be open to disposition or
concession, shall be disposed of under the
provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title
shall be classified as follows:
(a) Lands reclaimed by the
Government by dredging, filling, or
other means;
(b) Foreshore;
(c) Marshy lands or lands covered with
water bordering upon the shores or banks
of navigable lakes or rivers;
(d) Lands not included in any of the
foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b),

Section 56 of Act No. 2874 stated that lands "disposable

48
under this title shall be classified" as government
reclaimed, foreshore and marshy lands, as well as other
lands. All these lands, however, must be suitable for
residential, commercial, industrial or other productive nonagricultural purposes. These provisions vested upon the
Governor-General the power to classify inalienable lands of
the public domain into disposable lands of the public
domain. These provisions also empowered the GovernorGeneral to classify further such disposable lands of the
public domain into government reclaimed, foreshore or
marshy lands of the public domain, as well as other nonagricultural lands.
Section 58 of Act No. 2874 categorically mandated that
disposable lands of the public domain classified as
government reclaimed, foreshore and marshy lands "shall
be disposed of to private parties by lease only and not
otherwise." The Governor-General, before allowing the
lease of these lands to private parties, must formally declare
that the lands were "not necessary for the public service."
Act No. 2874 reiterated the State policy to lease and not to
sell government reclaimed, foreshore and marshy lands of
the public domain, a policy first enunciated in 1907 in Act

No. 1654. Government reclaimed, foreshore and marshy

lands remained sui generis, as the only alienable or
disposable lands of the public domain that the government
could not sell to private parties.
The rationale behind this State policy is obvious.
Government reclaimed, foreshore and marshy public lands
for non-agricultural purposes retain their inherent potential
as areas for public service. This is the reason the
government prohibited the sale, and only allowed the lease,
of these lands to private parties. The State always reserved
these lands for some future public service.
Act No. 2874 did not authorize the reclassification of
government reclaimed, foreshore and marshy lands into
other non-agricultural lands under Section 56 (d). Lands
falling under Section 56 (d) were the only lands for nonagricultural purposes the government could sell to private
parties. Thus, under Act No. 2874, the government could
not sell government reclaimed, foreshore and marshy lands
to private parties, unless the legislature passed a law
49
allowing their sale.
Act No. 2874 did not prohibit private parties from reclaiming
parts of the sea pursuant to Section 5 of the Spanish Law of
Waters of 1866. Lands reclaimed from the sea by private
parties with government permission remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its
ratification by the Filipino people. The 1935 Constitution, in
adopting the Regalian doctrine, declared in Section 1,
Article XIII, that
"Section 1. All agricultural, timber, and mineral
lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of
potential energy and other natural resources of the
Philippines belong to the State, and their
disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines or to
corporations or associations at least sixty per

centum of the capital of which is owned by such

citizens, subject to any existing right, grant, lease,
or concession at the time of the inauguration of the
Government established under this Constitution.
Natural resources, with the exception of public
agricultural land, shall not be alienated, and no
license, concession, or lease for the exploitation,
development, or utilization of any of the natural
resources shall be granted for a period exceeding
twenty-five years, renewable for another twentyfive years, except as to water rights for irrigation,
water supply, fisheries, or industrial uses other
than the development of water power, in which
cases beneficial use may be the measure and limit
of the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural
resources except public agricultural lands, which were the
only natural resources the State could alienate. Thus,
foreshore lands, considered part of the State's natural
resources, became inalienable by constitutional fiat,
available only for lease for 25 years, renewable for another
25 years. The government could alienate foreshore lands
only after these lands were reclaimed and classified as
alienable agricultural lands of the public domain.
Government reclaimed and marshy lands of the public
domain, being neither timber nor mineral lands, fell under
50
the classification of public agricultural lands. However,
government reclaimed and marshy lands, although subject
to classification as disposable public agricultural lands,
could only be leased and not sold to private parties because
of Act No. 2874.
The prohibition on private parties from acquiring ownership
of government reclaimed and marshy lands of the public
domain was only a statutory prohibition and the legislature
could therefore remove such prohibition. The 1935
Constitution did not prohibit individuals and corporations
from acquiring government reclaimed and marshy lands of
the public domain that were classified as agricultural lands
under existing public land laws. Section 2, Article XIII of the
1935 Constitution provided as follows:

"Section 2. No private corporation or

association may acquire, lease, or hold public
agricultural lands in excess of one thousand
and twenty four hectares, nor may any
individual acquire such lands by purchase in
excess of one hundred and forty hectares, or
by lease in excess of one thousand and twentyfour hectares, or by homestead in excess of
twenty-four hectares. Lands adapted to grazing,
not exceeding two thousand hectares, may be
leased to an individual, private corporation, or
association." (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the
legislature did not repeal Section 58 of Act No. 2874 to open
for sale to private parties government reclaimed and marshy
lands of the public domain. On the contrary, the legislature
continued the long established State policy of retaining for
the government title and ownership of government
reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National
Assembly
On November 7, 1936, the National Assembly approved
Commonwealth Act No. 141, also known as the Public Land
Act, which compiled the then existing laws on lands of the
public domain. CA No. 141, as amended, remains to this
day the existing general law governing the classification
and disposition of lands of the public domain other than
51
timber and mineral lands.
Section 6 of CA No. 141 empowers the President to classify
52
lands of the public domain into "alienable or disposable"
lands of the public domain, which prior to such classification
are inalienable and outside the commerce of man. Section 7
of CA No. 141 authorizes the President to "declare what
lands are open to disposition or concession." Section 8 of
CA No. 141 states that the government can declare open for
disposition or concession only lands that are "officially
delimited and classified." Sections 6, 7 and 8 of CA No. 141
read as follows:

"Sec. 6. The President, upon the

recommendation of the Secretary of
Agriculture and Commerce, shall from time to
time classify the lands of the public domain
into
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer
53
such lands from one class to another, for the
purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and
disposition of alienable or disposable public lands,
the President, upon recommendation by the
Secretary of Agriculture and Commerce, shall
from time to time declare what lands are open
to disposition or concession under this Act.
Sec. 8. Only those lands shall be declared open
to disposition or concession which have been
officially delimited and classified and, when
practicable, surveyed, and which have not been
reserved for public or quasi-public uses, nor
appropriated by the Government, nor in any
manner become private property, nor those on
which a private right authorized and recognized by
this Act or any other valid law may be claimed, or
which, having been reserved or appropriated, have
ceased to be so. x x x."
Thus, before the government could alienate or dispose of
lands of the public domain, the President must first officially
classify these lands as alienable or disposable, and then
declare them open to disposition or concession. There must
be no law reserving these lands for public or quasi-public
uses.
The salient provisions of CA No. 141, on government

reclaimed, foreshore and marshy lands of the public

domain, are as follows:
"Sec. 58. Any tract of land of the public domain
which, being neither timber nor mineral land, is
intended to be used for residential purposes or
for commercial, industrial, or other productive
purposes other than agricultural, and is open
to disposition or concession, shall be disposed
of under the provisions of this chapter and not
otherwise.
Sec. 59. The lands disposable under this title
shall be classified as follows:
(a) Lands reclaimed by the Government by
dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water
bordering upon the shores or banks of navigable
lakes or rivers;
(d) Lands not included in any of the foregoing
classes.
Sec. 60. Any tract of land comprised under this title
may be leased or sold, as the case may be, to any
person, corporation, or association authorized to
purchase or lease public lands for agricultural
purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b),
and (c) of section fifty-nine shall be disposed of
to private parties by lease only and not
otherwise, as soon as the President, upon
recommendation by the Secretary of Agriculture,
shall declare that the same are not necessary
for the public service and are open to disposition
under this chapter. The lands included in class
(d) may be disposed of by sale or lease under
the provisions of this Act." (Emphasis supplied)

Section 61 of CA No. 141 readopted, after the effectivity of

the 1935 Constitution, Section 58 of Act No. 2874
prohibiting the sale of government reclaimed, foreshore and
marshy disposable lands of the public domain. All these
lands are intended for residential, commercial, industrial or
other non-agricultural purposes. As before, Section 61
allowed only the lease of such lands to private parties. The
government could sell to private parties only lands falling
under Section 59 (d) of CA No. 141, or those lands for nonagricultural purposes not classified as government
reclaimed, foreshore and marshy disposable lands of the
public domain. Foreshore lands, however, became
inalienable under the 1935 Constitution which only allowed
the lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable
lands of the public domain intended for residential,
commercial, industrial or other productive purposes other
than agricultural "shall be disposed of under the
provisions of this chapter and not otherwise." Under
Section 10 of CA No. 141, the term "disposition" includes
lease of the land. Any disposition of government reclaimed,
foreshore and marshy disposable lands for non-agricultural
purposes must comply with Chapter IX, Title III of CA No.
54
141, unless a subsequent law amended or repealed these
provisions.
In his concurring opinion in the landmark case of Republic
55
Real Estate Corporation v. Court of Appeals, Justice
Reynato S. Puno summarized succinctly the law on this
matter, as follows:
"Foreshore lands are lands of public dominion
intended for public use. So too are lands reclaimed
by the government by dredging, filling, or other
means. Act 1654 mandated that the control and
disposition of the foreshore and lands under water
remained in the national government. Said law
allowed only the 'leasing' of reclaimed land. The
Public Land Acts of 1919 and 1936 also declared
that the foreshore and lands reclaimed by the
government were to be "disposed of to private

parties by lease only and not otherwise." Before

leasing, however, the Governor-General, upon
recommendation of the Secretary of Agriculture
and Natural Resources, had first to determine that
the land reclaimed was not necessary for the
public service. This requisite must have been met
before the land could be disposed of. But even
then, the foreshore and lands under water were
not to be alienated and sold to private parties.
The disposition of the reclaimed land was only
by lease. The land remained property of the
State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion,
"Commonwealth Act No. 141 has remained in effect at
present."
The State policy prohibiting the sale to private parties of
government reclaimed, foreshore and marshy alienable
lands of the public domain, first implemented in 1907 was
thus reaffirmed in CA No. 141 after the 1935 Constitution
took effect. The prohibition on the sale of foreshore lands,
however, became a constitutional edict under the 1935
Constitution. Foreshore lands became inalienable as natural
resources of the State, unless reclaimed by the government
and classified as agricultural lands of the public domain, in
which case they would fall under the classification of
government reclaimed lands.
After the effectivity of the 1935 Constitution, government
reclaimed and marshy disposable lands of the public
domain continued to be only leased and not sold to private
56
parties. These lands remained sui generis, as the only
alienable or disposable lands of the public domain the
government could not sell to private parties.
Since then and until now, the only way the government can
sell to private parties government reclaimed and marshy
disposable lands of the public domain is for the legislature
to pass a law authorizing such sale. CA No. 141 does not
authorize the President to reclassify government reclaimed
and marshy lands into other non-agricultural lands under
Section 59 (d). Lands classified under Section 59 (d) are the

only alienable or disposable lands for non-agricultural

purposes that the government could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires
congressional authority before lands under Section 59 that
the government previously transferred to government units
or entities could be sold to private parties. Section 60 of CA
No. 141 declares that
"Sec. 60. x x x The area so leased or sold shall be
such as shall, in the judgment of the Secretary of
Agriculture and Natural Resources, be reasonably
necessary for the purposes for which such sale or
lease is requested, and shall not exceed one
hundred and forty-four hectares: Provided,
however, That this limitation shall not apply to
grants, donations, or transfers made to a province,
municipality or branch or subdivision of the
Government for the purposes deemed by said
entities conducive to the public interest; but the
land so granted, donated, or transferred to a
province, municipality or branch or subdivision
of the Government shall not be alienated,
encumbered, or otherwise disposed of in a
manner affecting its title, except when
authorized by Congress: x x x." (Emphasis
supplied)
The congressional authority required in Section 60 of CA
No. 141 mirrors the legislative authority required in Section
56 of Act No. 2874.
One reason for the congressional authority is that Section
60 of CA No. 141 exempted government units and entities
from the maximum area of public lands that could be
acquired from the State. These government units and
entities should not just turn around and sell these lands to
private parties in violation of constitutional or statutory
limitations. Otherwise, the transfer of lands for nonagricultural purposes to government units and entities could
be used to circumvent constitutional limitations on
ownership of alienable or disposable lands of the public
domain. In the same manner, such transfers could also be

used to evade the statutory prohibition in CA No. 141 on the

sale of government reclaimed and marshy lands of the
public domain to private parties. Section 60 of CA No. 141
57
constitutes by operation of law a lien on these lands.
In case of sale or lease of disposable lands of the public
domain falling under Section 59 of CA No. 141, Sections 63
and 67 require a public bidding. Sections 63 and 67 of CA
No. 141 provide as follows:
"Sec. 63. Whenever it is decided that lands
covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the
Secretary of Agriculture and Commerce (now the
Secretary of Natural Resources) for authority to
dispose of the same. Upon receipt of such
authority, the Director of Lands shall give notice by
public advertisement in the same manner as in the
case of leases or sales of agricultural public land, x
x x.
Sec. 67. The lease or sale shall be made by oral
bidding; and adjudication shall be made to the
highest bidder. x x x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to
public auction all leases or sales of alienable or disposable
58
lands of the public domain.
Like Act No. 1654 and Act No. 2874 before it, CA No. 141
did not repeal Section 5 of the Spanish Law of Waters of
1866. Private parties could still reclaim portions of the sea
with government permission. However, the reclaimed land
could become private land only if classified as alienable
agricultural land of the public domain open to disposition
under CA No. 141. The 1935 Constitution prohibited the
alienation of all natural resources except public agricultural
lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition
of property of public dominion found in the Civil Code of

1889. Articles 420 and 422 of the Civil Code of 1950 state
that
"Art. 420. The following things are property of
public dominion:
(1) Those intended for public use, such as roads,
canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores,
roadsteads, and others of similar character;
(2) Those which belong to the State, without being
for public use, and are intended for some public
service or for the development of the national
wealth.
x x x.
Art. 422. Property of public dominion, when no
longer intended for public use or for public service,
shall form part of the patrimonial property of the
State."
Again, the government must formally declare that the
property of public dominion is no longer needed for public
use or public service, before the same could be classified as
59
patrimonial property of the State. In the case of
government reclaimed and marshy lands of the public
domain, the declaration of their being disposable, as well as
the manner of their disposition, is governed by the
applicable provisions of CA No. 141.
Like the Civil Code of 1889, the Civil Code of 1950 included
as property of public dominion those properties of the State
which, without being for public use, are intended for public
service or the "development of the national wealth."
Thus, government reclaimed and marshy lands of the State,
even if not employed for public use or public service, if
developed to enhance the national wealth, are classified as
property of public dominion.
Dispositions under the 1973 Constitution
The 1973 Constitution, which took effect on January 17,

1973, likewise adopted the Regalian doctrine. Section 8,

Article XIV of the 1973 Constitution stated that
"Sec. 8. All lands of the public domain, waters,
minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, wildlife, and
other natural resources of the Philippines belong to
the State. With the exception of agricultural,
industrial or commercial, residential, and
resettlement lands of the public domain,
natural resources shall not be alienated, and no
license, concession, or lease for the exploration,
development, exploitation, or utilization of any of
the natural resources shall be granted for a period
exceeding twenty-five years, renewable for not
more than twenty-five years, except as to water
rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water
power, in which cases, beneficial use may be the
measure and the limit of the grant." (Emphasis
supplied)
The 1973 Constitution prohibited the alienation of all natural
resources with the exception of "agricultural, industrial or
commercial, residential, and resettlement lands of the public
domain." In contrast, the 1935 Constitution barred the
alienation of all natural resources except "public agricultural
lands." However, the term "public agricultural lands" in the
1935 Constitution encompassed industrial, commercial,
60
residential and resettlement lands of the public domain. If
the land of public domain were neither timber nor mineral
land, it would fall under the classification of agricultural land
of the public domain. Both the 1935 and 1973
Constitutions, therefore, prohibited the alienation of all
natural resources except agricultural lands of the public
domain.
The 1973 Constitution, however, limited the alienation of
lands of the public domain to individuals who were citizens
of the Philippines. Private corporations, even if wholly
owned by Philippine citizens, were no longer allowed to
acquire alienable lands of the public domain unlike in the
1935 Constitution. Section 11, Article XIV of the 1973

Constitution declared that

"Sec. 11. The Batasang Pambansa, taking into
account conservation, ecological, and development
requirements of the natural resources, shall
determine by law the size of land of the public
domain which may be developed, held or acquired
by, or leased to, any qualified individual,
corporation, or association, and the conditions
therefor. No private corporation or association
may hold alienable lands of the public domain
except by lease not to exceed one thousand
hectares in area nor may any citizen hold such
lands by lease in excess of five hundred hectares
or acquire by purchase, homestead or grant, in
excess of twenty-four hectares. No private
corporation or association may hold by lease,
concession, license or permit, timber or forest
lands and other timber or forest resources in
excess of one hundred thousand hectares.
However, such area may be increased by the
Batasang Pambansa upon recommendation of the
National Economic and Development Authority."
(Emphasis supplied)
Thus, under the 1973 Constitution, private corporations
could hold alienable lands of the public domain only through
lease. Only individuals could now acquire alienable lands of
the public domain, and private corporations became
absolutely barred from acquiring any kind of alienable
land of the public domain. The constitutional ban
extended to all kinds of alienable lands of the public domain,
while the statutory ban under CA No. 141 applied only to
government reclaimed, foreshore and marshy alienable
lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

On February 4, 1977, then President Ferdinand Marcos
issued Presidential Decree No. 1084 creating PEA, a wholly
government owned and controlled corporation with a special
charter. Sections 4 and 8 of PD No. 1084, vests PEA with
the following purposes and powers:
"Sec. 4. Purpose. The Authority is hereby created
for the following purposes:
(a) To reclaim land, including foreshore and
submerged areas, by dredging, filling or other
means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal
in, subdivide, dispose, lease and sell any and all
kinds of lands, buildings, estates and other forms
of real property, owned, managed, controlled
and/or operated by the government;
(c) To provide for, operate or administer such
service as may be necessary for the efficient,
economical and beneficial utilization of the above
properties.
Sec. 5. Powers and functions of the Authority. The
Authority shall, in carrying out the purposes for
which it is created, have the following powers and
functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess
of the area permitted to private corporations by
statute.
(j) To reclaim lands and to construct work across,
or otherwise, any stream, watercourse, canal,
ditch, flume x x x.
xxx

(o) To perform such acts and exercise such

functions as may be necessary for the attainment
of the purposes and objectives herein specified."
(Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and
submerged areas of the public domain. Foreshore areas are
those covered and uncovered by the ebb and flow of the
61
tide. Submerged areas are those permanently under water
62
regardless of the ebb and flow of the tide. Foreshore and
63
submerged areas indisputably belong to the public domain
and are inalienable unless reclaimed, classified as alienable
lands open to disposition, and further declared no longer
needed for public service.
The ban in the 1973 Constitution on private corporations
from acquiring alienable lands of the public domain did not
apply to PEA since it was then, and until today, a fully
owned government corporation. The constitutional ban
applied then, as it still applies now, only to "private
corporations and associations." PD No. 1084 expressly
empowers PEA "to hold lands of the public domain"
even "in excess of the area permitted to private corporations
by statute." Thus, PEA can hold title to private lands, as
well as title to lands of the public domain.
In order for PEA to sell its reclaimed foreshore and
submerged alienable lands of the public domain, there must
be legislative authority empowering PEA to sell these lands.
This legislative authority is necessary in view of Section 60
of CA No.141, which states
"Sec. 60. x x x; but the land so granted, donated or
transferred to a province, municipality, or branch or
subdivision of the Government shall not be
alienated, encumbered or otherwise disposed of in
a manner affecting its title, except when
authorized by Congress; x x x." (Emphasis
supplied)
Without such legislative authority, PEA could not sell but
only lease its reclaimed foreshore and submerged alienable
lands of the public domain. Nevertheless, any legislative

authority granted to PEA to sell its reclaimed alienable lands

of the public domain would be subject to the constitutional
ban on private corporations from acquiring alienable lands
of the public domain. Hence, such legislative authority could
only benefit private individuals.
Dispositions under the 1987 Constitution
The 1987 Constitution, like the 1935 and 1973 Constitutions
before it, has adopted the Regalian doctrine. The 1987
Constitution declares that all natural resources are "owned
by the State," and except for alienable agricultural lands of
the public domain, natural resources cannot be alienated.
Sections 2 and 3, Article XII of the 1987 Constitution state
that
"Section 2. All lands of the public domain, waters,
minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the
exception of agricultural lands, all other natural
resources shall not be alienated. The
exploration, development, and utilization of natural
resources shall be under the full control and
supervision of the State. x x x.
Section 3. Lands of the public domain are
classified into agricultural, forest or timber, mineral
lands, and national parks. Agricultural lands of the
public domain may be further classified by law
according to the uses which they may be devoted.
Alienable lands of the public domain shall be
limited to agricultural lands. Private
corporations or associations may not hold
such alienable lands of the public domain
except by lease, for a period not exceeding
twenty-five years, renewable for not more than
twenty-five years, and not to exceed one
thousand hectares in area. Citizens of the
Philippines may lease not more than five hundred
hectares, or acquire not more than twelve hectares
thereof by purchase, homestead, or grant.

Taking into account the requirements of

conservation, ecology, and development, and
subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands
of the public domain which may be acquired,
developed, held, or leased and the conditions
therefor." (Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973
Constitution banning private corporations from acquiring
any kind of alienable land of the public domain. Like the
1973 Constitution, the 1987 Constitution allows private
corporations to hold alienable lands of the public domain
only through lease. As in the 1935 and 1973 Constitutions,
the general law governing the lease to private corporations
of reclaimed, foreshore and marshy alienable lands of the
public domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations
from acquiring, except through lease, alienable lands of the
public domain is not well understood. During the
deliberations of the 1986 Constitutional Commission, the
commissioners probed the rationale behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions
have reference to page 3, line 5 which says:
`No private corporation or association may hold
alienable lands of the public domain except by
lease, not to exceed one thousand hectares in
area.'
If we recall, this provision did not exist under the
1935 Constitution, but this was introduced in the
1973 Constitution. In effect, it prohibits private
corporations from acquiring alienable public lands.
But it has not been very clear in jurisprudence
what the reason for this is. In some of the cases
decided in 1982 and 1983, it was indicated that
the purpose of this is to prevent large
landholdings. Is that the intent of this provision?

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

FR. BERNAS: In existing decisions involving the
Iglesia ni Cristo, there were instances where the
Iglesia ni Cristo was not allowed to acquire a mere
313-square meter land where a chapel stood
because the Supreme Court said it would be in
violation of this." (Emphasis supplied)
64

In Ayog v. Cusi, the Court explained the rationale behind

this constitutional ban in this way:
"Indeed, one purpose of the constitutional
prohibition against purchases of public agricultural
lands by private corporations is to equitably diffuse
land ownership or to encourage 'ownercultivatorship and the economic family-size farm'
and to prevent a recurrence of cases like the
instant case. Huge landholdings by corporations or
private persons had spawned social unrest."
However, if the constitutional intent is to prevent huge
landholdings, the Constitution could have simply limited the
size of alienable lands of the public domain that
corporations could acquire. The Constitution could have
followed the limitations on individuals, who could acquire not
more than 24 hectares of alienable lands of the public
domain under the 1973 Constitution, and not more than 12
hectares under the 1987 Constitution.
If the constitutional intent is to encourage economic familysize farms, placing the land in the name of a corporation
would be more effective in preventing the break-up of
farmlands. If the farmland is registered in the name of a
corporation, upon the death of the owner, his heirs would
inherit shares in the corporation instead of subdivided
parcels of the farmland. This would prevent the continuing
break-up of farmlands into smaller and smaller plots from
one generation to the next.
In actual practice, the constitutional ban strengthens the
constitutional limitation on individuals from acquiring more
than the allowed area of alienable lands of the public

domain. Without the constitutional ban, individuals who

already acquired the maximum area of alienable lands of
the public domain could easily set up corporations to
acquire more alienable public lands. An individual could own
as many corporations as his means would allow him. An
individual could even hide his ownership of a corporation by
putting his nominees as stockholders of the corporation.
The corporation is a convenient vehicle to circumvent the
constitutional limitation on acquisition by individuals of
alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987
Constitutions, is to transfer ownership of only a limited area
of alienable land of the public domain to a qualified
individual. This constitutional intent is safeguarded by the
provision prohibiting corporations from acquiring alienable
lands of the public domain, since the vehicle to circumvent
the constitutional intent is removed. The available alienable
public lands are gradually decreasing in the face of an evergrowing population. The most effective way to insure faithful
adherence to this constitutional intent is to grant or sell
alienable lands of the public domain only to individuals.
This, it would seem, is the practical benefit arising from the
constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its
second Whereas clause, consists of three properties,
namely:
1. "[T]hree partially reclaimed and substantially
eroded islands along Emilio Aguinaldo Boulevard
in Paranaque and Las Pinas, Metro Manila, with a
combined titled area of 1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters
contiguous to the three islands;" and
3. "[A]t AMARI's option as approved by PEA, an
additional 350 hectares more or less to regularize
65
the configuration of the reclaimed area."
PEA confirms that the Amended JVA involves "the

development of the Freedom Islands and further

reclamation of about 250 hectares x x x," plus an option
"granted to AMARI to subsequently reclaim another 350
66
hectares x x x."
In short, the Amended JVA covers a reclamation area of
750 hectares. Only 157.84 hectares of the 750-hectare
reclamation project have been reclaimed, and the rest
of the 592.15 hectares are still submerged areas
forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the
sum of P1,894,129,200.00 for PEA's "actual cost" in partially
reclaiming the Freedom Islands. AMARI will also complete,
at its own expense, the reclamation of the Freedom Islands.
AMARI will further shoulder all the reclamation costs of all
the other areas, totaling 592.15 hectares, still to be
reclaimed. AMARI and PEA will share, in the proportion of
70 percent and 30 percent, respectively, the total net usable
area which is defined in the Amended JVA as the total
reclaimed area less 30 percent earmarked for common
areas. Title to AMARI's share in the net usable area, totaling
367.5 hectares, will be issued in the name of AMARI.
Section 5.2 (c) of the Amended JVA provides that
"x x x, PEA shall have the duty to execute without
delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's Land
share based on the Land Allocation Plan. PEA,
when requested in writing by AMARI, shall then
cause the issuance and delivery of the proper
certificates of title covering AMARI's Land
Share in the name of AMARI, x x x; provided, that
if more than seventy percent (70%) of the titled
area at any given time pertains to AMARI, PEA
shall deliver to AMARI only seventy percent (70%)
of the titles pertaining to AMARI, until such time
when a corresponding proportionate area of
additional land pertaining to PEA has been titled."
(Emphasis supplied)
Indisputably, under the Amended JVA AMARI will
acquire and own a maximum of 367.5 hectares of

reclaimed land which will be titled in its name.

To implement the Amended JVA, PEA delegated to the
unincorporated PEA-AMARI joint venture PEA's statutory
authority, rights and privileges to reclaim foreshore and
submerged areas in Manila Bay. Section 3.2.a of the
Amended JVA states that
"PEA hereby contributes to the joint venture its
rights and privileges to perform Rawland
Reclamation and Horizontal Development as well
as own the Reclamation Area, thereby granting the
Joint Venture the full and exclusive right, authority
and privilege to undertake the Project in
accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the
original JVA dated April 25, 1995 and its supplemental
agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private
corporation, can acquire and own under the Amended JVA
367.5 hectares of reclaimed foreshore and submerged
areas in Manila Bay in view of Sections 2 and 3, Article XII
of the 1987 Constitution which state that:
"Section 2. All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, fisheries, forests or
timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the
exception of agricultural lands, all other natural
resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public
domain shall be limited to agricultural lands.
Private corporations or associations may not
hold such alienable lands of the public domain
except by lease, x x x."(Emphasis supplied)

Classification of Reclaimed Foreshore and Submerged

Areas
PEA readily concedes that lands reclaimed from foreshore
or submerged areas of Manila Bay are alienable or
disposable lands of the public domain. In its
67
Memorandum, PEA admits that
"Under the Public Land Act (CA 141, as amended),
reclaimed lands are classified as alienable and
disposable lands of the public domain:
'Sec. 59. The lands disposable under this
title shall be classified as follows:
(a) Lands reclaimed by the government
by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
68

Likewise, the Legal Task Force constituted under

Presidential Administrative Order No. 365 admitted in its
Report and Recommendation to then President Fidel V.
Ramos, "[R]eclaimed lands are classified as alienable
69
and disposable lands of the public domain." The Legal
Task Force concluded that
"D. Conclusion
Reclaimed lands are lands of the public domain.
However, by statutory authority, the rights of
ownership and disposition over reclaimed lands
have been transferred to PEA, by virtue of which
PEA, as owner, may validly convey the same to
any qualified person without violating the
Constitution or any statute.
The constitutional provision prohibiting private
corporations from holding public land, except by
70
lease (Sec. 3, Art. XVII, 1987 Constitution), does
not apply to reclaimed lands whose ownership has
passed on to PEA by statutory grant."
Under Section 2, Article XII of the 1987 Constitution, the
foreshore and submerged areas of Manila Bay are part of

the "lands of the public domain, waters x x x and other

natural resources" and consequently "owned by the State."
As such, foreshore and submerged areas "shall not be
alienated," unless they are classified as "agricultural lands"
of the public domain. The mere reclamation of these areas
by PEA does not convert these inalienable natural
resources of the State into alienable or disposable lands of
the public domain. There must be a law or presidential
proclamation officially classifying these reclaimed lands as
alienable or disposable and open to disposition or
concession. Moreover, these reclaimed lands cannot be
classified as alienable or disposable if the law has reserved
71
them for some public or quasi-public use.
Section 8 of CA No. 141 provides that "only those lands
shall be declared open to disposition or concession which
72
have been officially delimited and classified." The
President has the authority to classify inalienable lands of
the public domain into alienable or disposable lands of the
public domain, pursuant to Section 6 of CA No. 141. In
73
Laurel vs. Garcia, the Executive Department attempted to
sell the Roppongi property in Tokyo, Japan, which was
acquired by the Philippine Government for use as the
Chancery of the Philippine Embassy. Although the
Chancery had transferred to another location thirteen years
74
earlier, the Court still ruled that, under Article 422 of the
Civil Code, a property of public dominion retains such
character until formally declared otherwise. The Court ruled
that
"The fact that the Roppongi site has not been used
for a long time for actual Embassy service does not
automatically convert it to patrimonial property. Any
such conversion happens only if the property is
withdrawn from public use (Cebu Oxygen and
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A
property continues to be part of the public
domain, not available for private appropriation
or ownership 'until there is a formal declaration
on the part of the government to withdraw it
from being such' (Ignacio v. Director of Lands,
108 Phil. 335 [1960]." (Emphasis supplied)
PD No. 1085, issued on February 4, 1977, authorized the

issuance of special land patents for lands reclaimed by PEA

from the foreshore or submerged areas of Manila Bay. On
January 19, 1988 then President Corazon C. Aquino issued
Special Patent No. 3517 in the name of PEA for the 157.84
hectares comprising the partially reclaimed Freedom
Islands. Subsequently, on April 9, 1999 the Register of
Deeds of the Municipality of Paranaque issued TCT Nos.
7309, 7311 and 7312 in the name of PEA pursuant to
Section 103 of PD No. 1529 authorizing the issuance of
certificates of title corresponding to land patents. To this
day, these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual
issuance of a special patent covering the Freedom Islands,
is equivalent to an official proclamation classifying the
Freedom Islands as alienable or disposable lands of the
public domain. PD No. 1085 and President Aquino's
issuance of a land patent also constitute a declaration that
the Freedom Islands are no longer needed for public
service. The Freedom Islands are thus alienable or
disposable lands of the public domain, open to
disposition or concession to qualified parties.
At the time then President Aquino issued Special Patent No.
3517, PEA had already reclaimed the Freedom Islands
although subsequently there were partial erosions on some
areas. The government had also completed the necessary
surveys on these islands. Thus, the Freedom Islands were
no longer part of Manila Bay but part of the land mass.
Section 3, Article XII of the 1987 Constitution classifies
lands of the public domain into "agricultural, forest or timber,
mineral lands, and national parks." Being neither timber,
mineral, nor national park lands, the reclaimed Freedom
Islands necessarily fall under the classification of
agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the
only natural resources that the State may alienate to
qualified private parties. All other natural resources, such as
the seas or bays, are "waters x x x owned by the State"
forming part of the public domain, and are inalienable
pursuant to Section 2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands

because CDCP, then a private corporation, reclaimed the

islands under a contract dated November 20, 1973 with the
Commissioner of Public Highways. AMARI, citing Article 5
of the Spanish Law of Waters of 1866, argues that "if the
ownership of reclaimed lands may be given to the party
constructing the works, then it cannot be said that reclaimed
lands are lands of the public domain which the State may
75
not alienate." Article 5 of the Spanish Law of Waters reads
as follows:
"Article 5. Lands reclaimed from the sea in
consequence of works constructed by the State, or
by the provinces, pueblos or private persons, with
proper permission, shall become the property of
the party constructing such works, unless
otherwise provided by the terms of the grant of
authority." (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866,
private parties could reclaim from the sea only with "proper
permission" from the State. Private parties could own the
reclaimed land only if not "otherwise provided by the terms
of the grant of authority." This clearly meant that no one
could reclaim from the sea without permission from the
State because the sea is property of public dominion. It also
meant that the State could grant or withhold ownership of
the reclaimed land because any reclaimed land, like the sea
from which it emerged, belonged to the State. Thus, a
private person reclaiming from the sea without permission
from the State could not acquire ownership of the reclaimed
land which would remain property of public dominion like the
76
sea it replaced. Article 5 of the Spanish Law of Waters of
1866 adopted the time-honored principle of land ownership
that "all lands that were not acquired from the government,
either by purchase or by grant, belong to the public
77
domain."
Article 5 of the Spanish Law of Waters must be read
together with laws subsequently enacted on the disposition
of public lands. In particular, CA No. 141 requires that lands
of the public domain must first be classified as alienable or
disposable before the government can alienate them. These
lands must not be reserved for public or quasi-public

78

purposes. Moreover, the contract between CDCP and the

government was executed after the effectivity of the 1973
Constitution which barred private corporations from
acquiring any kind of alienable land of the public domain.
This contract could not have converted the Freedom Islands
into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973,
revoked all laws authorizing the reclamation of areas under
water and revested solely in the National Government the
power to reclaim lands. Section 1 of PD No. 3-A declared
that
"The provisions of any law to the contrary
notwithstanding, the reclamation of areas under
water, whether foreshore or inland, shall be limited
to the National Government or any person
authorized by it under a proper contract.
(Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of
Waters of 1866 because reclamation of areas under water
could now be undertaken only by the National Government
or by a person contracted by the National Government.
Private parties may reclaim from the sea only under a
contract with the National Government, and no longer by
grant or permission as provided in Section 5 of the Spanish
Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979,
designated PEA as the National Government's
implementing arm to undertake "all reclamation projects of
the government," which "shall be undertaken by the PEA
or through a proper contract executed by it with any
person or entity." Under such contract, a private party
receives compensation for reclamation services rendered to
PEA. Payment to the contractor may be in cash, or in kind
consisting of portions of the reclaimed land, subject to the
constitutional ban on private corporations from acquiring
alienable lands of the public domain. The reclaimed land
can be used as payment in kind only if the reclaimed land is
first classified as alienable or disposable land open to
disposition, and then declared no longer needed for public

service.
The Amended JVA covers not only the Freedom Islands,
but also an additional 592.15 hectares which are still
submerged and forming part of Manila Bay. There is no
legislative or Presidential act classifying these
submerged areas as alienable or disposable lands of
the public domain open to disposition. These submerged
areas are not covered by any patent or certificate of title.
There can be no dispute that these submerged areas form
part of the public domain, and in their present state are
inalienable and outside the commerce of man. Until
reclaimed from the sea, these submerged areas are, under
the Constitution, "waters x x x owned by the State," forming
part of the public domain and consequently inalienable.
Only when actually reclaimed from the sea can these
submerged areas be classified as public agricultural lands,
which under the Constitution are the only natural resources
that the State may alienate. Once reclaimed and
transformed into public agricultural lands, the government
may then officially classify these lands as alienable or
disposable lands open to disposition. Thereafter, the
government may declare these lands no longer needed for
public service. Only then can these reclaimed lands be
considered alienable or disposable lands of the public
domain and within the commerce of man.
The classification of PEA's reclaimed foreshore and
submerged lands into alienable or disposable lands open to
disposition is necessary because PEA is tasked under its
charter to undertake public services that require the use of
lands of the public domain. Under Section 5 of PD No.
1084, the functions of PEA include the following: "[T]o own
or operate railroads, tramways and other kinds of land
transportation, x x x; [T]o construct, maintain and operate
such systems of sanitary sewers as may be necessary; [T]o
construct, maintain and operate such storm drains as may
be necessary." PEA is empowered to issue "rules and
regulations as may be necessary for the proper use by
private parties of any or all of the highways, roads,
utilities, buildings and/or any of its properties and to
impose or collect fees or tolls for their use." Thus, part of the
reclaimed foreshore and submerged lands held by the PEA

would actually be needed for public use or service since

many of the functions imposed on PEA by its charter
constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides
that PEA "shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and
on behalf of the National Government." The same section
also states that "[A]ll reclamation projects shall be approved
by the President upon recommendation of the PEA, and
shall be undertaken by the PEA or through a proper contract
executed by it with any person or entity; x x x." Thus, under
EO No. 525, in relation to PD No. 3-A and PD No.1084,
PEA became the primary implementing agency of the
National Government to reclaim foreshore and submerged
lands of the public domain. EO No. 525 recognized PEA as
the government entity "to undertake the reclamation of lands
and ensure their maximum utilization in promoting public
79
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.1wphi1.nt
Section 3 of EO No. 525, by declaring that all lands
reclaimed by PEA "shall belong to or be owned by the
PEA," could not automatically operate to classify inalienable
lands into alienable or disposable lands of the public
domain. Otherwise, reclaimed foreshore and submerged
lands of the public domain would automatically become
alienable once reclaimed by PEA, whether or not classified
as alienable or disposable.
The Revised Administrative Code of 1987, a later law than
either PD No. 1084 or EO No. 525, vests in the Department
of Environment and Natural Resources ("DENR" for brevity)
the following powers and functions:
"Sec. 4. Powers and Functions. The Department
shall:
(1) x x x
xxx

(4) Exercise supervision and control over forest

lands, alienable and disposable public lands,
mineral resources and, in the process of exercising
such control, impose appropriate taxes, fees,
charges, rentals and any such form of levy and
collect such revenues for the exploration,
development, utilization or gathering of such
resources;
xxx
(14) Promulgate rules, regulations and
guidelines on the issuance of licenses, permits,
concessions, lease agreements and such other
privileges concerning the development,
exploration and utilization of the country's
marine, freshwater, and brackish water and
over all aquatic resources of the country and
shall continue to oversee, supervise and police
our natural resources; cancel or cause to cancel
such privileges upon failure, non-compliance or
violations of any regulation, order, and for all other
causes which are in furtherance of the
conservation of natural resources and supportive
of the national interest;
(15) Exercise exclusive jurisdiction on the
management and disposition of all lands of the
public domain and serve as the sole agency
responsible for classification, sub-classification,
surveying and titling of lands in consultation with
80
appropriate agencies." (Emphasis supplied)
As manager, conservator and overseer of the natural
resources of the State, DENR exercises "supervision and
control over alienable and disposable public lands." DENR
also exercises "exclusive jurisdiction on the management
and disposition of all lands of the public domain." Thus,
DENR decides whether areas under water, like foreshore or
submerged areas of Manila Bay, should be reclaimed or
not. This means that PEA needs authorization from DENR
before PEA can undertake reclamation projects in Manila
Bay, or in any part of the country.

