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Republic vs Southside Homeowners Association

DECISION
GARCIA, J.:
Before the Court are these two petitions having, as common denominator, the issue of ownership of a large
tract of land.
In the first, a petition for review under Rule 45 of the Rules of Court and docketed as G.R. No. 156951, the
petitioner Republic of the Philippines seeks to nullify and set aside the Decision [1] dated January 28, 2003 of the Court
of Appeals (CA) in CA-G.R. CV No. 59454, affirming the dismissal by the Regional Trial Court (RTC) of Pasig City, Branch
71, of the Republics complaint for declaration of nullity and cancellation of a land title against the herein private
respondent, the Southside Homeowners Association, Inc. (SHAI).
In the second, docketed as G.R. No. 173408, petitioners Rene Saguisag and five (5) retired military officers
pray that Lt. Gen. Hermogenes C. Esperon, Jr., the present Chief of Staff of the Armed Forces of the Philippines (AFP),
be asked to show cause why he should not be cited for contempt for having announced time and again that the
military officers and their families in the contempt action would be ousted and evicted from the property subject of
the main petition even before the issue of ownership thereof is finally resolved by the Court.
After the private respondent SHAI had filed its Comment[2] to the petition in G.R. No. 156951, the Bases
Conversion Development Authority (BCDA), followed by the Department of National Defense (DND) and the AFP,
joined causes with the petitionerRepublic and thus sought leave to intervene. The Court, per its Resolutions dated
September 3, 2003,[3] and September 29, 2003,[4] respectively, allowed the intervention and admitted the
corresponding petitions-for-intervention.
Per Resolution of the Court dated August 09, 2006, both petitions were ordered consolidated.
The Republics recourse in G.R. No. 156951 is cast against the following backdrop:
On July 12, 1957, then President Carlos P. Garcia issued Proclamation No. 423 [5] establishing a military
reservation known as Fort William McKinley later renamed Fort Andres Bonifacio Military Reservation (FBMR). The
proclamation withdr[ew] from sale or settlement and reserve[d] for military purposes, under the administration of
the Chief of Staff of the [AFP] the [certain] parcels of the public domain [indicated in plan Psu-2031] situated in
the several towns and a city of what was once the Province of Rizal. On its face, the proclamation covers three (3)
large parcels of land, to wit: Parcel No. 2 (portion), Parcel No. 3 (or 3-A) and Parcel No. 4 (or 4-A). Parcel No. 3 with an
area of 15,912,684 square meters and Parcel No. 4 with an area of 7,660,128 square meters are described in the
proclamation as situated inside Fort McKinley, Rizal. Specifically mentioned as excluded from Parcel No. 4 albeit
within its boundaries are the American Battle Monument Cemetery (606,985 sq. m.), the Traffic Circle (7,093 sq. m.)
and the Diplomatic and Consular area (100,000 sq.m.).
Several presidential proclamations would later issue excluding certain defined areas from the operation of
Proclamation No. 423 and declaring them open for disposition. These are Proclamation No. 461 [6] and Proclamation

No. 462,[7] both series of 1965, excluding portions of the reservation and declaring them the AFP Officers Village and
the AFP EMs Village, respectively, to be disposed of under Republic Act (R.A.) 274 [8] and R.A. 730[9] in relation to the
Public Land Act (C.A. 141, as amended). Excluded, too, under Proclamation No. 172 dated October 16, 1987 and to
be disposed pursuant to the same laws aforementioned, save those used or earmarked for public/quasi-public
purposes, are portions of the reservation known as Lower and Upper Bicutan, Western Bicutan and the Signal Village,
all in Taguig, Metro Manila.
In 1992, Congress enacted the Bases Conversion and Development Act (R.A. 7227, as amended), investing the
BCDA the power to own, hold and administer portions of Metro Manila military camps that may be transferred to it
by the President[10] and to dispose, after the lapse of a number of months, portions of Fort Bonifacio.[11]
At the core of the instant proceedings for declaration of nullity of title are parcels of land with a total area
of 39.99 hectares, more or less, known as or are situated in what is referred to as the JUSMAG housing area in Fort
Bonifacio. As may be gathered from the pleadings, military officers, both in the active and retired services, and their
respective families, have been occupying housing units and facilities originally constructed by the AFP on the
JUSMAG area.
Private respondent SHAI is a non-stock corporation organized mostly by wives of AFP military officers.
Records show that SHAI was able to secure from the Registry of Deeds of the Province of Rizal a title Transfer
Certificate of Title (TCT) No. 15084[12] - in its name to the bulk of, if not the entire, JUSMAG area. TCT No. 15084
particularly describes the property covered thereby as follows:
A parcel of land (Lot 3-Y-1, Psd-76057, being a portion of Parcel 3 of plan Psu-2031) situated
in Jusmang (sic) Area, Fort Bonifacio, Province of Rizal. containing an area of (398,602) SQUARE
METERS. xxx.
A parcel of land (Lot 3-Y-2, Psd-76057 as shown on subdivision Plan Psd 76057, being a
portion of parcel 3 of plan Psu-2031, LRC Rec. No.) situated in Jusmang (sic)
Area, Fort Bonifacio, Province of Rizal. containing an area of (1,320) SQUARE METERS xxx..
(Underscoring added.)
The Rizal Registry issued TCT No. 15084 on October 30, 1991 on the basis of a notarized Deed of
Sale[13] purportedly executed on the same date by then Director Abelardo G. Palad, Jr. (Palad, for brevity) of the Lands
Management Bureau (LMB) in favor of SHAI. The total purchase price as written in the conveying deed
was P11,997,660.00 or P30.00 per square meter.
It appears that in the process of the investigation conducted by the Department of Justice on reported land
scams at the FBMR, a copy of the aforesaid October 30, 1991 deed of sale surfaced and eventually referred to the
National Bureau of Investigation (NBI) forexamination. The results of the examination undertaken by NBI Document
Examiner Eliodoro Constantino are embodied in his Questioned Documents Report (QDR) No. 815-1093.
[14]
Its highlights:
QUESTIONED SPECIMENS:
1. Original copy of the Deed of Sale issued in favor of the Navy Officers Village Association (NOVA)
containing the signature of ABELARDO G. PALAD, JR. designated as Q-961 .
2. Original copy of the Deed of Sale issued in favor of SHAI containing the signature of ABELARDO G.
PALAD, JR. ... designated as Q-962.
xxx xxx xxx