DENR also exercises exclusive jurisdiction over the

disposition of all lands of the public domain. Hence, DENR
decides whether reclaimed lands of PEA should be
81
82
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.
Clearly, the mere physical act of reclamation by PEA of
foreshore or submerged areas does not make the reclaimed
lands alienable or disposable lands of the public domain,
much less patrimonial lands of PEA. Likewise, the mere
transfer by the National Government of lands of the public
domain to PEA does not make the lands alienable or
disposable lands of the public domain, much less
patrimonial lands of PEA.
Absent two official acts a classification that these lands
are alienable or disposable and open to disposition and a
declaration that these lands are not needed for public
service, lands reclaimed by PEA remain inalienable lands of
the public domain. Only such an official classification and
formal declaration can convert reclaimed lands into
alienable or disposable lands of the public domain, open to
83
disposition under the Constitution, Title I and Title III of CA
84
No. 141 and other applicable laws.

PEA's Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or
disposable lands of the public domain, the reclaimed lands
shall be disposed of in accordance with CA No. 141, the
Public Land Act. PEA, citing Section 60 of CA No. 141,
admits that reclaimed lands transferred to a branch or
subdivision of the government "shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting
85
its title, except when authorized by Congress: x x x."
(Emphasis by PEA)
86

In Laurel vs. Garcia, the Court cited Section 48 of the

Revised Administrative Code of 1987, which states that
"Sec. 48. Official Authorized to Convey Real
Property. Whenever real property of the
Government is authorized by law to be
conveyed, the deed of conveyance shall be
executed in behalf of the government by the
following: x x x."
Thus, the Court concluded that a law is needed to convey
any real property belonging to the Government. The Court
declared that "It is not for the President to convey real property
of the government on his or her own sole will. Any
such conveyance must be authorized and
approved by a law enacted by the Congress. It
requires executive and legislative concurrence."
(Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute
the legislative authority allowing PEA to sell its reclaimed
lands. PD No. 1085, issued on February 4, 1977, provides
that
"The land reclaimed in the foreshore and
offshore area of Manila Bay pursuant to the
contract for the reclamation and construction of the
Manila-Cavite Coastal Road Project between the
Republic of the Philippines and the Construction
and Development Corporation of the Philippines
dated November 20, 1973 and/or any other

contract or reclamation covering the same area is

hereby transferred, conveyed and assigned to
the ownership and administration of the Public
Estates Authority established pursuant to PD No.
1084; Provided, however, That the rights and
interests of the Construction and Development
Corporation of the Philippines pursuant to the
aforesaid contract shall be recognized and
respected.
Henceforth, the Public Estates Authority shall
exercise the rights and assume the obligations of
the Republic of the Philippines (Department of
Public Highways) arising from, or incident to, the
aforesaid contract between the Republic of the
Philippines and the Construction and Development
Corporation of the Philippines.
In consideration of the foregoing transfer and
assignment, the Public Estates Authority shall
issue in favor of the Republic of the Philippines the
corresponding shares of stock in said entity with an
issued value of said shares of stock (which) shall
be deemed fully paid and non-assessable.
The Secretary of Public Highways and the General
Manager of the Public Estates Authority shall
execute such contracts or agreements, including
appropriate agreements with the Construction and
Development Corporation of the Philippines, as
may be necessary to implement the above.
Special land patent/patents shall be issued by the
Secretary of Natural Resources in favor of the Public
Estates Authority without prejudice to the subsequent
transfer to the contractor or his assignees of such
portion or portions of the land reclaimed or to be
reclaimed as provided for in the above-mentioned
contract. On the basis of such patents, the Land
Registration Commission shall issue the corresponding
certificate of title." (Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on

February 14, 1979, provides that "Sec. 3. All lands reclaimed by PEA shall
belong to or be owned by the PEA which shall
be responsible for its administration, development,
utilization or disposition in accordance with the
provisions of Presidential Decree No. 1084. Any
and all income that the PEA may derive from the
sale, lease or use of reclaimed lands shall be used
in accordance with the provisions of Presidential
Decree No. 1084."
There is no express authority under either PD No. 1085 or
EO No. 525 for PEA to sell its reclaimed lands. PD No. 1085
merely transferred "ownership and administration" of lands
reclaimed from Manila Bay to PEA, while EO No. 525
declared that lands reclaimed by PEA "shall belong to or be
owned by PEA." EO No. 525 expressly states that PEA
should dispose of its reclaimed lands "in accordance with
the provisions of Presidential Decree No. 1084," the charter
of PEA.
PEA's charter, however, expressly tasks PEA "to develop,
improve, acquire, administer, deal in, subdivide, dispose,
lease and sell any and all kinds of lands x x x owned,
87
managed, controlled and/or operated by the government."
(Emphasis supplied) There is, therefore, legislative
authority granted to PEA to sell its lands, whether
patrimonial or alienable lands of the public domain.
PEA may sell to private parties its patrimonial properties
in accordance with the PEA charter free from constitutional
limitations. The constitutional ban on private corporations
from acquiring alienable lands of the public domain does not
apply to the sale of PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the
public domain to private individuals since, with the
legislative authority, there is no longer any statutory
prohibition against such sales and the constitutional ban
does not apply to individuals. PEA, however, cannot sell any
of its alienable or disposable lands of the public domain to
private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative

authority benefits only individuals. Private corporations

remain barred from acquiring any kind of alienable land of
the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the
reclaimed lands could be transferred by PEA to the
"contractor or his assignees" (Emphasis supplied) would not
apply to private corporations but only to individuals because
of the constitutional ban. Otherwise, the provisions of PD
No. 1085 would violate both the 1973 and 1987
Constitutions.
The requirement of public auction in the sale of
reclaimed lands
Assuming the reclaimed lands of PEA are classified as
alienable or disposable lands open to disposition, and
further declared no longer needed for public service, PEA
would have to conduct a public bidding in selling or leasing
these lands. PEA must observe the provisions of Sections
63 and 67 of CA No. 141 requiring public auction, in the
absence of a law exempting PEA from holding a public
88
auction. Special Patent No. 3517 expressly states that the
patent is issued by authority of the Constitution and PD No.
1084, "supplemented by Commonwealth Act No. 141, as
amended." This is an acknowledgment that the provisions of
CA No. 141 apply to the disposition of reclaimed alienable
lands of the public domain unless otherwise provided by
89
law. Executive Order No. 654, which authorizes PEA "to
determine the kind and manner of payment for the transfer"
of its assets and properties, does not exempt PEA from the
requirement of public auction. EO No. 654 merely
authorizes PEA to decide the mode of payment, whether in
kind and in installment, but does not authorize PEA to
dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise
known as the Government Auditing Code, the government
is required to sell valuable government property through
public bidding. Section 79 of PD No. 1445 mandates that
"Section 79. When government property has
become unserviceable for any cause, or is no

longer needed, it shall, upon application of the

officer accountable therefor, be inspected by the
head of the agency or his duly authorized
representative in the presence of the auditor
concerned and, if found to be valueless or
unsaleable, it may be destroyed in their presence.
If found to be valuable, it may be sold at public
auction to the highest bidder under the
supervision of the proper committee on award or
similar body in the presence of the auditor
concerned or other authorized representative of
the Commission, after advertising by printed
notice in the Official Gazette, or for not less
than three consecutive days in any newspaper
of general circulation, or where the value of the
property does not warrant the expense of
publication, by notices posted for a like period in at
least three public places in the locality where the
property is to be sold. In the event that the public
auction fails, the property may be sold at a
private sale at such price as may be fixed by
the same committee or body concerned and
approved by the Commission."
It is only when the public auction fails that a negotiated sale
is allowed, in which case the Commission on Audit must
90
approve the selling price. The Commission on Audit
implements Section 79 of the Government Auditing Code
91
through Circular No. 89-296 dated January 27, 1989. This
circular emphasizes that government assets must be
disposed of only through public auction, and a negotiated
sale can be resorted to only in case of "failure of public
auction."
At the public auction sale, only Philippine citizens are
qualified to bid for PEA's reclaimed foreshore and
submerged alienable lands of the public domain. Private
corporations are barred from bidding at the auction sale of
any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom
Islands on December 10, 1991. PEA imposed a condition
that the winning bidder should reclaim another 250 hectares

of submerged areas to regularize the shape of the Freedom

Islands, under a 60-40 sharing of the additional reclaimed
92
areas in favor of the winning bidder. No one, however,
submitted a bid. On December 23, 1994, the Government
Corporate Counsel advised PEA it could sell the Freedom
Islands through negotiation, without need of another public
bidding, because of the failure of the public bidding on
93
December 10, 1991.
However, the original JVA dated April 25, 1995 covered not
only the Freedom Islands and the additional 250 hectares
still to be reclaimed, it also granted an option to AMARI to
reclaim another 350 hectares. The original JVA, a
negotiated contract, enlarged the reclamation area to 750
94
hectares. The failure of public bidding on December 10,
95
1991, involving only 407.84 hectares, is not a valid
justification for a negotiated sale of 750 hectares, almost
double the area publicly auctioned. Besides, the failure of
public bidding happened on December 10, 1991, more than
three years before the signing of the original JVA on April
25, 1995. The economic situation in the country had greatly
improved during the intervening period.
Reclamation under the BOT Law and the Local
Government Code
The constitutional prohibition in Section 3, Article XII of the
1987 Constitution is absolute and clear: "Private
corporations or associations may not hold such alienable
lands of the public domain except by lease, x x x." Even
Republic Act No. 6957 ("BOT Law," for brevity), cited by
PEA and AMARI as legislative authority to sell reclaimed
lands to private parties, recognizes the constitutional ban.
Section 6 of RA No. 6957 states
"Sec. 6. Repayment Scheme. - For the financing,
construction, operation and maintenance of any
infrastructure projects undertaken through the
build-operate-and-transfer arrangement or any of
its variations pursuant to the provisions of this Act,
the project proponent x x x may likewise be repaid
in the form of a share in the revenue of the project
or other non-monetary payments, such as, but not

limited to, the grant of a portion or percentage of

the reclaimed land, subject to the constitutional
requirements with respect to the ownership of
the land: x x x." (Emphasis supplied)
A private corporation, even one that undertakes the physical
reclamation of a government BOT project, cannot acquire
reclaimed alienable lands of the public domain in view of the
constitutional ban.
Section 302 of the Local Government Code, also mentioned
by PEA and AMARI, authorizes local governments in land
reclamation projects to pay the contractor or developer in
kind consisting of a percentage of the reclaimed land, to wit:
"Section 302. Financing, Construction,
Maintenance, Operation, and Management of
Infrastructure Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of
industrial estates, the repayment plan may consist
of the grant of a portion or percentage of the
reclaimed land or the industrial estate constructed."
Although Section 302 of the Local Government Code does
not contain a proviso similar to that of the BOT Law, the
constitutional restrictions on land ownership automatically
apply even though not expressly mentioned in the Local
Government Code.
Thus, under either the BOT Law or the Local Government
Code, the contractor or developer, if a corporate entity, can
only be paid with leaseholds on portions of the reclaimed
land. If the contractor or developer is an individual, portions
96
of the reclaimed land, not exceeding 12 hectares of nonagricultural lands, may be conveyed to him in ownership in
view of the legislative authority allowing such conveyance.
This is the only way these provisions of the BOT Law and
the Local Government Code can avoid a direct collision with
Section 3, Article XII of the 1987 Constitution.

Registration of lands of the public domain

4. Manalo v. Intermediate Appellate Court,

where the Court held

Finally, PEA theorizes that the "act of conveying the

ownership of the reclaimed lands to public respondent PEA
transformed such lands of the public domain to private
lands." This theory is echoed by AMARI which maintains
that the "issuance of the special patent leading to the
eventual issuance of title takes the subject land away from
the land of public domain and converts the property into
patrimonial or private property." In short, PEA and AMARI
contend that with the issuance of Special Patent No. 3517
and the corresponding certificates of titles, the 157.84
hectares comprising the Freedom Islands have become
private lands of PEA. In support of their theory, PEA and
AMARI cite the following rulings of the Court:
97

1. Sumail v. Judge of CFI of Cotabato, where the

Court held
"Once the patent was granted and the
corresponding certificate of title was issued, the
land ceased to be part of the public domain and
became private property over which the Director of
Lands has neither control nor jurisdiction."
98

2. Lee Hong Hok v. David, where the Court

declared "After the registration and issuance of the
certificate and duplicate certificate of title based on
a public land patent, the land covered thereby
automatically comes under the operation of
Republic Act 496 subject to all the safeguards
provided therein."3. Heirs of Gregorio Tengco v.
99
Heirs of Jose Aliwalas, where the Court ruled "While the Director of Lands has the power to
review homestead patents, he may do so only so
long as the land remains part of the public domain
and continues to be under his exclusive control;
but once the patent is registered and a certificate
of title is issued, the land ceases to be part of the
public domain and becomes private property over
which the Director of Lands has neither control nor
jurisdiction."

100

"When the lots in dispute were certified as

disposable on May 19, 1971, and free patents
were issued covering the same in favor of the
private respondents, the said lots ceased to be part
of the public domain and, therefore, the Director of
Lands lost jurisdiction over the same."
5.Republic v. Court of Appeals,
stated

101

where the Court

"Proclamation No. 350, dated October 9, 1956, of

President Magsaysay legally effected a land grant
to the Mindanao Medical Center, Bureau of
Medical Services, Department of Health, of the
whole lot, validly sufficient for initial registration
under the Land Registration Act. Such land grant is
constitutive of a 'fee simple' title or absolute title in
favor of petitioner Mindanao Medical Center. Thus,
Section 122 of the Act, which governs the
registration of grants or patents involving public
lands, provides that 'Whenever public lands in the
Philippine Islands belonging to the Government of
the United States or to the Government of the
Philippines are alienated, granted or conveyed to
persons or to public or private corporations, the
same shall be brought forthwith under the
operation of this Act (Land Registration Act, Act
496) and shall become registered lands.'"
The first four cases cited involve petitions to cancel the land
patents and the corresponding certificates of titles issued to
private parties. These four cases uniformly hold that the
Director of Lands has no jurisdiction over private lands or
that upon issuance of the certificate of title the land
automatically comes under the Torrens System. The fifth
case cited involves the registration under the Torrens
System of a 12.8-hectare public land granted by the
National Government to Mindanao Medical Center, a
government unit under the Department of Health. The
National Government transferred the 12.8-hectare public

land to serve as the site for the hospital buildings and other
facilities of Mindanao Medical Center, which performed a
public service. The Court affirmed the registration of the
12.8-hectare public land in the name of Mindanao Medical
Center under Section 122 of Act No. 496. This fifth case is
an example of a public land being registered under Act No.
496 without the land losing its character as a property of
public dominion.
In the instant case, the only patent and certificates of title
issued are those in the name of PEA, a wholly government
owned corporation performing public as well as proprietary
functions. No patent or certificate of title has been issued to
any private party. No one is asking the Director of Lands to
cancel PEA's patent or certificates of title. In fact, the thrust
of the instant petition is that PEA's certificates of title should
remain with PEA, and the land covered by these certificates,
being alienable lands of the public domain, should not be
sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does
not vest in the registrant private or public ownership of the
land. Registration is not a mode of acquiring ownership but
is merely evidence of ownership previously conferred by
any of the recognized modes of acquiring ownership.
Registration does not give the registrant a better right than
102
what the registrant had prior to the registration. The
registration of lands of the public domain under the Torrens
system, by itself, cannot convert public lands into private
103
lands.
Jurisprudence holding that upon the grant of the patent or
issuance of the certificate of title the alienable land of the
public domain automatically becomes private land cannot
apply to government units and entities like PEA. The
transfer of the Freedom Islands to PEA was made subject to
the provisions of CA No. 141 as expressly stated in Special
Patent No. 3517 issued by then President Aquino, to wit:
"NOW, THEREFORE, KNOW YE, that by authority
of the Constitution of the Philippines and in
conformity with the provisions of Presidential
Decree No. 1084, supplemented by

Commonwealth Act No. 141, as amended, there

are hereby granted and conveyed unto the Public
Estates Authority the aforesaid tracts of land
containing a total area of one million nine hundred
fifteen thousand eight hundred ninety four
(1,915,894) square meters; the technical
description of which are hereto attached and made
an integral part hereof." (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom
Islands on matters not covered by PD No. 1084. Section 60
of CA No. 141 prohibits, "except when authorized by
Congress," the sale of alienable lands of the public domain
that are transferred to government units or entities. Section
60 of CA No. 141 constitutes, under Section 44 of PD No.
1529, a "statutory lien affecting title" of the registered land
104
even if not annotated on the certificate of title. Alienable
lands of the public domain held by government entities
under Section 60 of CA No. 141 remain public lands
because they cannot be alienated or encumbered unless
Congress passes a law authorizing their disposition.
Congress, however, cannot authorize the sale to private
corporations of reclaimed alienable lands of the public
domain because of the constitutional ban. Only individuals
can benefit from such law.
The grant of legislative authority to sell public lands in
accordance with Section 60 of CA No. 141 does not
automatically convert alienable lands of the public domain
into private or patrimonial lands. The alienable lands of the
public domain must be transferred to qualified private
parties, or to government entities not tasked to dispose of
public lands, before these lands can become private or
patrimonial lands. Otherwise, the constitutional ban will
become illusory if Congress can declare lands of the public
domain as private or patrimonial lands in the hands of a
government agency tasked to dispose of public lands. This
will allow private corporations to acquire directly from
government agencies limitless areas of lands which, prior to
such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing
agency of the National Government to reclaim foreshore

and submerged areas of the public domain. Thus, EO No.

525 declares that
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the
Agency Primarily Responsible for all Reclamation
Projects
Whereas, there are several reclamation projects
which are ongoing or being proposed to be
undertaken in various parts of the country which
need to be evaluated for consistency with national
programs;
Whereas, there is a need to give further
institutional support to the Government's declared
policy to provide for a coordinated, economical and
efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires
that all reclamation of areas shall be limited to the
National Government or any person authorized by
it under proper contract;
Whereas, a central authority is needed to act
on behalf of the National Government which
shall ensure a coordinated and integrated
approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates
the Public Estates Authority as a government
corporation to undertake reclamation of lands
and ensure their maximum utilization in
promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides
the President with continuing authority to
reorganize the national government including the
transfer, abolition, or merger of functions and
offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS,

President of the Philippines, by virtue of the

powers vested in me by the Constitution and
pursuant to Presidential Decree No. 1416, do
hereby order and direct the following:
Section 1. The Public Estates Authority (PEA)
shall be primarily responsible for integrating,
directing, and coordinating all reclamation
projects for and on behalf of the National
Government. All reclamation projects shall be
approved by the President upon recommendation
of the PEA, and shall be undertaken by the PEA or
through a proper contract executed by it with any
person or entity; Provided, that, reclamation
projects of any national government agency or
entity authorized under its charter shall be
undertaken in consultation with the PEA upon
approval of the President.
x x x ."
As the central implementing agency tasked to undertake
reclamation projects nationwide, with authority to sell
reclaimed lands, PEA took the place of DENR as the
government agency charged with leasing or selling
reclaimed lands of the public domain. The reclaimed lands
being leased or sold by PEA are not private lands, in the
same manner that DENR, when it disposes of other
alienable lands, does not dispose of private lands but
alienable lands of the public domain. Only when qualified
private parties acquire these lands will the lands become
private lands. In the hands of the government agency
tasked and authorized to dispose of alienable of
disposable lands of the public domain, these lands are
still public, not private lands.
Furthermore, PEA's charter expressly states that PEA
"shall hold lands of the public domain" as well as "any
and all kinds of lands." PEA can hold both lands of the
public domain and private lands. Thus, the mere fact that
alienable lands of the public domain like the Freedom
Islands are transferred to PEA and issued land patents or
certificates of title in PEA's name does not automatically
make such lands private.

To allow vast areas of reclaimed lands of the public domain

to be transferred to PEA as private lands will sanction a
gross violation of the constitutional ban on private
corporations from acquiring any kind of alienable land of the
public domain. PEA will simply turn around, as PEA has
now done under the Amended JVA, and transfer several
hundreds of hectares of these reclaimed and still to be
reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the
constitutional ban in Section 3, Article XII of the 1987
Constitution which was intended to diffuse equitably the
ownership of alienable lands of the public domain among
Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable
agricultural lands of the public domain since PEA can
"acquire x x x any and all kinds of lands." This will open the
floodgates to corporations and even individuals acquiring
hundreds of hectares of alienable lands of the public domain
under the guise that in the hands of PEA these lands are
private lands. This will result in corporations amassing huge
landholdings never before seen in this country - creating the
very evil that the constitutional ban was designed to
prevent. This will completely reverse the clear direction of
constitutional development in this country. The 1935
Constitution allowed private corporations to acquire not
105
more than 1,024 hectares of public lands. The 1973
Constitution prohibited private corporations from acquiring
any kind of public land, and the 1987 Constitution has
unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once
registered under Act No. 496 or PD No. 1529, automatically
become private lands is contrary to existing laws. Several
laws authorize lands of the public domain to be registered
under the Torrens System or Act No. 496, now PD No.
1529, without losing their character as public lands. Section
122 of Act No. 496, and Section 103 of PD No. 1529,
respectively, provide as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine
Islands belonging to the x x x Government of the

Philippine Islands are alienated, granted, or

conveyed to persons or the public or private
corporations, the same shall be brought forthwith
under the operation of this Act and shall become
registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever
public land is by the Government alienated, granted
or conveyed to any person, the same shall be
brought forthwith under the operation of this
Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any
person" in Section 103 of PD No. 1529 includes conveyances
of public lands to public corporations.
Alienable lands of the public domain "granted, donated, or
transferred to a province, municipality, or branch or
subdivision of the Government," as provided in Section 60 of
CA No. 141, may be registered under the Torrens System
pursuant to Section 103 of PD No. 1529. Such registration,
however, is expressly subject to the condition in Section 60
of CA No. 141 that the land "shall not be alienated,
encumbered or otherwise disposed of in a manner affecting
its title, except when authorized by Congress." This
provision refers to government reclaimed, foreshore and
marshy lands of the public domain that have been titled but
still cannot be alienated or encumbered unless expressly
authorized by Congress. The need for legislative authority
prevents the registered land of the public domain from
becoming private land that can be disposed of to qualified
private parties.
The Revised Administrative Code of 1987 also recognizes
that lands of the public domain may be registered under the
Torrens System. Section 48, Chapter 12, Book I of the Code
states
"Sec. 48. Official Authorized to Convey Real
Property. Whenever real property of the
Government is authorized by law to be conveyed,
the deed of conveyance shall be executed in behalf
of the government by the following:

(1) x x x
(2) For property belonging to the Republic of the
Philippines, but titled in the name of any political
subdivision or of any corporate agency or
instrumentality, by the executive head of the
agency or instrumentality." (Emphasis supplied)
Thus, private property purchased by the National
Government for expansion of a public wharf may be titled in
the name of a government corporation regulating port
operations in the country. Private property purchased by the
National Government for expansion of an airport may also be
titled in the name of the government agency tasked to
administer the airport. Private property donated to a
municipality for use as a town plaza or public school site may
106
likewise be titled in the name of the municipality. All these
properties become properties of the public domain, and if
already registered under Act No. 496 or PD No. 1529, remain
registered land. There is no requirement or provision in any
existing law for the de-registration of land from the Torrens
System.
Private lands taken by the Government for public use under
its power of eminent domain become unquestionably part of
the public domain. Nevertheless, Section 85 of PD No. 1529
authorizes the Register of Deeds to issue in the name of the
National Government new certificates of title covering such
expropriated lands. Section 85 of PD No. 1529 states
"Sec. 85. Land taken by eminent domain. Whenever
any registered land, or interest therein, is
expropriated or taken by eminent domain, the
National Government, province, city or municipality,
or any other agency or instrumentality exercising
such right shall file for registration in the proper
Registry a certified copy of the judgment which shall
state definitely by an adequate description, the
particular property or interest expropriated, the
number of the certificate of title, and the nature of
the public use. A memorandum of the right or
interest taken shall be made on each certificate of
title by the Register of Deeds, and where the fee

simple is taken, a new certificate shall be issued

in favor of the National Government, province,
city, municipality, or any other agency or
instrumentality exercising such right for the land so
taken. The legal expenses incident to the
memorandum of registration or issuance of a new
certificate of title shall be for the account of the
authority taking the land or interest therein."
(Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No.
1529 are not exclusively private or patrimonial lands. Lands
of the public domain may also be registered pursuant to
existing laws.
AMARI makes a parting shot that the Amended JVA is not a
sale to AMARI of the Freedom Islands or of the lands to be
reclaimed from submerged areas of Manila Bay. In the words
of AMARI, the Amended JVA "is not a sale but a joint venture
with a stipulation for reimbursement of the original cost
incurred by PEA for the earlier reclamation and construction
works performed by the CDCP under its 1973 contract with
the Republic." Whether the Amended JVA is a sale or a joint
venture, the fact remains that the Amended JVA requires
PEA to "cause the issuance and delivery of the certificates of
title conveying AMARI's Land Share in the name of
107
AMARI."
This stipulation still contravenes Section 3, Article XII of the
1987 Constitution which provides that private corporations
"shall not hold such alienable lands of the public domain
except by lease." The transfer of title and ownership to
AMARI clearly means that AMARI will "hold" the reclaimed
lands other than by lease. The transfer of title and ownership
is a "disposition" of the reclaimed lands, a transaction
108
considered a sale or alienation under CA No. 141,
the
109
Government Auditing Code,
and Section 3, Article XII of
the 1987 Constitution.
The Regalian doctrine is deeply implanted in our legal
system. Foreshore and submerged areas form part of the
public domain and are inalienable. Lands reclaimed from
foreshore and submerged areas also form part of the public

domain and are also inalienable, unless converted pursuant

to law into alienable or disposable lands of the public domain.
Historically, lands reclaimed by the government are sui
generis, not available for sale to private parties unlike other
alienable public lands. Reclaimed lands retain their inherent
potential as areas for public use or public service. Alienable
lands of the public domain, increasingly becoming scarce
natural resources, are to be distributed equitably among our
ever-growing population. To insure such equitable
distribution, the 1973 and 1987 Constitutions have barred
private corporations from acquiring any kind of alienable land
of the public domain. Those who attempt to dispose of
inalienable natural resources of the State, or seek to
circumvent the constitutional ban on alienation of lands of the
public domain to private corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands
comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable
lands of the public domain. PEA may lease these
lands to private corporations but may not sell or
transfer ownership of these lands to private
corporations. PEA may only sell these lands to
Philippine citizens, subject to the ownership
limitations in the 1987 Constitution and existing
laws.
2. The 592.15 hectares of submerged areas of
Manila Bay remain inalienable natural resources of
the public domain until classified as alienable or
disposable lands open to disposition and declared
no longer needed for public service. The
government can make such classification and
declaration only after PEA has reclaimed these
submerged areas. Only then can these lands qualify
as agricultural lands of the public domain, which are
the only natural resources the government can
alienate. In their present state, the 592.15 hectares
of submerged areas are inalienable and outside
the commerce of man.
3. Since the Amended JVA seeks to transfer to

AMARI, a private corporation, ownership of 77.34

110
hectares of the Freedom Islands, such transfer is
void for being contrary to Section 3, Article XII of the
1987 Constitution which prohibits private
corporations from acquiring any kind of alienable
land of the public domain.
4. Since the Amended JVA also seeks to transfer to
111
AMARI ownership of 290.156 hectares
of still
submerged areas of Manila Bay, such transfer is
void for being contrary to Section 2, Article XII of the
1987 Constitution which prohibits the alienation of
natural resources other than agricultural lands of the
public domain. PEA may reclaim these submerged
areas. Thereafter, the government can classify the
reclaimed lands as alienable or disposable, and
further declare them no longer needed for public
service. Still, the transfer of such reclaimed
alienable lands of the public domain to AMARI will
be void in view of Section 3, Article XII of the 1987
Constitution which prohibits private corporations
from acquiring any kind of alienable land of the
public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and
112
3, Article XII of the 1987 Constitution. Under Article 1409
of the Civil Code, contracts whose "object or purpose is
contrary to law," or whose "object is outside the commerce of
men," are "inexistent and void from the beginning." The Court
must perform its duty to defend and uphold the Constitution,
and therefore declares the Amended JVA null and void ab
initio.
Seventh issue: whether the Court is the proper forum to
raise the issue of whether the Amended JVA is grossly
disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio,
there is no necessity to rule on this last issue. Besides, the
Court is not a trier of facts, and this last issue involves a
determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public
Estates Authority and Amari Coastal Bay Development

G.R. No. 164527

August 15, 2007
FRANCISCO I. CHAVEZ, Petitioner,
vs.
NATIONAL HOUSING AUTHORITY, R-II BUILDERS, INC.,
R-II HOLDINGS, INC., HARBOUR CENTRE PORT
TERMINAL, INC., and MR. REGHIS ROMERO II,
Respondents.
DECISION
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
1
transactions made respecting the project.

The Facts
On March 1, 1988, then President Corazon C. Aquino
2
issued Memorandum Order No. (MO) 161 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,
3
1988, MO 161-A 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
4
resettlement/low-cost housing projects." 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
5
management."
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 R10" 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
6
component of the project. Once finalized, the Plan was
submitted to President Aquino for her approval.
On July 9, 1990, the Build-Operate-and-Transfer (BOT) Law
7
(Republic Act No. [RA] 6957) was enacted. 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 governmentowned 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."
8

On February 10, 1992, Joint Resolution No. 03 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) Port infrastructure like piers, wharves, quays,
storage handling, ferry service and related
facilities;
xxxx
(k) Land reclamation, dredging and other related
development facilities;
(l) Industrial estates, regional industrial centers and
export processing zones including steel mills, ironmaking and petrochemical complexes and related
infrastructure and utilities;
xxxx
(p) Environmental and solid waste managementrelated 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
9
415 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
10
statements.
In the same MO 415, President Aquino created an
Executive Committee (EXECOM) to oversee the
implementation of the Plan, chaired by the National Capital
Region-Cabinet Officer for Regional Development (NCRCORD) with the heads of the NHA, City of Manila, DPWH,
PEA, Philippine Ports Authority (PPA), DENR, and
11
Development Bank of the Philippines (DBP) as members.
The NEDA subsequently became a member of the
12
EXECOM. Notably, in a September 2, 1994 Letter, 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
13
the region and to facilitate the completion of the project."
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
14
R-II Builders, Inc. (RBI) as the top two contractors.
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) The DBP, as financial advisor to the Project,
evaluated their Financial Proposals;
(2) The DPWH, PPA, PEA and NHA evaluated the
Technical Proposals for the Housing Construction
and Reclamation;
(3) The DENR evaluated Technical Proposals on
Waste Management and Disposal by conducting
the Environmental Impact Analysis; and
(4) 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
15
Proclamation No. 39 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
16
the Office of the President."
On March 19, 1993, the NHA and RBI entered into a Joint
17
Venture Agreement (JVA) for the development of the
Smokey Mountain dumpsite and the reclamation of the area
18
across R-10 based on Presidential Decree No. (PD) 757
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
19
of the Project." 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) To fully finance all aspects of development of
Smokey Mountain and reclamation of no more than
40 hectares of Manila Bay area across Radial
Road 10.

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.

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.

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.

c) The construction activities will only commence

after the acquisition of the ECC, and

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.

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.
2.04 The [RBI] shall construct 3,500 medium rise
low cost permanent housing units on the leveled

The profit sharing shall be based on the approved prefeasibility report submitted to the EXECOM, viz:
For the developer (RBI):
1. To own the forty (40) hectares of reclaimed land.
2. To own the commercial area at the Smokey
Mountain area composed of 1.3 hectares, and
3. To own all the constructed units of medium rise
low cost permanent housing units beyond the
3,500 units share of the [NHA].
For the NHA:
1. To own the temporary housing consisting of
3,500 units.
2. To own the cleared and fenced incinerator site
consisting of 5 hectares situated at the Smokey
Mountain area.
3. 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 residents.

4. To own the Industrial Area site consisting of 3.2

hectares, and

of project accomplishment reports to the [NHA] for proper

evaluation and supervision on the actual implementation.

such as the 3,500 units of permanent housing and the

allotted industrial area of 3.2 hectares.

5. To own the open spaces, roads and facilities

within the Smokey Mountain area.

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.

4.12 All advances outside of project costs made by the [RBI]

to the [NHA] shall be deducted from the proceeds due to the
[NHA].

In the event of "extraordinary increase in labor, materials,

20
fuel and non-recoverability of total project expenses," 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:

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:

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 Finance the total project cost for land development,
housing construction and reclamation of the PROJECT.
4.03 Warrant that all developments shall be in compliance
with the requirements of the FINAL REPORT.
4.04 Provide all administrative resources for the submission

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.
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

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 40hectare 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
21
Project.
Thus, on February 21, 1994, the parties entered into
another agreement denominated as the Amended and
22
Restated Joint Venture Agreement (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
23
cleared and leveled dumpsite. Phase II of the Project
involves the construction of an incineration area for the on24
site disposal of the garbage at the dumpsite. The enabling
component or consideration for Phase I of the Project was
increased from 40 hectares of reclaimed lands across R-10
25
to 79 hectares. 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
26
I. 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 affected residents while clearing
and development of Smokey Mountain [are] being
undertaken
b. the clearing of Smokey Mountain and the
subsequent construction of 3,520 units of medium
rise housing and the development of the
industrial/commercial site within the Smokey

Mountain area
c. the reclamation and development of a 79
hectare area directly across Radial Road 10 to
serve as the enabling component of Phase I
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
b. 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.
Under the ARJVA, RBI shall construct 2,992 temporary
27
housing units, a reduction from 3,500 units under the JVA.
However, it was required to construct 3,520 medium-rise
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 CHANGES/REVISIONS
1. TEMPORARY HOUSING
Wood/Plywood, ga. 31 G.I.
Concrete/Steel Frame Structure Sheet
usable life of 3 years, gauge 26 G.I.
roofing sheets future 12 SM floor area.
use as permanent structures for factory
and warehouses mixed 17 sm & 12 sm
floor area.
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 Use of clean
dredgefill material below the MLLW and
SM material mixed with dredgefill above
MLLW.
a. 100% use of Smokey
Mountain material as dredgefill
Use of Steel Sheet Piles needed
for longer depth of embedment.
b. Concrete Sheet Piles short
depth of embedment
c. Silt removal approximately
Need to remove more than 3.0
1.0 meter only meters of silt after sub-soil
28
investigation.
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
29
Joint Venture Agreement (AARJVA) 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. the construction and operation of an
incinerator plant that will conform to the
emission standards of the DENR
b. 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
30
approved by the SMDRP Committee
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

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.

9. A new paragraph to be numbered 5.05 shall be

added to Article V of the ARJVA, and shall read as
follows:

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.

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 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.

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
33
(PNB) executed the Smokey Mountain Asset Pool
34
Formation Trust Agreement (Asset Pool Agreement).
Thereafter, a Guaranty Contract was entered into by NHA,
RBI, and HIGC.

Afterwards, President Ramos issued Proclamation No. 465

31
dated August 31, 1994 increasing the proposed area for
32
reclamation across R-10 from 40 hectares to 79 hectares,
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.

On June 23, 1994, the Legislature passed the Clean Air

35
Act. 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
36
necessary.
37

The land reclamation was completed in August 1996.

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
38
to implement the change orders or necessary works.
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 79hectare 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
39
completion of the necessary works."
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
40
enabling component under the ARJVA."
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
41
ARJVA."
The EXECOM passed Resolution Nos. 99-16-01 and 99-1642
02 which approved the modification of the Supplemental
Agreement, to wit:
a) Approval of 150 hectares additional reclamation
in order to make the reclamation feasible as part of
the enabling component.
b) The conveyance of the 15-hectare NHA Vitas
property (actually 17 hectares based on surveys)
to the SMDRP Asset Pool.

c) The inclusion in the total development cost of

other additional, necessary and indispensable
infrastructure works and the revision of 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 17hectare 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
43
billion in direct cost and P3.87 billion in indirect cost,"
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
44
the expanded enabling component."
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.

c. Amendment and Restated

Joint Venture Agreement dated
11 August 1994
d. Supplemental Agreement
dated 24 March 1998

In the July 20, 2002 Cabinet Meeting, HUDCC was directed

"to submit the works covered by the PhP 480 million
45
[advance to the Project] and the ASA to public bidding."
On August 28, 2002, the HUDCC informed RBI of the
decision of the Cabinet.

e. Amended Supplemental
Agreement (ASA) dated 19
November 2001.
xxxx

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
46
6.2 of the ASA."
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. Joint Venture Agreement
(JVA) dated 19 March 1993
b. Amended and Restated Joint
Venture Agreement (ARJVA)
dated 21 February 1994

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.

5. 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 P250 Million in cash from the escrow
account in accordance with Section 2
herewith;
a.2 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

5.3 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.
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 lands of the public
domain as this power is vested exclusively with the PEA.
2. Even assuming that respondents NHA and R-II builders
were given the power and authority to reclaim foreshore and
submerged land, they were never given the authority by the
denr to do so.

2. 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. There was never any public bidding awarding ownership
of the subject land to respondent R-II builders.
5. 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.

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
47
file a complaint or petition. 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
48
assailed contracts or agreements." 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.
49

We explicated in Chavez v. PCGG 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
50
our ruling in Chavez v. PEA 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.

The Courts Ruling

II
Respondent R-II builders cannot acquire the reclaimed
foreshore and submerged land areas because:
1. The reclaimed foreshore and submerged parcels of land
are inalienable public lands which are beyond the
commerce of man.

Whether petitioners direct recourse to this Court was proper

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 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

52

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
51
Courts docket. x x x

[this Courts] primary jurisdiction." 1avvphi1

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."

Core factual matters undisputed

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

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.

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
53
this Court a trier of facts.
We find the position of respondents bereft of merit.
For one, we already gave due course to the instant petition
54
in our January 18, 2005 Resolution. 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
55
admissions of the parties in their pleadings 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.1avvphi1 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
56
Executive Order No. (EO) 525. 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
57
to NHA.
58

Thus the PEA Decision cannot be considered an authority

or precedent to the instant case. The principle of stare
59
decisis 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 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
60
those still needed for public service.
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) approval by the President;
(2) favorable recommendation of PEA; and
(3) undertaken by any of the following:
a. by PEA
b. by any person or entity pursuant to a
contract it executed with PEA
c. by the National Government agency or
entity authorized under its charter to
reclaim lands subject to consultation with
PEA
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
61
of PEA, PD 1084, does not mention that PEA has the
exclusive and sole power and authority to reclaim lands of
public domain. EO 525 even reveals the exception

reclamation 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 R10 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.
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
62
pertinent lawsRA 7279 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
63
inferred or are implicit in the wordings of the law or
conferred by necessary or fair implication in the enabling
64
act. 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
65
the other is also conferred by necessary implication. 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
66
carry out its functions.
The power to reclaim on the part of the NHA is implicit from
67
PD 757, RA 7279, MO 415, RA 6957, and PD 3-A, viz:

1. NHAs power to reclaim derived from PD 757 provisions:

and assumed by the Authority. x x x (Emphasis supplied.)

a. Sec. 3 of PD 757 implies that reclamation may be

resorted to in order to attain the goals of NHA:

PD 570 dated October 30, 1974 created the TFDA, which

defined its objectives, powers, and functions. Sec. 2
provides:

Section 3. Progress and Objectives. The Authority shall

have the following purposes and objectives:

Section 2. Objectives and Purposes. The Authority shall

have the following purposes and objectives:

xxxx
b) To undertake housing, development,
resettlement or other activities as would enhance
the provision of housing to every Filipino;
c) 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,

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;
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) Develop and implement the comprehensive and
integrated housing program provided for in Section
hereof;

xxxx
(c) Prescribe guidelines and standards for the
reservation, conservation and utilization of public
lands identified for housing and resettlement;
xxxx
(e) Develop and undertake housing development
and/or resettlement projects through joint ventures
or other arrangements with public and private
entities;
xxxx
(k) Enter into contracts whenever necessary under
such terms and conditions as it may deem proper
and reasonable;
(l) Acquire property rights and interests and
encumber or otherwise dispose the same as it may
deem appropriate;
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.)

indispensable component for the development and

construction of the SMDRP housing facilities.
2. NHAs implied power to reclaim land is enhanced by RA
7279.
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

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

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 Law
serves 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 3-A
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
68
National Government. 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 3A 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
69
whether foreshore or inland, was made clear in EO 543
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:
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
70
public domain.
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
71
judgment of the former for that of the latter."
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
72
supplied).

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 40hectare 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.

xxxx

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.

These contracts cannot be ratified. Neither can the right to

set up the defense of illegality be waived.

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) Those whose cause, object or purpose is contrary to
law, morals, good customs, public order or public policy;

(7) Those expressly prohibited or declared void by law.

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
73
or concession to qualified parties. (Emphasis supplied.)
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
74
disposition or concession (emphasis supplied)."
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 buildoperate-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
75
supplied)." 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 79hectare 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-003901000012-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
76
even finality. Preparation of special patents calls for
technical examination and a specialized review of
calculations and specific details which the courts are illequipped to undertake; hence, the latter defer to the

administrative agency which is trained and knowledgeable

77
on such matters.
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
78
patent.
The doctrine was reiterated in Republic v. Heirs of Felipe
79
80
Alijaga, Sr., Heirs of Carlos Alcaraz v. Republic, and the
more recent case of Doris Chiongbian-Oliva v. Republic of

81

the Philippines. 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
82
thereof.
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
83
to qualified parties."

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 the patrimonial properties of the State under Art. 422
84
of the Civil Code. 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) Enter into contracts whenever necessary under such
terms and conditions as it may deem proper and
reasonable;

(l) 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.

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.
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.

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

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
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

85
of which is determined to be hazardous.
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 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
86
qualified private corporations. (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 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
87
can such bear fruit.
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
88
existence and proper functioning of any democracy.
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
89
and the contents of the perfected contract. 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.

inequitable result that is contrary to its proper office.

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.

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
90
Philippines.

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

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.
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
91
speaking for the Court in Fernandez v. Cuerva and Co.
(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
92
of a formal leave application. (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.
93

In the May 6, 2003 Resolution in Chavez v. PEA, we ruled

94
that De Agbayani 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
95
the private contractor of reclaimed lands. Such law was
relied upon by respondents, along with the abovementioned 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.

principle has set in. The titles to the lands in the hands of
the buyers can no longer be invalidated.

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:

The Courts Dispositions

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
96
risks, including the annulment of the Amended JVA.
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"

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.
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, quasi-judicial 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
97
act done.
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
98
government agencies. 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
SMDRPincluding, 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.
No costs.
SO ORDERED.

G.R. No. 173289

February 17, 2010
ELAND PHILIPPINES, INC., Petitioner,
vs.
AZUCENA GARCIA, ELINO FAJARDO, AND HEIR OF
TIBURCIO MALABANAN NAMED TERESA
MALABANAN, Respondents.
DECISION
PERALTA, J.:
This is a Petition for Review on Certiorari under Rule 45 of
the Rules of Court, seeking to reverse and set aside the
1
decision dated February 28, 2006 of the Court of Appeals
(CA) in CA-G.R. CV No. 67417, which dismissed the appeal
of petitioner Eland Philippines, Inc. and affirmed the
Resolutions dated November 3, 1999 and June 28, 2006 of
Branch 18, Regional Trial Court (RTC) of Tagaytay City.
The facts of the case, as shown in the records, are the
following:

complaint was filed. They also found out that Decree No. N217313, LRC Record No. N-62686, was already issued on
August 20, 1997 to the petitioner pursuant to the Decision
dated June 7, 1994 of the same court. They averred that
they were not notified of the said land registration case;
thus, they claimed the presence of misrepresentation
amounting to actual or extrinsic fraud. Thus, they argued
that they were also entitled to a writ of preliminary injunction
in order to restrain or enjoin petitioner, its privies, agents,
representatives, and all other persons acting on its behalf,
to refrain from committing acts of dispossession on the
subject lot.

(10) days from receipt of the same. Petitioner then filed two
15
Motions for Extension to File an Answer.

Summons, together with a copy of the complaint, were

served on the petitioner on April 7, 1998. On April 29, 1998,
petitioner filed an Entry of Appearance with Motion for
5
6
Extension of Time, which the trial court granted for a
period of ten (10) days within which to file a responsive
pleading. Petitioner filed a Second Motion for Extension of
7
Time to File Answer dated April 29, 1998, which the trial
8
court likewise granted.

Meanwhile, respondents filed a Motion to Declare

19
Defendant Eland in Default dated November 17, 1998. On
December 4, 1998 Petitioner Eland filed its Comment (on
20
Plaintiff's Motion to Declare Defendant Eland in Default)
dated December 2, 1998, while respondents filed a Reply to
Comment (on Plaintiff's Motion to Declare Defendant Eland
21
in Default) dated December 29, 1998. Thereafter, the trial
22
court issued an Order dated January 11, 1999 declaring
the petitioner in default and allowed the respondents to
present evidence ex parte. Petitioner filed a Motion for
23
Reconsideration (of the Order dated 11 January 1999)
dated February 5, 1999 on the trial court's denial of its
motion to dismiss and in declaring it in default. The trial
24
court in an Order dated March 18, 1999, denied the former
and granted the latter. In the same Order, the trial court
admitted petitioner's Answer Ad Cautelam.

Respondents Azucena Garcia, Elino Fajardo, and Teresa

Malabanan, the heir of Tiburcio Malabanan, filed a
2
Complaint dated March 2, 1998 for Quieting of Title with
Writ of Preliminary Injunction with the RTC, Branch XVIII,
Tagaytay City against petitioner Eland Philippines, Inc.
Respondents claimed that they are the owners, in fee
simple title, of a parcel of land identified as Lot 9250 Cad355, Tagaytay Cadastre, Plan Ap-04-008367, situated in
Barangay Iruhin, Tagaytay City, containing an area of Two
Hundred Forty-Four Thousand One Hundred Twelve
(244,112) square meters, by occupation and possession
3
under the provisions of Sec. 48 (b) of the Public Land Law
or Commonwealth Act No. 141, as amended.

Thereafter, petitioner filed a Motion to Dismiss dated May

9, 1998, stating that the pleading asserting the claim of
respondents stated no cause of action, and that the latter
were not entitled to the issuance of a writ of preliminary
injunction, setting the same for hearing on May 21, 1998.
10
On the date of the hearing, the trial court issued an Order,
which granted the respondents ten (10) days from that day
to file a comment, and set the date of the hearing on July
23, 1998. Respondents filed a Motion to Admit
11
Comment/Opposition to Defendant Eland, together with
12
the corresponding Comment/Opposition dated June 8,
1998.

For having been in continuous, public, and adverse

possession as owners of the said lot for at least thirty years,
respondents stated that they were not aware of any person
or entity who had a legal or equitable interest or claim on
the same lot until the time they were requesting that the lot
be declared for tax purposes. They found out that the lot
was the subject of a land registration proceeding that had
4
already been decided by the same court where their

On the scheduled hearing of September 23, 1998, the trial

13
court issued an Order, considering the Motion to Dismiss
submitted for resolution due to the non-appearance of the
parties and their respective counsels. The said motion was
14
eventually denied by the trial court in an Order dated
September 25, 1998, ruling that the allegations in the
complaint established a cause of action and enjoined
petitioner Eland to file its answer to the complaint within ten

Petitioner, on November 9, 1998, filed a Motion for

16
Reconsideration of the trial court's Order dated September
25, 1998, denying the former's Motion to Dismiss. Again,
petitioner filed a Motion for Final Extension of Time to File
17
Answer dated November 6, 1998. Respondents filed their
Comment/Opposition to Motion for Reconsideration dated
November 24, 1998. Subsequently, the trial court denied
18
petitioner's motion for reconsideration in an Order dated
January 11, 1999.

Earlier, petitioner filed its Answer Ad Cautelam (With

25
Compulsory Counterclaim) dated November 12, 1998.
Respondents countered by filing a Motion to Expunge
26
Eland's Answer from the Records dated December 2,
1998. Petitioner filed its Opposition (to Plaintiff's Motion to
27
Expunge Eland's Answer from the Records) dated
December 21, 1998, as well as a Comment (on Plaintiff's
28
Motion to Expunge Eland's Answer from the Records)
dated January 26, 1999.
Consequently, respondents filed a Motion to Set
29
Presentation of Evidence Ex Parte dated January 18,
30
1999, which was granted in an Order dated January 22,

1999.

Resolution reads:

On January 28, 1999, respondents presented their evidence

before the Clerk of Court of the trial court which ended on
February 3, 1999; and, on February 10, 1999, respondents
31
filed their Formal Offer of Evidence. However, petitioner
filed an Urgent Motion to Suspend Plaintiff's Ex Parte
32
Presentation of Evidence dated February 8, 1999. In that
33
regard, the trial court issued an Order dated February 11,
1999 directing the Clerk of Court to suspend the
proceedings.

WHEREFORE, premises considered, the motion for

summary judgment is hereby GRANTED and it is hereby
adjudged that:

On May 14, 1999, respondents filed a Motion for

34
Clarification as to whether or not the evidence presented
ex parte was nullified by the admission of petitioner's
35
Answer Ad Cautelam. Petitioner filed its Comment dated
May 13, 1999 on the said motion for clarification.
A pre-trial conference was scheduled on May 27, 1999,
36
wherein the parties submitted their pre-trial briefs.
However, petitioner filed a Motion to Suspend
37
Proceedings dated May 24, 1999 on the ground that the
same petitioner had filed a petition for certiorari with the CA,
asking for the nullification of the Order dated March 18,
1999 of the trial court and for the affirmation of its earlier
Order denying petitioner's Motion to Dismiss. The petition
for certiorari was subsequently denied; and a copy of the
38
Resolution dated June 14, 1999 was received by the trial
39
court. Hence, in an Order dated July 7, 1999, the trial
court ruled that the reception of evidence already presented
by the respondents before the Clerk of Court remained as
part of the records of the case, and that the petitioner had
the right to cross-examine the witness and to comment on
the documentary exhibits already presented. Consequently,
40
petitioner filed a Motion for Reconsideration dated July 19,
1999, but it was denied by the trial court in an Omnibus
41
Order dated September 14, 1999.
Eventually, respondents filed a Motion for Summary
42
Judgment dated August 5, 1999, while petitioner filed its
43
Opposition to the Motion dated August 31, 1999. In its
44
Resolution dated November 3, 1999, the trial court found
favor on the respondents. The dispositive portion of the

1. Plaintiffs are the absolute owners and rightful

possessors of Lot 9250, CAD-355, Tagaytay
Cadastre, subject to the rights of occupancy of the
farm workers on the one-third area thereof;
2. The Judgment dated June 7, 1994 in Land
Registration Case No. TG-423 is set aside and the
Decree No. N-217313, LRC Record No. N-62686
dated August 20, 1997 is null and void;
3. The Original Transfer Certificate of Title is
ordered to be canceled, as well as tax declaration
covering Lot 9250, Cad-355.
SO ORDERED.
Petitioner appealed the Resolution of the trial court with the
CA, which dismissed it in a Decision dated February 28,
2006, which reads:
WHEREFORE, for lack of merit, the appeal is DISMISSED.
The assailed Resolution dated November 3, 1999, of the
RTC, Branch 18, Tagaytay City, in Civil Case No. TG-1784,
is AFFIRMED. No pronouncement as to cost.
SO ORDERED.
Hence, the present petition.
The grounds relied upon by the petitioner are the following:
5.1 THE COURT OF APPEALS ACTED IN A
MANNER NOT IN ACCORD WITH LAW AND
WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT WHEN IT RULED THAT
RESPONDENTS' MOTION FOR SUMMARY
JUDGMENT DATED AUGUST 05, 1999 DID NOT

VIOLATE THE TEN (10)-DAY NOTICE RULE

UNDER SECTION 3, RULE 35 OF THE 1997
RULES OF CIVIL PROCEDURE.
5.2 THE COURT OF APPEALS ACTED IN A
MANNER NOT IN ACCORD WITH LAW AND
WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT WHEN IT RULED THAT A
MOTION FOR SUMMARY JUDGMENT IS
PROPER IN AN ACTION FOR QUIETING OF
TITLE.
5.3 THE COURT OF APPEALS ACTED IN A
MANNER NOT IN ACCORD WITH LAW AND
WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT WHEN IT RULED THAT
THERE ARE NO GENUINE FACTUAL AND
TRIABLE ISSUES IN CIVIL CASE NO. TG-1784.
5.4 THE COURT OF APPEALS ACTED IN A
MANNER NOT IN ACCORD WITH LAW AND
WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT WHEN IT UPHELD THE
RESOLUTION DATED NOVEMBER 03, 1999 OF
THE COURT A QUO, BASED ON TESTIMONIES
OF RESPONDENTS' WITNESSES TAKEN
WITHOUT GRANTING HEREIN PETITIONER
THE RIGHT TO CROSS-EXAMINE AND UPON
DOCUMENTARY EXHIBITS PRESENTED BUT
NOT ADMITTED AS EVIDENCE.
5.5 THE COURT OF APPEALS ACTED IN A
MANNER NOT IN ACCORD WITH LAW AND
WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT WHEN IT UPHELD THE
RESOLUTION DATED NOVEMBER 03, 1999 OF
THE COURT A QUO BASED ON FALSIFIED
"EVIDENCE."
5.6 THE COURT OF APPEALS ACTED IN A
MANNER NOT IN ACCORD WITH LAW AND
WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT WHEN IT FAILED TO

RULE THAT THE COURT A QUO PATENTLY

DEPRIVED PETITIONER OF ITS RIGHT TO DUE
PROCESS IN RENDERING ITS SUMMARY
JUDGMENT.
5.7 THE COURT OF APPEALS ACTED IN A
MANNER NOT IN ACCORD WITH LAW AND
WITH THE APPLICABLE DECISIONS OF THIS
HONORABLE COURT WHEN IT HELD THAT
THE COURT A QUO HAS JURISDICTION TO
CANCEL PETITIONER'S ORIGINAL
CERTIFICATE OF TITLE (OCT) NO. 0-660 IN AN
ACTION TO QUIET TITLE.
According to the petitioner, a motion for summary judgment
must be served at least ten (10) days before the date set for
hearing thereof, and that a hearing must be held to hear the
parties on the propriety of a summary judgment, per Sec. 3
of Rule 35 of the Revised Rules of Court, which was not
observed because the petitioner received a copy of the
respondents' motion for summary judgment only on August
20, 1999, or the very same day that the motion was set for
hearing. Petitioner further claims that the trial court never
conducted any hearing on the motion for summary
judgment.
Petitioner also argued that a summary judgment is only
available to a claimant seeking to recover upon a claim,
counterclaim or cross-claim or to obtain a declaratory relief,
and does not include cases for quieting of title. Furthermore,
petitioner also averred that a summary judgment has no
place in a case where genuine factual and triable issues
exist, like in the present case. It added that the genuine and
triable issues were all raised in its Answer Ad Cautelam.
Another ground relied upon by petitioner is its failure to
cross-examine the witnesses for the respondents without
fault on its part. It also stated that the trial court did not issue
any order admitting in evidence the documentary exhibits
presented by the respondents. Hence, according to the
petitioner, the trial court gravely erred in relying upon the
testimonies of the witnesses for the respondents, without
having the latter cross-examined; and upon the

documentary exhibits presented but not admitted as

evidence.
Petitioner further claimed that the trial court based its
Resolution dated November 3, 1999 on falsified evidence.
Lastly, petitioner raised the issue that by rendering
summary judgment, the trial court deprived the former of its
right to due process.
45

Respondents, in their Comment dated October 16, 2006,

countered the first issue raised by the petitioner, stating that
their filing of the motion for summary judgment fourteen (14)
days before the requested hearing of the same motion was
in compliance with Sec. 3, Rule 35 of the Rules of Court.
As to the second and third issues, respondents argued that
petitioner had a constricted perception of the coverage of
the Rules of Summary Judgment, and that the latter's
citation of cases decided by this Court showed the diverse
causes of action that could be the subject matters of
summary judgment. Respondents also posited that
petitioner's statements in its Answer Ad Cautelam, although
denominated as Specific Denial, were really general denials
that did not comply with the provisions of Section 10, Rule 8
of the Rules of Court.

which stated that the motion for summary judgment has

been submitted for resolution without further argument. With
regard to the contention of the petitioner that the trial court
wrongly appreciated falsified evidence, respondents
asserted that petitioner's counsel failed to study carefully the
records of the proceedings for the presentation of the
evidence ex parte to be able to know that it was not only a
single-day proceeding, and that more than one witness had
been presented. They further averred that the trial court did
not only rely on the photographs of the houses of the
occupants of the property in question.
Finally, as to the sixth and seventh issues, respondents
asseverated that their complaint alleged joint causes of
action for quieting of title under Art. 476 of the New Civil
Code and for the review of the decree of registration
pursuant to Sec. 32 of the Property Registration Decree or
P.D. No. 1529, because they are complimentary with each
other.
The petition is impressed with merit.
The basic contention that must be resolved by this Court is
the propriety of the summary judgment in this particular
case of quieting of title.
Rule 35 of the 1997 Rules of Civil Procedure provides:

Anent the fourth and fifth issues, respondents claimed that

despite the opportunity, or the right allowed in the Order
dated July 17, 1999 of the trial court, for the petitioner to
cross-examine respondents' witnesses and to comment on
the documentary evidence presented ex parte after the
default order against the same petitioner, the latter
evasively moved to set aside respondents' evidence in order
to suspend further proceedings that were intended to abort
the pre-trial conference. They added that petitioner
neglected to avail itself of, or to comply with, the prescription
of the rules found in Rule 35 of the Rules of Court by opting
not to avail itself of the hearing of its opposition to the
summary judgment after receiving the Order dated August
20, 1999; by failing to serve opposing affidavit, deposition or
admission in the records; and by not objecting to the
decretal portion of the said Order dated August 20, 1999,

SEC. 1. Summary judgment for claimant. - A party seeking

to recover upon a claim, counterclaim, or cross-claim or to
obtain a declaratory relief may, at any time after the
pleading in answer thereto has been served, move with
supporting affidavits for a summary judgment in his favor
upon all or any part thereof
SEC. 3. Motion and proceedings thereon. - The motion shall
be served at least ten (10) days before the time specified for
the hearing. The adverse party prior to the day of hearing
may serve opposing affidavits. After the hearing, the
judgment sought shall be rendered forthwith if the pleading,
depositions, and admissions on file together with the
affidavits, show that, except as to the amount of damages,
there is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a matter of

46
law.
In the present case, it was the respondents who moved for
a summary judgment.
Petitioner contended that the ten-day notice rule was
violated, because the copy of the motion for summary
judgment was served only on August 20, 1999 or on the
same day it was set for hearing. It also added that even if
the petitioner received a copy of the motion only on August
20, 1999, there was no hearing conducted on that date
because the trial court issued an order giving petitioner 10
days within which to file its comment or opposition.

is permitted only if there is no genuine issue as to any

material fact and a moving party is entitled to a judgment as
a matter of law. A summary judgment is proper if, while the
pleadings on their face appear to raise issues, the affidavits,
depositions, and admissions presented by the moving party
49
show that such issues are not genuine.
It must be remembered that the non-existence of a
genuine issue is the determining factor in granting a motion
for summary judgment, and the movant has the burden of
proving such nonexistence. The trial court found no genuine
issue as to any material fact that would necessitate
conducting a full-blown trial. However, a careful study of the
case shows otherwise.

The above specific contention, however, is misguided. The

CA was correct in its observation that there was substantial
compliance with due process. The CA ruled, as the records
show, that the ten-day notice rule was substantially
complied with because when the respondents filed the
motion for summary judgment on August 9, 1999, they
furnished petitioner with a copy thereof on the same day as
shown in the registry receipt and that the motion was set for
hearing on August 20, 1999, or 10 days from the date of the
filing thereof.

In their motion for summary judgment, the respondents

failed to clearly demonstrate the absence of any genuine
issue of fact. They merely reiterated their averments in the
complaint for quieting of title and opposed some issues
raised by the petitioner in its Answer Ad Cautelam, to wit:

Due process, a constitutional precept, does not, therefore,

always and in all situations a trial-type proceeding. The
essence of due process is found in the reasonable
opportunity to be heard and submit one's evidence in
support of his defense. What the law prohibits is not merely
the absence of previous notice, but the absence thereof and
47
the lack of opportunity to be heard.

The first defense as to the identity of the subject property,

the issue has already become nil because of not only the
lack of seriousness in the allegations but also because the
identity of the subject parcel of land Lot 9250 was proven by
the approved plan Ap-04-008367 that was already
presented and offered in evidence as Exhibit "B" for the
plaintiffs.

Petitioner further argues that summary judgment is not

proper in an action for quieting of title. This particular
argument, however, is misplaced. This Court has already
ruled that any action can be the subject of a summary
judgment with the sole exception of actions for annulment of
48
marriage or declaration of its nullity or for legal separation.

The second defense that plaintiffs' claim of the property is

barred by prior judgment rule is unavailing considering that
the vital documentary evidence they presented in Land
Registration Case No. TG-423 before this Honorable Court
the markings and descriptions of such documents are stated
in the Judgment quoted as follows:

Proceeding to the main issue, this Court finds that the grant
of summary judgment was not proper. A summary judgment

Nonetheless, going by the records of the admitted and

uncontroverted facts and facts established there is no more
litigious or genuine issue of basic fact to be the subject of
further trial on the merits.

(1) Tax Declaration No. 015224-A (Exhibit "Q"; x x

x.

(2) Tax Declaration No. 05019-B (Exhibit "R"; x x x.

(3) Tax Declaration No. 01926-B (Exhibit "S"; x x x.
(4) Tax Declaration No. GR-007-0007 (Exhibit "T" x
x x.
are the very documentary evidence adopted and relied upon
by the plaintiffs in seeking the review and nullity of the
Decree No. 217313 issued on August 20, 1997 under LRC
Record No. N-62686 pursuant to the Judgment dated June
7, 1994 rendered by this Honorable Court penned by the
acting presiding Judge Eleuterio F. Guerrero in said Land
Registration Case No. TG-423.
On the other hand, as to the gravamen of the claims in the
complaint, the plaintiffs have presented clear and
convincing evidence as the well-nigh or almost
incontrovertible evidence of a registerable title to the subject
land in the proceedings conducted on the reception of
evidence ex-parte for the plaintiffs establishing in detail the
specifications of continuous, open, exclusive possession as
aspects of acquisitive prescription as confirmed in the
affidavit herein attached as Annex "A";
In ruling that there was indeed no genuine issue involved,
the trial court merely stated that:
This Court, going by the records, observed keenly that
plaintiffs cause of action for quieting of title on the
disputed parcel of land is based on the alleged fraud in the
substitution of their landholdings of Lot 9250, Cad 355,
Tagaytay Cadastre containing only an area of 244,112
square meters with Lot 9121, Cad 335, Tagaytay Cadastre,
containing only an area of 19,356 square meters. While
defendant Eland in its answer practically and mainly
interposed the defenses of: (a) the parcel of land being
claimed by the plaintiffs is not the parcel of land subject
matter of Land Registration Case No. TG-423; (b) the claim
of the plaintiffs is barred by prior judgment of this Court in
said Land Registration Case; and (c) plaintiffs' complaint is
barred by the Statute of Limitation since Original Certificate
of Title No. 0-660 has become incontrovertible.
Cross-reference of the above-cited Land Registration Case

No. TG-423 that was decided previously by this Court with

the case at bench was imperatively made by this Court.
Being minded that the Court has and can take judicial notice
of the said land registration case, this Court observed that
there is no genuine issue of fact to be tried on the merits.
Firstly, because the supposed identity crisis of the
controverted parcel of land covered by the Land
Registration Case No. TG-423 with the subject parcel of
land is established by Plan Ap-04-006275 (Exhibit "N") LRC
Case No. 423 and by Plan A04 008367 (Exhibit "B" of the
plaintiffs) and the Technical Description of Lot 9250, Cad
355 (Exhibit "B-1" of the plaintiffs). Secondly, the prior
judgment rule cannot be availed of by defendant Eland
since not only intrinsic fraud but extrinsic fraud were alleged
in and established by the records. (Heirs of Manuel Roxas
v. Court of Appeals, G. R. No. 1184436, pro. March 21,
1997). Thirdly, it is incontrovertible that the complaint in this
case seeking to review the judgment and annul the decree
was filed on March 5, 1998 or within one (1) year from
August 20, 1997 or the date of issuance of Decree No.
217313, LRC Record No. N-62686, hence, the Original
Certificate of Title No. 0-660 issued to defendant Eland has
not attained incontrovertibility. (Heirs of Manuel Roxas v.
Court of Appeals, G.R. No. 118436, prom. March 21, 1997).
Notwithstanding, the issue of possession is a question of
fact by the interaction of the basic pleadings, the
observation of this Court is that the plaintiffs were able to
prove by the well-nigh incontrovertible evidence, the
aspects of possession in accordance with Section 48 (b) of
Commonwealth Act 141, as amended, as hereinafter
illustrated.
The CA, in affirming the above Resolution of the trial court,
propounded thus:
The contention of defendant-appellant is untenable.
Summary judgment is not only limited to solving actions
involving money claims. Under Rule 35 of the 1997 Rules of
Court, except as to the amount of damages, when there is
no genuine issue as to any material fact and the moving
party is entitled to a judgment as a matter of law, summary
judgment may be allowed. The term "genuine issue" has

been defined as an issue of fact which calls for the

presentation of evidence as distinguished from an issue
which is sham, fictitious, contrived, set up in bad faith and
patently unsubstantial so as not to constitute a genuine
issue for trial.
Thus, under the aforecited rule, summary judgment is
appropriate when there are no genuine issues of fact, which
call for the presentation of evidence in a full-blown trial.
Thus, even if on their face the pleadings appear to raise
issues, but when the affidavits, depositions and admissions
show that such issues are not genuine, then summary
judgment as prescribed by the rules must ensue as a matter
of law.
It should be stressed that the court a quo which rendered
the assailed resolution in Civil Case No. TG-1784 was the
very court that decided the LRC Case No. TG-423. Such
being the case, the court a quo was privy to all relevant
facts and rulings pertaining to LRC Case No. TG-423 which
it considered and applied to this case. Thus, where all the
facts are within the judicial knowledge of the court, summary
judgment may be granted as a matter of right.
On the contrary, in petitioner's Answer Ad Cautelam,
genuine, factual and triable issues were raised, aside from
specifically denying all the allegations in the complaint, thus:
2. SPECIFIC DENIALS
2.1 Answering defendant specifically denies the
allegations contained in paragraphs 1 and 3 of the
Complaint insofar as it alleges the personal
circumstances of the plaintiff and one A. F.
Development Corporation for lack of knowledge or
information sufficient to form a belief as to the truth
thereof.
2.2 Answering defendant specifically denies the
allegations contained in paragraphs 4, 5, 6 and 7
of the Complaint for lack of knowledge or
information sufficient to form a belief as to the truth
of said allegations. And if the property referred to in

said paragraphs is that parcel of land which was

the subject matter of Land Registration Case No.
TG-423 which was previously decided by this
Honorable Court with finality, said allegations are
likewise specifically denied for the obvious reason
that the said property had already been adjudged
with finality by no less than this Honorable Court as
absolutely owned by herein answering defendant
as will be further discussed hereunder.
2.3 Answering defendant specifically denies the
allegations contained in paragraph 8 of the
Complaint insofar as it alleged that "(u)pon
exercise of further circumspection, counsel for the
plaintiffs once followed-up in writing the 1994
request of the plaintiffs to have the subject parcel
of land be declared for taxation purposes" and
insofar as it is made to appear that parcel of land
being claimed by the plaintiffs is the same parcel of
land subject matter of Land Registration Case No.
TG-423 for lack of knowledge or information
sufficient to form a belief as to the truth thereof and
for the reason that the names of the herein
plaintiffs were never mentioned during the entire
proceedings in said land registration case and by
reason of the Affirmative Allegations contained
hereunder.
2.4 Answering defendant specifically denies the
allegations contained in paragraphs 9, 10, 10 (a),
10 (b), 10 (c), 10 (d), 10 (e), 10 (f), 10 (g), 10 (h),
and 11 for the reason that there is no showing that
the parcel of land being claimed by the plaintiff is
the same parcel of land which was the subject
matter of Land Registration Case No. TG- 423, and
in the remote possibility that the parcel of land
being claimed by the plaintiffs is the same as that
parcel of land subject of Land Registration Case
No. TG-423, the allegations contained in said
paragraphs are still specifically denied for the
reason that no less than the Honorable Court had
decided with finality that the parcel of land is
absolutely owned by herein defendant to the

exclusion of all other persons as attested to by the

subsequent issuance of an Original Certificate of
Title in favor of answering defendant and for
reasons stated in the Affirmative Allegations.
2.5 Answering defendant specifically denies the
allegations contained in paragraph 12 of the
Complaint for the obvious reason that it was the
plaintiffs who appear to have been sleeping on
their rights considering that up to the present they
still do not have any certificate of title covering the
parcel of land they are claiming in the instant case,
while on the part of herein defendant, no less than
the Honorable Court had adjudged with finality that
the parcel of land subject matter of Land
Registration Case No. TG-423 is absolutely owned
by herein defendant.
2.6 Answering defendant specifically denies the
allegations contained in paragraph 13 of the
complaint for the reason that defendant has never
ladgrabbed any parcel of land belonging to others,
much less from the plaintiffs, and further,
answering defendant specifically denies the
allegations therein that plaintiffs engaged the
services of a lawyer for a fee for lack of knowledge
r information sufficient to form a belief as to the
truth thereof.
2.7 Answering defendant specifically denies the
allegations contained in paragraphs 14, 15, 16, 17
and 18 of the Complaint for lack of knowledge or
information sufficient to form a belief as the truth
thereof.
2.8 Answering defendant specifically denies the
allegations contained in paragraphs IV (a) to IV (c)
for the reason that, as above-stated, if the parcel of
land being claimed by the plaintiffs is the same as
that parcel of land subject matter of Land
Registration Case No. TG-423, this Honorable
Court had already decided with finality that said
parcel of land is absolutely owned by herein

answering defendant and additionally, for those

reasons stated in defendant's Motion to Dismiss.

never bothered to present their alleged claims in

the proceedings.

2.9 Answering defendant specifically denies the

allegations contained in paragraph IV (d) of the
Complaint for lack of knowledge or information
sufficient to form a belief as to the truth thereof.

4.6 Answering defendant has always acted with

justice, given everyone his due, and observed
honesty and good faith in his dealings.