PURPOSE OF EXAMINATION:
To determine whether or not the questioned and sample/specimen signatures ABELARDO G.
PALAD, JR. were written by one and the same person.
FINDINGS:
Scientific comparative examination and analysis of the specimens, submitted, under
stereoscopic microscope and magnifying lens, with the aid of photographic enlargement reveals that
there exist fundamental, significant differences in writing characteristics between the questioned
and the standard/sample signatures "ABELARDO G. PALAD, JR." such as in:
- The questioned signatures show slow, drawn, painstaking laborious manner in execution of
strokes; that of the standard/sample signatures show free, rapid coordinated and spontaneous
strokes in the manner of execution of letters/elements.
xxx xxx xxx
Furthermore, the questioned signature "ABELARDO G. PALAD, JR." marked "Q-961" is a
product of TRACING PROCESS by CARBON-OUTLINE METHOD.
CONCLUSION:
Based on the above FINDINGS, the questioned and the standard/sample signatures
"ABELARDO G. PALAD, JR." were not written by one and the same person.
The questioned signature "ABELARDO G. PALAD, JR." marked "Q-961" is a TRACED FORGERY
by carbon process.
REMARKS:
The other questioned Deeds of Sale containing the signatures of "ABELARDO G. PALAD, JR."
are still in the process of examination.[15]
On October 16, 1993, then President Fidel V. Ramos issued Memorandum Order No. 173[16] directing the
Office of the Solicitor General (OSG) to institute action towards the cancellation of TCT No. 15084 and the title
acquired by the Navy Officers Village Association (NOVA) over a bigger parcel within the reservation. A month later,
the OSG, in behalf of the petitioner Republic, filed with the RTC of Pasig City the corresponding nullification and
cancellation of title suit against the private respondent SHAI. In its complaint, docketed as Civil Case No. 63883 and
eventually raffled to Branch 71 of the court, the Republic alleged that fraud attended SHAIs procurement of TCT No.
15084. In paragraph No. 5 of the complaint, the Republic alleged that TCT No. 15084 is void owing,inter alia, to the
following circumstances: a) the conveying deed is spurious as the purported signature thereon of Palad is a forgery;
b) there are no records with the LMB of (i) the application to purchase and (ii) the alleged payment of the purchase
price; and c) the property in question is inalienable, being part of a military reservation established under
Proclamation No. 423.[17]
In its ANSWER with counterclaim, respondent SHAI denied the material allegations of the complaint and countered
that the impugned title as well as the October 30, 1991 Deed of Sale are valid documents which the Republic is
estopped to deny.[18] SHAI also alleged paying in full the purchase price indicated in the deed as evidenced by Official
Receipt No. 6030203-C dated October 29, 1991.
On October 19, 1994, the case was heard on pre-trial in the course of which the Republic, as plaintiff therein, marked
(and later offered in evidence) the Deed of Sale dated October 30, 1991 as its Exhibit "A," and TCT No. 15084
as Exhibit "B." Respondent, thendefendant SHAI adopted Exhibits "A" and B as its Exhibits "1" and 2, respectively. As
the pre-trial order was written, it would appear that the parties agreed to limit the issue to the due execution and
genuineness of Exhs. A and B.[19]

During the trial, the Republic presented as expert witness NBI Document Examiner Eliodoro Constantino who
testified on NBI QDR No. 815-1093 and asserted that the signature of Palad in Exhibit A is a forgery. For his part,
Palad dismissed as forged his signature appearing in the same document and denied ever signing the same, let alone
in front of a notary public holding office outside of the LMB premises. Pressing the point, Palad stated that he could
not have had signed the conveying deed involving as it did a reservation area which, apart from its being outside of
the LMBs jurisdiction, is inalienable in the first place. The testimony of other witnesses revolved around the absence
of bureau records respecting SHAIs application to acquire, payment of the purchase price and Psd-76057, the plan
described in TCT No. 15084. [20]
For its part, then defendant SHAI presented an opposing expert witness in the person of Police Inspector
Redencion Caimbon who brought with him PNP QDR No. 001-96 and testified that Palads signature in Exhibit
A (same as Exh. 1) is genuine. Mrs. Virginia Santos, then SHAI president, likewise testified, saying that applications to
purchase were signed and then filed with the LMB by one Engr. Eugenia Balis, [21] followed by the payment in full of
the contract price. Atty. Vicente Garcia, the then Register of Deeds of Rizal,also testified about his having endorsed to
Palad a letter-inquiry he received from SHAI respecting the authenticity of TCT No. 15084. Palads response-letter
dated January 23, 1992 (Exh. 10), according to Atty. Garcia, is to the effect that TCT No. 15084 must be genuine as it
emanated from the Registrys office on the basis of the October 30, 1991 Deed of Sale. [22]
On rebuttal, Palad would deny authorship of Exhibit 10 and an LMB official would disclaim transmitting the
same to Atty. Garcia.
Eventually, in a decision[23] dated October 7, 1997, the trial court rendered judgment dismissing the Republics
complaint, to wit:
WHEREFORE, in view of the foregoing, the Complaint dated November 15, 1991 is
hereby DISMISSED without pronouncement as to costs.
The counterclaims are also DISMISSED.
SO ORDERED.
In not so many words, the trial court considered the parcels covered by the deed in question as no longer
part of the FBMR.
Therefrom, the Republic went on appeal to the CA whereat its appellate recourse was docketed as CA-G.R.
CV No. 59454.
In the herein assailed Decision [24] dated January 28, 2003, the appellate court affirmed in toto that of the trial
court.
Hence, this petition of the Republic on the threshold abstract submission that the CA completely ignored, overlooked
and/or grossly misappreciated facts of substance which, if duly considered, will materially affect the outcome of this
case.
In its COMMENT To Petition, private respondent SHAI parlays the what-can-be-raised line. It urges the dismissal of
the petition on the ground that the issues raised therein, particularly those bearing on the authenticity of Exhibit
A/1, are mainly questions of fact, adding that the matter of the inalienability of the area purportedly sold is outside
the issue agreed upon during the pre-trial stage.
The desired dismissal cannot be granted on the bases of the reasons proffered above.

While the Court, in a petition for review of CA decisions under Rule 45 of the Rules of Court, usually limits its
inquiry only to questions of law, this rule is far from absolute. Reyes v. Court of Appeals,[25] citing Floro v. Llenado,
[26]

for one, suggests as much. InFloro, we wrote:


xxx There are, however, exceptional circumstances that would compel the Court to review
the finding of facts of the [CA], summarized in and subsequent cases as follows: 1) when the
inference made is manifestly mistaken, absurd or impossible; 2) when there is grave abuse of
discretion; 3) when the finding is grounded entirely on speculations, surmises or conjectures; 4)
when the judgment of the [CA] are based on misapprehension of facts; 5) when the findings of facts
are conflicting; 6) ; 7) ; 8) ; 9) when the [CA] manifestly overlooked certain relevant facts not disputed
by the parties and which if properly considered would justify a different conclusion; and 10) when
the findings of facts are premised on the absence of evidence and are contradicted by the evidence
on record. (Words in bracket, added.)

To the mind of the Court, the instant case is within the purview of at least three of the exceptions listed above,
foremost of which is item #9.
Private respondent SHAIs stance about the petitioner Republic being barred from raising the issue of inalienability
since it failed to plead or assert the same at the pre-trial proceedings is, to a degree, correct. For the general rule, as
articulated in Permanent Concrete Products, Inc. v. Teodoro, [27] is that the determination of issues at a pre-trial
conference bars the consideration of others on appeal. It should be pointed out, however, that the rationale for such
preliminary, albeit mandatory, conference is to isolate as far as possible the trial out of the realm of surprises and
back-handed maneuverings. And lest it be overlooked, the adverted rule on the procedure to be observed in pretrials is, as Bergano v. Court of Appeals[28] teaches, citing Gicano v. Gegato,[29] subject to exceptions. And without
meaning to diminish the importance of the same rule, the Court is possessed with inherent power to suspend its
own rules or to except a particular case from its operations whenever the demands of justice so require. [30]
Given the foregoing considerations, the rule to be generally observed in pre-trial conferences hardly poses an
insurmountable obstacle to tackling the question of inalienability which, under the premises, is an issue more legal
than factual. As it were, the element of surprise is not really present here. For the issue of inalienability, which
is central to the Republics cause of action, was raised in its basic complaint, passed upon by the CA and, before it, by
the trial court[31] and of which at least one witness (Palad) was examined as follows:
Q: Mr. Witness you stated that the parcel of land in question at the time of the land alleged
sale was part of the [FBMR]. Now as part of the [FBRM] do you know whether the said parcel of land
can be the subject of disposition?
A: If it is part of the reservation it cannot be sold and it is already part of those government
lands that has been assigned to other government agencies that is no longer within my jurisdiction.
Meaning to say I have no more say on that because the proclamation to the effect was reserving this
for particular purpose under the DND .[32] (Words in bracket added.)
At any rate, Palads testimony drew nary an objection from private respondent SHAI. It even cross-examined
said witness.[33] The rule obtains that the introduction of evidence bearing on an issue not otherwise included in the
pre-trial order amounts to implied consent conferring jurisdiction on the court to try such issue. [34]

Digressing from the procedural aspects of this case, we now consider the clashing assertions regarding the
JUSMAG area. Was it, during the period material, alienable or inalienable, as the case may be, and, therefore, can or
cannot be subject of a lawful private conveyance?
Petitioner Republic, as do the intervenors, asserts the inalienable character of the JUSMAG area, the same
having not effectively been separated from the military reservation and declared as alienable and disposable.
The Republics and the intervenors parallel assertions are correct.
The President, upon the recommendation of the Secretary of Environment and Natural Resources, may
designate by proclamation any tract or tracts of land of the public domain as reservations for the use of the Republic
or any of its branches, or for quasi-public uses or purposes. [35] Such tract or tracts of land thus reserved shall be nonalienable and shall not be subject to sale or other disposition until again declared alienable. [36] Consistent with the
foregoing postulates, jurisprudence teaches that a military reservation, like the FBMR, or a part thereof is not open
to private appropriation or disposition and, therefore, not registrable, [37] unless it is in the meantime reclassified and
declared as disposable and alienable public land. [38] And until a given parcel of land is released from its classification
as part of the military reservation zone and reclassified by law or by presidential proclamation as disposable and
alienable, its status as part of a military reservation remains, [39] even if incidentally it is devoted for a purpose other
than as a military camp or for defense. So it must be here.
There can be no quibbling that the JUSMAG area subject of the questioned October 30, 1991 sale formed
part of the FBMR as originally established under Proclamation No. 423. And while private respondent SHAI would
categorically say that the petitioner Republic had not presented evidence that subject land is within military
reservation,[40] and even dared to state that the JUSMAG area is the private property of the government and
therefore removed from the concept of public domain per se, [41] its own evidence themselves belie its posture. We
start with its Exhibit 2 (petitioners Exh. B), a copy of TCT No. 15084, which described the area covered thereby
measuring 399,922 square meters as a portion of Parcel 3 of plan Psu-2031 situated in Jusmang (sic)
area Fort Bonifacio.Complementing its Exhibit 2 is its Exhibit 1 - the deed of sale - which technically described the
property purportedly being conveyed to private respondent SHAI as follows:
A PARCEL OF LAND (Lot 3-Y-1, Psd-76067, being a portion of Parcel 3 of plan Psu-2031)
situated in Jusmag (sic) area, Fort Bonifacio, Province of Rizal. Xxx (Emphasis added)
As the Court distinctly notes, the disputed property, as described in private respondents Exhibits
1 and 2, formed part of that wide expanse under Proclamation No. 423 which lists, as earlier stated, three (3) parcels
of land of the public domain as falling within its coverage. These include, inter alia, the entire 15,912,684-square
meter area constituting Parcel No. 3 of Plan Psu 2031 located inside the now renamed Fort Mckinley which, to a
redundant point, was declared a military reservation.

The Court has, on the issue of inalienability, taken stock of the Compilation Map of Approved Surveys Plan
inside Parcels 1, 2, 3 and 4, of plan Psu 2031[42] prepared in September 1995 and certified by the Department of
Environment and Natural Resources (DENR). It indicates in colored ink the outlines of Parcels 2, 3 and 4 covered by
Proclamation No. 423. As there also shown, the 399,992-square meter area embraced by SHAIs TCT No.
15084, defined in the legend by red-colored stripes, is within the violet-colored borders of Parcel No. 3 and Parcel
No. 4 of Proclamation No. 423.
Indubitably, the area covered by SHAIs TCT No. 15084 was and is still part of the FBMR, more particularly
within the 15,912,684- square meter Parcel No. 3 of the reservation. The petitioner Republic, joined by the
intervenors BCDA, DND and AFP in this appellate proceedings, has maintained all along this thesis. Towards
discharging its burden of proving that the disputed property is part of the reservation, the petitioner Republic need
only to demonstrate that all of the 15,912,684 square meters of Parcel No. 3 of Plan Psu 2031 have been reserved for
military purposes. The evidence, however, of the fact of reservation is the law or, to be more precise, Proclamation
No. 423 itself, the contents and issuance of which courts can and should take judicial notice of under Section 1, Rule
129 of the Rules of Court.[43]
The Republic has, since the filing of its underlying complaint, invoked Proclamation No. 423. In the process, it
has invariably invited attention to the proclamations specific area coverage to prove the nullity of TCT No. 15084,
inasmuch as the title embraced a reserved area considered inalienable, and hence, beyond the commerce of man. In
this regard, the appellate court seemed to have glossed over, if not entirely turned a blind eye on, certain admissions
made by the private respondent, the most basic being those made in its answer to the Republics allegations in
paragraph 5 (e) and (g) of its complaint. To the Republics allegations that the property covered by TCT No. 15084 was
and remains part the FBMR, SHAIs answer thereto reads:
2. It specifically denies the allegations in paragraphs 5 of the complaint, the truth of the
matter being that in the Deed of Sale , the Director of Lands Certificate (sic) that he is authorized
under the law to sell the subject property and that the lots were duly awarded by the [LBM] to the
vendee.[44] ( Emphasis and word in bracket added.)