Special and affirmative defenses were also raised

in the same Answer Ad Cautelam, to wit:
xxxx
4.1 The pleading asserting the claim of the plaintiff
states no cause of action as asserted in the Motion
To Dismiss filed by herein answering defendant
and for the reason that there is no evidence
whatsoever showing or attesting to the fact that the
parcel of land being claimed by the plaintiffs in the
Complaint is the same parcel of land which was
the subject matter of Land Registration Case No.
TG-423.
4.2 The complaint was barred by the prior
judgment rendered by this Honorable in Land
Registration Case No. TG-423.
4.3 The complaint is barred by the Statute of
Limitation in that OCT No. 0-660 had become
incontrovertible by virtue of the Torrens System of
Registration; and to allow plaintiffs to question the
validity of answering defendant's title through the
instant complaint would be a collateral of OCT No.
0-660 which is not permissible under the law.
4.4 Plaintiffs are barred by their own acts and/or
omission from filing the present complaint under
the principles of estoppel and laches.
4.5 Plaintiffs does not to the Court with clean
hands as they appear to be well aware of the
proceedings in said Land Registration Case No.
TG- 423 and inspite of such knowledge, plaintiffs

Clearly, the facts pleaded by the respondents in their motion

for summary judgment have been duly disputed and
contested by petitioner, raising genuine issues that must be
resolved only after a full-blown trial. When the facts as
pleaded by the parties are disputed or contested,
proceedings for summary judgment cannot take the place of
50
trial. In the present case, the petitioner was able to point
out the genuine issues. A "genuine issue" is an issue of fact
that requires the presentation of evidence as distinguished
51
from a sham, fictitious, contrived or false claim.
It is of utmost importance to remember that petitioner is
already the registered owner (Original Certificate of Title
[OCT] No. 0-660 issued by the Register of Deeds) of the
parcel of land in question, pursuant to a decree of
registration (Decree No. N-217313, LRC Record No. 62686)
based on the ruling of the same court that granted the
summary judgment for the quieting of title.
Incidentally, the findings of the trial court contained in the
disputed summary judgment were obtained through judicial
notice of the facts and rulings pertaining to that earlier case
(LRC Case No. TG-423) wherein the same trial court ruled
in favor of the petitioner. It is, therefore, disorienting that the
same trial court reversed its earlier ruling, which
categorically stated that:
x x x There is overwhelming evidence or proof on record
that the vendors listed in Exhibit "HH," with submarkings,
are the previous owners of the parcel of land mentioned in
the same deed of sale and aside form the tax declarations
covering the same property (Exhibits "Q" to "T," inclusive),
the uncontroverted testimony of Atty. Ruben Roxas
establishes beyond any shadow of doubt that applicant's
(referring to herein defendant-appellant)
sellers/predecessors-in-interest are the grandchildren, great

grandchildren and great great grandchildren of the spouses

Lucio Petate and Maria Pobleta Petate, the former owners
of the same property, whose ownership is further bolstered
by tax receipts showing payments of realty taxes (Exhibits
"U" to "GG," inclusive, with submarkings).
xxx
On the basis of the foregoing facts and circumstances, and
considering that applicant is a domestic corporation not
otherwise disqualified from owning real properties in the
Philippines, this Court finds that applicant has satisfied all
the conditions/requirements essential to the grant of its
application pursuant to the provisions of the Land
Registration Law, as amended, inspite of the opposition filed
by the Heirs of the late Doroteo Miranda. Hence, the grant
of applicant's petition appears to be inevitable.
WHEREFORE, this Court hereby approves the instant
petition for land registration and, thus, places under the
operation of Act 141, Act 496 and/or P.D. 1529, otherwise
known as the Property Registration Law, the land described
in Plan Ap-04-006275 and containing an area of Two
Hundred Forty-Two Thousand Seven Hundred Ninety-Four
(242,794) square meters, as supported by its technical
description now forming part of the record of this case, in
addition to other proofs adduced in the name of the
applicant, ELAND PHILIPPINES, INC., with principal office
at No. 43 E. Rodriguez Ave. (Espaa Extension), Quezon
City, Metro Manila.
Once this decision becomes final and executory, the
corresponding decree of registration shall forthwith issue.
SO ORDERED.
By granting the summary judgment, the trial court has in
effect annulled its former ruling based on a claim of
possession and ownership of the same land for more than
thirty years without the benefit of a full-blown trial. The fact
that the respondents seek to nullify the original certificate of
title issued to the petitioner on the claim that the former
were in possession of the same land for a number of years,

is already a clear indicium that a genuine issue of a material

fact exists. This, together with the failure of the respondents
to show that there were no genuine issues involved, should
have been enough for the trial court to give the motion for
summary judgment, filed by respondents, scant
consideration. Trial courts have limited authority to render
summary judgments and may do so only when there is
52
clearly no genuine issue as to any material fact.
Based on the foregoing, this Court deems it necessary to
delve briefly on the nature of the action of quieting of title as
applied in this case. This Court's ruling in Calacala, et al. v.
53
Republic, et al. is instructive on this matter, thus:
To begin with, it bears emphasis that an action for quieting
of title is essentially a common law remedy grounded on
54
equity. As we held in Baricuatro, Jr. vs. CA:
Regarding the nature of the action filed before the trial court,
quieting of title is a common law remedy for the removal of
any cloud upon or doubt or uncertainty with respect to title
to real property. Originating in equity jurisprudence, its
purpose is to secure x x x an adjudication that a claim of
title to or an interest in property, adverse to that of the
complainant, is invalid, so that the complainant and those
claiming under him may be forever afterward free from any
danger of hostile claim. In an action for quieting of title, the
competent court is tasked to determine the respective rights
of the complainant and other claimants, x x x not only to
place things in their proper place, to make the one who has
no rights to said immovable respect and not disturb the
other, but also for the benefit of both, so that he who has the
right would see every cloud of doubt over the property
dissipated, and he could afterwards without fear introduce
the improvements he may desire, to use, and even to abuse
the property as he deems best xxx.
Under Article 476 of the New Civil Code, the remedy may
be availed of only when, by reason of any instrument,
record, claim, encumbrance or proceeding, which appears
valid but is, in fact, invalid, ineffective, voidable, or
unenforceable, a cloud is thereby cast on the complainants
title to real property or any interest therein. The codal

provision reads:
Article 476. Whenever there is a cloud on title to real
property or any interest therein, by reason of any
instrument, record, claim, encumbrance or proceeding
which is apparently valid or effective but is in truth and in
fact invalid, ineffective, voidable, or unenforceable, and may
be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from
being cast upon title to real property or any interest therein.
In turn, Article 477 of the same Code identifies the party
who may bring an action to quiet title, thus:
Article 477. The plaintiff must have legal or equitable title to,
or interest in the real property which is the subject-matter of
the action. He need not be in possession of said property.
It can thus be seen that for an action for quieting of title to
prosper, the plaintiff must first have a legal, or, at least, an
equitable title on the real property subject of the action and
that the alleged cloud on his title must be shown to be in
55
fact invalid. So it is that in Robles, et al. vs. CA, we ruled:
It is essential for the plaintiff or complainant to have a legal
title or an equitable title to or interest in the real property
which is the subject matter of the action. Also, the deed,
claim, encumbrance or proceeding that is being alleged as a
cloud on plaintiffs title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or
legal efficacy.
Verily, for an action to quiet title to prosper, two (2)
indispensable requisites must concur, namely: (1) the
plaintiff or complainant has a legal or an equitable title
to or interest in the real property subject of the action;
and (2) the deed, claim, encumbrance, or proceeding
claimed to be casting cloud on his title must be shown
to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.

Respondents, in their Complaint, claim that they have

become the owners in fee-simple title of the subject land by
occupation and possession under the provisions of Sec. 48
(b) of the Public Land Law or Commonwealth Act No. 141,
as amended. Thus, it appears that the first requisite has
been satisfied. Anent the second requisite, respondents
enumerated several facts that would tend to prove the
invalidity of the claim of the petitioner. All of these claims,
which would correspond to the two requisites for the
quieting of title, are factual; and, as discussed earlier, the
petitioner interposed its objections and duly disputed the
said claims, thus, presenting genuine issues that can only
be resolved through a full-blown trial.
Anent the propriety of the filing of an action for the quieting
of title, the indefeasibility and incontrovertibility of the decree
of registration come into question. Under Sec. 32 of P.D.
No. 1529 or the Property Registration Decree:
Section 32. Review of decree of registration; Innocent
purchaser for value. The decree of registration shall not be
reopened or revised by reason of absence, minority, or
other disability of any person adversely affected thereby,
nor by any proceeding in any court for reversing judgments,
subject, however, to the right of any person, including the
government and the branches thereof, deprived of land or of
any estate or interest therein by such adjudication or
confirmation of title obtained by actual fraud, to file in the
proper Court of First Instance a petition for reopening and
review of the decree of registration not later than one year
from and after the date of the entry of such decree of
registration, but in no case shall such petition be entertained
by the court where an innocent purchaser for value has
acquired the land or an interest therein, whose rights may
be prejudiced. Whenever the phrase "innocent purchaser for
value" or an equivalent phrase occurs in this Decree, it shall
be deemed to include an innocent lessee, mortgagee, or
other encumbrancer for value.
Upon the expiration of said period of one year, the decree
of registration and the certificate of title issued shall
become incontrovertible. Any person aggrieved by such
decree of registration in any case may pursue his remedy by

action for damages against the applicant or any other

persons responsible for the fraud.
As borne out by the records and undisputed by the parties,
OCT No. 0-660 of petitioner was issued on August 29, 1997
pursuant to a Decree issued on August 20, 1997, while the
complaint for the quieting of title in Civil Case No. TG-1784
was filed and docketed on March 5, 1998; hence, applying
the above provisions, it would seem that the period of one (1)
year from the issuance of the decree of registration has not
elapsed for the review thereof. However, a closer
examination of the above provisions would clearly indicate
that the action filed, which was for quieting of title, was not
the proper remedy.
Courts may reopen proceedings already closed by final
decision or decree when an application for review is filed by
the party aggrieved within one year from the issuance of the
56
decree of registration. However, the basis of the aggrieved
party must be anchored solely on actual fraud. Shedding light
on the matter is a discussion presented in one of the
57
recognized textbooks on property registration,
citing
decisions of this Court, thus:
The right of a person deprived of land or of any estate or
interest therein by adjudication or confirmation of title
obtained by actual fraud is recognized by law as a valid and
legal basis for reopening and revising a decree of
58
registration. One of the remedies available to him is a
petition for review. To avail of a petition for review, the
following requisites must be satisfied:
(a) The petitioner must have an estate or interest in
the land;
(b) He must show actual fraud in the procurement of
the decree of registration;
(c) The petition must be filed within one year from
the issuance of the decree by the Land Registration
Authority; and
(d) The property has not yet passed to an innocent

purchaser for value.

59

A mere claim of ownership is not sufficient to avoid a

certificate of title obtained under the Torrens system. An
important feature of a certificate of title is its finality. The
proceedings whereby such a title is obtained are directed
against all persons, known or unknown, whether actually
served with notice or not, and includes all who have an
interest in the land. If they do not appear and oppose the
registration of their own estate or interest in the property in
the name of another, judgment is rendered against them by
default, and, in the absence of fraud, such judgment is
conclusive. If an interest in the land will not by itself operate
to vacate a decree of registration, a fortiori, fraud is not alone
60
sufficient to do so.
61

As further pointed out in the same book, the petition for

review must be filed within one year from entry of the decree
of registration. As written:
As long as a final decree has not been entered by the Land
Registration Authority and period of one year has not elapsed
from the date of entry of such decree, the title is not finally
adjudicated and the decision in the registration case
continues to be under the control and sound discretion of the
62
registration court. After the lapse of said period, the decree
becomes incontrovertible and no longer subject to reopening
or review.
Section 32 provides that a petition for review of the
decree of registration may be filed "not later than one
year from and after the date of entry of such decree of
registration." Giving this provision a literal interpretation, it
may at first blush seem that the petition for review cannot be
presented until the final decree has been entered. However,
it has been ruled that the petition may be filed at any time
after the rendition of the court's decision and before the
expiration of one year from the entry of the final decree
63
of registration for, as noted in Rivera v. Moran, there can
be no possible reason requiring the complaining party to
wait until the final decree is entered before urging his claim
for fraud.

The one-year period stated in Sec. 32 within which a

petition to re-open and review the decree of registration
refers to the decree of registration described in Section 31,
which decree is prepared and issued by the Land
64
Registration Administrator.
The provision of Section 31 that every decree of registration
shall bind the land, quiet title thereto, and be conclusive
upon and against all persons, including the national
government, and Sec. 32 that the decree shall not be
reopened or revised by reason of absence, minority or other
disability or by any proceeding in court, save only in cases
of actual fraud and then only for one year from the entry of
the decree, must be understood as referring to final and
unappealable decrees of registration. A decision or, as it is
sometimes called after entry, a decree of a registration
court, does not become final and unappealable until fifteen
days after the interested parties have been notified of its
entry, and during that period may be set aside by the trial
judge on motion for new trial, upon any of the grounds
65
stated in the Rules of Court. An appeal from the decision
of the trial court prevents the judgment from becoming final
until that decree is affirmed by the judgment of the appellate
66
court.
A petition for review under Section 32 is a remedy
separate and distinct from a motion for new trial and the
right to the remedy is not affected by the denial of such
a motion irrespective of the grounds upon which it may
have been presented. Thus, where petitioners acquired
their interest in the land before any final decree had been
entered, the litigation was therefore in effect still pending and,
in these circumstances, they can hardly be considered
67
innocent purchasers in good faith. 1avvphi1
Where the petition for review of a decree of registration is filed
within the one-year period from entry of the decree, it is error
for the court to deny the petition without hearing the evidence
in support of the allegation of actual and extrinsic fraud upon
which the petition is predicated. The petitioner should be
68
afforded an opportunity to prove such allegation.
In the present case, the one-year period before the Torrens

title becomes indefeasible and incontrovertible has not yet

expired; thus, a review of the decree of registration would
have been the appropriate remedy.
Based on the above disquisitions, the other issues raised by
the petitioner are necessarily rendered inconsequential.
WHEREFORE, the petition for review on certiorari of
petitioner Eland Philippines, Inc. is hereby GRANTED, and
the decision dated February 28, 2006 of the Court of
Appeals (CA) in CA-G.R. CV No. 67417, which dismissed
the appeal of petitioner Eland Philippines, Inc. and affirmed
the resolutions dated November 3, 1999 and June 28, 2006
of Branch 18, RTC of Tagaytay City, is hereby REVERSED
and SET ASIDE. Consequently, the resolutions dated
November 3, 1999 and June 28, 2006 of Branch 18, RTC of
Tagaytay City in Civil Case No. TG-1784 are hereby
declared NULL and VOID.
SO ORDERED.

G.R. No. 193787

April 7, 2014
SPOUSES JOSE C. ROQUE AND BEATRIZ DELA CRUZ
ROQUE, with deceased Jose C. Roque represented by
his substitute heir JOVETTE ROQUE-LIBREA, Petitioners,
vs.
MA. PAMELA P. AGUADO, FRUCTUOSO C. SABUG, JR.,
NATIONAL COUNCIL OF CHURCHES IN THE
PHILIPPINES (NCCP), represented by its Secretary
General SHARON ROSE JOY RUIZ-DUREMDES, LAND
BANK OF THE PHILIPPINES (LBP), represented by
Branch Manager EVELYN M. MONTERO, ATTY. MARIO
S.P. DIAZ, in his Official Capacity as Register of Deeds
for Rizal, Morong Branch, and CECILIO U. PULAN, in his
Official Capacity as Sheriff, Office of the Clerk of Court,
Regional Trial Court, Binangonan, Rizal, Respondents.
DECISION
PERLAS-BERNABE, J.:
1

Assailed in this petition for review on certiorari are the

2
3
Decision dated May 12, 2010 and the Resolution dated
September 15, 2010 of the Court of Appeals (CA) in CA
4
G.R. CV No. 92113 which affirmed the Decision dated July
8, 2008 of the Regional Trial Court of Binangonan, Rizal,
Branch 69 (RTC) that dismissed Civil Case Nos. 03-022 and
05-003 for reconveyance, annulment of sale, deed of real
estate mortgage, foreclosure and certificate of sale, and
damages.
The Facts
The property subject of this case is a parcel of land with an
area of 20,862 square meters (sq. m.), located in Sitio
Tagpos, Barangay Tayuman, Binangonan, Rizal, known as
5
Lot 18089.
On July 21, 1977, petitioners-spouses Jose C. Roque and
Beatriz dela Cruz Roque (Sps. Roque) and the original
owners of the then unregistered Lot 18089 namely, Velia
R. Rivero (Rivero), Magdalena Aguilar, Angela Gonzales,
Herminia R. Bernardo, Antonio Rivero, Araceli R. Victa,
Leonor R. Topacio, and Augusto Rivero (Rivero, et al.)
6
executed a Deed of Conditional Sale of Real Property

(1977 Deed of Conditional Sale) over a 1,231-sq. m. portion

of Lot 18089 (subject portion) for a consideration of
P30,775.00. The parties agreed that Sps. Roque shall make
an initial payment of P15,387.50 upon signing, while the
remaining balance of the purchase price shall be payable
upon the registration of Lot 18089, as well as the
segregation and the concomitant issuance of a separate title
over the subject portion in their names. After the deeds
execution, Sps. Roque took possession and introduced
improvements on the subject portion which they utilized as a
7
balut factory.
On August 12, 1991, Fructuoso Sabug, Jr. (Sabug, Jr.),
former Treasurer of the National Council of Churches in the
Philippines (NCCP), applied for a free patent over the entire
Lot 18089 and was eventually issued Original Certificate of
8
Title (OCT) No. M-5955 in his name on October 21, 1991.
On June 24, 1993, Sabug, Jr. and Rivero, in her personal
capacity and in representation of Rivero, et al., executed a
9
Joint Affidavit (1993 Joint Affidavit), acknowledging that the
subject portion belongs to Sps. Roque and expressed their
willingness to segregate the same from the entire area of
Lot 18089.
On December 8, 1999, however, Sabug, Jr., through a
10
Deed of Absolute Sale (1999 Deed of Absolute Sale), sold
Lot 18089 to one Ma. Pamela P. Aguado (Aguado) for
P2,500,000.00, who, in turn, caused the cancellation of
OCT No. M-5955 and the issuance of Transfer Certificate of
11
Title (TCT) No. M-96692 dated December 17, 1999 in her
name.
Thereafter, Aguado obtained an P8,000,000.00 loan from
the Land Bank of the Philippines (Land Bank) secured by a
12
mortgage over Lot 18089. When she failed to pay her loan
obligation, Land Bank commenced extra-judicial foreclosure
proceedings and eventually tendered the highest bid in the
auction sale. Upon Aguados failure to redeem the subject
property, Land Bank consolidated its ownership, and TCT
13
14
No. M-115895 was issued in its name on July 21, 2003.
15

On June 16, 2003, Sps. Roque filed a complaint for

reconveyance, annulment of sale, deed of real estate

mortgage, foreclosure, and certificate of sale, and damages

before the RTC, docketed as Civil Case No. 03-022, against
Aguado, Sabug, Jr., NCCP, Land Bank, the Register of
Deeds of Morong, Rizal, and Sheriff Cecilio U. Pulan,
seeking to be declared as the true owners of the subject
portion which had been erroneously included in the sale
between Aguado and Sabug, Jr., and, subsequently, the
mortgage to Land Bank, both covering Lot 18089 in its
entirety.
In defense, NCCP and Sabug, Jr. denied any knowledge of
the 1977 Deed of Conditional Sale through which the
subject portion had been purportedly conveyed to Sps.
16
Roque.
For her part, Aguado raised the defense of an innocent
purchaser for value as she allegedly derived her title
(through the 1999 Deed of Absolute Sale) from Sabug, Jr.,
the registered owner in OCT No. M-5955, covering Lot
18089, which certificate of title at the time of sale was free
from any lien and/or encumbrances. She also claimed that
Sps. Roques cause of action had already prescribed
because their adverse claim was made only on April 21,
2003, or four (4) years from the date OCT No. M-5955 was
17
issued in Sabug, Jr.s name on December 17, 1999.
On the other hand, Land Bank averred that it had no
knowledge of Sps. Roques claim relative to the subject
portion, considering that at the time the loan was taken out,
Lot 18089 in its entirety was registered in Aguados name
and no lien and/or encumbrance was annotated on her
18
certificate of title.
Meanwhile, on January 18, 2005, NCCP filed a separate
19
complaint also for declaration of nullity of documents and
certificates of title and damages, docketed as Civil Case No.
05-003. It claimed to be the real owner of Lot 18089 which it
supposedly acquired from Sabug, Jr. through an oral
20
contract of sale in the early part of 1998, followed by the
execution of a Deed of Absolute Sale on December 2, 1998
21
(1998 Deed of Absolute Sale). NCCP also alleged that in
October of the same year, it entered into a Joint Venture
Agreement (JVA) with Pilipinas Norin Construction

Development Corporation (PNCDC), a company owned by

Aguados parents, for the development of its real properties,
including Lot 18089, into a subdivision project, and as such,
22
turned over its copy of OCT No. M-5955 to PNCDC. Upon
knowledge of the purported sale of Lot 18089 to Aguado,
Sabug, Jr. denied the transaction and alleged forgery.
23
Claiming that the Aguados and PNCDC conspired to
defraud NCCP, it prayed that PNCDCs corporate veil be
pierced and that the Aguados be ordered to pay the amount
of 38,092,002.00 representing the unrealized profit from
24
the JVA. Moreover, NCCP averred that Land Bank failed
to exercise the diligence required to ascertain the true
owners of Lot 18089. Hence, it further prayed that: (a) all
acts of ownership and dominion over Lot 18089 that the
bank might have done or caused to be done be declared
null and void; (b) it be declared the true and real owners of
Lot 18089; and (c) the Register of Deeds of Morong, Rizal
be ordered to cancel any and all certificates of title covering
25
the lot, and a new one be issued in its name. In its answer,
Land Bank reiterated its stance that Lot 18089 was used as
collateral for the P8,000,000.00 loan obtained by the
Countryside Rural Bank, Aguado, and one Bella Palasaga.
There being no lien and/ or encumbrance annotated on its
certificate of title, i.e., TCT No. M-115895, it cannot be held
liable for NCCPs claims. Thus, it prayed for the dismissal of
26
NCCPs complaint.
On September 7, 2005, Civil Case Nos. 02-022 and 05-003
27
were ordered consolidated.

of Conditional Sale is neither a deed of conveyance nor a

transfer document, as it only gives the holder the right to
compel the supposed vendors to execute a deed of
absolute sale upon full payment of the consideration; (d)
neither Sps. Roque nor the alleged owners-vendors, i.e.,
Rivero, et al., have paid real property taxes in relation to Lot
18089; and (e) Sps. Roques occupation of the subject
portion did not ripen into ownership that can be considered
30
superior to the ownership of Land Bank. Moreover, the
RTC ruled that Sps. Roques action for reconveyance had
already prescribed, having been filed ten (10) years after
31
the issuance of OCT No. M-5955.

purchase price. Hence, it only directed Land Bank to

respect Sps. Roques possession with the option to
appropriate the improvements introduced thereon upon
36
payment of compensation.

On the other hand, regarding NCCPs complaint, the RTC

observed that while it anchored its claim of ownership over
Lot 18089 on the 1998 Deed of Absolute Sale, the said
deed was not annotated on OCT No. M-5955. Neither was
any certificate of title issued in its name nor did it take
possession of Lot 18089 or paid the real property taxes
therefor. Hence, NCCPs claim cannot prevail against Land
Banks title, which was adjudged by the RTC as an innocent
purchaser for value. Also, the RTC disregarded NCCPs
allegation that the signature of Sabug, Jr. on the 1999 Deed
of Absolute Sale in favor of Aguado was forged because his
signatures on both instruments bear semblances of
similarity and appear genuine. Besides, the examiner from
the National Bureau of Investigation, who purportedly found
that Sabug, Jr.s signature thereon was spurious leading to
the dismissal of a criminal case against him, was not
32
presented as a witness in the civil action.

Aggrieved, both Sps. Roque and NCCP moved for

40
reconsideration but were denied by the CA in a Resolution
dated September 15, 2010, prompting them to seek further
recourse before the Court.

The RTC Ruling

28

After due proceedings, the RTC rendered a Decision

dated July 8, 2008, dismissing the complaints of Sps.
Roque and NCCP.

With respect to Sps. Roques complaint, the RTC found that

the latter failed to establish their ownership over the subject
portion, considering the following: (a) the supposed ownersvendors, i.e., Rivero, et al., who executed the 1977 Deed of
Conditional Sale, had no proof of their title over Lot 18089;
(b) the 1977 Deed of Conditional Sale was not registered
29
with the Office of the Register of Deeds; (c) the 1977 Deed

Finally, the RTC denied the parties respective claims for

33
damages.
The CA Ruling
On appeal, the Court of Appeals (CA) affirmed the foregoing
34
RTC findings in a Decision dated May 12, 2010. While
Land Bank was not regarded as a mortgagee/purchaser in
good faith with respect to the subject portion considering
35
Sps. Roques possession thereof, the CA did not order its
reconveyance or segregation in the latters favor because of
Sps. Roques failure to pay the remaining balance of the

As regards NCCP, the CA found that it failed to establish its

right over Lot 18089 for the following reasons: (a) the sale to
it of the lot by Sabug, Jr. was never registered; and (b) there
is no showing that it was in possession of Lot 18089 or any
portion thereof from 1998. Thus, as far as NCCP is
concerned, Land Bank is a mortgagee/purchaser in good
37
faith.
38

39

The Issue Before the Court

The central issue in this case is whether or not the CA erred
in not ordering the reconveyance of the subject portion in
Sps. Roques favor.
Sps. Roque maintain that the CA erred in not declaring
them as the lawful owners of the subject portion despite
having possessed the same since the execution of the 1977
Deed of Conditional Sale, sufficient for acquisitive
41
prescription to set in in their favor. To bolster their claim,
they also point to the 1993 Joint Affidavit whereby Sabug,
42
Jr. and Rivero acknowledged their ownership thereof.
Being the first purchasers and in actual possession of the
disputed portion, they assert that they have a better right
over the 1,231- sq. m. portion of Lot 18089 and, hence,
cannot be ousted therefrom by Land Bank, which was
adjudged as a ortgagee/purchaser in bad faith, pursuant to
43
Article 1544 of the Civil Code.
In opposition, Land Bank espouses that the instant petition
should be dismissed for raising questions of fact, in violation
of the proscription under Rule 45 of the Rules of Court
44
which allows only pure questions of law to be raised.
Moreover, it denied that ownership over the subject portion

had been acquired by Sps. Roque who admittedly failed to

45
pay the remaining balance of the purchase price. Besides,
Land Bank points out that Sps. Roques action for
46
reconveyance had already prescribed.
Instead of traversing the arguments of Sps. Roque, NCCP,
47
in its Comment dated December 19, 2011, advanced its
own case, arguing that the CA erred in holding that it failed
to establish its claimed ownership over Lot 18089 in its
entirety. Incidentally, NCCPs appeal from the CA Decision
48
dated May 12, 2010 was already denied by the Court, and
hence, will no longer be dealt with in this case.

transfer and convey unto the VENDEE, or their heirs,

executors, administrators, or assignors, that unsegregated
portion of the above lot, x x x.
That the aforesaid amount shall be paid in two installments,
the first installment which is in the amount of __________
(P15,387.50) and the balance in the amount of __________
(P15,387.50), shall be paid as soon as the described portion
of the property shall have been registered under the Land
Registration Act and a Certificate of Title issued accordingly;

The Courts Ruling

That as soon as the total amount of the property has been

paid and the Certificate of Title has been issued, an
absolute deed of sale shall be executed accordingly;

The petition lacks merit.

xxxx

The essence of an action for reconveyance is to seek the

transfer of the property which was wrongfully or erroneously
registered in another persons name to its rightful owner or
49
to one with a better right. Thus, it is incumbent upon the
aggrieved party to show that he has a legal claim on the
property superior to that of the registered owner and that the
property has not yet passed to the hands of an innocent
50
purchaser for value.

xxxx

Examining its provisions, the Court finds that the stipulation

above-highlighted shows that the 1977 Deed of Conditional
Sale is actually in the nature of a contract to sell and not
52
one of sale contrary to Sps. Roques belief. In this relation,
it has been consistently ruled that where the seller promises
to execute a deed of absolute sale upon the completion by
the buyer of the payment of the purchase price, the contract
is only a contract to sell even if their agreement is
53
denominated as a Deed of Conditional Sale, as in this
case. This treatment stems from the legal characterization
of a contract to sell, that is, a bilateral contract whereby the
prospective seller, while expressly reserving the ownership
of the subject property despite delivery thereof to the
prospective buyer, binds himself to sell the subject property
exclusively to the prospective buyer upon fulfillment of the
condition agreed upon, such as, the full payment of the
54
purchase price. Elsewise stated, in a contract to sell,
ownership is retained by the vendor and is not to pass to the
55
vendee until full payment of the purchase price. Explaining
56
the subject matter further, the Court, in Ursal v. CA, held
that:

That for and in consideration of the sum of THIRTY

THOUSAND SEVEN HUNDRED SEVENTY FIVE PESOS
(P30,775.00), Philippine Currency, payable in the manner
hereinbelow specified, the VENDORS do hereby sell,

[I]n contracts to sell the obligation of the seller to sell

becomes demandable only upon the happening of the
suspensive condition, that is, the full payment of the
purchase price by the buyer. It is only upon the existence of

Sps. Roque claim that the subject portion covered by the

1977 Deed of Conditional Sale between them and Rivero, et
al. was wrongfully included in the certificates of title covering
Lot 18089, and, hence, must be segregated therefrom and
their ownership thereof be confirmed. The salient portions of
the said deed state:
DEED OF CONDITIONAL SALE OF REAL PROPERTY
KNOW ALL MEN BY THESE PRESENTS:

51

the contract of sale that the seller becomes obligated to

transfer the ownership of the thing sold to the buyer. Prior to
the existence of the contract of sale, the seller is not
obligated to transfer the ownership to the buyer, even if
there is a contract to sell between them.
Here, it is undisputed that Sps. Roque have not paid the
57
final installment of the purchase price. As such, the
condition which would have triggered the parties obligation
to enter into and thereby perfect a contract of sale in order
to effectively transfer the ownership of the subject portion
from the sellers (i.e., Rivero et al.) to the buyers (Sps.
Roque) cannot be deemed to have been fulfilled.
Consequently, the latter cannot validly claim ownership over
the subject portion even if they had made an initial payment
58
and even took possession of the same.
The Court further notes that Sps. Roque did not even take
any active steps to protect their claim over the disputed
portion. This remains evident from the following
circumstances appearing on record: (a) the 1977 Deed of
Conditional Sale was never registered; (b) they did not seek
the actual/physical segregation of the disputed portion
despite their knowledge of the fact that, as early as 1993,
the entire Lot 18089 was registered in Sabug, Jr.s name
under OCT No. M-5955; and (c) while they signified their
59
willingness to pay the balance of the purchase price, Sps.
Roque neither compelled Rivero et al., and/or Sabug, Jr. to
accept the same nor did they consign any amount to the
court, the proper application of which would have effectively
60
fulfilled their obligation to pay the purchase price. Instead,
Sps. Roque waited 26 years, reckoned from the execution
of the 1977 Deed of Conditional Sale, to institute an action
for reconveyance (in 2003), and only after Lot 18089 was
sold to Land Bank in the foreclosure sale and title thereto
was consolidated in its name. Thus, in view of the foregoing,
Sabug, Jr. as the registered owner of Lot 18089 borne by
the grant of his free patent application could validly
convey said property in its entirety to Aguado who, in turn,
mortgaged the same to Land Bank. Besides, as aptly
observed by the RTC, Sps. Roque failed to establish that
the parties who sold the property to them, i.e., Rivero, et al.,
61
were indeed its true and lawful owners. In fine, Sps.

Roque failed to establish any superior right over the subject

portion as against the registered owner of Lot 18089, i.e.,
Land Bank, thereby warranting the dismissal of their
reconveyance action, without prejudice to their right to seek
62
damages against the vendors, i.e., Rivero et al. As applied
63
in the case of Coronel v. CA:
It is essential to distinguish between a contract to sell and a
conditional contract of sale specially in cases where the
subject property is sold by the owner not to the party the
seller contracted with, but to a third person, as in the case at
bench. In a contract to sell, there being no previous sale of
the property, a third person buying such property despite
the fulfilment of the suspensive condition such as the full
payment of the purchase price, for instance, cannot be
deemed a buyer in bad faith and the prospective buyer
cannot seek the relief of reconveyance of the property.
There is no double sale in such case.1wphi1 Title to the
property will transfer to the buyer after registration because
there is no defect in the owner-sellers title per se, but the
latter, of course, may be sued for damages by the intending
buyer. (Emphasis supplied)

from the same seller.

Finally, regarding Sps. Roques claims of acquisitive
prescription and reimbursement for the value of the
improvements they have introduced on the subject
67
property, it is keenly observed that none of the arguments
68
therefor were raised before the trial court or the CA.
Accordingly, the Court applies the well-settled rule that
litigants cannot raise an issue for the first time on appeal as
this would contravene the basic rules of fair play and justice.
In any event, such claims appear to involve questions of fact
69
which are generally prohibited under a Rule 45 petition.
With the conclusions herein reached, the Court need not
belabor on the other points raised by the parties, and
ultimately finds it proper to proceed with the denial of the
petition.
WHEREFORE, the petition is DENIED. The Decision dated
May 12, 2010 and the Resolution dated September 15,
2010 of the Court of Appeals in CAG.R. CV No. 92113 are
hereby AFFIRMED.
SO ORDERED.

On the matter of double sales, suffice it to state that Sps.

64
65
Roques reliance on Article 1544 of the Civil Code has
been misplaced since the contract they base their claim of
ownership on is, as earlier stated, a contract to sell, and not
66
one of sale. In Cheng v. Genato, the Court stated the
circumstances which must concur in order to determine the
applicability of Article 1544, none of which are obtaining in
this case, viz.:
(a) The two (or more) sales transactions in issue must
pertain to exactly the same subject matter, and must be
valid sales transactions;
(b) The two (or more) buyers at odds over the rightful
ownership of the subject matter must each represent
conflicting interests; and
(c) The two (or more) buyers at odds over the rightful
ownership of the subject matter must each have bought

G.R. No. 166516

September 3, 2009
EMMA VER REYES and RAMON REYES, Petitioners,
vs.
IRENE MONTEMAYOR and THE REGISTER OF DEEDS
OF CAVITE, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of
1
the Rules of Court, assailing the Decision dated 20 May
2004, rendered by the Court of Appeals in CA-G.R. CV No.
2
54517, which affirmed the Decision dated 7 October 1996,
of the Regional Trial Court (RTC), Branch 21, of Imus,
Cavite, in Civil Case No. 878-94, dismissing the Complaint
for Reconveyance of petitioners, spouses Emma Ver-Reyes
(Emma) and Ramon Reyes (Ramon), and declaring private
respondent Irene Montemayor as the owner of the subject
property.
On 18 February 1994, petitioners filed before the RTC a
3
Complaint for Reconveyance against private respondent
and the Register of Deeds of Cavite. The Complaint was
docketed as Civil Case No. 878-94. Petitioners alleged in
their Complaint that they were the owners of a parcel of land
4
covered by Transfer Certificate of Title (TCT) No. T-58459
situated in Paliparan, Dasmarias, Cavite (subject property).
They bought the subject property from the previous owner,
Marciano Cuevas (Marciano), as evidenced by a Deed of
5
Absolute Sale dated 8 October 1976. Thereafter, Marciano
surrendered to petitioners the Owners Duplicate Copy of
TCT No. T-58459. Petitioners accordingly paid the taxes on
the sale of the subject property. However, they were unable
to register the sale and effect the transfer of the certificate of
title to the subject property to their names.
Petitioners claimed that they had consistently paid the real
estate taxes on the subject property since their acquisition
of the same in 1976 until 1991. In 1993, when they went to
the Office of the Register of Deeds of Cavite to pay their
real estate taxes for the years 1992 and 1993, they were
informed that the subject property was sold by Marciano to
private respondent on 10 November 1992, and TCT No. T-

369793 covering it was issued in private respondents name

on 4 January 1993.
Petitioners asserted that private respondent was able to
cause the issuance of TCT No. T-369793 in her name by
presenting a simulated and fictitious Deed of Absolute Sale
dated 10 November 1992. The signatures of the sellers,
spouses Virginia (Virginia) and Marciano Cuevas (spouses
6
Cuevas), were forged in the said Deed.
Hence, petitioners prayed for the cancellation of TCT No. T369793 in private respondents name; the issuance of a new
certificate of title in petitioners names; the award of nominal
damages of P50,000.00 and exemplary damages of
P100,000.00, by reason of the fraud employed by private
respondent in having the subject property registered in her
name; the award of attorneys fees of not less than P50,000;
7
and the costs of suit.
On 18 April 1994, private respondent filed with the RTC her
Answer with Counterclaim, wherein she denied petitioners
allegation that the signatures of the spouses Cuevas in the
Deed of Absolute Sale dated 10 November 1992 were
forged. Private respondent averred that the subject property
was offered to her for sale, but she did not disclose who
actually made the offer. She discovered that there was no
adverse claim or any kind of encumbrance annotated on the
certificate of title of the spouses Cuevas covering the
subject property. She had purchased the subject property
for value and in good faith and had been in possession
thereof. Private respondent insisted that she had a better
title to the subject property, since she was the first registrant
of its sale. Private respondent thus prayed for the award of
moral damages in the amount of not less than P100,000.00
for the mental anguish, serious anxiety, and besmirched
reputation she suffered by reason of the unjustified filing by
petitioners of the case; the award of exemplary damages in
the amount of P100,000.00 for petitioners malicious filing of
the case; and the award of attorneys fees, and costs of suit.
8

After the conduct of pre-trial, petitioners offered the

testimonies of Marciano, petitioner Emma, and Carolyn
Moldez-Pitoy (Carolyn).

Marciano testified that he and his wife Virginia signed, on 8

October 1976, a Deed of Absolute Sale covering the subject
property in petitioner Emmas favor. He denied selling the
subject property to any other person, including private
respondent. Marciano, when shown the Deed of Absolute
Sale dated 10 November 1992, involving the same property,
in private respondents favor, flatly stated that the signatures
9
found therein were not his or his wifes.
Petitioner Emma personally confirmed that Marciano sold
the subject property to her in 1976. She had faithfully paid
the real property taxes on it from 1976 until 1993, when she
learned that it had been registered in private respondents
name. Upon examining the Deed of Absolute Sale dated 10
November 1992, supposedly executed by the spouses
Cuevas over the subject property in private respondents
favor, petitioner Emma observed that the spouses Cuevas
signatures found therein appeared to have been forged.
She further claimed that after finding that the subject
property had been registered in private respondents name,
she suffered from nervousness and the aggravation of her
rheumatoid arthritis. She was compelled to engage the
services of a lawyer to prosecute her case against private
respondent, which could cost her P100,000.00 or more.
During the cross-examination and re-direct examination,
petitioner Emma explained that she had not been able to
register the subject property in her name because of her
10
diabetes and rheumatoid arthritis.
Carolyn introduced herself as a Senior Document Examiner
in the National Bureau of Investigation (NBI), performing,
among her other duties, handwriting analysis. She admitted
to preparing Questioned Documents Report No. 548-795,
11
dated 18 July 1995.
Questioned Documents Report No. 548-795, prepared by
Carolyn, was submitted by petitioners as evidence and was
12
marked as Exhibit "G". They had obtained the report for
the purpose of finding out whether (1) the signatures of the
spouses Cuevas in the Deed of Absolute Sale dated 10
November 1992, which they purportedly executed in private
respondents favor; and (2) the signature of Escolastico
Cuevas (Escolastico), Registrar of Deeds (ROD) of Cavite,

in the Owners Duplicate Copy of TCT No. T-58459, which

Mariano surrendered to petitioners in 1972, were forged, by
comparing them with the specimen signatures given by the
spouses Cuevas and ROD Escolastico. As stated in her
Report, Carolyn found that:
1. The questioned and the standard/specimen
signatures VIRGINIA M. CUEVAS were not written
by one and the same person.
2. The questioned and the standard /specimen
signatures of ESCOLASTICO CUEVAS were
written by one and the same person.
3. No definite opinion on MARCIANO CUEVAS per
13
above stated findings no. 3.
On the other hand, private respondent offered the
testimonies of Jaime Laudato (Jaime) and Angelina Cortez
(Angelina) in support of her version of events.
Jaime disclosed that it was Vice-Mayor Lauro Carungcong
(Carungcong) of Dasmarias who supposedly brokered the
sale of the subject property, and who instructed Jaime to
verify with the Register of Deeds the existence of the
Original Copy of TCT No. T-58459, and to check for any
encumbrances thereon. Three weeks thereafter, Vice-Mayor
Carungcong gave Jaime a copy of the Deed of Absolute
Sale dated 10 November 1992 executed by the spouses
Cuevas over the subject property in private respondents
favor, and directed Jaime to pay the obligatory taxes and to
register the subject property in private respondents name.
On cross-examination, Jaime admitted that he had never
met nor was he acquainted with either of the spouses
14
Cuevas, the alleged vendors of the subject property.
Angelina, employed as a Deeds Examiner in the Register of
Deeds of Cavite, was tasked, as part of her duties, to
examine the documents related to the transfer of the subject
property in private respondents name before issuing the
corresponding certificate of title. However, she admitted
during cross-examination that she was not in a position to
determine the authenticity of the documents presented to

her.

15

16

The RTC rendered a Decision in Civil Case No. 878-94 on

7 October 1996, dismissing petitioners Complaint. The RTC
found that the statements of their witness Marciano and the
results of Questioned Documents Report No. 548-795
issued by the NBI were contradictory. The RTC noted that
Marciano testified that the signatures found in the Deed of
Absolute Sale dated 8 October 1976 and the Kasunduan sa
17
Bilihan ng Lupa dated 15 June 1971 were Virginias; but
the NBI Report stated that "the questioned and the
standard/specimen signatures VIRGINIA M. CUEVAS were
not written by one and the same person." The RTC also
gave little credence to Marcianos denial of the sale of the
subject property to private respondent, on the ground that it
was self-serving. Although the RTC did observe differences
in Marcianos signature in the Kasunduan ng Bilihan ng
Lupa dated 15 June 1971 and the Deed of Absolute Sale
dated 10 November 1992, the trial court dismissed the
same as mere changes in a persons penmanship or
signature that could occur over the years. The RTC
concluded that Civil Case No. 878-94 involved a double sale
of the subject property, wherein private respondent, an
innocent purchaser for value who first registered the
property in her name, should be adjudged to have a better
title. The dispositive part of the RTC Decision dated 7
October 1996 reads:
WHEREFORE, judgment is hereby rendered dismissing this
case and declaring that the true and lawful owner of the
subject property as described in, and covered by, TCT No.
T-369793 is [herein respondent] Irene Montemayor.
All other claims of the parties are dismissed for inadequate
18
substantiation.
On 11 July 1997, petitioners filed an appeal with the Court
of Appeals, docketed as CA-G.R. CV No. 54517, which
challenged the afore-mentioned RTC judgment.
During the pendency of CA-G.R. CV No. 54517, petitioners
19
filed with the Court of Appeals an Urgent Manifestation on
20 October 1998. According to them, they obtained

information that private respondents TCT No. T-369793

covering the subject property had already been canceled;
that a new certificate of title, TCT No. T-784707, had been
issued in the name of another person, Engracia Isip
(Engracia); and that a mortgage was constituted on the
subject property. It began with private respondent executing
a Waiver and Quitclaim on 15 January 1998, wherein she
confessed to obtaining TCT No. T-369793 over the subject
property in bad faith. In the same document, private
respondent recognized Engracias title to the subject
property and, thus, private respondent relinquished her right
over it to Engracia and the latters heirs and successors-ininterest. The Register of Deeds, impleaded as a party in
CA-G.R. CV No. 54517, canceled TCT No. T-369793 in
private respondents name; issued TCT No. T-784707 in the
names of Engracias heirs; and annotated on the latest
certificate of title private respondents Waiver and Quitclaim
dated 15 January 1998.
On 18 November 1998, Perfecto Dumay-as, Deputy ROD of
Trece Martires City, Cavite, filed a Comment/Manifestation
stating that Civil Case No. 878-94 was not inscribed on
private respondents TCT No. T-369793, since the case
before the RTC had already been resolved in favor of
private respondent, thus, the presentation of the owners
original certificate of title along with the Waiver/Quitclaim,
dated 15 January 1998, complied with the requirements of a
voluntary transaction, justifying the issuance of TCT No. T20
784707 in the name of Engracias heirs.
In its Decision dated 20 May 2004 in CA-G.R. CV No.
54517, the Court of Appeals denied petitioners appeal and
affirmed the RTC Decision dated 7 October 1996 in Civil
Case No. 878-94. The appellate court held that petitioners
were negligent in failing to register the subject property in
their names. And, just like the RTC, the Court of Appeals
declared Marcianos denial of the sale of the subject
property in private respondents favor as self-serving. The
appellate court also pointed out that the findings of the NBI
were not definite as regards the alleged forgery of
Marcianos signature in the Deed of Absolute Sale dated 10
November 1992. Lastly, the Court of Appeals took judicial
notice of the Comment/Manifestation of Perfecto Dumay-as,

Deputy ROD of Trece Martires City, Cavite, stating that Civil

Case No. 878-94 was not inscribed on private respondents
TCT No. T-369793, since the case before the RTC had
already been resolved in favor of private respondent, and
the acquisition by Engracias heirs of the subject property
and TCT No. T-784707 over the same was in good faith
and, therefore, valid. The Court of Appeals decreed:
WHEREFORE, premises considered, the appealed
Decision dated October 7, 1996 of the Regional Trial Court
21
of Cavite is hereby AFFIRMED.
22

Petitioners filed a Motion for Reconsideration of the

foregoing Decision on 25 June 2004, which the Court of
23
Appeals denied in a Resolution dated 28 December 2004.
Hence, the present Petition, where petitioners made the
following assignment of errors:
I
RESPONDENT COURT COMMITTED SERIOUS ERROR
IN RENDERING THE DECISION AND RESOLUTION IN
QUESTION IN COMPLETE DISREGARD OF LAW AND
JURISPRUDENCE BY SUSTAINING THE ORDER OF THE
REGIONAL TRIAL COURT (BRANCH 21) OF CAVITE
NOTWITHSTANDING THE CLEAR AND AUTHENTIC
RECORDS PRESENTED DURING TRIAL WHICH
NEGATE AND CONTRADICT ITS FINDINGS.
II
RESPONDENT COURT COMMITED GRAVE AND
REVERSIBLE ERROR IN RENDERING THE DECISION
AND RESOLUTION IN QUESTION IN VIOLATION OF LAW
AND JURISPRUDENCE BY SUSTAINING THE ORDER
OF THE REGIONAL TRIAL COURT (BRANCH 21) OF
CAVITE THEREBY IGNORING THE EVIDENCE ON
RECORD SHOWING THE PETITIONERS CLEAR RIGHTS
OF OWNERSHIP OVER THE SUBJECT PROPERTY.
III
RESPONDENT COURT COMMITTED SERIOUS ERROR
IN AFFIRMING THAT THE TRUE AND LAWFUL OWNER
OVER (sic) THE SUBJECT PROPERTY AS DESCRIBED

IN AND COVERED BY TCT NO. T-369793 IS PRIVATE

RESPONDENT IRENE MONTEMAYOR DESPITE
DOCUMENTARY AND TESTIMONIAL EVIDENCE TO THE
24
CONTRARY.
The fundamental issue for resolution of this Court in this
case is who has better right to the subject property. Before
the Court can settle the same, it must first determine the
question of whether there was a double sale of the subject
property to both petitioners and private respondent, which is
essentially a question of fact requiring the Court to review,
examine and evaluate, or weigh the probative value of the
evidence presented by the parties.
Rule 45 of the Rules of Court provides that only questions of
law shall be raised in a Petition for Review before this Court.
This rule, however, admits of certain exceptions, namely, (1)
when the findings are grounded entirely on speculations,
surmises, or conjectures; (2) when the inference made is
manifestly mistaken, absurd or impossible; (3) when there is
grave abuse of discretion; (4) when the judgment is based
on a misappreciation of facts; (5) when the findings of fact
are conflicting; (6) when, in making its findings, the same
are contrary to the admissions of both appellant and
appellee; (7) when the findings are contrary to those of the
trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the
respondent; and (10) when the findings of fact are premised
on the supposed absence of evidence and contradicted by
25
the evidence on record.
While as a general rule appellate courts do not usually
disturb the lower court's findings of fact, unless said findings
are not supported by or are totally devoid of or inconsistent
with the evidence on record, such finding must of necessity
be modified to conform with the evidence if the reviewing
tribunal were to arrive at the proper and just resolution of
26
the controversy. Thus, although the findings of fact of the
Court of Appeals are generally conclusive on this Court,
which is not a trier of facts, if said factual findings do not
conform to the evidence on record, this Court will not

hesitate to review and reverse the factual findings of the

lower courts. In the instant case, the Court finds sufficient
basis to deviate from the rule since the extant evidence and
prevailing law support a finding different from the conclusion
27
of the Court of Appeals and the RTC.
Contrary to the findings of both the Court of Appeals and the
RTC, the evidence on record reveals that the spouses
Cuevas, the previous owners of the subject property, did not
sell the said property to private respondent.
Marcianos explicit statements, made under oath before the
trial court, that he did not sell the subject property to anyone
other than petitioners, and that the signatures of the
vendors appearing in the Deed of Absolute Sale dated 10
November 1992 were not made by him and his wife, were
not refuted. Private respondents witness, Jaime, who was
tasked to verify if there was no encumbrance on the
spouses Cuevas title to the subject property and to register
it in private respondents name after the alleged sale,
admitted that he had never met the supposed vendors of
the subject property and, thus, could not competently testify
on whether it was actually the spouses Cuevas who
executed the Deed of Absolute Sale dated 10 November
1992 in private respondents favor.
The pronouncement of the RTC, affirmed by the Court of
Appeals, that Marcianos testimony was self-serving was
utterly baseless. Neither the RTC nor the Court of Appeals
explained how Marcianos confirmation of the sale of the
subject property to petitioners, and his renunciation of the
supposed sale of the same property to private respondent,
would accrue to Marcianos benefit. In giving such a
testimony in 1994, Marciano did not stand to gain back the
subject property, which he had already admitted to selling to
petitioners 18 years prior, in 1976. On the other hand, if
Marciano falsely testified in open court that he and his wife
did not sell the subject property to private respondent,
Marciano was risking prosecution for the crime of perjury
and liability for damages.
Additionally, although Questioned Documents Report No.
548-795 of the NBI did not make a definitive finding on

whether Marcianos purported signature on the Deed of

Sale dated 10 November 1992 was actually his or a forgery,
the same Report did unqualifiedly state that the signature
that Virginia supposedly affixed to the said Deed and the
specimen signatures that she provided the NBI were not
written by the same person. Clearly, Questioned Documents
Report No. 548-795 of the NBI established that her
purported signature in the Deed of Absolute Sale dated 10
November 1992 was forged.
It is true that a finding of forgery does not depend
exclusively on the testimonies of expert witnesses and that
judges must use their own judgment, through an
independent examination of the questioned signature, in
28
determining the authenticity of the handwriting. However, it
is important to note that in this case neither the RTC nor the
Court of Appeals made any finding through an independent
examination of Virginias signatures. The RTC gave
credence to Questioned Documents Report No. 548-795 of
the NBI, but misread it as saying that the two specimen
signatures given by Virginia were not written by the same
person. Hence, Questioned Documents Report No. 548-795
of the NBI, finding that the signature of Virginia in the Deed
of Absolute Sale dated 10 November 1992 is a forgery,
stands unquestioned.
That at least one of the signatures of the alleged vendors
was indubitably established as a forgery should have
already raised serious doubts as to the authenticity and
validity of the Deed of Absolute Sale dated 10 November
1992. This, taken together with Marcianos candid and
categorical testimony that he and his wife did not sell the
subject property to private respondent or executed any deed
to evidence the same, strongly militates against the
existence of a second sale of the subject property to private
respondent.
In comparison, the circumstances surrounding the alleged
second sale of the subject property by the spouses Cuevas
to private respondent are sketchy at best. Vice Mayor
Carungcong, who allegedly brokered the sale, had already
died during the pendency of the case and was not
presented as witness. It was not made clear whether he

was duly authorized by the spouses Cuevas to broker such

sale. Private respondents witness, Jaime, did not claim to
have been present during the negotiations or in any part of
the sale transaction, and had not even met the spouses
Cuevas. All he was able to testify on was that he verified
with the Register of Deeds that there was no encumbrance
annotated on TCT No. T-58459 of the spouses Cuevas, and
eventually, he was able to cause the cancellation of TCT
No. T-58459 in the spouses Cuevas names and the
issuance of TCT No. T-369793 in private respondents
name based on the questionable Deed of Absolute Sale
dated 10 November 1992. Similarly ambiguous was how
Jaime was able to have TCT No. T-58459 of the spouses
Cuevas cancelled when the Owners Duplicate Copy thereof
was with petitioners. When a certificate of title is cancelled,
the owners duplicate must also be surrendered to the
Register of Deeds for cancellation, in accordance with
29
Section 53 of Presidential Decree No. 1529, otherwise
known as the Property Registration Decree, as amended.
Other than the forged Deed of Absolute Sale dated 10
November 1992, private respondents bad faith in
registering the subject property in her name and her
dishonest scheme in appropriating the land for herself are
further evidenced by her own admissions in the Waiver and
Quitclaim dated 15 January 1998, which she executed in
30
favor of Engracias heirs, to wit :
1. That, I am the holder of Transfer Certificate of
Title No. 369793 covering a parcel of land (Lot No.
6961-N) with an area of Forty One Thousand Eight
Hundred and Thirty Seven square meters (41, 837
sq. m.) situated in Barangay Paliparan,
Dasmarias, Cavite and declared for taxation
purposes under Tax Declaration No. 151746
Dasmarias, Cavite;
2. That, I know (sic) from the very beginning the
dubiousness of my title to the above described
roperty (sic);
3. That, I have neither legal or equitable title to the
said property as the previous document (Deed of

Conveyance) which is the basis of immediate

transfer from OCT No. 1002 is of questionable
origin;
4. That, all documents relative to the issuance of
subsequent transfer certificate of titles including
TCT No. 369793 under my name were in reality,
entirely simulated and fictitious;
5. That, I am recognizing the genuineness of
Transfer Certificate of Title No. 769357-3911 in the
name of ENGRACIA ISIP with Tax Declaration No.
151745, which has been transferred to her heirs,
APOLONIA I.R. ALCARAZ, ELIZA I. REYESGLORIA, VICTOR ISIP REYES and EPITACIO
ISIP REYES, covered by TCT. No. T-784707;
6. That, in the light of the foregoing, I do hereby
waive and renounce, now and forever, all claims of
whatever nature to the said property in favor of the
said ENGRACIA ISIP, her heirs, executors,
administrator or assigns.
Private respondents unabashed confession that she knew
of the dubiousness of her title from the very beginning is
contrary to the concept of good faith. Good faith consists in
the belief of the possessors that the persons from whom
they received the thing are its rightful owners who could
31
convey their title.
Based on the foregoing, the preponderance of evidence in
this case is in petitioners favor. The spouses Cuevas only
sold the subject property to them in 1976, and did not sell it
a second time to private respondent in 1992. As a
consequence, the rules on the double sale of registered
property are not relevant herein. The Court then proceeds to
rule on the consequence of private respondents fraudulent
registration of the subject property in her name.
The Deed of Absolute Sale dated 10 November 1992, a
32
forged deed, is a nullity and conveys no title. Paragraph 2
of Section 53 of Presidential Decree No. 1529 reads:
In all cases of registration procured by fraud, the owner may

pursue all his legal and equitable remedies against the

parties to such fraud without prejudice, however, to the
rights of any innocent holder for value of a certificate of title.
After the entry of the decree of registration on the original
petition or application, any subsequent registration procured
by the presentation of a forged duplicate certificate of title,
or of a forged deed or other instrument, shall be null and
void.
Insofar as a person who fraudulently obtained a property is
concerned, the registration of the property in said persons
name would not be sufficient to vest in him or her the title to
the property. A certificate of title merely confirms or records
title already existing and vested. The indefeasibility of the
Torrens title should not be used as a means to perpetrate
fraud against the rightful owner of real property. Good faith
must concur with registration because, otherwise,
33
registration would be an exercise in futility. A Torrens title
does not furnish a shield for fraud, notwithstanding the longstanding rule that registration is a constructive notice of title
binding upon the whole world. The legal principle is that if
the registration of the land is fraudulent, the person in
whose name the land is registered holds it as a mere
34
trustee.
It has long been established that the sole remedy of the
landowner whose property has been wrongfully or
erroneously registered in another's name is to bring an
ordinary action in an ordinary court of justice for
reconveyance or, if the property has passed into the hands
of an innocent purchaser for value, for damages. "It is one
thing to protect an innocent third party; it is entirely a
different matter and one devoid of justification if deceit
would be rewarded by allowing the perpetrator to enjoy the
35
fruits of his nefarious deed." Reconveyance is all about
the transfer of the property, in this case the title thereto,
which has been wrongfully or erroneously registered in
another person's name, to its rightful and legal owner, or to
36
one with a better right. Evidently, petitioners, being the
rightful owners of the subject property, are entitled to the
reconveyance of the title over the same.
However, as a further demonstration of private respondents

continuing bad faith and persistent effort to unlawfully

deprive petitioners of the subject property, private
respondent executed the Waiver and Quitclaim dated 15
January 1998, in which she admitted that her title to the said
property was void and, instead, recognized the title of
Engracia, who owned the subject property prior to the
spouses Cuevas. Pursuant to said Waiver and Quitclaim,
the Register of Deeds cancelled TCT No. T-369793 in
private respondents name and issued TCT No. T-784707 in
the names of Engracias heirs.
It must be stressed that Engracia, whose TCT No. T-13105
over the subject property was already cancelled on 26 April
1965, had never filed a case questioning the cancellation of
37
said certificate of title during her lifetime. There is also
nothing in the records that would show that after Engracias
death in 1981, her heirs attempted to recover title to the
subject property.
The Waiver and Quitclaim dated 15 January 1998 deserves
little evidentiary weight as to the truth or veracity of the
statements contained therein, considering that they were
unilaterally made by private respondent. There is no
independent evidence that all certificates of title subsequent
to OCT No. 1002 covering the subject property were
simulated and fictitious. In fact, private respondent
contradicted herself by acknowledging in the very same
document that Engracias title, which was transferred to her
heirs, was genuine. The only fact that said Waiver and
Quitclaim established was private respondents bad faith in
having the subject property registered in her name. For the
Court to make such finding of bad faith on private
respondents part, it need not actually be true that all titles to
the subject property, prior to private respondents, were
simulated and fictitious, only, private respondent believed
them to be so, but still persisted in acquiring and registering
in her name what she already knew was a dubious title.
What is apparent to this Court is that private respondent
executed the Waiver and Quitclaim dated 15 January 1998
so as to effect the transfer of the subject property to third
persons, i.e., Engracias heirs, and defeat any judgment
granting the petitioners the remedy of reconveyance of the

subject property.
In connection therewith, this Court expresses its disfavor
over the cavalier attitude of the Register of Deeds of Cavite
in canceling TCT No. T-369793 in private respondents
name and issuing TCT No. T-784707 in the names of
Engracias heirs, on the sole basis of the Waiver and
Quitclaim dated 15 January 1998, executed by private
respondent. The Register of Deeds of Cavite, who was a
party to petitioners case for reconveyance, and was
undoubtedly aware of the issues involved in the said case
and the pendency of the same. Yet it blindly allowed the
registration of the alleged title to the subject property of
Engracia and her heirs, in effect, reviving a title that had
already been cancelled way back in 1965, and disregarding
all other titles issued in between, based entirely on the
unilateral claims of a self-confessed fraud. Moreover, in
placing its faith in the unsupported statements of the private
respondent, who had confessed to having acquired and
registered the property in bad faith, against the presumed
good faith of the former owners, the Register of Deeds
acted in a manner that was highly irregular.1avvphi1
This having been said, an action for reconveyance is an
action in personam available to a person whose property
has been wrongfully registered under the Torrens system in
anothers name. Reconveyance is always available as long
as the property has not passed to an innocent person for
38
value.
Engracias heirs cannot be considered "innocent" persons
or persons who acquired the subject property "for value."
Engracias heirs "re-acquired" the subject property by virtue
of the private respondents Waiver and Quitclaim dated 15
January 1998. That the said document was executed by
private respondent, who admitted to holding a dubious title
to the subject property, should be sufficient to put
Engracias heirs on notice and to cause the latter to
investigate the other transfers and titles issued for the
subject property. The Waiver and Quitclaim dated 15
January 1998 also does not establish that the subject
property was transferred to Engracias heirs for value, it
appearing to have been executed by private respondent in

favor of Engracias heirs without any consideration at all.

Hence, the cancellation of TCT No. T-369793 in private
respondents name and the issuance of TCT No. T-784707
in the names of Engracias heirs cannot bar the
reconveyance of the subject property to petitioners.
A judgment directing a party to deliver possession of a
property to another is in personam; it is binding only against
the parties and their successors in interest by title
39
subsequent to the commencement of the action. The
Court may deem Engracias heirs as private respondents
successors-in-interest, having acquired title to the subject
property through private respondent after the
commencement of petitioners action for reconveyance of
the same property.
Since private respondents fraudulent registration of the
subject property in her name violated petitioners right to
remain in peaceful possession of the subject property,
petitioners are entitled to nominal damages under Article
2221 of the Civil Code, which provides:
Art. 2221. Nominal damages are adjudicated in order that a
right of the plaintiff which has been violated or invaded by
the defendant, may be vindicated or recognized, and not for
the purpose of indemnifying the plaintiff for any loss suffered
by him.
This Court finds that petitioners prayer for nominal
damages in the amount of P50,000.00 is proper and
reasonable.
The award of attorneys fees is also in order because
private respondent acted in gross and evident bad faith in
refusing to satisfy petitioners plainly valid, just and
40
demandable claim. Given the time spent on the present
case, which lasted for more than 15 years, the extent of
services rendered by petitioners lawyers, the benefits
resulting in favor of the client, as well as said lawyers
41
professional standing, the award of P100,000.00 is proper.
However, exemplary damages cannot be imposed in this
case, where petitioners only prayed for the award of

nominal damages and attorneys fees, but not for moral,

temperate, liquidated, or compensatory damages. Article
2229 of the Civil Code imposes exemplary damages only
under the following circumstances:
Art. 2229. Exemplary or corrective damages are imposed,
by way of example or correction for public good, in addition
to the moral, temperate, liquidated or compensatory
damages.
IN VIEW OF THE FOREGOING, the instant Petition is
GRANTED. The assailed Decision dated 20 May 2004 of
the Court of Appeals in CA-G.R. CV No. 54517 is
REVERSED and SET ASIDE. The Register of Deeds is
ORDERED to (1) CANCEL TCT No. T-784707 over the
subject property in the name of Engracias heirs, which was
derived, not in good faith or for value, but from the
fraudulently procured TCT No. T-369793 in private
respondents name; and (2) ISSUE a new certificate of title
over the subject property in the name of petitioners, the
rightful owners thereof. Private respondent is ORDERED to
PAY petitioners nominal damages in the amount of
P50,000.00 and attorneys fees in the amount of
P100,000.00. Costs against private respondent.
SO ORDERED.

G.R. No. 148147

February 16, 2007
JESSIE GASATAYA, Petitioner,
vs.
EDITHA MABASA, Respondent.
DECISION
CORONA, J.:
Before us is an appeal by certiorari under Rule 45 of the
1
1997 Rules of Civil Procedure assailing the decision of the
Court of Appeals (CA) in CA-G.R. CV No. 55055 which, in
turn, affirmed the decision of the Regional Trial Court (RTC)
2
of Lanao del Norte, Branch 7.
The facts follow.
Respondent Editha Mabasas father, Buenaventura
Mabasa, was granted a homestead patent on Lots 279, 272
and 972 located in Lala, Lanao del Norte. Buenaventura
Mabasa mortgaged these lots to secure a loan from the
Development Bank of the Philippines (DBP). Because of his
failure to pay his indebtedness, DBP foreclosed on the lots
and sold them at public auction where it emerged as the
highest bidder. DBP then obtained titles to the lots: Lot 279
under TCT No. T-2247 and consolidated Lots 272 and 972
under TCT No. T-2448.
When Buenaventura Mabasa died, respondents siblings
authorized her to negotiate with DBP for the repurchase of
the lots. DBP allowed respondent to reacquire the
foreclosed properties through a deed of conditional sale for
3
P25,875.
Subsequently, respondent entered into an agreement with
petitioners father, Sabas Gasataya, for the latter to assume
payment of her obligation to DBP. They further agreed that
Sabas Gasataya would take possession of the lots for 20
years and develop them into a fishpond. As consideration
thereof, respondent received P10,000 cash, in addition to
the P25,000 that Sabas Gasataya had to pay DBP on her
behalf.
Upon representation by Sabas Gasataya that respondents
obligation to DBP had already been settled, they entered

into another agreement denominated as "Deed of Sale of

Fishpond Lands with Right to Repurchase."
Eight years after the execution of the above deed of sale
with right to repurchase, respondent discovered that Sabas
Gasataya had stopped paying DBP. As a result, DBP
revoked her right to repurchase the subject lots.1awphi1.net
DBP later on held a public auction of the properties where
petitioner participated and bid the highest price of P27,200.
Eventually, he acquired titles to the lots for which he was
issued TCT No. T-11720 in lieu of TCT No. T-2447 (Lot
279) and TCT No. T-11721 for TCT No. T-2448 (Lots 272
and 972).
Respondent then filed a complaint in the RTC for
4
reconveyance of titles of lands with damages against
petitioner and Sabas Gasataya (Gasatayas). She claimed
that the latter deliberately reneged on his commitment to
pay DBP to: (1) revoke her right to repurchase the lots
under the deed of conditional sale and (2) subject the
properties to another public auction where petitioner could
bid.
Petitioner and his father denied the allegations saying that
the deed of conditional sale assumed by the latter from
respondent was rendered ineffective by DBPs refusal to
accept payments thereon.
The trial court ruled in favor of respondent finding that the
Gasatayas failed to controvert her claim that they defrauded
her just so petitioner could acquire the lots at public
5
auction. According to the trial court, the Gasatayas failed to
prove that DBP indeed rejected payments from Sabas
Gasataya. The trial court ruled:
WHEREFORE, judgment is hereby rendered in favor of the
[respondent] and against [the Gasatayas] ordering [them] to
wit:
a. Ordering [petitioner] to reconvey to [respondent]
TCT. No.[T-11720] and TCT No. T-11721, both of
the Registry of Deeds for the Province of Lanao del
Norte, upon tender to and receipt by [petitioner] of

the amount of P37,200.00 Philippine money;

b. Ordering the Registrar of Deeds for the Province
of Lanao del Norte to procure and cause the
transfer and registration of the aforesaid transfer
certificates of title in favor and in the name of
herein [respondent] Editha S. Mabasa;
c. Ordering [the Gasatayas] to cede, transfer and
reconvey to [respondent] the physical possession
and occupancy of Lot 279, 272 and Lot 972as
covered by the aforesaid certificates of title;
d. Ordering [the Gasatayas] to pay [respondent]
the sum of P5,000.00 for attorneys fees;
P5,000.00 as litigation expenses;
e. Ordering [the Gasatayas] to pay costs of this
proceeding[s].
SO ORDERED.

Petitioner and his father appealed to the CA which affirmed

the RTCs decision and dismissed their appeal for lack of
merit. The CA declared:
The contention of [respondent] that [the Gasatayas]
deliberately chose not to pay DBP as agreed, in order for
them to acquire said properties in a fraudulent and
treacherous manner, was not fully controverted by [them].
[The Gasatayas] failed to produce evidence to support their
defenses.
xxx xxx xxx
Moreover, [the Gasatayas] are in possession of said land[s]
by virtue of a Deed of Sale with a Right to Repurchase and
not because the DBP granted it to them[T]o facilitate their
acquisition of the land in question, [they] deliberately
defaulted in the payment of the assumed obligation to the
damage and prejudice of [respondent]. Consequently, the
lands in question were subjected to public bidding wherein
[petitioner] participated and eventually won[the

Gasatayas] committed a breach of trust amounting to fraud

7
which would warrant an action for reconveyance.
Petitioner alone came to us via this appeal by certiorari
seeking the reversal of the CA decision.
Before us, petitioner contests the CA decision affirming the
trial courts order to reconvey his titles on the disputed lots
to respondent who, according to him, is not the owner
thereof.
We affirm the CA.
Reconveyance is available not only to the legal owner of a
property but also to the person with a better right than the
person under whose name said property was erroneously
8
registered. While respondent is not the legal owner of the
disputed lots, she has a better right than petitioner to the
contested lots on the following grounds: first, the deed of
conditional sale executed by DBP vested on her the right to
repurchase the lots and second, her right to repurchase
them would have subsisted had they (the Gasatayas) not
defrauded her.
The trial courts findings, as affirmed by the CA, that
petitioner and his father deceived respondent to acquire the
disputed lots bind us. Well-settled is the rule that factual
conclusions of the trial court deserve respect and become
9
irrefutable especially when affirmed by the CA. Absent any
evidence that the CA overlooked salient matters that could
justify a reversal of the outcome of this case, we decline to
disturb such factual conclusions.
Petitioner, however, insists that respondent had no right to
the disputed lots since the conditional sale agreement
where such right was based had long been cancelled by
DBP. According to petitioner, a void and inexistent deed
cannot override his right as registered owner of the lots.
We disagree.
Petitioner cannot discredit the deed of conditional sale just
so he can to keep his titles to the lots. Petitioner should be

reminded that DBP revoked respondents right to

repurchase the lots under said deed because of the
deceitful maneuverings that he and his father employed. If
we were to sustain petitioners argument, then we would, in
effect, reward him for his misdeed.
Neither can this Court uphold petitioners contention that his
titles are unsullied on the mere fact that he purchased the
properties at public auction. Fraud overthrows the
presumption that the public sale was attended with
regularity. The public sale did not vest petitioner with any
valid title to the properties since it was but the consequence
of his and his fathers fraudulent schemes.
The registration of the properties in petitioners name did not
obliterate the fact that fraud preceded and facilitated such
registration. Actual or positive fraud proceeds from an
intentional deception practiced by means of
10
misrepresentation of material facts, which in this case was
the conscious representation by petitioners father (Sabas
Gasataya) that respondents obligation to DBP had already
been settled. It is fraud to knowingly omit or conceal a fact,
11
upon which benefit is obtained, to the prejudice of another.
12
Consequently, fraud is a ground for reconveyance.
Moreover, the law only protects an innocent purchaser for
value and not one who has knowledge of and participation
in the employment of fraud. An innocent purchaser for value
is one who buys the property of another without notice that
some other person has a right to or interest in that same
property, and who pays a full and fair price at the time of the
purchase or before receiving any notice of another persons
13
claim. Obviously, petitioner was not an innocent purchaser
for value.
As a final point, the Court takes significant note of the fact
that respondents father originally acquired the subject lots
through homestead grant. Commonwealth Act 141 (Public
Land Act) aims to confine and preserve to the homesteader
and his kin the homestead lots. We, therefore, agree with
the CAs disquisition that courts should "lend a stout
shoulder to help keep a homestead in the homesteaders
family" for the stern reality cannot be belied that

"homesteaders and their families are generally in the lower

stratum of life" and most likely, when they alienate the
14
homestead, it is "out of dire necessity." According to the
CA, desperation does not allow much of a choice, hence
homesteaders and their kin should be given every
opportunity to repurchase their homestead.
WHEREFORE, the assailed decision of the Court of Appeals
in CA-G.R. CV No. 55055 is hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.

G.R. No. L-33261 September 30, 1987

LIWALUG AMEROL, MACATANTO AMEROL, TAIB
AMEROL, DIBARATUN AMEROL, DIBARATUN,
MATABALAO, MINDALANO DIBARATUN, DIPUNDUGUN
MORO, and MANUCAO MORO, petitioners,
vs.
MOLOK BAGUMBARAN, respondent.
SARMIENTO, J.:
This is a petition for review on certiorari of the decision 1 of
the then Court of First Instance of Lanao del Sur, Branch III,
Marawi City, in Civil Case No. 1354, entitled, "Molok
Bagumbaran vs. Liwalug Amerol et al.," under Republic Act
2
No. 5400, "as only question of law is raised."
The only issue for resolution is the prescriptive period of an
action for reconveyance of real property which has been
wrongfully or erroneously registered under the Torrens
System in another's name. In other words, what is the
prescriptive period for the action to reconvey the title to real
property arising from an implied or constructive trust and,
corrolarily reference. The petitioners herein, defendants in
the trial court, assert that they have ten years to bring the
action, while the respondent, plaintiff in the court below,
claims the prescriptive period is four years. The trial court
ruled tor the plaintiff, now respondent.
We reverse. We hold that the prescriptive period for such an
action for reconveyance, as this case, is ten years. The point
of reference is, or the ten-year prescriptive period
commences to run from, the. date of the issuance of the
certificate of title over the real property.
There is no issue as to the facts, this case having been
elevated to this Court, as aforestated, on purely a question of
law. Be that as it may, in order to satisfy constitutional
requirements as well as to place the question of law in proper
perspective, there is need to state the facts of the case. On
this regard, the findings of the trial court would best serve the
stated purposes.
xxx xxx xxx
From the evidence submitted during the trial there is

no dispute concerning the fact relative to the Identity

of the land in litigation. It is commonly known as Lot
No. 524, Pls-126 and technically described and
bounded in the sketch (Exh. "7 "). This is the very
tract of land alleged by the plaintiff to have been
forcibly entered into by the defendants and which
plaintiff now w&s to recover possession thereof. It
has also been proven that the same lot was covered
by two free patent applications: (l) that of
defendant Liwalug Datomanong (erroneously
surnamed Amerol) which he filed on the 4th day of
September, 1953, and (2) that of Molok
Bagumbaran which was filed on December 27,
1954. There is also no question regarding the fact
that as to these two free patent applications, that of
plaintiff Molok Bagumbaran was given due course
as a result of which Free Patent No. V-19050 was
issued on August 16,1955 by authority of the
President of the Philippines Ramon Magsaysay, by
Jaime Ferrer, Undersecretary of Agriculture and
Natural Resources and duly registered with the
office of the Register of Deeds of the Province of
Lanao (now Lanao del Sur) in the mm year
whereupon Original Certificate of Title No. P-466
was duly issued, owner's duplicate certificate having
been furnished the herein plaintiff.
This court is also inclined to believe that defendant
Liwalug Datomanong had never known of plaintiff's
free patent application on the land in question nor
was he ever notified or participated in the
administrative proceedings relative to plaintiff's free
patent application. In the meantime, since the date
he purchased the land from Mandal Tondo, said
defendant has been and up to the present in con.
tinuous occupation and cultivation of the same. His
co-defendants named in the complaint are merely
his tenants.
It is also incontrovertible fact that said defendant did
not take appropriate action to annul the patent and
title of the plaintiff within one year from issuance
thereof and that the first step taken by him to contest

said patent and title was a formal protest (Exh. "12",

p. 408, Record) dated April 24, 1964, filed before the
Bureau of Lands after the lapse of Nine (9) long
years from the issuance of patent in favor of the
plaintiff. The second step he took was his
counterclaim contained in his answer to the
complaint in the above entitled case, which answer
was filed with this court on December 4, 1964. In
said counterclaim, defendant reiterated his stand
that plaintiff secured patent on the land by means of
deceit and fraud, wherefore, defendant prayed that
said title be annulled, or, alternatively, plaintiff be
ordered to reconvey the said land to the said
defendant Liwalug Datomanong.
First question to be resolved is whether or not the
plaintiff is guilty of fraud or misrepresentation in
securing the Free Patent No. V-19050 covering the
land in question.
Upon a thorough examination of the evidence,
proofs are sufficient to support defendant's
contention that plaintiff is guilty of fraud and
misrepresentation. In the first place, proofs are
abundant tending to show that since 1952 when
Mandal Tando transferred the land to said
defendant, the latter occupied, took possession
thereof and cultivated the same continuously,
publicly, adversely against any claimant and in the
concept of owner up to the present; that said
defendant
had
introduced
considerable
improvements such as coconut and coffee
plantations and other fruit trees besides his farm
house, a mosque, cassava plantation and clearing
and full cultivation of the entire area. The fact of
possession on the part of said defendant has been
attested to by competent and creditable witnesses
like Mandal Tando who conveyed the land to the
defendant; Hadji Sirad Gomandang, the barrio
captain of Montay, Malabang, Lanao del Sur, Hadji
Rasol Maruhom and Hadji Abdulcadir Pagayawan,
both of Pialot, Malabang, Lanao del Sur who are
farmers and barrio-mates of said defendant; and

also Disomnong Dimna Macabuat, an employee in

the office of the District Land Officer at Marawi City
who had officially conducted occular inspection and
investigation of the premises in connection with the
protest of said defendant found thereon the abovementioned improvements introduced by the said
defendant.
What is more, on or before filing his free patent
application, plaintiff knew that the land in question
which was covered by his free patent application
was then actually occupied and cultivated by
defendant Liwalug Datomanong if not by Mandal
Tando, the original occupant. Be it remembered that
Mandal Tando had transferred to defendant Liwalug
Datomanong Twenty Four (24) hectares, more than
eleven hectares of which is (sic) outside the military
reservation and designated as Lot No. 524, Pls-126
and the rest which is in the southern portion lies
within the military reservation. Now, immediately
adjacent thereto on the south is the land claimed
and occupied by the herein plaintiff also consisting
of Twenty Four (24) hectares but wholly within the
military reservation. It appears that plaintiff declared
this Twenty four hectares for the first time on
October 24, 1950 for taxation purposes (Tax
Declaration No. 1529, Record) and stated in said tax
declaration (Exhs. "8" and "8-A," p. 414, Record)
regarding the boundaries that the adjacent owner on
the north is Mandal Tando. In other words, plaintiff
had expressly recognized the fact that Mandal
Tando is an adjacent land owner north of plaintiff's
property. On February 19, 1951 herein plaintiff
revised the above-stated tax declaration and
secured another (Tax Declaration No. 1794, Exh.
"9" and "9-A," p. 413, Record) and still plaintiff stated
therein that his boundary land owner on the north is
3
Hadji
Abdul
Gani.
[a.k.a.Liwalug
4
Datomanong(Amerol)].
xxx xxx xxx
Notwithstanding the aforequoted findings, very unequivocal

to be sure, the trial court denied the counterclaim of the

defendants, now petitioners, for the affirmative relief of
reconveyance on the ground of prescription. Said the court:

Hundred Fifty-Two Pesos and Sixty-Two Centavos

(P6,752.62) which he incurred for the necessary
and useful expenses on the land in question with the
right of said defendant to retain possession of the
premises if said reimbursement be not completely
6
made. No pronouncement as to costs.

xxx xxx xxx

The patent of the plaintiff having been registered
back in 1955 and in contemplation of law
registration thereof is notice to the whole world and
yet defendant exerted no effort whatsoever either to
annul the title or institute proceedings for
reconveyance except in his counterclaim contained
in his answer to the complaint in this case at bar
which answer and counter-claim was filed on
December 4, 1964, some nine long years from the
date of registration of the patent, defendant
unfortunately lost his right to reconveyance within
the period of four (4) years from the date of
5
registration of said patent.
xxx xxx xxx
Thus, the dispositive portion of the assailed decision stated:
xxx xxx xxx
PREMISES CONSIDERED, judgment is hereby
rendered as follows: (1) declaring the herein plaintiff
the registered owner of Lot No. 524, Pls-126 and
sustaining and respecting the validity of the
plaintiff's Original Certificate of Title No. P-466
covering the said land; (2) ordering the defendants
to vacate the premises of Lot No. 524; Pls-126 and
deliver possession thereof to the herein plaintiff
under certain terms and conditions herein below
stated; (3) denying and hereby dismissing the
counterclaim of the herein defendants and
consequently the prayer to annul the title and/or for
reconveyance of the land to said defendant Liwalug
Datomanong must Likewise be denied; (4) that
before plaintiff could take possession of said
premises he must reimburse defendant Liwalug
Datomanong the total sum of Six Thousand Seven

xxx xxx xxx

Hence, this petition.