In net effect, private respondent SHAI admitted what the petitioner Republic alleged in par. 5 (e) and (g) of
the complaint, the formers denial to such allegations on the inalienable nature of the property covered by TCT No.
15084 being in the nature of a general denial. Under the rules on pleadings, a specific, not a general, denial is
required; a denial is not specific because it is so qualified or termed specific by the pleader. [45] The defendant must
specify each material factual allegation the truth of which he absolutely denies and, whenever practicable, shall set
forth the substance of the matters upon which he will rely to support his denial. [46] Else, the denial will be regarded as
general and will, therefore, be regarded as an admission of a given material fact/s stated in the complaint.
What private respondent SHAI did under the premises was to enter what, under the Rules, is tantamount to
a general denial of the Republics averments that what SHAIs TCT No. 15084 covers is part of the military reservation.
In the process, private respondent SHAI is deemed to admit the reality of such averment.

To be sure, the petitioner Republic, as plaintiff below, had more than sufficiently established its claim on the
inalienability of the parcels of land covered by TCT No. 15084. In fine, it had discharged the burden of proof on the
issue of inalienability. Be that as it may, the burden of evidence to disprove inalienability or, to be precise, that said
parcels of land had, for settlement purposes, effectively been withdrawn from the reservation or excluded from the
coverage of Proclamation No. 423, devolves upon the private respondent. This is as it should be for the cogency of
SHAIs claim respecting the validity of both the underlying deed of sale (Exh. A/1) and its TCT No. 15084 (Exh. B/2)
rests on the postulate that what it purportedly bought from the LMB had ceased to be part of the reserved lands of
the public domain. Elsewise put, SHAI must prove that the JUSMAG area had been withdrawn from the reservation
and declared open for disposition, failing which it has no enforceable right over the area as against the State.
Private respondent SHAI has definitely not met its burden by reason of lack of evidence. To be sure, it has
not, because it cannot even if it wanted to, pointed to any presidential act specifically withdrawing the disputed
parcels from the coverage of Proclamation No. 423. Worse still, its own Exhibit 5,[47] a letter dated March 19, 1991 of
then PA Commanding General, M/Gen Lisandro Abadia, to one Mrs. Gabon, then President of the SHAI, cannot but
be viewed as a partys judicial admission that the disputed land has yet to be excluded from the military reservation.
The Abadia letter, with its feature dis-serving to private respondent SHAI, reads in part as follows:
Dear Mrs. Gabon:
This is in connection with your move to make a petition to President Aquino regarding
the possible exclusion of Southside Housing Area from the military reservation and for its eventual
allotment to the military officers presently residing thereat. Allow me to state that I interpose no
objection . I find it helpful to our officers to be provided a portion of the Fort Bonifacio military
reservation . (Underscoring added.)
Owing to the foregoing considerations, the Court is hard put to understand how the CA could still have found
for SHAI.. The appellate court, apparently swayed by what SHAI said in its Brief for the Appellees[48] that:
Appellant [petitioner Republic] is probably unaware that , then President Diosdado
Macapagal issued Proclamation 461 when he excluded from the operation of Proclamation No. 423
an area of 2,455,810 square meters more or less. Likewise on October 16, 1987, then President
Corazon Aquino issued Proclamation No. 172 excluding five (5) parcels of land from the operation of
Proclamation No. 423 also located at Fort Bonifacio containing an area of 4,436, 478 . So if we deduct
the 6,892,288 [2,455,810 + 4,436,478 = 6,892,288] square meters covered by Proclamation Nos. 461
and 172 of the areas reserved for military purposes of 7,053,143 square meters, what is only left is
160,857 square meters or more or less 16 hectares . [49]
justified its holding on the alienability of the disputed land with the following disquisition:
The foregoing admission aside, appellants [now petitioners] reliance on Proclamation No. 493
[should be 423] in insisting that the land in litigation is inalienable because it is part of the [FBMR] is
too general to merit serous consideration. While it is true that, under the said July 12,
1957Proclamation, then President Carlos P. Garcia reserved the area now known as Fort Bonifacio for
military purposes, appellee [now respondent] correctly calls our attention to the fact, among other
matters, that numerous exceptions thereto had already been declared through the years. The

excluded areas under Proclamation No. 461, dated September 29, 1965 and Proclamation No. 172,
dated October 16, 1987 alone already total 6,892,338 square meters. (Figures in bracket added.)
The CAs justifying line does not commend itself for concurrence.
For one, it utilizes SHAIs misleading assertion as a springboard to justify speculative inferences. Per our
count, Proclamation 423 reserved for military purposes roughly a total area of 25,875,000 square meters, not
7,053,143. On the other hand, Proclamation Nos. 461 and 172 excluded a combined area of 6,892,338 square
meters. Now then, the jump from an acknowledgment of the disputed parcels of land having been reserved for
military purposes to a rationalization that they must have been excluded from the reservation because 6,892,338
square meters had already been withdrawn from Proclamation 423 is simply speculative. Needless to stress, factual
speculations do not make for proof.
Corollary to the first reason is the fact that private respondent SHAI - and quite understandably, the appellate
court - had not pointed to any proclamation, or legislative act for that matter, segregating the property covered by
TCT No. 15084 from the reservation and classifying the same as alienable and disposable lands of the public domain.
To reiterate what we earlier said, lands of the public domain classified as a military reservation remains as such until,
by presidential fiat or congressional act, the same is released from such classification and declared open to
disposition.[50] The October 30, 1991 Deed of Sale purportedly executed by Palad, assuming for the nonce its
authenticity, could not plausibly be the requisite classifying medium converting the JUSMAG area into a disposable
parcel. And private respondent SHAIs unyielding stance that would have the Republic in estoppel to question the
transfer to it by the LMB Director of the JUSMAG area is unavailing. It should have realized that the Republic is not
usually estopped by the mistake or error on the part of its officials or agents. [51]
Since the parcels of land in question allegedly sold to the private respondent are, or at least at the time of
the supposed transaction were, still part of the FBMR, the purported sale is necessarily void ab initio.
The Court can hypothetically concede, as a matter of fact, the withdrawal of the JUSMAG area from the
ambit of Proclamation No. 423 and its reclassification as alienable and disposable lands of the public domain. Still,
such hypothesis would not carry the day for private respondent SHAI. The reason therefor is basic: Article XII, Section
3[52] of the 1987 Constitution forbids private corporations from acquiring any kind of alienable land of the public
domain, except through lease for a limited period. While Fr. Bernas had stated the observation that the reason for
the ban is not very clear under existing jurisprudence, [53] the fact remains that private corporations, like SHAI, are
prohibited from purchasing or otherwise acquiring alienable public lands.
Even if on the foregoing score alone, the Court could write finis to this disposition. An appropriate closure to
this case could not be had, however, without delving to an extent on the issue of the validity of the October 30,
1991 Deed of Sale which necessarily involves the question of the authenticity of what appears to be Palads signature
thereon.
With the view we take of the case, the interplay of compelling circumstances and inferences deducible therefrom,
would, as a package, cast doubt on the authenticity of such deed, if not support a conclusion that the deed is
spurious. Consider:

1. Palad categorically declared that his said signature on the deed is a forgery. The Court perceives no reason why he
should lie, albeit respondent states, without elaboration, that Palads declaration is aimed at avoiding criminal
prosecution.[54] The NBI signature expert corroborated Palads allegation on forgery. [55] Respondent SHAIs expert
witness from the PNP, however, disputes the NBIs findings. In net effect, both experts from the NBI and the PNP
cancel each other out.
2. Palad signed the supposed deed of sale in Manila, possibly at the LMB office at Plaza Cervantes, Binondo. Even if
he acted in an official capacity, Palad nonetheless proceeded on the same day to Pasig City to appear before the
notarizing officer. The deed was then brought to the Rizal Registry and there stamped Received by the entry
clerk. That same afternoon, or at 3:14 p.m. of October 30, 1991 to be precise, TCT No. 15084 was issued. In other
words, the whole conveyance and registration process was done in less than a day. The very unusual dispatch is quite
surprising. Stranger still is why a bureau head, while in the exercise of his functions as the bureaus authorized
contracting officer, has to repair to another city just to have a deed notarized.
3. There is absolutely no record of the requisite public land application to purchase required under Section 89 of the
Public Land Act.[56] There is also no record of the deed of sale and of documents usually accompanying an application
to purchase, inclusive of the investigation report and the property valuation.The Certification under the seal of the
LMB bearing date November 24, 1994 and issued/signed by Alberto Recalde, OIC, Records Management Division of
the LMB pursuant to a subpoena issued by the trial court[57] attest to this fact of absence of records. Atty. Alice B.
Dayrit, then Chief, Land Utilization and Disposition Division, LMB, testified having personally looked at the bureau
record book, but found no entry pertaining to SHAI. [58]
4. In its Answer as defendant a quo, respondent SHAI states that the deed of sale specifically meritorious Official
Receipt No. 6030203C dated 29 October 1991, (sic) as evidence of full payment of the agreed purchase price.. An
official receipt (O.R.) is doubtless the best evidence to prove payment. While it kept referring to O.R. No. 6030203 as
its evidence of the required payment, [59] it failed to present and offer the receipt in evidence. A Certification under
date September 15, 1993 of the OIC Cash Division, LMB, states that OR # 6030203 in the amount of P11,977,000.00
supposedly paid by [SHAI] is not among the series of [ORs] issued at any time by the National Printing Office to the
Cashier, LMB, Central Office. [60] A copy of the OR receipt is not appended to any of the pleadings filed before the
Court. We can thus validly presume that no such OR exists or, if it does, that its presentation would be adverse to
SHAI.
A contract of sale is void where the price, which appears in the document as paid has, in fact, never been paid.[61]
5. The purchase price was, according to the witnesses for SHAI, paid in full in cash to the cashier of the
LMB the corresponding amount apparently coming in a mix of P500 and P100 denominations. Albeit plausible, SHAIs
witnesses account taxes credulity to the limit.
A final consideration in G.R. No. 156951. This case could not have come to pass without the participation of a cabal
of cheats out to make a dishonest buck at the expense of the government and most likely the members of SHAI. No
less than its former president (Ms. Virginia Santos) testified that a facilitator did, for a fee, the necessary paper and
leg work before the LMB and the Registry of Deeds that led to the execution of the Deed of Sale and issuance of the
certificate

of

the facilitator

[63]

title

in

question. [62] Ms.

Santos

identified

who facilitated all these presentation of documents,

Eugenia
[64]

Balis,

geodetic

engineer,

as

and most of the time, directly transacted with

the LMB and the Register of Deeds leading to acquisition of title. [65] Engr. Balis was, in the course of Ms. Santos
testimony, directly mentioned by name for at least fifteen (15) times. Not surprisingly, Engr. Balis did not appear in
court, despite SHAIs stated intention to present her as witness. [66]
The extent of the misappropriation of the Fort Bonifacio land involved in this and the NOVA area litigations is, as
described in the Report of the FactFinding Commission, [67] so epic in scale as to make the overpricing of land
complained of in the two hundred AFP [Retirement and Separation Benefits System] RSBS cases (P703 million) seem
like petty shoplifting in comparison. [68] The members of private respondent SHAI may very well have paid for what
they might have been led to believe as the purchase price of the JUSMAG housing area. The sad reality, however, is

that the over P11 Million they paid, if that be the case, for a piece of real estate contextually outside the commerce
of man apparently fell into the wrong hands and did not enter the government coffers. Else, there must be some
memorials of such payment.
At bottom, this disposition is nothing more than restoring the petitioner Republic, and eventually the BCDA, to what
rightfully belongs to it in law and in fact. There is nothing unjust to this approach.
With the foregoing disquisitions, the petition for contempt in G.R. No. 173408 need not detain us long. As it were,
the question raised by the petitioners therein respecting the ownership of the JUSMAG area and, accordingly, of the
right of the petitioning retired military officers to remain in the housing units each may be occupying is now moot
and academic. However, contempt petitioners expressed revulsion over the efforts of the military establishment,
particularly the AFP Chief of Staff, to oust them from their respective dwellings, if that really be the case, even before
G.R. No. 156951 could be resolved, is understandable as it is justified. We thus end this ponencia with a reminder to
all and sundry that might is not always right; that ours is still a government of laws and not of men, be they in the
civilian or military sector. Accordingly, the Court will not treat lightly any attempt to trifle, intended or otherwise,
with its processes and proceedings. A becoming respect to the majesty of the law and the prerogatives of the Court is
a must for the orderly administration of justice to triumph.
WHEREFORE, the petition in G.R.
No.
156951 is GRANTED and
the
appealed
CA
Decision
is REVERSED and SET ASIDE. Accordingly, the Deed of Sale dated October 30, 1991 (Exh.
A/1) purportedly executed in favor of private respondent SHAI andTCT No. 15084 (Exh. B/2) of the Registry of Deeds
of Rizal issued on the basis of such deed are declared VOID. The Register of Deeds of Pasig
or Taguig, as the case may be, is hereby ordered to CANCEL TCT No. 15084 in the name of SHAI and the area covered
thereby is DECLARED part of the Fort Bonifacio Military Reservation, unless the same has, in the interim, been duly
excluded by law or proclamation from such reservation. Private respondent SHAI, its members, representatives
and/or their assigns shall vacate the subject parcels of land immediately upon the finality of this decision, subject to
the provisions of Republic Act No. 7227, otherwise known as the Bases Conversion and Development Act.
Cost against the private respondent SHAI.
Having said our piece in G.R. No. 173408, we need not speak any further thereon other than to deny as we hereby
similarly DENY the same.
SO ORDERED.
VIII
G.R. No. 103882 November 25, 1998
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL ESTATE CORPORATION, respondents, CULTURAL CENTER
OF THE PHILIPPINES, intervenor.
G.R. No. 105276 November 25, 1998
PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners,
vs.
COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.