The petitioners in their Brief assign the following two errors

allegedly committed by the trial court:
I.
THE COURT ERRED IN ITS CONCLUSION OF LAW
TOTHE EFFECT THAT PETITIONERS RIGHT OF ACTION
FOR RECONVEYANCE FOR VIOLATION OF AN IMPLIED
TRUST PRESCRIBED AFTER FOUR YEARS FROM THE
REGISTRATION OF THE PATENT OF RESPONDENT.
II.
THE COURT ERRED IN NOT REQUIRING THE
INTRODUCTION OF EVIDENCE AS BASIS IN THE
ASSESSMENT OF THE FAIR MARKET VALUE OF THE
IMPROVEMENT INTRODUCED ON THE LAND IN GOOD
FAITH BY PETITIONERS INSTEAD OF BASING SUCH
ASSESSMENT UPON PURE AND SIMPLE GUESS
WORKS AND WILD ESTIMATIONS.
The first assignment of error is well-taken as adverted to at
the outset.
Indubitably, the act of respondent in misrepresenting that he
was in actual possession and occupation of the property in
question, obtaining a patent and Original Certificate of Title
No. P- 466 in his name, created an implied trust in favor of
the actual possessor of the said property. The Civil Code
provides:
ARTICLE 1456. If property is acquired through
mistake or fraud, the person obtaining it is by force

of law, considered a trustee of an implied trust for

the benefit of the person from whom the property
comes.
In this case, the land in question was patented and titled in
respondent's name by and through his false pretenses. Molok
Bagumbaran fraudulently misrepresented that he was the
occupant and actual possessor of the land in question when
he was not because it was Liwalug Datomanong.
Bagumbaran falsely pretended that there was no prior
applicant for a free patent over the land but there was
Liwalug Datomanong. By such fraudulent acts, Molok
Bagumbaran is deemed to hold the title of the property in trust
and for the benefit of petitioner Liwalug Datomanong.
Notwithstanding the irrevocability of the Torrens title already
issued in the name of respondent, he, even being already the
registered owner under the Torrens system, may still be
compelled under the law to reconvey the subject property to
Liwalug Datomanong. After all, the Torrens system was not
designed to shield and protect one who had committed fraud
or misrepresentation and thus holds title in bad faith. Further,
9
contrary to the erroneous claim of the respondent,
reconveyance does not work to set aside and put under
review anew the findings of facts of the Bureau of Lands. In
an action for reconveyance, the decree of registration is
respected as incontrovertible. What is sought instead is the
transfer of the property, in this case the title thereof, which
has been wrongfully or erroneously registered in another
person's name, to its rightful and legal owner, 10 or to one
with a better right. That is what reconveyance is all about.
Yet, the right to seek reconveyance based on an implied or
constructive trust is not absolute. It is subject to extinctive
prescription. 11 Happily, both parties agree on this point. The
seeming impediment however, is that while the petitioners
assert that the action prescribes in ten years, the respondent
avers that it does in only four years.
In support of his submission, the respondent invokes several
cases. We have examined the invocations and find them
inapplicable. For instance, the case of Fabian vs. Fabian, 12
relied on by the respondent, does not square with the present
case. In Fabian, the party who prayed for reconveyance was

not in actual possession and occupation of the property. It

was instead the party to whom title over the property had
been issued who occupied and possessed it. Further, the
litigated property had been in the adverse possession of the
registered owner for well-nigh over twenty-nine big years,
hence, reconveyance had been irretrievably lost.
Miguel vs. Court of Appeals, 13 is, likewise, inapplicable. In
Miguel, the actual occupant and possessor of the
controverted parcel of land, after having been enticed by
Leonor Reyes, an ambulatory notary public, with promise of
help, engaged and retained the services of the latter to
facilitate the issuance of a patent for the said land in his
(Miguel's) favor. Thus, there existed between the parties a
relationship very much akin to that of lawyer-client and which
is similarly fiduciary in character. But Reyes, inspite of his
compensation of one-fifth of the yearly produce of the
property, still violated the trust reposed on him and instead
worked for the issuance of the patent in the name of his own
wife. So, after the demise of Leonor Reyes, the property was
fraudulently patented and titled in his widow's favor. The
reconveyance of the property was decreed by the Court
based on "breach of fiduciary relations and/or fraud." It was
shown that the parties were legally bound to each other by a
bond of fiduciary trust, a bond lacking in the case at bar.
Finally, the case of Ramirez vs. Court of Appeals 14 can not
be availed of because the period of prescription was not there
definitely and squarely settled. In fact, Ramirez underscores
a vacillation between the four-year and the ten-year rule.
There it was stated that "an action for relief on the ground of
fraud to which class the remedy prayed for by Paguia
belong scan only be brought within four years after accrual
of the right of action, or from the discovery of the fraud." If the
decision just stayed pat on that statement, there would be
merit in the respondent's presentation. But Ramirez
continues: "(I)ndepedently, however, of the alleged fraud on
the part of Ramirez, the right to demand a reconveyance
prescribes after 10 years from accrual of the cause of action,
June 22, 1944, the date of registration of the patent and of
the issuance of OCT No. 282- A in his name." 15
Significantly, the three cases cited by the respondent to

buttress his position and support the ruling of the trial court
have a common denominator, so to speak. The cause of
action assailing the frauds committed and impugning the
Torrens titles issued in those cases, all accrued prior to the
effectivity of the present Civil Code. The accrual of the cause
of action in Fabian was in 1928, in Miguel, February, 1950,
and in Ramirez, 1944. It must be remembered that before
August 30, 1950, the date of the effectivity of the new Civil
Code, the old Code of Civil Procedure (Act No. 190) governed
prescription. It provided:
SEC. 43. Other civil actions; how limited-Civil
actions other than for the recovery of real property
can only be brought within the following periods
after the right of action accrues:
xxx xxx xxx
3. Within four years: x x x An action for relief on the
ground of fraud, but the right of action in such case
shall not be deemed to have accrued until the
discovery of the fraud;
xxx xxx xxx
In contrast, under the present Civil Code, we find that just as
an implied or constructive trust is an offspring of the law (Art.
1456, Civil Code), so is the corresponding obligation to
reconvey the property and the title thereto in favor of the true
owner. In this context, and vis-a-vis prescription, Article 1144
of the Civil Code is applicable.
Article 1144. The following actions must be brought
within ten years from the time the right of action
accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
xxx xxx xxx

(Emphasis supplied)
An action for reconveyance based on an implied or
constructive trust must perforce prescribed in ten years and
not otherwise. A long line of decisions of this Court, and of
very recent vintage at that, illustrates this rule. Undoubtedly,
it is now well-settled that an action for reconveyance based
on an implied or constructive trust prescribes in ten years
from the issuance of the Torrens title over the property. 16
The only discordant note, it seems, is Balbin vs. Medalla, 17
which states that the prescriptive period for a reconveyance
action is four years. However, this variance can be explained
by the erroneous reliance on Gerona vs. de Guzman. 18 But
in Gerona, the fraud was discovered on June 25, 1948, hence
Section 43(3) of Act No. 190, was applied, the new Civil Code
not coming into effect until August 30, 1950 as mentioned
earlier. It must be stressed, at this juncture, that Article 1144
and Article 1456, are new provisions. They have no
counterparts in the old Civil Code or in the old Code of Civil
Procedure, the latter being then resorted to as legal basis of
the four-year prescriptive period for an action for
reconveyance of title of real property acquired under false
pretenses.
It is abundantly clear from all the foregoing that the action of
petitioner Datomanong for reconveyance, in the nature of a
counterclaim interposed in his Answer, filed on December 4,
1964, to the complaint for recovery of possession instituted
by the respondent, has not yet prescribed. Between August
16, 1955, the date of reference, being the date of the
issuance of the Original Certificate of Title in the name of the
respondent, and December 4, 1964, when the period of
prescription was interrupted by the filing of the Answer cum
Counterclaim, is less than ten years.
The respondent also interposed as a deterrent to
reconveyance the existence of a mortgage on the property. It
is claimed by the respondent that reconveyance would not be
legally possible because the property under litigation has
already been mortgaged by him to the Development Bank of
the Philippines. 19 This claim is untenable otherwise the
judgment for reconveyance could be negated at the will of the
holder of the title. By the simple expedient of constituting a

mortgage or other encumbrance on the property, the remedy

of reconveyance would become illusory. In the instant case,
the respondent being doubly in bad faith for applying for
and obtaining a patent and the Original Certificate of Title
therefor without being in possession of the land and for
mortgaging it to the Development Bank knowing that his
Original Certificate of Title was issued under false pretenses
must alone suffer the consequences.
Besides, given the undisputed facts, we cannot consider the
mortgage contracted by the respondent in favor of the
Development Bank of the Philippines as valid and binding
against petitioner Liwalug Datomanong. It would be most
unjust to saddle him, as owner of the land, with a mortgage
lien not of his own making and from which he derived no
benefit whatsoever. The consequences of the void mortgage
must be left between the mortgagor and the mortgagee. In no
small measure the Development Bank of the Philippines
might even be faulted for not making the requisite
investigation on the possession of the land mortgaged.
Premises considered, we deemed it superfluous to rule on
the second assignment of error raised by the petitioners.
WHEREFORE, the petition is GRANTED and the Decision
dated June 3, 1970 of the then Court of First Instance of
Lanao del Sur in Civil Case No. 1354 is hereby ANNULLED
and SET ASIDE and a new one entered ORDERING the
respondent to RECONVEY Original Certificate of Title No. P466 in favor of petitioner Liwalug Datomanong, free of any
encumbrance. Costs against the respondent.
SO ORDERED.
Yap (Chairman), Melencio-Herrera and Paras, JJ., concur.

Separate Opinions
PADILLA, J, concurring and dissenting:
I concur in the result. I do not however agree with the
sweeping proposition that all actions for reconveyance,
based upon the ground of fraud, prescribed in ten (10) years.
A distinction should be made. Fraud, or dolo it should be

recalled, is of two (2) kinds: dolo causante or that which

determines or is the essential cause of the consent; and dolo
incidente, or that which does not have such decisive
influence and by itself cannot cause the giving of consent by
refers only to some particular or accident of obligation.
(Tolentino, Civil Code of the Philippines, 1956 ed., Vol. IV, p.
463).
If the fraud committed was but an incident to the registration
of land (dolo incidents), as in the case at bar, then I would
agree that the action for reconveyance prescribes in ten (10)
years. But, where it is necessary to annul a deed or title
before relief could be granted, as when fraud, which vitiates
consent dolo causante is alleged to have been committed in
the execution of the deed which became the basis for the
registration of a parcel of land, the action for reconveyance
should be filed within four (4) years from the discovery of the
fraud.
In Rone vs. Claro and Baquiring (91 Phil. 250, 251), the Court
held that an action for the recovery of title to parcel of
registered land, where it was alleged that the defendants or
one of them, through fraud, deceit and breach of faith,
succeeded in getting the original certificate of title from one
of the plaintiffs, and then, again, with use of fraud, deceit,
breach of faith, and other machinations, succeeded in having
the plaintiffs execute a deed of sale of the lot in question in
favor of the defendants, and, thereafter, obtained a certificate
of title in their names: "It may be that the recovery of title and
possession of the lot was the ultimate objective of plaintiffs,
but to attain that goal, they must need first travel over the road
of relief on the ground of fraud."

G.R. No. 140457

January 19, 2005
HEIRS OF MAXIMO SANJORJO, namely, VICENTE
SANJORJO, MACARIA SANJORJO, DOMINGO
SANJORJO, ALFREDO CASTRO, and SPOUSES
SANTOS AND LOLITA INOT, petitioners,
vs.
HEIRS OF MANUEL Y. QUIJANO, namely, ROSA Q.
LEDESMA, MILAGROS Q. YULIONGSIU, ALAN P.
QUIJANO AND GWENDOLYN P. ENRIQUEZ, and
VICENTE Z. GULBE, respondents.
DECISION

F.P.A. No. VII-4-3152-A. However, the heirs of Guillermo

Sanjorjo, namely, Tranquilina, Pablo, Boir, Erlinda, Josefina,
Maria, Maximo, Isabel, Jose, Dario, Vicente, Noel, Albina,
Ramon, Domingo, Adriano and Celedonia, all surnamed
Sanjorjo, filed a protest/complaint with the DENR on May
22, 1991, praying for the cancellation of Free Patent No. VII4-2974, as well as Free Patent No. VII-4-3088, and for the
dismissal of the free patent applications over Lots 376 and
5
378. The complaint was docketed as PENRO Claim No.
PN 072231-4, and was assigned to the Regional Executive
Director for hearing and decision.

CALLEJO, SR., J.:

The protestants/claimants alleged that the said parcels of

land were originally owned by Ananias Ursal but were
exchanged for a parcel of land located in San Remegio,
Cebu, owned by their predecessor, Guillermo Sanjorjo,
married to Maria Ursal, and from whom they inherited the
property. They prayed that:

This is a petition for review on certiorari under Rule 45 of

1
the Revised Rules of Court of the Decision dated February
17, 1999 of the Court of Appeals (CA) in CA-G.R. CV No.
2
50246 and its Resolution dated October 12, 1999 denying
the petitioners motion for reconsideration.
The Antecedents
On August 29, 1988, Free Patent No. VII-4-2974 was issued
to Alan P. Quijano, married to Mila Matutina, over a parcel
of land located in Antipolo, Medellin, Cebu, with an area of
14,197 square meters identified as Lot 374, Cadastre 374D. Based on the said patent, Original Certificate of Title
(OCT) No. OP-38221 was issued by the Register of Deeds
to and in the name of Alan P. Quijano on September 6,
3
1988. On November 11, 1988, Free Patent No. VII-4-3088
was issued to and in favor of Gwendolyn Q. Enriquez,
married to Eugenio G. Enriquez, over a parcel of land
located in Antipolo, Medellin, Cebu, identified as Lot 379,
Cadastre 374-D, with an area of 6,640 square meters.
Based on the said patent, OCT No. OP-39847 was issued in
4
her favor on February 11, 1989.
In the meantime, Gwendolyn Enriquez filed an application
for a free patent over Lot 376 of Cadastre 374-D with the
Department of Environment and Natural Resources
(DENR). The application was docketed as Free Patent
Application (F.P.A.) No. VII-4-3152. She also filed an
application for a free patent over Lot 378, docketed as

WHEREFORE, premises considered and after hearing on

the merits, it is most respectfully prayed of this most
Honorable Office to render judgment ordering:
1. The cancellation of Free Patent Titles Nos. VII4-2974 and VII-4-3088 issued to respondents Alan
P. Quijano and Gwendolyn Quijano Enriquez
concerning Lot Nos. 374 and 379, respectively.
2. The cancellation of Free Patent Application Nos.
VII-4-3152, VII-4-3152-A, and VII-1-18277-I of
respondents concerning Lot Nos. 376 and 378.
3. The return of possession and ownership of
these lots to the complainants/protestants who are
the rightful owners by inheritance.
Protestants further pray for other relief, just and equitable,
6
under the premises.
During the pre-trial conference of August 2, 1991, the
protestants/claimants manifested that they were
withdrawing their protest/complaint. Thus, on April 14, 1992,
7
the Regional Executive Director rendered a decision giving

due course to the applications. However, he ruled that the

free patents over Lots 374 and 379 could no longer be
disturbed since the complaint for the cancellation was filed
more than one year from their issuance. The dispositive
portion of the decision reads:
WHEREFORE, it is hereby ordered that the above-entitled
administrative case be dismissed and dropped from the
records. It is further ordered that the Free Patent Application
of applicants-respondents over Lot Nos. 376 and 378 be
given due course for being in the actual adverse and
continuous possession of the land in controversy.
Patent/Titles already issued and entered in the Registry
Book in favor of applicants-respondents on Lot Nos. 374
and 379 in 1988 and 1989 need not be disturbed anymore,
for failure to show evidence of actual fraud in the
8
procurement of such titles.
On September 13, 1993, Vicente Sanjorjo, the heirs of
Maximo Sanjorjo, namely, Macaria Sanjorjo, Domingo
Sanjorjo, Alfredo Castro, and the Spouses Santos and Lolita
Inot, herein petitioners, filed a complaint for cancellation of
titles under tax declarations and reconveyance of
possession of real property covering Lots 374, 376, 378 and
379 located in Medellin, Cebu, against the private
respondents, the heirs of Manuel Quijano, namely, Rosa Q.
Ledesma, Milagros Q. Yuliongsiu, Alan P. Quijano and
Gwendolyn P. Enriquez, and Vicente Gulbe. The petitioners
did not implead the rest of the heirs of Guillermo Sanjorjo,
including his daughter Tranquilina Sanjorjo, as partiesplaintiffs, and alleged, inter alia
3. That the plaintiffs are the owners of several
parcels of land in Antipolo, Medellin, Cebu, which
are more particularly described as follows:
(a) Lot No. 374 with an area of 14,179 sq.m. and
covered by Tax Declaration No. 00718 in the name
of PONCIANO DEMIAR and Tax Declaration No.
01042 in the name of TRANQUILINA SANJORJO;
(b) Lot No. 376 with an area of 6,177 sq.m. and
covered by Tax Declaration No. 01038 in the name
of MAURO SANJORJO;

(c) Lot No. 378 with an area of 3,201 sq.m. and

covered by Tax Declaration No. 01035 in the name
of FLORENTINO SANJORJO;
(d) Lot No. 379 with an area of 6,640 sq.m. and
covered by Tax Declaration No. 00772 in the name
of SANTOS INOT and Tax Declaration No. 01039
in the name of SABINIANO SANJORJO;
The said Tax Declarations are hereto attached and
marked as Annexes "A," "B," "C," "D," "E" and "F,"
respectively, and made integral parts of this
complaint;
4. That the aforestated lots originally belonged to
the late MAXIMO SANJORJO who died during
World War II. His children MAURO, FLORENTINO,
SABINIANO, TRANQUILINA and RAYMUNDA, all
surnamed SANJORJO, inherited the said
properties. They have also passed away and the
plaintiffs, who are the children of MAXIMO
SANJORJOs children are now the rightful heirs of
the aforementioned parcels of land;
5. That sometime in 1983, the parcels of land in
question were leased to MANUEL QUIJANO for a
two (2) year period at the rate of P4,500.00 per
year. However, the lease was never paid for nor
was possession of the said properties ever
returned to the plaintiffs, despite repeated
demands on QUIJANO to return the same;
6. That MANUEL QUIJANO died in 1987 and the
herein defendants, the heirs of MANUEL
QUIJANO, divided among themselves the land
belonging to the plaintiffs. Titles and Tax
Declarations were then issued on the said lots in
the name of the defendants, as follows:
(a) Lot No. 374 is now covered by OCT No. OP38221 in the name of defendant ALAN P.
QUIJANO. A copy of the title is hereto attached
and marked as Annex "G" and made an integral

part of this complaint;

integral part of this complaint;

(b) Lot No. 376 is now covered by Tax Declaration

No. 10015 in the name of MANUEL Y. QUIJANO
married to FLAVIANA P. QUIJANO. A copy of the
said tax declaration is hereto attached and marked
as Annex "H" and made an integral part of this
complaint;

10. That upon their discovery of defendants

fraudulent acts, plaintiffs demanded the return of
their properties but the defendants have failed and
9
refused and continue to fail and refuse to do so.

(c) Lot No. 379 is now covered by OCT No. OP39847 in the name of GWENDOLYN Q.
ENRIQUEZ. A copy of the title is hereto attached
and marked as Annex "I" and made an integral part
of this complaint;
7. That the plaintiffs nor their ascendants have
never sold, donated, or mortgaged any of these
lots in question to the defendants or their
ascendants;
8. That sometime in September 1991, the
defendant ALAN QUIJANO charged plaintiff
ALFREDO CASTRO with QUALIFIED THEFT for
allegedly having stolen the coconuts on the
properties in question. Subsequently, the Municipal
Court of Medellin acquitted CASTRO on the
ground that he was the real owner of the lot. It was
only on that time that plaintiffs discovered that
defendants had already titled their lots.
Furthermore, in 1992, the herein plaintiffs were
sued by the defendants for Quieting of Title, which
case they subsequently withdrew. This case made
the plaintiffs realize that all their properties had
already been titled in defendants names;
9. That, at present, defendants have leased these
lots to a certain VICENTE GULBE, who is named
as a defendant in this case. Plaintiffs also
demanded from defendant GULBE the return of
their possession over these lots but to no avail.
The Certification to File Action from the barangay
captain of Antipolo, Medellin, Cebu, is hereto
attached and marked as Annex "J" and made an

The petitioners prayed that, after due proceedings,

judgment be rendered in their favor:
(a) Ordering the cancellation of OCT Nos. OP38221 and OP-39847 and Tax Declaration No.
10015;
(b) Ordering the defendants to pay rentals to the
plaintiffs in the amount of P4,500.00 per year from
1983 up to the time the properties are returned to
the plaintiffs; and
(c) Ordering the defendants to pay the plaintiffs
moral damages in the amount of not less than
P20,000.00.
Plaintiffs further pray for such other relief and remedies as
this Court may deem just and equitable under the
10
premises.
The private respondents filed a motion to dismiss the
complaint on the ground of res judicata based on the
decision of the Regional Executive Director on April 14,
1992. They maintained that the decision of the Regional
Executive Director had become final and executory and, as
such, barred the petitioners action.
The petitioners opposed the motion. In their reply to such
opposition, the private respondents invoked another ground
that the petitioners action was barred by the issuance of
OCT No. OP-38221 covering Lot 374 on August 29, 1988,
and OCT No. OP-39847 covering Lot 379 on November 11,
1988.
On September 13, 1994, the trial court issued an Order
dismissing the complaint on the ground of res judicata. The

petitioners appealed the order to the CA.

We note that the petitioners limited the issues to the two
titled lots, Lots 374 and 379, arguing that there can be no
res judicata in this case because one of its elements, i.e.,
that the former judgment is a judgment on the merits, was
lacking. The petitioners did not assail the trial courts order
dismissing the complaint insofar as Lots 376 and 378 are
concerned. Moreover, according to the petitioners, the April
14, 1992 Decision of the Regional Executive Director was
not a decision on the merits of the complaint, as they had
yet to prove their allegation of fraud as regards the said lots.
In its Decision promulgated on February 17, 1999, the
appellate court affirmed the assailed order of the trial court,
albeit for a different reason, i.e., prescription. Citing Section
11
32 of Presidential Decree No. 1529, it held that the OCTs
issued to the respondents on the basis of their respective
free patents became as indefeasible as one which was
judicially secured upon the expiration of one year from the
date of the issuance of the patent. The CA did not deem it
necessary to rule on the issue of res judicata since it
12
dismissed the case on the ground of prescription.
When their motion for reconsideration of the said decision of
13
the CA was denied, the petitioners filed the instant petition
for review, contending that:
THE HONORABLE COURT OF APPEALS (THIRD
DIVISION) GRAVELY ERRED IN AFFIRMING
THE DECISION OF THE REGIONAL TRIAL
COURT, BRANCH 13, CEBU CITY, DATED
SEPTEMBER 13, 1994.
PETITIONERS BEG THAT THIS PETITION BE
GIVEN DUE COURSE IN THE INTEREST OF
SUBSTANTIAL JUSTICE, [SINCE] THE
DECISION OF THE COURT OF APPEALS, IF
NOT CORRECTED, WOULD CAUSE
IRREPARABLE INJURY TO THE PREJUDICE OF
HEREIN PETITIONERS WHO ARE THE REAL
14
OWNERS OF THE LOTS IN QUESTION.
The petitioners maintain that the appellate court erred in

holding that their action in Civil Case No. CEB 14580 was
barred by the Decision dated April 14, 1992 of the DENR
Regional Executive Director. They contend that the latter
decision is not a decision on its merits so as to bar their
complaint.
We agree.
The elements of res judicata are the following: (1) the
previous judgment has become final; (2) the prior judgment
was rendered by a court having jurisdiction over the subject
matter and the parties; (3) the first judgment was made on
the merits; and (4) there was substantial identity of parties,
subject matter and causes of action, as between the prior
15
and subsequent actions.
A judgment on the merits is one rendered after argument
and investigation, and when there is determination which
party is right, as distinguished from a judgment rendered
upon some preliminary or formal or merely technical point,
16
or by default and without trial.
As gleaned from the decision of the DENR Regional
Executive Director, he dismissed the petitioners complaint
for the cancellation of Free Patent Nos. VII-4-2974 and VII4-3088 on the ground that it was filed only on May 22, 1991,
more than three years from the issuance of the said patents
on August 29, 1988 and November 11, 1988, respectively.
In the said decision, the Regional Executive Director
declared that after the lapse of one year from the issuance
of patent and registry thereof in the Registry Book of the
Register of Deeds, Cebu Province, only the regular courts of
justice have jurisdiction on the matter of cancellation of
17
title. The petitioners agreed with the Regional Executive
Director and withdrew their complaint, opting to file an
appropriate action in court for the nullification of the said
patents and titles. Hence, the decision of the Regional
Executive Director was not a decision on the merits of the
petitioners complaint.
On the second issue, we agree with the petitioners that their
action against the private respondents for the reconveyance
of Lots 374 and 379, covered by OCT No. OP-38221 issued

on September 6, 1988 and OCT No. OP-39847 issued on

February 11, 1989, respectively, was not barred by Section
32 of P.D. No. 1529, which reads:
SEC. 32. Review of decree of registration; Innocent
purchaser for value. The decree of registration shall not
be reopened or revised by reason of absence, minority, or
other disability of any person adversely affected thereby,
nor by any proceeding in any court for reversing judgments,
subject, however, to the right of any person, including the
government and the branches thereof, deprived of land or of
any estate or interest therein by such adjudication or
confirmation of title obtained by actual fraud, to file in the
proper Court of First Instance a petition for reopening and
review of the decree of registration not later than one year
from and after the date of the entry of such decree of
registration, but in no case shall such petition be entertained
by the court where an innocent purchaser for value has
acquired the land or an interest therein, whose rights may
be prejudiced. Whenever the phrase "innocent purchaser for
value" or any equivalent phrase occurs in this Decree, it
shall be deemed to include an innocent lessee, mortgagee,
18
or other encumbrancer for value.
We agree with the ruling of the CA that the torrens title
issued on the basis of the free patents became as
indefeasible as one which was judicially secured upon the
19
expiration of one year from date of issuance of the patent.
The order or decision of the DENR granting an application
for a free patent can be reviewed only within one year
thereafter, on the ground of actual fraud via a petition for
review in the Regional Trial Court (RTC) provided that no
innocent purchaser for value has acquired the property or
any interest thereon. However, an aggrieved party may still
file an action for reconveyance based on implied or
constructive trust, which prescribes in ten years from the
date of the issuance of the Certificate of Title over the
property provided that the property has not been acquired
by an innocent purchaser for value. Thus:
The basic rule is that after the lapse of one (1) year, a
decree of registration is no longer open to review or attack
although its issuance is attended with actual fraud. This

does not mean, however, that the aggrieved party is without

a remedy at law. If the property has not yet passed to an
innocent purchaser for value, an action for reconveyance is
still available. The decree becomes incontrovertible and can
no longer be reviewed after one (1) year from the date of
the decree so that the only remedy of the landowner whose
property has been wrongfully or erroneously registered in
anothers name is to bring an ordinary action in court for
reconveyance, which is an action in personam and is
always available as long as the property has not passed to
an innocent third party for value. If the property has passed
into the hands of an innocent purchaser for value, the
remedy is an action for damages. In this case, the disputed
property is still registered in the name of respondent
Demetrio Caringal, so that petitioner was correct in availing
20
himself of the procedural remedy of reconveyance.
An action for reconveyance is one that seeks to transfer
property, wrongfully registered by another, to its rightful and
21
legal owner. All that must be alleged in the complaint are
two (2) facts which, admitting them to be true, would entitle
the plaintiff to recover title to the disputed land, namely, (1)
that the plaintiff was the owner of the land and, (2) that the
22
defendant had illegally dispossessed him of the same. The
body of the pleading or complaint determines the nature of
23
an action, not its title or heading. In their complaint, the
petitioners clearly asserted that their predecessors-ininterest have long been the absolute and exclusive owners
of the lots in question and that they were fraudulently
deprived of ownership thereof when the private respondents
obtained free patents and certificates of title in their
24
names. These allegations certainly measure up to the
requisite statement of facts to constitute an action for
reconveyance.
Article 1456 of the New Civil Code provides that a person
acquiring property through fraud becomes by operation of
law a trustee of an implied trust for the benefit of the real
owner of the property. The presence of fraud in this case
created an implied trust in favor of the petitioners, giving
them the right to seek reconveyance of the property from
the private respondents. However, because of the trial
courts dismissal order adverted to above, the petitioners

have been unable to prove their charges of fraud and

misrepresentation.
The petitioners action for reconveyance may not be said to
have prescribed, for, basing the present action on implied
25
trust, the prescriptive period is ten years. The questioned
titles were obtained on August 29, 1988 and November 11,
1988, in OCT Nos. OP-38221 and OP-39847, respectively.
The petitioners commenced their action for reconveyance
on September 13, 1993. Since the petitioners cause of
action is based on fraud, deemed to have taken place when
26
the certificates of title were issued, the complaint filed on
September 13, 1993 is, therefore, well within the
prescriptive period.
IN LIGHT OF ALL THE FOREGOING, the petition is
PARTIALLY GRANTED. The Decision of the Court of
Appeals is MODIFIED. Accordingly, the Regional Trial Court
of Cebu City, Branch 13, is DIRECTED to reinstate the
complaint insofar as Lots 374 and 379 are concerned. No
costs.
SO ORDERED.

G.R. No. L-21362

November 29, 1968
DEVELOPMENT BANK OF THE PHILIPPINES, plaintiffappellant,
vs.
LOURDES GASPAR BAUTISTA, THE DIRECTOR OF
THE LANDS and THE NATIONAL TREASURER OF THE
PHILIPPINES, defendants-appellees.
FERNANDO, J.:
The question this appeal from a judgment of a lower court
presents is one that possesses both novelty and
significance. It is this: What is the right, if any, of a creditor
which previously satisfied its claim by foreclosing
extrajudicially on a mortgage executed by the debtor, whose
title was thereafter nullified in a judicial proceeding where
she was not brought in as a party?
As creditor, the Development Bank of the Philippines now
appellant, filed a complaint against one of its debtors,
Lourdes Gaspar Bautista, now appellee, for the recovery of
a sum of money representing the unpaid mortgage
indebtedness, which previously had been wiped out with the
creditor bank acquiring the title of the mortgaged property in
an extrajudicial sale. Thereafter, the title was nullified in a
judicial proceeding, the land in question being adjudged as
belonging to another claimant, without, however, such
debtor, as above noted, having been cited to appear in such
court action.
The Development Bank was unsuccessful, the lower court
being of the view that with the due process requirement thus
flagrantly disregarded, since she was not a party in such
action where her title was set aside, such a judgment could
in no wise be binding on her and be the source of a claim by
the appellant bank. The complaint was thus dismissed by
the lower court, then presided by Judge, now Justice,
Magno Gatmaitan of the Court of Appeals. Hence, this
appeal by appellant bank.
Such dismissal is in accordance with law. There is no
occasion for us to repudiate the lower court.

From the very statement of facts in the brief for appellant

bank, the following appears: "On or before May 31, 1949,
the defendant-appellee, Lourdes Gaspar Bautista, who shall
hereafter be referred to as Bautista, applied to the
Government for the sale favor of a parcel of land with an
area of 12 has., 44 ares, and 22 centares, located at Bo.
Barbara, San Jose, Nueva Ecija. After proper investigation,
Sales Patent no. V-132 covering said property was issued in
her favor on June 1, 1949 (Exh. A-1) by the Director of
Lands. Sales Patent No. V-132 was registered in the office
of the Register of Deeds of Nueva Ecija pursuant to Section
122 of Act 496 on June 3, 1949 (Exh. A), as a result of
which Original Certificate of Title No. P-389 was issued in
1
her favor."
How the loan was contracted by now appellee Bautista was
therein set forth. Thus: "On July 16, 1949, Bautista applied
for a loan with the Rehabilitation Finance Corporation
(RFC), predecessor in interest of the plaintiff-appellee
Development Bank of the Philippines (DBP), offering as
security the parcel of land covered by O.C.T. No. P-389.
Aside from her certificate of title, Bautista also submitted to
the RFC other documents to show her ownership and
possession of the land in question, namely, Tax Declaration
No. 5153 (Exh. A-4) in her name and the blueprint plan of
the land. On the basis of the documents mentioned and the
appraisal of the property by its appraiser, the RFC approved
a loan of P4,000.00 in favor of Bautista. On July 16, 1949,
Bautista executed the mortgage contract over the property
covered by O.C.T. No. P-389 and the promissory note for
P4,000.00 in favor of RFC (Exhs. C and C-1), after which
2
the proceeds of the loan were released."
The satisfaction of the mortgage debt with the acquisition of
the title to such property by appellant Bank, by virtue of an
extrajudicial foreclosure sale, and such title losing its validity
in view of a court proceeding, where however, appellee
Bautista, was not made a party, was next taken up in the
brief of plaintiff-appellant. Thus: "Bautista failed to pay the
amortization on the loan so that the RFC took steps to
foreclose the mortgage extra-judicially under Act 3135, as
amended. In the ensuing auction sale conducted by the
sheriff of Nueva Ecija on June 27, 1951, the RFC acquired

the mortgaged property as the highest bidder (Exh. D). On

the date of the sale, the total obligation of Bautista with the
RFC was P4,858.48 (Exh. I). On July 21, 1952, upon failure
of Bautista to redeem the property within the one (1) year
period as provided bylaw, plaintiff-appellant RFC
consolidated its ownership thereon (Exhs. E and E-I). On
July 26, 1952, the Register of Deeds of Nueva Ecija
cancelled O.C.T. No. P-389 and replaced it with T.C.T. No.
NT-12108 in the name of the RFC (Exhs. F and F-1). On or
about this time, however, an action (Civil Case No. 870)
was filed by Rufino Ramos and Juan Ramos in the Court of
First Instance of Nueva Ecija against the Government of the
Republic of the Philippines and the RFC (as successor in
interest of Bautista) claiming ownership of the land in
question and seeking the annulment of T.C.T. No. 2336 in
the name of the Government, O.C.T. No. P-389 in the name
of Bautista and T.C.TG. No. NT-12108 in the name of the
RFC. A decision thereon was rendered on June 27, 1955
(Exhs. G, G-1, and G-3) whereby the aformentioned
3
certificates of title were declared null and void."
Why the complaint had to be dismissed was explained thus
in the decision now on appeal: "The Court after examining
the proofs, is constrained to sustain her on that; it will really
appear that she had never been placed within the
jurisdiction of the Nueva Ecija Court; as the action there was
one to annual the title, it was an action strictly in personam,
if that was the case as it was, the judgment there could not
in any way bind Lourdes who had not acquired in said
decision in any way for what only happened is that as to the
mortgage, the Bank foreclosed, and then sold unto Conrada
and when the title had been annulled, the Bank reimbursed
Conrada; stated otherwise, the annulment of Lourdes' title
was a proceeding ex parte as far as she was concerned and
could not bind her at all; and her mortgage was foreclosed
an the Bank realized on it, when the Bank afterwards
acquiesced in the annulment of the title and took it upon
itself to reimburse Conrada, the Bank was acting on its own
peril because it could not have by that, bound Lourdes at
4
all."
As stated at the outset, the decision must be affirmed. The
fundamental due process requirement having been

disregarded, appellee Bautista could not in any wise be

made to suffer, whether directly or indirectly, from the
effects of such decision. After appellant bank had acquired
her title by such extrajudicial foreclosure sale and thus,
through its own act, seen to it that her obligation had been
satisfied, it could not thereafter, seek to revive the same on
the allegation that the title in question was subsequently
annulled, considering that she was not made a party on the
occasion of such nullification.
If it were otherwise, then the cardinal requirement that no
party should be made to suffer in person or property without
being given a hearing would be brushed aside. The doctrine
consistently adhered to by this Court whenever such a
question arises in a series of decisions is that a denial of
due process suffices to cast on the official act taken by
5
whatever branch of the government the impress of nullity.
6

A recent decision, Macabingkil v. Yatco, possesses

relevance. "A 1957 decision, Cruzcosa v. Concepcion, is
even more illuminating in so far as the availability of the
remedy sought is concerned. In the language of this Court,
speaking through Justice J.B.L. Reyes: 'The petition is
clearly meritorious. Petitioners were conclusively found by
the Court of Appeals to be co-owners of the building in
question. Having an interest therein, they should have been
made parties to the ejectment proceedings to give them a
chance to protect their rights: and not having been made
parties thereto, they are not bound and can not be affected
by the judgment rendered therein against their co-owner
Catalino Cruzcosa. Jr. ....' Two due process cases deal
specifically with a writ of execution that could not validly be
enforced against a party who was not given his day in court,
Sicat v. Reyes, and Hamoy v. Batingoplo. According to the
former: 'The above agreement, which served as basis for
the ejectment of Alipio Sicat, cannot be binding and
conclusive upon the latter, who is not a party to the case.
Indeed, that order, as well as the writ of execution, cannot
legally be enforced against Alipio Sicat for the simple
reason that he was not given his day in court.' From the
latter: 'The issue raised in the motion of Rangar is not
involved in the appeal for it concerns a right which he claims
over the property which has not so far been litigated for the

reason that he was not made a party to the case either as

plaintiff for a defendant. He only came to know of the
litigation when he was forced out of the property by the
sheriff, and so he filed the present motion to be heard and
prove his title to the property. This he has the right to do as
the most expeditious manner to protect his interest instead
of filing a separate action which generally is long, tedious
and protracted.'"
Reinforcement to the above conclusion comes from a codal
7
provision. According to the Civil Code: "The vendor shall
not be obliged to make good the proper warranty, unless he
is summoned in the suit for eviction at the instance of the
vendee. "While not directly in point, the principle on which
the above requirement is based sustains the decision of the
lower court. In effect, appellant bank would hold appellee
Bautista liable for the warranty on her title, its annullment
having the same effect as that of an eviction. In such a
case, it is wisely provided by the Civil Code that appellee
Bautista, as vendor, should have been summoned and
given the opportunity to defend herself. In view of her being
denied her day in court, it would to be respected, that she is
not "obliged to made good the proper warranty."
In the suit before the lower court, the Director of Lands and
the National Treasurer of the Philippines were likewise
made defendants by appellant bank because of its belief
that if no right existed as against appellee Bautista, recovery
could be had from the Assurance Fund. Such a belief finds
no support in the applicable, law, which allows recovery only
upon a showing that there be no negligence on the part of
the party sustaining any loss or damage or being deprived
of any land or interest therein by the operation of the Land
8
Registration Act. This certainly is not the case here,
plaintiff-appellant being solely responsible for the light in
which it now finds itself. Accordingly, the Director of Lands
and the National Treasurer of the Philippines are likewise
exempt from any liability.
WHEREFORE, the judgment appealed from is affirmed,
with costs against the Development Bank of the Philippines.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar,

G.R. No. 170207

April 19, 2010
VICENTE CAWIS (substituted by his son, EMILIO
CAWIS), PEDRO BACLANGEN, FELIZA DOMILIES, IVAN
MANDI-IT a.k.a. IVAN MANDI-IT LUPADIT, DOMINGO
CAWIS and GERARD LIBATIQUE, Petitioners,
vs.
HON. ANTONIO CERILLES, in his capacity as the DENR
Secretary, HON. MANUEL GEROCHI, in his capacity as
the Director, Lands, Management Bureau, and MA.
EDELIZA PERALTA, Respondents.
DECISION
CARPIO, J.:
The Case
1

This is a petition for review of the 17 February 2005

2
3
Decision and the 6 September 2005 Resolution of the
Court of Appeals (appellate court) in CA-G.R. CV No.
66685. In its 17 February 2005 Decision, the appellate court
4
affirmed the 3 November 1999 Resolution of Branch 61 of
the Regional Trial Court of Baguio City (trial court), which
dismissed the complaint filed by Vicente Cawis, Pedro
Baclangen, Feliza Domilies, Ivan Mandi-it, Domingo Cawis,
and Gerard Libatique (collectively petitioners). In its 6
September 2005 Resolution, the appellate court denied
petitioners motion for reconsideration.
The Facts
On 23 September 1957, the Department of Environment
5
and Natural Resources (DENR), pursuant to Section 79 of
6
the Public Land Act, approved the sales patent application
of Jose V. Andrada (Andrada) for Lot No. 47 with an area of
1,339 square meters situated within Holy Ghost Hill
Subdivision in Baguio City. Sales Patent No. 1319 was
issued to Andrada upon full payment of the purchase price
of the lot on 20 November 1968, as evidenced by O.R. No.
7
459651.
8

On 4 August 1969, Republic Act No. 6099 took effect. It

provided that subject to certain conditions, parcels of land
within the Holy Ghost Hill Subdivision, which included Lot
No. 47, would be sold to the actual occupants without the
necessity of a public bidding, in accordance with the

provisions of Republic Act No. 730.

Claiming to be the actual occupants referred to in R.A. No.

6099, petitioners protested the sales patent awarded to
Andrada. The Bureau of Lands denied their protest on the
ground that R.A. No. 6099, being of later passage, could no
longer affect the earlier award of sales patent to Andrada.
Petitioners sought reconsideration, but the Bureau of Lands
denied it on 19 May 1987. Petitioners failed to appeal the
adverse decision of the Bureau of Lands to any higher
administrative authority or to the courts. Thus, the decision
10
had attained finality.

argued that upon the enactment of R.A. No. 6099,

Andradas sales patent was deemed cancelled and revoked
in their favor.
16

In her answer with a motion to dismiss, Peralta averred

that petitioners have no cause of action against her, that
she obtained her title after compliance with the legal
requirements, that her title was issued more than ten years
prior to the filing of the complaint, that the action was a
collateral attack on a title, and that even if the action was a
direct attack, petitioners were not the proper parties.
The Ruling of the Trial Court

Sometime in 1987, private respondent Ma. Edeliza S.

Peralta (Peralta) purchased Lot No. 47 from Andrada. On
28 October 1987, the Deputy Public Land Inspector, in his
11
final report of investigation, found that neither Andrada nor
Peralta had constructed a residential house on the lot,
which was required in the Order of Award and set as a
condition precedent for the issuance of the sales patent.
Apparently, it was Vicente Cawis, one of the petitioners,
who had built a house on Lot No. 47.
On 13 November 1987, Sales Patent No. 1319 was
nonetheless transferred to Peralta. In the Order for the
12
Issuance of Patent, the Assistant Director of Lands verified
the investigation conducted by the Land Inspector, whose
report was fully endorsed by the District Land Officer, that
Peralta had complied with the requirements of the law
regarding the construction of improvements on the land
13
applied for. In the Order for Transfer of Sales Rights, the
Director of Lands confirmed that before the transfer of the
sales patent to Peralta, Andrada had complied with the
construction requirement. On 4 December 1987, Original
14
Certificate of Title (OCT) No. P-1604 was duly issued in
Peraltas name.
15

On 8 September 1998, petitioners filed a complaint before

the trial court alleging fraud, deceit, and misrepresentation
in the issuance of the sales patent and the original
certificate of title over Lot No. 47. They claimed they had
interest in the lot as qualified beneficiaries of R.A. No. 6099
who met the conditions prescribed in R.A. No. 730. They

The trial court issued a Resolution dated 3 November 1999

dismissing the complaint filed by petitioners. The trial court
held that reversion of title on the ground of fraud must be
initiated by the government through the Office of the
17
Solicitor General (OSG). In its 13 January 2000 Order, the
trial court denied petitioners motion for reconsideration.
The Ruling of the Appellate Court
In its 17 February 2005 Decision, the appellate court
affirmed the resolution of the trial court. The appellate court
18
explained that under Section 2 of R.A. No. 6099,
ownership of public land within the Holy Ghost Hill
Subdivision was not automatically conferred on petitioners
as occupants. The appellate court stated that petitioners
must first apply for a sales patent in order to avail of the
benefits of the law. The appellate court agreed with the trial
court that petitioners had no standing to file a suit for
annulment of Sales Patent No. 1319 and OCT No. P-1604.
19
It cited Section 101 of the Public Land Act, which provides
that only the government, through the OSG, could file an
action for reversion. In its 6 September 2005 Resolution, the
appellate court denied petitioners motion for
reconsideration.
The Issues
The twin issues raised by petitioners are (1) whether the
actual occupants of parcels of land covered by R.A. No.

6099, which includes Lot No. 47, have standing to question

the validity of the sales patent and the original certificate of
title issued over Lot No. 47; and (2) whether the suit for
annulment of title allegedly issued through fraud, deceit, or
misrepresentation, has prescribed.
The Courts Ruling
The petition has no merit.
Petitioners contend private respondent misrepresented that
there was no improvement on Lot No. 47 at the time she
filed her sales patent application when in fact, there were
numerous improvements consisting of residential houses
erected by them. Petitioners argue neither private
respondent nor her predecessor-in-interest has introduced
any improvement on Lot No. 47, which is a condition
precedent before she can be a qualified awardee.
Petitioners take exception to the rule that only the OSG is
allowed to file a suit questioning the validity of the sales
patent and the original certificate of title. As to the second
issue, petitioners argue that since the sales patent and the
original certificate of title are void from the beginning, the
complaint filed by petitioners cannot be deemed to have
prescribed.
In her Comment, private respondent asserts that petitioners
have no personality to question the validity of the sales
patent and the original certificate of title issued in her name.
She maintains that only the government, through the OSG,
may file an action for reversion on the ground of fraud,
deceit, or misrepresentation. As to the second issue, private
respondent claims that petitioners annulment suit has
20
prescribed pursuant to Section 32 of Presidential Decree
21
No. 1529.
At the outset, we must point out that petitioners complaint
questioning the validity of the sales patent and the original
certificate of title over Lot No. 47 is, in reality, a reversion
suit. The objective of an action for reversion of public land is
the cancellation of the certificate of title and the resulting
reversion of the land covered by the title to the State. This is
why an action for reversion is oftentimes designated as an

annulment suit or a cancellation suit.

Coming now to the first issue, Section 101 of the Public
22
Land Act clearly states:
SEC. 101. All actions for the reversion to the Government of
lands of the public domain or improvements thereon shall
be instituted by the Solicitor General or the officer acting in
his stead, in the proper courts, in the name of the Republic
of the Philippines.
Even assuming that private respondent indeed acquired title
to Lot No. 47 in bad faith, only the State can institute
reversion proceedings, pursuant to Section 101 of the
23
Public Land Act and our ruling in Alvarico v. Sola. Private
persons may not bring an action for reversion or any action
which would have the effect of canceling a land patent and
the corresponding certificate of title issued on the basis of
the patent, such that the land covered thereby will again
24
form part of the public domain. Only the OSG or the officer
acting in his stead may do so. Since the title originated from
a grant by the government, its cancellation is a matter
25
between the grantor and the grantee. 1avvphi1
26

Similarly, in Urquiaga v. CA, this Court held that there is

no need to pass upon any allegation of actual fraud in the
acquisition of a title based on a sales patent. Private
persons have no right or interest over land considered
public at the time the sales application was filed. They have
no personality to question the validity of the title. We further
stated that granting, for the sake of argument, that fraud
was committed in obtaining the title, it is the State, in a
reversion case, which is the proper party to file the
27
necessary action.
In this case, it is clear that Lot No. 47 was public land when
Andrada filed the sales patent application. Any subsequent
action questioning the validity of the award of sales patent
on the ground of fraud, deceit, or misrepresentation should
thus be initiated by the State. The State has not done so
and thus, we have to uphold the validity and regularity of the
sales patent as well as the corresponding original certificate
of title issued based on the patent.

At any rate, the Court, in the exercise of its equity

jurisdiction, may directly resolve the issue of alleged fraud in
the acquisition of a sales patent although the action is
instituted by a private person. In this connection, the 19 May
1987 letter of the Director of Lands to petitioner Vicente
Cawis is instructive:
As to your allegation that the award in favor of applicantrespondent (Andrada) should be cancelled as he failed to
introduce improvements on the land, we find the said
contention to be untenable. Somewhere in your letter dated
July 11, 1983, you stated that you took possession of the lot
in question in the early 1950s, introduced improvements
thereon, and resided therein continuously up to the present.
By your own admission, it would appear that you were the
ones who made it impossible for Mr. Andrada to take
possession of the said lot and to improve the same. This
being the case, the failure of the applicant-respondent
(Andrada) to introduce improvements on the land in
question is not attributable to him.
In view of the foregoing facts and circumstances, we regret
to inform you that we cannot reconsider our position on this
matter. It is further advised that you vacate the premises
and remove all your improvements thereon so that the
applicant-awardee (Andrada) can take immediate
28
possession of the land in question.
Clearly then, fraud cannot be imputed to Andrada. His
supposed failure to introduce improvements on Lot No. 47 is
simply due to petitioners refusal to vacate the lot. It appears
from the factual finding of the Director of Lands that
petitioners are the ones in bad faith. Contrary to petitioners
claim, R.A. No. 6099 did not automatically confer on them
ownership of the public land within Holy Ghost Hill
Subdivision. The law itself, Section 2 of R.A. No. 6099,
provides that the occupants must first apply for a sales
patent in order to avail of the benefits of the law, thus:
SEC. 2. Except those contrary to the provisions of Republic
Act Numbered Seven Hundred and Thirty, all other
provisions of Commonwealth Act Numbered One hundred
and Forty-One governing the procedure of issuing titles

shall apply in the disposition of the parcels above-described

to the beneficiaries of this Act.
The complaint filed by petitioners did not state that they had
filed an application for a sales patent over Lot No. 47. Even
if it did, an application for a sales patent could only create,
at most, an inchoate right. Not being the real parties-ininterest, petitioners have no personality to file the reversion
suit in this case.
Consequently, the prescription issue pertaining to the action
for reversion initiated by petitioners who could not have
successfully initiated the reversion suit in the first place, is
now moot.
WHEREFORE, we DENY the petition for review. We
AFFIRM the 17 February 2005 Decision and the 6
September 2005 Resolution of the Court of Appeals in CAG.R. CV No. 66685.
Costs against petitioners.
SO ORDERED.

G.R. No. L-45202 September 11, 1980

REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, LANDOLINO
ALPUERTO, PAZ ALPUERTO, NORMA ALPUERTO,
FRANCISCA ALPUERTO, in their capacity as heirs of
PERPETUO ALPUERTO, HENRY O. ANTONIO
ANGELES, AUREA ANGELES, INDUSTRIAL
MARKETING & INVESTMENT CORP., LANDOLINO
ALPUERTO, LUCILA UNLAYAO, ARTEMIO CALUSIN,
LUCIANO POTESTADES, ELPIDIO BANAGAN, LUZ
OLIVEROS, DIONISIO LLAMAS, ALICIA CAPARROS,
CORAZON ALFUENTE, EMILIO CALIWARA, ANDRES
LARIEDO, LAND REGISTRATION COMMISSIONER and
REGISTER OF DEEDS OF QUEZON, respondents.
MAKASIAR, J.:
Appeal by certiorari from the decision of the Court of
Appeals in CA-G.R. No. 52323-R, entitled Republic of the
Philippines, vs. Landolino Alpuerto, et al., affirming the order
of the Court of First Instance of Quezon which dismissed
the complaint for annulment and cancellation of titles and
reversion of lands filed by petitioner, as well as from the
resolution dated November 22, 1976 of the Court of
Appeals, denying petitioner's motion for reconsideration.
This case involves Lot No. 7718 of the cadastral survey of
Mauban, Quezon, containing an area of 19,873,835 square
meters, more or less.
On May 16, 1966, Perpetuo Alpuerto, now deceased, filed
with the Court of First Instance of Quezon (Branch II), a
motion to reopen Cadastral Case No. 97, LCR Cad. Rec.
No. 1555, and to admit his answer over Lot No. 7718 of the
Mauban (Quezon) cadastre. After trial, the lower court
rendered its decision dated August 3, 1966, adjudicating to
said Perpetuo Alpuerto Lot No. 7718 together with its
improvements, and ordering the issuance in his favor of the
corresponding decree of registration. On September 22,
1966, the lower court issued an order for the issuance of a
decree of registration over the said lot, and pursuant
thereto, the Land Registration Commission issued Decree

No. 127177 which was subsequently transcribed in the

Registration book of the Register of Deeds of Quezon on
November 18, 1969. This was the basis of the issuance of
Original Certificate of Title No. 0-13541 in favor of Perpetuo
Alpuerto. Portions of the lot were subsequently transferred
to various persons who were issued their respective transfer
certificates of title, among whom are private respondents
Henry O. Antonio Angeles, Industrial Marketing &
Investment Corporation, Landolino Alpuerto, Artemio
Calusin, Luciano Potestades, Alpidio Banagan, Dionisio
Llamas, Corazon Alpuente and Andres Laredo.
On September 26, 1966, the Provincial Fiscal of Quezon
filed a Motion for Reconsideration (pp. 78-80, rec.) of the
decision dated August 3, 1966, on the ground that the said
decision was obtained through fraud, misrepresentation and
deceit. Then on March 14, 1967, Attys. Amado Aquino and
Francisco Lopez, special attorneys of the Office of the
Solicitor General, filed, also for the Director of Lands, a
Supplemental Motion for Reconsideration and/or for New
Trial (pp. 82-87, rec.), alleging that the cadastral case was
improperly reopened despite the absence of the necessary
conditions for such reopening, and that the Director of
Lands was not duly notified of the hearing and therefore
denied his day in court. Both these motions were denied by
the lower court on June 19, 1970. (Please note that no copy
of said order of denial is found in the record).
Before the issuance of the order of denial dated June 18,
1970, the Provincial Fiscal of Quezon again filed on May 25,
1970 a motion for cancellation of titles and for preliminary
injunction (pp. 89-90, rec.), assailing the order for the
issuance of the decree of registration dated September 22,
1966 for being illegal, invalid and without effect because it
was issued when the decision of August 3, 1966 had not yet
become final and his timely motion for reconsideration was
still pending. On July 14, 1970, the Director of Lands, again
through Attys. Aquino and Lopez, filed a motion for
reconsideration (pp. 91-92, rec.) of the order dated June 18,
1970 on the ground that the same was issued on the wrong
premise, i.e., that the decision of the court had already
become final and executory when in fact it had not. These
two motions were likewise denied by the court in its order of

July 27, 1970 (Note: no copy of said order in the records).

On April 6, 1971, the Solicitor General filed for the
government a complaint for annulment, cancellation of titles
and for reversion of Lot No. 7718 of Cadastral Survey of
Mauban, Quezon to the State (pp. 96-100, rec.), on the
ground that the decision of the court dated August 3, 1966
adjudicating Lot No. 7718 to Perpetuo Alpuerto, its order for
the issuance of the decree of registration dated September
22, 1966, as well as the Original Certificate of Title No.
013541 and all the transfer certificates of title derived
therefrom, are all null and void and without legal effect
because the court had no jurisdiction to allocate the subject
land, which is inalienable.
On May 11, 1971, defendants Industrial Marketing and
Investments Corporation, Henry O. Antonio Angeles and
Aurea Angeles filed a motion to dismiss the complaint (pp.
103-105, rec.), alleging that the action is barred by a prior
judgment and that the court lacks jurisdiction over the
nature of the action or suit. Another defendant, Andres
Laredo, likewise on May 17, 1971, filed a motion for
dismissal of the complaint, based on the grounds that the
complaint states no cause of action and that venue is
improperly laid.
After hearing the motions for dismissal and the opposition
thereto, the lower court, on September 28, 1971, issued an
order denying the motion to dismiss filed by defendant
Andres Laredo, but granting the motion to dismiss tied by
defendants Industrial Marketing and Investments
Corporation, Henry O. Antonio Angeles and Aurea Angeles
and dismissing the complaint filed by petitioner.
Petitioner filed on October 29, 1971 a motion seeking to
reconsider the lower court's order of dismissal (pp. 119-124,
rec.) which, however, was denied by the said court in an
order dated December 24, 1971 (pp. 130-134, rec.).
Consequently, petitioner appealed the case to the Court of
Appeals which, on August 25, 1976, promulgated a decision
(pp. 27-37, rec.), affirming the order of dismissal by the
lower court. Petitioner again filed a motion for
reconsideration, but the same was likewise denied (p. 38,

rec.).
Forthwith, petitioner elevated the matter to US through the
present petition, which WE find to be meritorious.
In the first place, the land in question is not within the
jurisdiction of the Director of Lands but of the Director of
Forestry. Although the Public Land Act vests upon the
Director of Lands, subject to the immediate control of the
Secretary of Agriculture and Commerce, direct executive
control of the survey, classification, lease, sale or any other
form of concession or disposition and management of the
lands of the public domain (Sec. 4, Commonwealth Act No.
141), the same law explicitly states that timber and mineral
lands shall be governed by special laws. And the Forestry
Law (Secs. 1814-1842, Revised Administrative Code, as
amended) now vests in the Director of Forestry (now
Director of Forest Development under P.D. No. 705) the
jurisdiction and authority over forest or timberland.
As held in the case of Mejia Vda. de Alfafara vs. Mapa, et
al. (95 Phil. 125) wherein WE upheld the findings of the
Secretary of Agriculture and Natural Resources thus:
"Where the land covered by the homestead application of
petitioner was still within the forest zone or under the
jurisdiction of the Bureau of Forestry, the Director of Lands
had no jurisdiction to dispose of said land under the
provisions of the Public Land Law, and the petitioner
acquired no right to the land." It follows that "if a person
obtains a title under the Public Land Act which includes, by
oversight, lands which cannot be registered under the
Torrens system, or when the Director of Lands did not have
jurisdiction over the same because it is a public forest, the
grantee does not, by virtue of the said certificate of title
alone, become the owner of the land illegally included"
(Republic vs. Animas, 56 SCRA 499, 503; Ledesma vs.
Municipality of Iloilo, 49 Phil. 769).

ordered cancelled (Republic vs. Animas, et al., supra), and

the cancellation may be pursued through an ordinary action
therefor. This action cannot be barred by the prior judgment
of the land registration court, since the said court had no
jurisdiction over the subject matter. And if there was no such
jurisdiction, then the principle of res judicata does not apply.
For it is a well-settled rule that for a prior judgment to
constitute a bar to a subsequent case, the following
requisites must concur; (1) it must be a final judgment; (2) it
must have been rendered by a court having jurisdiction over
the subject matter and over the parties; (3) it must be a
judgment on the merits; and (4) there must be, between the
first and second actions, Identity of parties, Identity of
subject matter and Identity of cause of action (Municipality
of Daet vs. CA, 93 SCRA 503; Mendoza vs. Arrieta, et al.,
91 SCRA 113). Certainly, one of the essential requisites,
i.e., jurisdiction over the subject matter, is absent in this
case.
The argument that the subject land being a timberland is
urged only now, is not well-taken. So also is the contention
that it is not enough for the land to be within a timberland in
the absence of evidence showing conclusively that it is
covered by natural growth of trees of such considerable
extent to bring it within the definition of forest land. This is
because the Director of Forestry was not notified of the
proceedings. Under the law, the Director of Forestry is the
official clothed with jurisdiction and authority over the
demarcation, protection, management, reproduction,
reforestation, occupancy, and use of all forests and forest
resources (Sec. 1816, Revised Administrative Code, as
amended).

The patent or title thus issued is void at law, since the officer
who issued it had no authority to do so (Republic vs. de la
Cruz, 67 SCRA, 221).

In any case, even granting that the said official was

negligent, the doctrine of estoppel cannot operate against
the State. "It is a well-settled rule in our jurisdiction that the
Republic or its government is usually not estopped by
mistake or error on the part of its officials or agents (Manila
Lodge No. 761 vs. CA, 73 SCRA 166, 186; Republic vs.
Marcos, 52 SCRA 238, 244; Luciano vs. Estrella, 34 SCRA
769).

Under these circumstances, the certificate of title may be

Consequently, the State may still seek the cancellation of

the title issued to Perpetuo Alpuerto and his successorsinterest pursuant to Section 101 of the Public Land Act.
Such title has not become indefeasible, for prescription
cannot be invoked against the State (Republic vs. Animas,
supra).
WHEREFORE, THE INSTANT PETITION IS GRANTED,
THE DECISION OF THE RESPONDENT COURT DATED
AUGUST 25, 1976 AND ITS RESOLUTION OF
NOVEMBER 22, 1976 ARE HEREBY VACATED AND SET
ASIDE. LET THIS CASE BE REMANDED TO THE COURT
OF FIRST INSTANCE OF QUEZON FOR FURTHER
PROCEEDINGS.

G.R. No. 168661

October 26, 2007
ESTATE OF THE LATE JESUS S. YUJUICO, represented
by ADMINISTRATORS BENEDICTO V. YUJUICO and
EDILBERTO V. YUJUICO; and AUGUSTO Y. CARPIO,
Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES and the COURT OF
APPEALS, Respondents.
DECISION
VELASCO, JR., J.:
In 1973, Fermina Castro filed an application for the
registration and confirmation of her title over a parcel of land
with an area of 17,343 square meters covered by plan
(LRC) Psu-964 located in the Municipality of Paraaque,
Province of Rizal (now Paraaque City), in the Pasig-Rizal
Court of First Instance (CFI), Branch 22. The application
was docketed LRC Case No. N-8239. The application was
opposed by the Office of the Solicitor General (OSG) on
behalf of the Director of Lands, and by Mercedes Dizon, a
private party. Both oppositions were stricken from the
records since the opposition of Dizon was filed after the
expiration of the period given by the court, and the
opposition of the Director of Lands was filed after the entry
of the order of general default. After considering the
evidence, the trial court rendered its April 26, 1974
Decision. The dispositive portion reads:
____________________________
* As per September 3, 2007 raffle.
WHEREFORE, the Court hereby declares the applicant,
Fermina Castro, of legal age, single, Filipino and a resident
of 1515 F. Agoncillo St., Corner J. Escoda St., Ermita,
Manila, the true and absolute owner of the land applied for
situated in the Municipality of Paraaque, Province of Rizal,
with an area of 17,343 square meters and covered by plan
(LRC) Psu-964 and orders the registration of said parcel of
land in her name with her aforementioned personal
circumstances.
Once this decision becomes final and executory, let the
corresponding order for the issuance of the decree be

issued.
SO ORDERED.

The Director of Lands and Mercedes Dizon did not appeal

from the adverse decision of the Pasig-Rizal CFI. Thus, the
order for the issuance of a decree of registration became
final, and Decree No. N-150912 was issued by the Land
2
Registration Commission (LRC). Original Certificate of Title
(OCT) No. 10215 was issued in the name of Fermina Castro
by the Register of Deeds for the Province of Rizal on May
3
29, 1974.
The land was then sold to Jesus S. Yujuico, and OCT No.
4
10215 was cancelled. On May 31, 1974, Transfer
Certificate of Title (TCT) No. 445863 was issued in Yujuicos
name, who subdivided the land into two lots. TCT No.
5
446386 over Lot 1 was issued in his name, while TCT No.
6
S-29361 over Lot 2 was issued in the name of petitioner
Augusto Y. Carpio.
Annotations at the back of TCT No. 446386 show that
Yujuico had, at one time or another, mortgaged the lot to the
Philippine Investments System Organization (PISO) and
Citibank, N.A. Annotations in the title of petitioner Carpio
reveal the lot was mortgaged in favor of Private
Development Corporation (PDC), Rizal Commercial
Banking Corporation (RCBC) and then Philippine
Commercial and Industrial Bank (PCIB) and the
Development Bank of the Philippines (DBP) to secure
various loans.
Sometime in 1977, Presidential Decree No. (PD) 1085
entitled Conveying the Land Reclaimed in the Foreshore
and Offshore of the Manila Bay (The Manila-Cavite Coastal
Road Project) as Property of the Public Estates Authority as
well as Rights and Interests with Assumptions of Obligations
in the Reclamation Contract Covering Areas of the Manila
Bay between the Republic of the Philippines and the
Construction and Development Corporation of the
Philippines (1977) was issued. Land reclaimed in the
foreshore and offshore areas of Manila Bay became the
properties of the Public Estates Authority (PEA), a

government corporation that undertook the reclamation of

lands or the acquisition of reclaimed lands. On January 13,
1989, OCT No. SP 02 was issued in favor of PEA. The PEA
also acquired ownership of other parcels of land along the
Manila Bay coast, some of which were subsequently sold to
the Manila Bay Development Corporation (MBDC), which in
7
turn leased portions to Uniwide Holdings, Inc.
The PEA undertook the construction of the Manila Coastal
Road. As this was being planned, Yujuico and Carpio
discovered that a verification survey they commissioned
showed that the road directly overlapped their property, and
that they owned a portion of the land sold by the PEA to the
MBDC.
On July 24, 1996, Yujuico and Carpio filed before the
Paraaque City Regional Trial Court (RTC), a complaint for
the Removal of Cloud and Annulment of Title with Damages
docketed as Civil Case No. 96-0317 against the PEA. On
May 15, 1998 the parties entered into a compromise
agreement approved by the trial court in a Resolution dated
May 18, 1998. On June 17, 1998, the parties executed a
Deed of Exchange of Real Property, pursuant to the
compromise agreement, where the PEA property with an
area of 1.4007 hectares would be conveyed to Jesus
Yujuico and petitioner Carpio in exchange for their property
with a combined area of 1.7343 hectares.
On July 31, 1998, the incumbent PEA General Manager,
Carlos P. Doble, informed the OSG that the new PEA board
and management had reviewed the compromise agreement
and had decided to defer its implementation and hold it in
abeyance following the view of the former PEA General
Manager, Atty. Arsenio Yulo, Jr., that the compromise
agreement did not reflect a condition of the previous PEA
Board, requiring the approval of the Office of the President.
The new PEA management then filed a petition for relief
from the resolution approving the compromise agreement
on the ground of mistake and excusable negligence.
The petition was dismissed by the trial court on the ground
that it was filed out of time and that the allegation of mistake
and excusable negligence lacked basis.

The PEA fared no better in the Court of Appeals (CA), as

the petition was dismissed for failure to pay the required
docket fees and for lack of merit.
The matter was raised to the Supreme Court in Public
8
Estates Authority v. Yujuico but PEAs petition was denied,
upholding the trial courts dismissal of the petition for relief
for having been filed out of time. The allegation of fraud in
the titling of the subject property in the name of Fermina
Castro was not taken up by the Court.
On June 8, 2001, in a Complaint for Annulment and
Cancellation of Decree No. N-150912 and its Derivative
Titles, entitled Republic of the Philippines v. Fermina
Castro, Jesus S. Yujuico, August Y. Carpio and the Registry
of Deeds of Paraaque City docketed as Civil Case No. 010222, filed with the Paraaque City RTC, respondent
Republic of the Philippines, through the OSG, alleged that
when the land registered to Castro was surveyed by Engr.
H. Obreto on August 3, 1972 and subsequently approved by
the LRC on April 23, 1973, the land was still a portion of
Manila Bay as evidenced by Namria Hydrographic Map No.
4243, Surveys to 1980; 1st Ed/. January 9/61: Revised 8011-2; that Roman Mataverde, the then OIC of the Surveys
Division, Bureau of Lands, informed the OIC of the Legal
Division that "[w]hen projected on Cadastral Maps CM 14
deg. 13 N-120 deg, 59E, Sec.2-A of Paraaque Cadastre
(Cad. 299), (LRC) Psu-964 falls inside Manila Bay, outside
Cad. 299"; that then Acting Regional Lands Director Narciso
V. Villapando issued a Report dated November 15, 1973
stating that plan (LRC) Psu-964 is a portion of Manila Bay;
that then Officer-in-Charge, Assistant Director of Lands,
Ernesto C. Mendiola, submitted his Comment and
Recommendation re: Application for Registration of Title of
FERMINA CASTRO, LRC Case No. N-8239, dated Dec. 1,
1977, praying that the instant registration case be
dismissed; and that Fermina Castro had no registrable
rights over the property.
More significantly, respondent Republic argued that, first,
since the subject land was still underwater, it could not be
registered in the name of Fermina Castro. Second, the land
registration court did not have jurisdiction to adjudicate

inalienable lands, thus the decision adjudicating the subject

parcel of land to Fermina Castro was void. And third, the
titles of Yujuico and Carpio, being derived from a void title,
9
were likewise void.
On September 13, 2001, Yujuico and Carpio filed a Motion
10
to Dismiss (With Cancellation of Notice of Lis Pendens),
on the grounds that: (1) the cause of action was barred by
prior judgment; (2) the claim had been waived, abandoned,
or otherwise extinguished; (3) a condition precedent for the
filing of the complaint was not complied with; and (4) the
complaint was not verified and the certification against
forum shopping was not duly executed by the plaintiff or
principal party.
On November 27, 2001, respondent Republic filed an
11
Opposition to the motion to dismiss to which defendants
12
filed a Reply on January 14, 2002, reiterating the grounds
for the motion to dismiss.
13

In the August 7, 2002 Order of the RTC, Civil Case No.

01-0222 was dismissed. The trial court stated that the
matter had already been decided in LRC Case No. N-8239,
and that after 28 years without being contested, the case
had already become final and executory.1wphi1 The trial
court also found that the OSG had participated in the LRC
case, and could have questioned the validity of the decision
but did not. Civil Case No. 01-0222 was thus found barred
by prior judgment.
On appeal to the CA, in CA-G.R. CV No. 76212, respondent
Republic alleged that the trial court erred in disregarding
that appellant had evidence to prove that the subject parcel
of land used to be foreshore land of the Manila Bay and that
the trial court erred in dismissing Civil Case No. 01-0222 on
14
the ground of res judicata.
The CA observed that shores are properties of the public
domain intended for public use and, therefore, not
registrable and their inclusion in a certificate of title does not
convert the same into properties of private ownership or
confer title upon the registrant.

Further, according to the appellate court res judicata does

not apply to lands of public domain, nor does possession of
the land automatically divest the land of its public character.
The appellate court explained that rulings of the Supreme
Court have made exceptions in cases where the findings of
the Director of Lands and the Department of Environment
and Natural Resources (DENR) were conflicting as to the
true nature of the land in as much as reversion efforts
pertaining foreshore lands are embued with public interest.
The dispositive portion of the CA decision reads,
WHEREFORE, premises considered, the present appeal is
hereby GRANTED. The appealed Order dated August 7,
2002 of the trial court in Civil Case No. 01-0222 is hereby
REVERSED and SET ASIDE. The case is hereby
REMANDED to said court for further proceedings and a full15
blown trial on the merits with utmost dispatch.
Hence, this petition.
The Issues
Petitioners now raise the following issues before this Court:
THE COURT OF APPEALS COMMITTED REVERSIBLE
ERROR AND DECIDED A QUESTION OF SUBSTANCE IN
A WAY NOT IN ACCORDANCE WITH LAW AND THE
APPLICABLE DECISIONS OF THE HONORABLE COURT
AND HAS DEPARTED FROM THE ACCEPTED AND
USUAL COURSE OF JUDICIAL PROCEEDINGS
NECESSITATING THE HONORABLE COURTS
EXERCISE OF ITS POWER OF SUPERVISION
CONSIDERING THAT:
I. THE REVERSAL BY THE COURT OF APPEALS OF THE
TRIAL COURTS APPLICATION OF THE PRINCIPLE OF
RES JUDICATA IN THE INSTANT CASE IS BASED ON
ITS ERRONEOUS ASSUMPTION THAT THE SUBJECT
LAND IS OF PUBLIC DOMAIN, ALLEGEDLY PART OF
MANILA BAY.

A. IN THE FIRESTONE CASE, THE HONORABLE

COURT APPLIED THE PRINCIPLE OF RES
JUDICATA NOTWITHSTANDING ALLEGATIONS
OF LACK OF JURISDICTION OF A LAND
REGISTRATION COURT, FORECLOSING ANY
FURTHER ATTEMPT BY RESPONDENT
THEREIN, AS IN THE INSTANT CASE, TO
RESURRECT A LONG-SETTLED JUDICIAL
DETERMINATION OF REGISTRABILITY OF A
PARCEL OF LAND BASED ON THE SHEER
ALLEGATION THAT THE SAME IS PART OF THE
PUBLIC DOMAIN.
B. THE LAND REGISTRATION COURT HAD
JURISDICTION TO DETERMINE WHETHER THE
SUBJECT LAND WAS PART OF THE PUBLIC
DOMAIN.
C. RESPONDENTS REVERSION CASE SEEKS
TO RETRY THE VERY SAME FACTUAL ISSUES
THAT HAVE ALREADY BEEN JUDICIALLY
DETERMINED OVER THIRTY (30) YEARS AGO.
D. THE JURISPRUDENTIAL BASES APPLIED BY
THE COURT OF APPEALS IN ITS QUESTIONED
DECISION ARE MISPLACED, CONSIDERING
THAT THEY ARE ALL PREDICATED ON THE
ERRONEOUS PREMISE THAT IT IS
UNDISPUTED THAT THE SUBJECT LAND IS
PART OF THE PUBLIC DOMAIN.
II. RESPONDENT IS BARRED BY JURISDICTIONAL
ESTOPPEL AND LACHES FROM QUESTIONING THE
JURISDICTION OF THE LAND REGISTRATION COURT.
III. RELIANCE BY THE COURT OF APPEALS ON THE
ISOLATED PRONOUNCEMENT OF THE HONORABLE
COURT IN THE PEA CASE IS UNWARRANTED AND
MISLEADING CONSIDERING THAT THE MATTER OF
WHETHER RES JUDICATA APPLIES WITH RESPECT TO
THE LAND REGISTRATION COURTS DECISION IN 1974
WAS NOT IN ISSUE IN SAID CASE.