PURISIMA, J.:

At bar are two consolidated petitions for review on certiorari under Rule 45 of the Revised Rules of Court. Here, the
Court is confronted with a case commenced before the then Court of First Instance (now Regional Trial Court) of Rizal
in Pasay City, in 1961, more than 3 decades back, that has spanned six administrations of the Republic and outlasted
the tenure of ten (10) Chief Justices of the Supreme Court.
In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision, dated January 29, 1992 and
Amended Decision, dated April 28, 1992, of the Court of Appeals 1 which affirmed with modification the Decision of
the former Court of First Instance of Rizal (Branch 7, Pasay City) in Civil Case No. 2229-P, entitled "Republic of the
Philippines vs. Pasay City and Republic Real Estate Corporation".
The facts that matter are, as follows:
Republic Act No. 1899 ("RA 1899"), which was approved on June 22, 1957, authorized the reclamation of foreshore
lands by chartered cities and municipalities. Section I of said law, reads:
Sec. 1. Authority is hereby granted to all municipalities and chartered cities to undertake and carry
out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands
bordering them, and to establish, provide, construct, maintain and repair proper and adequate
docking and harbor facilities as such municipalities and chartered cities may determine in
consultation with the Secretary of Finance and the Secretary of Public Works and Communications.
On May 6, 1958, invoking the a forecited provision of RA 1899, the Pasay City Council passed Ordinance No. 121, for
the reclamation of Three Hundred (300) hectares of foreshore lands in Pasay City, empowering the City Mayor to
award and enter into reclamation contracts, and prescribing terms and conditions therefor. The said Ordinance was
amended on April 21, 1959 by Ordinance No. 158, which authorized the Republic Real Estate Corporation ("RREC") to
reclaim foreshore lands of Pasay City under certain terms and conditions.
On April 24, 1959, Pasay City and RREC entered into an Agreement 2 for the reclamation of the foreshore lands in
Pasay City.
On December 19, 1961, the Republic of the Philippines ("Republic") filed a Complaint 3 for Recovery of Possession
and Damages with Writ of Preliminary Preventive injunction and Mandatory Injunction, docketed as Civil Case No.
2229-P before the former Court of First Instance of Rizal, (Branch 7, Pasay City).
On March 5, 1962, the Republic of the Philippines filed an Amended Complaint 4 questioning subject Agreement
between Pasay City and RREC (Exhibit "P") on the grounds that the subject-matter of such Agreement is outside the
commerce of man, that its terms and conditions are violative of RA 1899, and that the said Agreement was executed
without any public bidding.
The Answers 5 of RREC and Pasay City, dated March 10 and March 14, 1962, respectively, averred that the subjectmatter of said Agreement is within the commerce of man, that the phrase "foreshore lands" within the
contemplation of RA 1899 has a broader meaning than the cited definition of the term in the Words and Phrases and
in the Webster's Third New International Dictionary and the plans and specifications of the reclamation involved
were approved by the authorities concerned.
On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former Court of First Instance of Rizal (Branch 7,
Pasay City) issued an Order 6 the dispositive portion of which was to the following effect:
WHEREFORE, the court hereby orders the defendants, their agents, and all persons claiming under
them, to refrain from "further reclaiming or committing acts of dispossession or dispoilation over any
area within the Manila Bay or the Manila Bay Beach Resort", until further orders of the court.
On the following day, the same trial court issued a writ of preliminary injunction 7 which enjoined the defendants,
RREC and Pasay City, their agents, and all persons claiming under them "from further reclaiming or committing acts
of dispossession."

Thereafter, a Motion to Intervene 8, dated June 27, 1962, was filed by Jose L. Bautista, Emiliano Custodio, Renato
Custodio, Roger de la Rosa, Belen Gonzales, Norma Martiner, Emilia E. Paez, Ambrosio R. Parreno, Antolin M. Oreta,
Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, Zamora Enterprises, Inc., Industrial and Commercial Factors, Inc.,
Metropolitan Distributors of the Philippines, and Bayview Hotel, Inc. stating inter alia that they were buyers of lots in
the Manila Bay area being reclaimed by RREC, whose rights would be affected by whatever decision to be rendered
in the case. The Motion was granted by the trial court and the Answer attached thereto admitted. 9
The defendants and the intervenors then moved to dismiss 10 the Complaint of the Republic, placing reliance on
Section 3 of Republic Act No. 5187, which reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from the south boundary of the City of
Manila to Cavite City, to the south, and from the north boundary of the City of Manila to the
municipality of Mariveles, province of Bataan, to the north, including the reclamation of the
foreshore and submerged areas: Provided, That priority in the construction of such seawalls, highway
and attendant reclamation works shall be given to any corporation and/or corporations that may
offer to undertake at its own expense such projects, in which case the President of the Philippines
may, after competitive didding, award contracts for the construction of such project, with the
winning bidder shouldering all costs thereof, the same to be paid in terms of percentage fee of the
contractor which shall not exceed fifty percent of the area reclaimed by the contractor and shall
represent full compensation for the purpose, the provisions of the Public Land Law concerning
disposition of reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally, that
the foregoing provisions and those of other laws, executive orders, rules and regulations to the
contrary notwithstanding, existing rights, projects and/or contracts of city or municipal governments
for the reclamation of foreshore and submerged lands shall be respected. . . . . (emphasis ours).
Since the aforecited law provides that existing contracts shall be respected, movants contended that the
issues raised by the pleadings have become "moot, academic and of no further validity or effect."
Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU") moved to intervene 11, alleging as legal interest in the
matter in litigation the avowed purpose of the organization for the promotion of good government in Pasay City. In
its Order of June 10, 1969, the lower court of origin allowed the said intervention 12.
On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:
WHEREFORE, after carefully considering (1) the original complaint, (2) the first Amended Complaint,
(3) the Answer of Defendant Republic Real Estate Corporation to the first Amended Complaint, (4)
the Answer of Defendant Pasay City to the first Amended Complaint, (5) the Second Amended
Complaint, (6) the Answer of Defendant Republic Real Estate Corporation to the Second Amended
Complaint, (7) the Answer of Defendant Pasay City to the Second Amended Complaint, (8) the
Memorandum in Support of Preliminary Injunction of Plaintiff, (9) the Memorandum In Support of
the Opposition to the Issuance of Preliminary Injunction of Defendant Pasay City and Defendant
Republic Real Estate Corporation, (10) the Answer in Intervention of Intervenors Bautista, et. al., (11)
Plaintiff's Opposition to Motion to Intervene, (12) the Reply to Opposition to Motion to Intervene of
Intervenors Bautista, et. al., (13) the Stipulation of Facts by all the parties, (14) the Motion for Leave
to Intervene of Intervenor Pasay Law and Conscience Union, Inc., (15) the Opposition to Motion For
Leave to Intervene of Intervenors Bautista, et. al., (16) the Reply of Intervenor Pasay Law and
Conscience Union, Inc., (17) the Supplement to Opposition to Motion to Intervene of Defendant
Pasay City and Republic Real Estate Corporation (18) the Complain in Intervention of Intervenor
Pasay Law and Conscience Union, Inc., (19) the Answer of Defendant Republic Real Estate
Corporation, (20) the Answer of Intervenor Jose L. Bautista, et. al., to Complaint in Intervention, (21)
the Motion to Dismiss of Defendant Republic Real Estate Corporation, and Intervenors
Bautista, et. al., (22) the Opposition of Plaintiff to said Motion to Dismiss, (23) the Opposition of