A. THE INSTANT REVERSION CASE IS NOT

THE PROPER RECOURSE.
B. THE VALIDITY OF THE COURT-APPROVED
COMPROMISE AGREEMENT 15 MAY 1998 HAS
ALREADY BEEN AFFIRMED BY THE
HONORABLE COURT IN THE PEA CASE.
IV. EQUITABLE CONSIDERATIONS MANDATE THE
APPLICATION OF THE RULE ON ORDINARY ESTOPPEL
AND LACHES IN THE INSTANT CASE AGAINST
RESPONDENT.
V. RESPONDENT CANNOT BE GIVEN SPECIAL
CONSIDERATION AND EXCUSED FOR
16
TRANSGRESSING RULES OF PROCEDURE.
Essentially, the issues boil down to three: (1) Is a reversion
suit proper in this case? (2) Is the present petition estopped
by laches? (3) Did the CA erroneously apply the principle of
res judicata?
An action for reversion seeks to restore public land
fraudulently awarded and disposed of to private individuals
17
or corporations to the mass of public domain. This remedy
is provided under Commonwealth Act (CA) No. 141 (Public
Land Act) which became effective on December 1, 1936.
Said law recognized the power of the state to recover lands
of public domain. Section 124 of CA No. 141 reads:
SEC. 124. Any acquisition, conveyance, alienation, transfer,
or other contract made or executed in violation of any of the
provisions of Sections one hundred and eighteen, one
hundred and twenty, one hundred and twenty one, one
hundred and twenty-two, and one hundred twenty-three of
this Act shall be unlawful and null and void from its
execution and shall produce the effect of annulling and
cancelling the grant, title, patent, or permit originally issued,
recognized or confirmed, actually or presumptively, and
cause the reversion of the property and its improvements to
the State. (Emphasis supplied.)
Pursuant to Section 124 of the Public Land Act, reversion

suits are proper in the following instances, to wit:

1. Alienations of land acquired under free patent or
homestead provisions in violation of Section 118,
CA No. 141;
2. Conveyances made by non-Christians in
violation of Section 120, CA No. 141; and
3. Alienations of lands acquired under CA No. 141
in favor of persons not qualified under Sections
121, 122, and 123 of CA No. 141.
From the foregoing, an action for reversion to cancel titles
derived from homestead patents or free patents based on
transfers and conveyances in violation of CA No. 141 is filed
by the OSG pursuant to its authority under the
Administrative Code with the RTC. It is clear therefore that
reversion suits were originally utilized to annul titles or
patents administratively issued by the Director of the Land
Management Bureau or the Secretary of the DENR.
While CA No. 141 did not specify whether judicial
confirmation of titles by a land registration court can be
subject of a reversion suit, the government availed of such
remedy by filing actions with the RTC to cancel titles and
decrees granted in land registration applications.
The situation changed on August 14, 1981 upon effectivity
of Batas Pambansa (BP) Blg. 129 which gave the
Intermediate Appellate Court the exclusive original
jurisdiction over actions for annulment of judgments of
RTCs.
When the 1997 Rules of Civil Procedure became effective
on July 1, 1997, it incorporated Rule 47 on annulment of
judgments or final orders and resolutions of the RTCs. The
two grounds for annulment under Sec. 2, Rule 47 are
extrinsic fraud and lack of jurisdiction. If based on extrinsic
fraud, the action must be filed within four (4) years from its
discovery, and if based on lack of jurisdiction, before it is
barred by laches or estoppel as provided by Section 3, Rule
47. Thus, effective July 1, 1997, any action for reversion of
public land instituted by the Government was already

covered by Rule 47.

The instant Civil Case No. 01-0222 for annulment and
cancellation of Decree No. N-150912 and its derivative titles
was filed on June 8, 2001 with the Paraaque City RTC. It is
clear therefore that the reversion suit was erroneously
instituted in the Paraaque RTC and should have been
dismissed for lack of jurisdiction. The proper court is the CA
which is the body mandated by BP Blg. 129 and prescribed
by Rule 47 to handle annulment of judgments of RTCs.
18

In Collado v. Court of Appeals, the government,

represented by the Solicitor General pursuant to Section
9(2) of BP Blg. 129, filed a petition for annulment of
judgment with the CA. Similarly in the case of Republic v.
19
Court of Appeals, the Solicitor General correctly filed the
annulment of judgment with the said appellate court.
This was not done in this case. The Republic misfiled the
reversion suit with the Paraaque RTC. It should have been
filed with the CA as required by Rule 47. Evidently, the
Paraaque RTC had no jurisdiction over the instant
reversion case.
Assuming that the Paraaque RTC has jurisdiction over the
reversion case, still the lapse of almost three decades in
filing the instant case, the inexplicable lack of action of the
Republic and the injury this would cause constrain us to rule
for petitioners. While it may be true that estoppel does not
20
operate against the state or its agents, deviations have
been allowed. In Manila Lodge No. 761 v. Court of Appeals,
we said:
Estoppels against the public are little favored. They should
not be invoked except in rare and unusual circumstances,
and may not be invoked where they would operate to defeat
the effective operation of a policy adopted to protect the
public. They must be applied with circumspection and
should be applied only in those special cases where the
interests of justice clearly require it. Nevertheless, the
government must not be allowed to deal dishonorably or
capriciously with its citizens, and must not play an ignoble
part or do a shabby thing; and subject to limitations x x x,

the doctrine of equitable estoppel may be invoked against

21
public authorities as well as against private individuals.
(Emphasis supplied.)
Equitable estoppel may be invoked against public
authorities when as in this case, the lot was already
alienated to innocent buyers for value and the government
did not undertake any act to contest the title for an
unreasonable length of time.
In Republic v. Court of Appeals, where the title of an
innocent purchaser for value who relied on the clean
certificates of the title was sought to be cancelled and the
excess land to be reverted to the Government, we ruled that
"[i]t is only fair and reasonable to apply the equitable
principle of estoppel by laches against the government to
avoid an injustice to innocent purchasers for value
22
(emphasis supplied)." We explained:
Likewise time-settled is the doctrine that where innocent
third persons, relying on the correctness of the certificate of
title, acquire rights over the property, courts cannot
disregard such rights and order the cancellation of the
certificate. Such cancellation would impair public confidence
in the certificate of title, for everyone dealing with property
registered under the Torrens system would have to inquire
in every instance whether the title has been regularly issued
or not. This would be contrary to the very purpose of the
law, which is to stabilize land titles. Verily, all persons
dealing with registered land may safely rely on the
correctness of the certificate of title issued therefore, and
the law or the courts do not oblige them to go behind the
certificate in order to investigate again the true condition of
the property. They are only charged with notice of the liens
and encumbrances on the property that are noted on the
23
certificate.

third persons. First, the real purpose of the Torrens system

is to quiet title to land to put a stop forever to any question
as to the legality of the title, except claims that were noted in
the certificate at the time of the registration or that may arise
subsequent thereto. Second, as we discussed earlier,
estoppel by laches now bars petitioner from questioning
private respondents titles to the subdivision lots. Third, it
was never proven that Private Respondent St. Jude was a
party to the fraud that led to the increase in the area of the
property after its subdivision. Finally, because petitioner
even failed to give sufficient proof of any error that might
have been committed by its agents who had surveyed the
property, the presumption of regularity in the performance of
their functions must be respected. Otherwise, the integrity of
the Torrens system, which petitioner purportedly aims to
protect by filing this case, shall forever be sullied by the
ineptitude and inefficiency of land registration officials, who
are ordinarily presumed to have regularly performed their
24
duties.
Republic v. Court of Appeals is reinforced by our ruling in
25
Republic v. Umali, where, in a reversion case, we held that
even if the original grantee of a patent and title has obtained
the same through fraud, reversion will no longer prosper as
the land had become private land and the fraudulent
acquisition cannot affect the titles of innocent purchasers for
value.
Considering that innocent purchaser for value Yujuico bought
the lot in 1974, and more than 27 years had elapsed before
the action for reversion was filed, then said action is now
barred by laches.

xxxx

While the general rule is that an action to recover lands of

public domain is imprescriptible, said right can be barred by
laches or estoppel. Section 32 of PD 1592 recognized the
rights of an innocent purchaser for value over and above the
interests of the government. Section 32 provides:

But in the interest of justice and equity, neither may the

titleholder be made to bear the unfavorable effect of the
mistake or negligence of the States agents, in the absence
of proof of his complicity in a fraud or of manifest damage to

SEC. 32. Review of decree of registration; Innocent

purchaser for value.The decree of registration shall not be
reopened or revised by reason of absence, minority, or other
disability of any person adversely affected thereby, nor by

any proceeding in any court for reversing judgments, subject,

however, to the right of any person, including the government
and the branches thereof, deprived of land or of any estate
or interest therein by such adjudication or confirmation of title
obtained by actual fraud, to file in the proper Court of First
Instance a petition for reopening and review of the decree of
registration not later than one year from and after the date of
the entry of such decree of registration, but in no case shall
such petition be entertained by the court where an innocent
purchaser for value has acquired the land or an interest
therein, whose rights may be prejudiced. Whenever the
phrase "innocent purchaser for value" or an equivalent
phrase occurs in this Decree, it shall be deemed to include
an innocent lessee, mortgagee, or other encumbrances for
value. (Emphasis supplied.)
In this petition, the LRC (now LRA), on May 30, 1974, issued
Decree No. N-150912 in favor of Fermina Castro and OCT
No. 10215 was issued by the Rizal Registrar of Deeds on
May 29, 1974. OCT No. 10215 does not show any
annotation, lien, or encumbrance on its face. Relying on the
clean title, Yujuico bought the same in good faith and for
value from her. He was issued TCT No. 445863 on May 31,
1974. There is no allegation that Yujuico was a buyer in bad
faith, nor did he acquire the land fraudulently. He thus had
the protection of the Torrens System that every subsequent
purchaser of registered land taking a certificate of title for
value and in good faith shall hold the same free from all
encumbrances except those noted on the certificate and any
26
of the x x x encumbrances which may be subsisting. The
same legal shield redounds to his successors-in-interest, the
Yujuicos and Carpio, more particularly the latter since Carpio
bought the lot from Jesus Y. Yujuico for value and in good
faith.
Likewise protected are the rights of innocent mortgagees for
value, the PISO, Citibank, N.A., PDC, RCBC, PCIB, and
DBP. Even if the mortgagors title was proved fraudulent and
the title declared null and void, such declaration cannot nullify
27
the mortgage rights of a mortgagee in good faith.
All told, a reversion suit will no longer be allowed at this stage.

More on the issue of laches. Laches is the failure or neglect,

for an unreasonable and unexplained length of time, to do
that which by exercising due diligence could or should have
been done earlier. It is negligence or omission to assert a
right within a reasonable time, warranting a presumption that
the party entitled thereto has either abandoned or declined to
28
assert it.
When respondent government filed the reversion case in
2001, 27 years had already elapsed from the time the late
Jesus Yujuico purchased the land from the original owner
Castro. After the issuance of OCT No. 10215 to Castro, no
further action was taken by the government to question the
issuance of the title to Castro until the case of Public Estates
Authority, brought up in the oral argument before this Court
29
on September 6, 2000. We then held that allegation of fraud
in the issuance of the title was not proper for consideration
and determination at that stage of the case.
From the undisputed facts of the case, it is easily revealed
that respondent Republic took its sweet time to nullify
Castros title, notwithstanding the easy access to ample
remedies which were readily available after OCT No. 10215
was registered in the name of Castro. First, it could have
appealed to the CA when the Pasig-Rizal CFI rendered a
decision ordering the registration of title in the name of
applicant Castro on April 26, 1974. Had it done so, it could
have elevated the matter to this Court if the appellate court
affirms the decision of the land registration court. Second,
when the entry of Decree No. N-150912 was made on May
29, 1974 by the Rizal Register of Deeds, the Republic had
one (1) year from said date or up to May 28, 1975 to file a
petition for the reopening and review of Decree No. N-150912
with the Rizal CFI (now RTC) on the ground of actual fraud
under section 32 of PD 1592. Again, respondent Republic did
not avail of such remedy. Third, when Jesus Yujuico filed a
complaint for Removal of Cloud and Annulment of Title with
Damages against PEA before the Paraaque RTC in Civil
Case No. 96-0317, respondent could have persevered to
question and nullify Castros title. Instead, PEA undertook a
compromise agreement on which the May 18, 1998
30
Resolution was issued. PEA in effect admitted that the
disputed land was owned by the predecessors-in-interest of

petitioners and their title legal and valid; and impliedly waived
its right to contest the validity of said title; respondent
Republic even filed the petition for relief from judgment
beyond the time frames allowed by the rules, a fact even
acknowledged by this Court in Public Estates Authority.
Lastly, respondent only filed the reversion suit on June 8,
2001 after the passage of 27 years from the date the decree
of registration was issued to Fermina Castro.
Such a Rip Van Winkle, coupled with the signing of the
settlement with PEA, understandably misled petitioners to
believe that the government no longer had any right or
interest in the disputed lot to the extent that the two lots were
even mortgaged to several banks including a government
financing institution. Any nullification of title at this stage
would unsettle and prejudice the rights and obligations of
innocent parties. All told, we are constrained to conclude that
laches had set in.
Even granting arguendo that respondent Republic is not
precluded by laches from challenging the title of petitioners in
the case at bar, still we find that the instant action for
reversion is already barred by res judicata.
Petitioners relying on Firestone Ceramics, Inc. v. Court of
31
Appeals as a precedent to the case at bar contend that the
instant reversion suit is now barred by res judicata.
We agree with petitioners.
The doctrine on precedents is expressed in the latin maxim
Stare decisis et non quieta movere. Follow past precedents
32
and do not disturb what has been settled. In order however
that a case can be considered as a precedent to another case
which is pending consideration, the facts of the first case
should be similar or analogous to the second case.
A perusal of the facts of the Firestone case and those of the
case at bar reveals that the facts in the two (2) cases are
parallel. First, in Firestone and in this case, the claimants filed
land registration applications with the CFI; both claimants
obtained decrees for registration of lots applied for and were
issued OCTs. Second, in Firestone, the Republic filed a

reversion case alleging that the land covered by the OCT was
still inalienable forest land at the time of the application and
hence the Land Registration Court did not acquire jurisdiction
to adjudicate the property to the claimant. In the instant case,
respondent Republic contend that the land applied for by
Yujuico was within Manila Bay at the time of application and
therefore the CFI had no jurisdiction over the subject matter
of the complaint. Third, in Firestone, the validity of the title of
the claimant was favorably ruled upon by this Court in G.R.
No. 109490 entitled Patrocinio E. Margolles v. CA. In the case
at bar, the validity of the compromise agreement involving the
disputed lot was in effect upheld when this Court in Public
Estates Authority v. Yujuico dismissed the petition of PEA
seeking to reinstate the petition for relief from the May 18,
1998 Resolution approving said compromise agreement.
With the dismissal of the petition, the May 18, 1998
Resolution became final and executory and herein
respondent Republic through PEA was deemed to have
recognized Castros title over the disputed land as legal and
33
valid. In Romero v. Tan,
we ruled that "a judicial
compromise has the effect of res judicata." We also made
clear that a judgment based on a compromise agreement is
a judgment on the merits, wherein the parties have validly
entered into stipulations and the evidence was duly
considered by the trial court that approved the agreement. In
the instant case, the May 18, 1998 Resolution approving the
compromise agreement confirmed the favorable decision
directing the registration of the lot to Castros name in LRC
Case No. N-8239. Similarly, in Firestone, the Margolles case
confirmed the decision rendered in favor of Gana in Land
Registration Case No. 672 ordering the issuance of the
decree to said applicant. Fourth, in Firestone, the Supreme
Court relied on the letter of then Solicitor General Francisco
Chavez that the evidence of the Bureau of Lands and the
LRC was not sufficient to support an action for cancellation
of OCT No. 4216. In the instant case, both the Solicitor
General and the Government Corporate Counsel opined that
the Yujuico land was not under water and that "there appears
to be no sufficient basis for the Government to institute the
action for annulment." Fifth, in Firestone, we ruled that "the
Margolles case had long become final, thus the validity of
OCT No. 4216 should no longer be disturbed and should be
applied in the instant case (reversion suit) based on the

36

principle of res judicata or, otherwise, the rule on

34
conclusiveness of judgment."

Municipality of Antipolo v. Zapanta

37
Castillo.

Clearly from the above, Firestone is a precedent case. The

Public Estates Authority had become final and thus the
validity of OCT No. 10215 issued to Castro could no longer
be questioned.

In Municipality of Antipolo, we held that the land registration

court had no jurisdiction to entertain any land registration
application if the land was public property, thus:

While we said in Public Estates Authority that the court does

not foreclose the right of the Republic from pursuing the
proper recourse in a separate proceedings as it may deem
warranted, the statement was obiter dictum since the inquiry
on whether or not the disputed land was still under water at
the time of its registration was a non-issue in the said case.
Even granting for the sake of argument that Firestone is not
squarely applicable, still we find the reversion suit already
barred by res judicata.
For res judicata to serve as an absolute bar to a subsequent
action, the following requisites must concur: (1) there must
be a final judgment or order; (2) the court rendering it must
have jurisdiction over the subject matter and the parties; (3)
it must be a judgment or order on the merits; and (4) there
must be between the two cases, identity of parties, subject
35
matter and causes of action.

Since the Land Registration Court had no jurisdiction to

entertain the application for registration of public property of
ANTIPOLO, its Decision adjudicating the DISPUTED
PROPERTY as of private ownership is null and void. It never
attained finality, and can be attacked at any time. It was not
a bar to the action brought by ANTIPOLO for its annulment
by reason of res judicata.
"[x x x] the want of jurisdiction by a court over the subject
matter renders the judgment void and a mere nullity, and
considering that a void judgment is in legal effect no
judgment, by which no rights are divested, from which no
rights can be obtained, which neither binds nor bars any one,
and under which all acts performed and all claims flowing out
of are void, and considering, further, that the decision, for
want of jurisdiction of the court, is not a decision in
contemplation of law, and hence, can never become
executory, it follows that such a void judgment cannot
constitute a bar to another case by reason of res judicata."

There is no question as to the first, third and last requisites.

The threshold question pertains to the second requisite,
whether or not the then Pasig-Rizal CFI, Branch 22 had
jurisdiction over the subject matter in LRC Case No. N-8239.
In Civil Case No. 01-0222, the Paraaque City RTC, Branch
257 held that the CFI had jurisdiction. The CA reversed the
decision of the Paraaque City RTC based on the assertion
of respondent Republic that the Pasig-Rizal CFI had no
jurisdiction over the subject matter, and that there was a need
to determine the character of the land in question.

xxxx

The Paraaque City RTC Order dismissing the case for res
judicata must be upheld.

[x x x x]

The CA, in rejecting the dismissal of the reversion case by

the Paraaque RTC, relied on two cases, namely:

and Republic v. Vda. De

"It follows that if a person obtains a title under the Public Land
Act which includes, by oversight, lands which cannot be
registered under the Torrens System, or when the Director of
Lands did not have jurisdiction over the same because it is a
public forest, the grantee does not, by virtue of the said
certificate of title alone, become the owner of the land illegally
included (Republic vs. Animas, 56 SCRA 499, 503; Ledesma
vs. Municipality of Iloilo, 49 Phil. 769)."

"Under these circumstances, the certificate of title may be

ordered cancelled (Republic vs. Animas, et al., supra), and
the cancellation maybe pursued through an ordinary action

therefore. This action cannot be barred by the prior judgment

of the land registration court, since the said court had no
jurisdiction over the subject matter. And if there was no such
jurisdiction, then the principle of res judicata does not apply.
[x x x] Certainly, one of the essential requisites, i.e.,
jurisdiction over the subject matter, is absent in this case."
38
(Italics supplied).
The plain import of Municipality of Antipolo is that a land
registration court, the RTC at present, has no jurisdiction over
the subject matter of the application which respondent
Republic claims is public land. This ruling needs elucidation.
Firmly entrenched is the principle that jurisdiction over the
39
subject matter is conferred by law. Consequently, the
40
proper CFI (now the RTC) under Section 14 of PD 1529
(Property Registration Decree) has jurisdiction over
applications for registration of title to land.

In our view, it was imprecise to state in Municipality of

Antipolo that the "Land Registration Court [has] no jurisdiction
to entertain the application for registration of public property
x x x" for such court precisely has the jurisdiction to entertain
land registration applications since that is conferred by PD
1529. The applicant in a land registration case usually claims
the land subject matter of the application as his/her private
property, as in the case of the application of Castro. Thus, the
conclusion of the CA that the Pasig-Rizal CFI has no
jurisdiction over the subject matter of the application of
Castro has no legal mooring. The land registration court
initially has jurisdiction over the land applied for at the time of
the filing of the application. After trial, the court, in the
exercise of its jurisdiction, can determine whether the title to
the land applied for is registrable and can be confirmed. In
the event that the subject matter of the application turns out
to be inalienable public land, then it has no jurisdiction to
order the registration of the land and perforce must dismiss
the application.

The trial courts Decision in 1974 easily reveals the basis for
its conclusion that the subject matter was a dry land, thus:

Escoda, Ermita, Manila; that she was born on June 3, 1911;

that she first came to know of the land applied for which is
situated in the Municipality of Paraaque, province of Rizal,
with an area of 17,343 square meters and covered by plan
(LRC) Psu-964 while she was still ten (10) years old or
sometime in 1921; that when she first came to know of the
land applied for, the person who was in possession and
owner of said land was her father, Catalino Castro; that
during that time her father used to plant on said land various
crops like pechay, mustard, eggplant, etc.; that during that
time, her father built a house on said land which was used by
her father and the other members of the family, including the
applicant, as their residential house; that the land applied for
was inherited by her father from her grandfather Sergio
Castro; that Catalino Castro continuously possessed and
owned the land in question from 1921 up to the time of his
death in 1952; and that during that period of time nobody ever
disturbed the possession and ownership of her father over
the said parcel of land; that after the death of her father in
1952 she left the place and transferred her place of residence
but she had also occasions to visit said land twice or thrice a
week and sometimes once a week; that after she left the land
in question in 1952, she still continued possessing said land,
through her caretaker Eliseo Salonga; that her possession
over the land in question from the time she inherited it up to
the time of the filing of the application has been continuous,
public, adverse against the whole world and in the concept of
an owner; that it was never encumbered, mortgaged, or
disposed of by her father during his lifetime and neither did
she ever encumber or sell the same; that it was declared for
taxation purposes by her father when he was still alive and
her father also paid the real estate taxes due to the
government although the receipt evidencing the payment of
said real estate taxes for the property applied for have been
lost and could no longer be found inspite of diligent effort
exerted to locate the same.

On February 1, 1974, the applicant presented her evidence

before the Deputy Clerk of this Court and among the
evidence presented by her were certain documents which
were marked as Exhibits D to J, inclusive. The applicant
testified in her behalf and substantially declared that: she was
62 years old, single, housekeeper and residing at 1550 J.

The other witness presented by the applicant was Emiliano

de Leon, who declared that he was 70 years old, married,
farmer and residing at San Jose, Baliwag, Bulacan; that he
knew Catalino Castro, the father of the applicant because
said Catalino Castro was his neighbor in Tambo, Paraaque,
Rizal, he had a house erected on the land of Catalino Castro;

Section 14 of PD 1592 provides:

SEC. 14. Who may apply.The following persons may file in
the proper Court of First Instance an application for
registration of title to land, whether personally or through their
duly authorized representatives:
(1) Those who by themselves or through their predecessorsin-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. (Emphasis
supplied.)
Conformably, the Pasig-Rizal CFI, Branch XXII has
jurisdiction over the subject matter of the land registration
case filed by Fermina Castro, petitioners predecessor-ininterest, since jurisdiction over the subject matter is
determined by the allegations of the initiatory pleadingthe
41
application. Settled is the rule that "the authority to decide
a case and not the decision rendered therein is what makes
up jurisdiction. When there is jurisdiction, the decision of all
questions arising in the case is but an exercise of
42
jurisdiction."

Based on our ruling in Antipolo, the threshold question is

whether the land covered by the titles of petitioners is under
water and forms part of Manila Bay at the time of the land
registration application in 1974. If the land was within Manila
Bay, then res judicata does not apply. Otherwise, the
decision of the land registration court is a bar to the instant
reversion suit.
After a scrutiny of the case records and pleadings of the
parties in LRC Case No. N-8239 and in the instant petition,
we rule that the land of Fermina Castro is registrable and not
part of Manila Bay at the time of the filing of the land
registration application.

that he was born in 1903 and he first came to know of the

land in question when in 1918 when he was about 18 years
old; that the area of the land owned and possessed by
Catalino Castro where he constructed a residential house
has an area of more than one and one-half (1 ) hectares;
that the possession of Catalino Castro over the land in
question was peaceful, continuous, notorious, adverse
against the whole world and in the concept of an owner; that
during the time that Catalino Castro was in possession of the
land applied for he planted on said parcel of land mango,
coconut and banana, etc.; that Catalino Castro continuously
possessed and owned said parcel of land up to the year 1952
when he died; that during the time that Catalino Castro was
in possession of said land, nobody ever laid claim over the
said property; that said land is not within any military or naval
reservation; that upon the death of Catalino Castro, the
applicant took possession of the land applied for and that up
to the present the applicant is in possession of said land; that
he resided in the land in question from 1918 up to the time he
transferred his place of residence in Baliwag, Bulacan in the
year 1958.
On February 11, 1974, the Court, pursuant to the provision of
Presidential Decree No. 230 issued by his Excellency,
Ferdinand E. Marcos dated July 9, 1973 held in abeyance the
rendition of a decision in this case and directed the applicant
to submit a white print copy of plan (LRC) Psu-964 to the
Director of lands who was directed by the Court to submit his
comment and recommendation thereon.
The property in question is declared for taxation purposes
under Tax Declaration No. 51842 (Exhibit G) and real estate
taxes due thereon have been paid up to the year 1973
(Exhibit H).
In compliance with the Order of this Court February 11, 1974,
the Director of Lands, thru Special Attorney Saturnino A.
Pacubas, submitted a report to this Court dated April 25,
1974, stating among other things, that upon ocular inspection
conducted by Land Inspector Adelino G. Gorospe and the
subsequent joint ocular inspection conducted by Geodetic
Engineer Manuel A. Cervantes and Administrative Assistant
Lazaro G. Berania, it was established that the parcel of land

covered by plan (LRC) Psu-964 no longer forms part of the

Manila Bay but is definitely solid and dry land.
In this connection, it should be noted that Administrative
Assistant Lazaro G. Berania and Geodetic Engineer Manuel
A. Cervantes, in their report dated March 22, 1974 have also
stated that the land applied for cannot be reached by water
even in the highest tide and that the said land is occupied by
squatter families who have erected makeshift shanties and a
basketball court which only prove that the same is dry and
solid land away from the shores of Manila Bay.
Furthermore, Land Inspector Adelino G. Gorospe in his letterreport dated November 28, 1973 has also stated that there is
a house of pre-war vintage owned by the applicant on the
land in question which in effect corroborates the testimony of
the applicant and her witness that they have lived on the land
in question even prior to the outbreak of the second world war
and that the applicant has been in possession of the land in
43
question long time ago.
To counter the evidence of applicant Castro, and bolster its
claim that she has no valid title, respondent Republic relies
44
on the July 18, 1973 Office Memorandum of Roman
Mataverde, OIC, Surveys Division, to the OIC, Legal Division,
of the Bureau of Lands, stating that "when projected on
cadastral maps CM 14 13N - 120 59 E., Sec. 3-D and CM
14 30N - 120 59E., Sec. 2-A of Paranaque [sic] Cadastre
(Cad-299), (LRC) Psu-964 falls inside Manila Bay, outside
45
Cad-299."
The same conclusion was adopted in a November 15, 1973
letter of Narciso Villapando, Acting Regional Lands Director
to the Chief, Legal Division, Bureau of Lands and in the
Comment and Recommendation of Ernesto C. Mendiola,
Assistant Director, also of the Bureau of Lands.
Respondent likewise cites Namria Hydrographic Map No.
4243 Revised 80-11-2 to support its position that Castros lot
is a portion of Manila Bay.
The burden of proving these averments falls to the shoulders
of respondent Republic. The difficulty is locating the

witnesses of the government. Roman Mataverde, then OIC

of the Surveys Division retired from the government service
in 1982. He should by this time be in his 90s. Moreover, Asst.
Regional Director Narciso Villapando and Asst. Director
Ernesto C. Mendiola are no longer connected with the
Bureau of Lands since 1986.
Assuming that OIC Roman Mataverde, Asst. Regional
Director Narciso Villapando and Assistant Director Ernesto C.
Mendiola are still available as witnesses, the projections
made on the cadastral maps of the then Bureau of Lands
cannot prevail over the results of the two ocular inspections
by several Bureau of Lands officials that the disputed lot is
definitely "dry and solid land" and not part of Manila Bay.
Special Attorney Saturnino A. Pacubas, Land Inspector
Adelino G. Gorospe, Geodetic Engineer Manuel A.
Cervantes and Administrative Asst. Lazaro A. Berana, all
officials of the Bureau of Lands, were positive that the
disputed land is solid and dry land and no longer forms part
of Manila Bay. Evidence gathered from the ocular inspection
is considered direct and firsthand information entitled to great
weight and credit while the Mataverde and Villapando reports
are evidence weak in probative value, being merely based on
theoretical projections "in the cadastral map or table
46
surveys." Said projections must be confirmed by the actual
inspection and verification survey by the land inspectors and
geodetic engineers of the Bureau of Lands. Unfortunately for
respondent Republic, the bureau land inspectors attested
and affirmed that the disputed land is already dry land and
not within Manila Bay.
On the other hand, the Namria Hydrographic Map No. 4243
does not reveal what portion of Manila Bay was Castros lot
located in 1974. Moreover, a hydrographic map is not the
best evidence to show the nature and location of the lot
subject of a land registration application. It is derived from a
hydrographic survey which is mainly used for navigation
purposes, thus:
Surveys whose principal purpose is the determination of data
relating to bodies of water. A hydrographic survey may
consist of the determination of one or several of the following
classes of data: depth water; configuration and nature of the

bottom; directions and force of currents; heights and times of

tides and water stages; and location of fixed objects for
47
survey and navigation purposes.
Juxtaposed with finding of the ocular inspection by Bureau of
Lands Special Attorney Pacubas and others that Castros lot
is dry land in 1974, Namria Hydrographic Map No. 4243 is
therefore inferior evidence and lacking in probative force.
Moreover, the reliability and veracity of the July 18, 1973
report of Roman Mataverde based on the alleged projection
on cadastral maps and the Villapando report dated
November 15, 1973 are put to serious doubt in the face of the
opinion dated October 13, 1997 of the Government
Corporate Counsel, the lawyer of the PEA, which upheld the
validity of the titles of petitioners, thus:
We maintain to agree with the findings of the court that the
property of Fermina Castro was registrable land, as based on
the two (2) ocular inspections conducted on March 22, 1974
by Lands Administrative Assistant Lazaro G. Berania and
Lands Geodetic Engr. Manuel Cervantes, finding the
same no longer forms part of Manila Bay but is definitely solid
land which cannot be reached by water even in the highest
of tides. This Berania-Cervantes report based on ocular
inspections literally overturned the findings and
recommendations of Land Director Narciso V. Villapando
dated November 15, 1973, and that of Director Ernesto C.
Mendiola dated December 1, 1977, and the fact that the
Villapando-Mendiola reports were merely based on
projections in the cadastral map or table surveys.
xxxx
A. The Legal prognosis of the case is not promising in favor
of PEA.
4.1 LRC Case No. N-8239 has already become final
and executory and OCT No. 10215 was already
issued in favor of Fermina Castro. Any and all
attempts to question its validity can only be
entertained in a quo warranto proceedings (sic),
assuming that there are legal grounds (not factual
grounds) to support its nullification. Subjecting it to

a collateral attack is not allowed under the Torrens

Title System. In Calalang vs. Register of Deeds of
Quezon City, 208 SCRA 215, the Supreme Court
held that the present petition is not the proper
remedy in challenging the validity of certificates of
titles since the judicial action required is a direct and
not a collateral attack (refer also to: Toyota Motor
Philippine Corporation vs. CA, 216 SCRA 236).
4.2 OCT No. 10215 in favor of Fermina Castro was
issued pursuant to a cadastral proceeding, hence is
a rem proceedings which is translated as a
constructive notice to the whole world, as held in
Adez Realty Incorporated vs. CA, 212 SCRA 623.
4.3 From the cursory and intent reading of the
decision of Judge Sison in LRC Case No. N-8239,
we cannot find any iota of fraud having been
committed by the court and the parties. In fact, due
process was observed when the Office of the
Solicitor General represented ably the Bureau of
Lands. In Balangcad vs. Justices of the Court of
Appeals, 206 SCRA 169, the Supreme Court held
that title to registered property becomes
indefeasible after one-year from date of registration
except where there is actual fraud in which case it
may be challenged in a direct proceeding within that
period. This is also the ruling in Bishop vs. CA, 208
SCRA 636, that to sustain an action for annulment
of a torrens certificate for being void ab initio, it must
be shown that the registration court had not
acquired jurisdiction over the case and there was
actual fraud in securing the title.
4.4 As to priority of torrens title, PEA has no
defense, assuming that both PEA and Yujuico titles
are valid, as held in Metropolitan Waterworks and
Sewerage System vs. CA, 215 SCRA 783, where
two (2) certificates purport to include the same land,
the earlier in date prevails.
4.5 The documents so far submitted by the parties
to the court indicate that the mother title of the

Yujuico land when registered in 1974 was not

underwater. This was shown in the two (2) ocular
inspections conducted by the officials of the Land
Bureau.
4.6 The provision of P.D. 239 that no decree of
registration may be issued by the court unless upon
approval and recommendation of the Bureau of
Lands was substantially complied with in the Report
of Lands Special Attorney Saturnino Pacubas,
48
submitted to the court.
Even the counsel of respondent Republic, the OSG, arrived
at the conclusion that there is no sufficient legal basis for said
respondent to institute action to annul the titles of petitioners,
thus:
It may be stated at the outset that a petition for annulment of
certificate of title or reconveyance of land may be based on
fraud which attended the issuance of the decree of
registration and the corresponding certificate of title.
Based on the decision in the LRC Case No. N-8239 involving
the petition for registration and confirmation of title filed by
Fermina Castro, there is no showing that fraud attended the
issuance of OCT No. 10215. it appears that the evidence
presented by Fermina Castro was sufficient for the trial court
to grant her petition.
The testimony of Fermina Castro, which was corroborated by
Emiliano de Leon, that she and her predecessors-in-interest
had been in possession of the land for more than thirty (30)
years sufficiently established her vested right over the
property initially covered by OCT No. 10215. The report
dated April 25, 1974 which was submitted to the trial court by
the Director of Lands through Special Attorney Saturnino
Pacubas showed that the parcel of land was solid and dry
land when Fermina Castros application for registration of title
was filed. It was based on the ocular inspection conducted by
Land Inspector Adelino Gorospe and the joint circular
inspection conducted by Geodetic Engineer Manuel A.
Cervantes and Administrative Assistant Lazaro Berania on
November 28, 1973 and March 22, 1974 respectively.

51

The aforesaid report must be requested unless there is a

concrete proof that there was an irregularity in the issuance
thereof. In the absence of evidence to the contrary, the ocular
inspection of the parcel of land, which was made the basis of
said report, is presumed to be in order.
Based on the available records, there appears to be no
sufficient basis for the Government to institute an action for
the annulment of OCT No. 10215 and its derivative titles. It is
opined that a petition for cancellation/annulment of Decree
No. N-150912 and OCT No. 10215 and all its derivative titles
will not prosper unless there is convincing evidence to negate
the report of the then Land Management Bureau through
Special Attorney Pacubas. Should the Government pursue
the filing of such an action, the possibility of winning the case
49
is remote.
More so, respondent Government, through its counsel,
admits that the land applied by Fermina Castro in 1973 was
solid and dry land, negating the nebulous allegation that said
land is underwater. The only conclusion that can be derived
from the admissions of the Solicitor General and Government
Corporate Counsel is that the land subject of the titles of
petitioners is alienable land beyond the reach of the reversion
suit of the state.
Notably, the land in question has been the subject of a
compromise agreement upheld by this Court in Public
50
Estates Authority. In that compromise agreement, among
other provisions, it was held that the property covered by TCT
Nos. 446386 and S-29361, the land subject of the instant
case, would be exchanged for PEA property. The fact that
PEA signed the May 15, 1998 Compromise Agreement is
already a clear admission that it recognized petitioners as
true and legal owners of the land subject of this controversy.
Moreover, PEA has waived its right to contest the legality and
validity of Castros title. Such waiver is clearly within the
powers of PEA since it was created by PD 1084 as a body
corporate "which shall have the attribute of perpetual
succession and possessed of the powers of the corporations,
to be exercised in conformity with the provisions of this

Charter [PD 1084]." It has the power "to enter into, make,
perform and carry out contracts of every class and
description, including loan agreements, mortgages and other
types of security arrangements, necessary or incidental to the
realization of its purposes with any person, firm or
corporation, private or public, and with any foreign
52
government or entity." It also has the power to sue and be
53
sued in its corporate name.
Thus, the Compromise
Agreement and the Deed of Exchange of Real Property
signed by PEA with the petitioners are legal, valid and binding
on PEA. In the Compromise Agreement, it is provided that it
"settles in full all the claims/counterclaims of the parties
54
against each other." The waiver by PEA of its right to
question petitioners title is fortified by the manifestation by
PEA in the Joint Motion for Judgment based on Compromise
Agreement that

dismissed for lack of jurisdiction on the part of the Paraaque

RTC. Even if we treat said case as a petition for annulment
of judgment under Rule 47 of the 1997 Rules of Civil
Procedure, the dismissal of the case nevertheless has to be
upheld because it is already barred by laches. Even if laches
is disregarded, still the suit is already precluded by res
judicata in view of the peculiar facts and circumstances
obtaining therein.

4. The parties herein hereto waive and abandon any and all
other claims and counterclaims which they may have against
55
each other arising from this case or related thereto.

No costs.

Thus, there was a valid waiver of the right of respondent

Republic through PEA to challenge petitioners titles.
The recognition of petitioners legal ownership of the land is
further bolstered by the categorical and unequivocal
acknowledgment made by PEA in its September 30, 2003
letter where it stated that: "Your ownership thereof was
acknowledged by PEA when it did not object to your
membership in the CBP-IA Association, in which an owner of
a piece of land in CBP-IA automatically becomes a member
56
thereof." Section 26, Rule 130 provides that "the act,
declaration or omission of a party as to a relevant fact may
be given in evidence against him." The admissions of PEA
which is the real party-in-interest in this case on the nature of
the land of Fermina Castro are valid and binding on
respondent Republic. Respondents claim that the disputed
land is underwater falls flat in the face of the admissions of
PEA against its interests. Hence, res judicata now effectively
precludes the relitigation of the issue of registrability of
petitioners lot.
In sum, the Court finds that the reversion case should be

WHEREFORE, premises considered, the petition is

GRANTED. The Decision of the Court of Appeals in CA-G.R.
CV No. 76212 is REVERSED and SET ASIDE, and the
August 7, 2002 Order of the Paraaque City RTC, Branch
257 in Civil Case No. 01-0222 entitled Republic of the
Philippines v. Fermina Castro, et al. dismissing the complaint
is AFFIRMED.

SO ORDERED.