Intervenor Pasay Law and Conscience Union, Inc., (24) the Memorandum of the Defendant Republic
Real Estate Corporation, (25) the Memorandum for the Intervenor Pasay Law and Conscience Union,
Inc., (26) the Manifestation of Plaintiff filed by the Office of the Solicitor General, and all the
documentary evidence by the parties to wit: (a) Plaintiff's Exhibits "A" to "YYY- 4", (b) Defendant
Republic Real Estate Corporation's Exhibits "1-RREC" to "40-a" and (c) Intervenor Pasay Law and
Conscience Union, Inc's., Exhibits "A-PLACU" to "C-PLACU", the Court hereby:
(1) Denies the "Motion to Dismiss" filed on January 10, 1968, by Defendant Republic Real Estate
Corporation and Intervenors Bautista, et. al., as it is the finding of this Court that Republic Act No.
5187 was not passed by Congress to cure any defect in the ordinance and agreement in question and
that the passage of said Republic Act No. 5187 did not make the legal issues raised in the pleadings
"moot, academic and of no further validity or effect;" and
(2) Renders judgment:
(a) dismissing the Plaintiff's Complaint;
(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law and Conscience Union, Inc.,
(c) Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City to have all the
plans and specifications in the reclamation approved by the Director of Public Works and to have all
the contracts and sub-contracts for said reclamation awarded by means of, and only after, public
bidding; and
(d) Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon as Defendant
Republic Real Estate Corporation and Defendant Pasay City shall have submitted the corresponding
plans and specifications to the Director of Public Works, and shall have obtained approval thereof,
and as soon as the corresponding public bidding for the award to the contractor and sub-contractor
that will undertake the reclamation project shall have been effected.
No pronouncement as to costs.
SO ORDERED. (See Court of Appeals' Decision dated January 28, 1992; pp. 6-8)
Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of Appeals. However, on January
11, 1973, before the appeal could be resolved, Presidential Decree No. 3-A issued, amending Presidential Decree No.
3, thus:
Sec. 1. Section 7 of Presidential Decree No. 3, dated September 26, 1972, is hereby amended by the
addition of the following paragraphs:
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.
All reclamations made in violation of this provision shall be forfeited to the State without need of
judicial action.
Contracts for reclamation still legally existing or whose validity has been accepted by the National
Government shall be taken over by the National Government on the basis of quantum meruit, for
proper prosecution of the project involved by administration.
On November 20, 1973, the Republic and the Construction Development Corporation of the Philippines ("CDCP")
signed a Contract 13 for the Manila-Cavite Coastal Road Project (Phases I and II) which contract included the
reclamation and development of areas covered by the Agreement between Pasay City and RREC. Then, there was

issued Presidential Decree No. 1085 which transferred to the Public Estate Authority ("PEA") the rights and
obligations of the Republic of the Philippines under the contract between the Republic and CDCP.
Attempts to settle amicably the dispute between representatives of the Republic, on the one hand, and those of
Pasay City and RREC, on the other, did not work out. The parties involved failed to hammer out a compromise.
On January 28, 1992, the Court of Appeals came out with a Decision 14 dismissing the appeal of the Republic and
holding, thus:
WHEREFORE, the decision appealed from is hereby AFFIRMED with the following modifications:
1. The requirement by the trial court on public bidding and submission of RREC's plans specification
to the Department Public Works and Highways in order that RREC may continue the implementation
of the reclamation work is deleted for being moot and academic;
2. Ordering the plaintiff-appellant to turn over to Pasay City the ownership and possession over all
vacant spaces in the twenty-one hectare area already reclaimed by Pasay City and RREC at the time it
took over the same. Areas thereat over which permanent structures has (sic) been introduced shall,
including the structures, remain in the possession of the present possessor, subject to any
negotiation between Pasay City and the said present possessor, as regards the continued possession
and ownership of the latter area.
3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the Twenty-One (21)
hectares of land already reclaimed by it, to be exercised within one (1) year from the finality of this
decision, at the same terms and condition embodied in the Pasay City-RREC reclamation contract,
and enjoining appellee Pasay City to respect RREC's option.
SO ORDERED.
On February 14, 1992, Pasay City and RREC presented a Motion for Reconsideration of such Decision of the Court of
Appeals, contending, among others, that RREC had actually reclaimed Fifty-Five (55) hectares, and not only Twentyone (21) hectares, and the respondent Court of Appeals erred in not awarding damages to them, movants.
On April 28, 1992, the Court of Appeals acted favorably on the said Motion for Reconsideration, by amending the
dispositive portion of its judgment of January 28, 1992, to read as follows:
WHEREFORE, the dispositive portion of our Decision dated January 28, 1992 is hereby AMENDED to
read as follows:
1. The requirement by the trial court on public bidding and the submission of the RREC's plans and
specification to the Department of Public Works and Highways in order that RREC may continue the
implementation of the reclamation work is deleted for being moot and academic.
2. Ordering plaintiff-appellant to turn over to Pasay City the ownership and possession of the above
enumerated lots (1 to 9).
3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the land referred to in No.
2 of this dispositive portion, to be exercised within one (1) year from the finality of this Decision, at
the same terms and condition embodied in the Pasay City-RREC reclamation contract, and enjoining
Pasay City to respect RREC's irrevocable option.
SO ORDERED.
From the Decision and Amended Decision of the Court of Appeals aforementioned, the Republic of the Philippines,
as well as Pasay City and RREC, have come to this Court to seek relief, albeit with different prayers.

On September 10, 1997, the Court commissioned the former thirteenth Division of Court of Appeals to hear and
receive evidence on the controversy. The corresponding Commissioner's Report, dated November 25, 1997, was
submitted and now forms part of the records.
On October 11, 1997, the Cultural Center of the Philippines ("CCP") filed a Petition in Intervention, theorizing that it
has a direct interest in the case being the owner of subject nine (9) lots titled in its (CCP) name, which the
respondent Court of Appeals ordered to be turned over to Pasay City. The CCP, as such intervenor, was allowed to
present its evidence, as it did, before the Court of Appeals, which evidence has been considered in the formulation of
this disposition.
In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of errors, that:
I
THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF PASAY CITY
ORDINANCE NO. 158 DATED APRIL 21, 1959 AND THE RECLAMATION CONTRACT
ENTERED INTO BETWEEN PASAY CITY AND RREC;
II
THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD RECLAIMED 55
HECTARES AND IN ORDERING THE TURN-OVER TO PASAY CITY OF THE OWNERSHIP
AND POSSESSION OF NINE (9) LOTS TITLED IN THE NAME OF CCP.
In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that:
I
THE COURT OF APPEALS ERRED IN NOT DECLARING PRESIDENTIAL DECREE NO. 3-A
UNCONSTITUTIONAL;
II
THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN FAVOR OF PASAY
CITY AND RREC.
Let us first tackle the issues posed in G.R. No. 103882.
On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21, 1959 and the Agreement
dated April 24, 1959 between Pasay City and RREC, we rule in the negative.
Sec. 1 of RA 1899, reads:
Sec. 1. Authority is hereby granted to all municipalities and chartered cities to
undertake and carry out at their own expense the reclamation by dredging, filling, or
other means, of any foreshore lands bordering them, and to establish, provide,
construct, maintain and repair proper and adequate docking and harbor facilities as
such municipalities and chartered cities may determine in consultation with the
Secretary of Finance and the Secretary of Public Works and Communications.
It is the submission of the petitioner, Republic of the Philippines, that there are no foreshore lands along the seaside
of Pasay City 15; that what Pasay City has are submerged or offshore areas outside the commerce of man which could
not be a proper subject matter of the Agreement between Pasay City and RREC in question as the area affected is
within the National Park, known as Manila Bay Beach Resort, established under Proclamation No. 41, dated July 5,
1954, pursuant to Act No. 3915, of which area it (Republic) has been in open, continuous and peaceful possession
since time immemorial.

Petitioner faults the respondent court for unduly expanding what may be considered "foreshore land" through the
following disquisition:
The former Secretary of Justice Alejo Mabanag, in response to a request for an
opinion from the then Secretary of Public Works and Communications as to whether
the term, "foreshore areas" as used in Section I of the immediately aforequoted law
is that defined in Webster's Dictionary and the Law of Waters so as to make any
dredging or filling beyond its prescribed limit illegal, opined:
According to the basic letter of the Director of Public Works, the law of Waters speaks
of "shore" and defines it thus: "that space movement of the tide. Its interior or
terrestrial limit in the line reached by highest equinoctial tides."
Webster's definition of foreshore reads as follows:
That part of the shore between high water and low-water marks usually fixed at the
line to which the ordinary means tide flows: also, by extension, the beach, the shore
near the water's edge.
If we were to be strictly literal the term foreshore or foreshore lands should be
confined to but a portion of the shore, in itself a very limited area. (p. 6, Intervenorsappellees' brief).
Bearing in mind the (Webster's and Law of Waters) definitions of "shore" and of
foreshore lands, one is struck with the apparent inconsistency between the areas
thus described and the purpose to which that area, when reclaimed under the
provision of Republic Act No. 1899, shall be devoted. Section I (of said Law)
authorizes the construction thereat of "adequate docking and harbor facilities". This
purpose is repeated in Sections 3 and 4 of the Act.
And yet, it is well known fact that foreshore lands normally extend only from 10 to
20 meters along the coast. Not very much more if at all. In fact certain parts in
Manila bordering on Manila Bay, has no foreshore to speak of since the sea washes
the sea wall.
It does not seem logical, then, that Congress had in mind. Webster's limited concept
of foreshore when it enacted Republic Act No. 1899, unless it intends thatthe
wharves, piers, docks, etc. should be constructed parallel to the shore, which is
impractical.
Since it is to be presumed that Congress could not have intended to enact an ineffectual
measure not one that would lead to absurd consequences, it would seem that it used
"foreshore" in a sense wider in scope that defined by Webster. . . .
To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant could not offer any
refutation or contrary opinion. Neither can we. In fact, the above construction is consistent
with the "rule on context" in statutory construction which provides that in construing a statute,
the same must be construed as a whole. The particular words, clauses and phrases should not
be studied as detached and isolated expressions, but the whole and every part of the statute
must be considered in fixing the meaning of any of its parts in order to produce a harmonious
whole (see Araneta vs. Concepcion, 99 Phil. 709). There are two reasons for this. Firstly, the
force and significance of particular expressions will largely depend upon the connection in
which they are found and their relation to the general subject-matter of the law. The
legislature must be understood to have expressed its whole mind on the special object to
which the legislative act is directed but the vehicle for the expressions of that meaning is the
statute, considered as one entire and continuous act, and not as an agglomeration of

unrelated clauses. Each clause or provision will be illuminated by those which are cognate to it
and by the general tenor of the whole statute and thus obscurities end ambiguities may often
be cleared up by the most direct and natural means. Secondly effect must be given, if it is
possible, to every word and clause of the statute, so that nothing shall be left devoid of
meaning or destitute of force. To this end, each provision of the statute should be read in the
light of the whole. For the general meaning of the legislature, as gathered from the entire act,
may often prevail over the construction which would appear to be the most natural and
obvious on the face of a particular clause. If is by this means that contradiction and
repugnance between the different parts of the statute may be avoided. (See Black,
Interpretation of Laws, 2nd Ed., pp. 317-319).
Resorting to extrinsic aids, the "Explanatory Note" to House Bill No. 3830, which was
subsequently enacted as Republic Act No. 1899, reads:
In order to develop and expand the Maritime Commerce of the Philippines, it is necessary that
harbor facilities be correspondingly improved and, where necessary, expanded and
developed. The national government is not in a financial position to handle all this work. On
the other hand, with a greater autonomy many chartered cities and provinces are financially
able to have credit position which will allow them to undertake these projects. Some cities,
such as the City of Bacolod under R.A. 161, has been authorized to reclaim foreshore lands
bordering it.
Other cities end provinces have continuously been requesting for authority to reclaim
foreshore lands on the basis of the Bacolod City pattern, and to undertake work to establish,
construct on the reclaimed area and maintain such port facilities as may be necessary. In
order not to unduly delay the undertaking of these projects, and inorder to obviate the
passage of individual pieces of legislation for every chartered city and province, it is hereby
recommended that the accompanying bill be approved. It covers Authority for All chartered
cities and provinces to undertake this work. . . . (emphasis supplied)
Utilizing the above explanatory note in interpreting and construing the provisions of R.A.
1899, then Secretary of Justice Mabanag opined:
It is clear that the "Bacolod City pattern" was the basis of the enactment of the
aforementioned bill of general application. This so-called "Bacolod City pattern" appears to be
composed of 3 parts, namely: Republic Ad No. 161, which grants authority to Bacolod City to
undertake or carry out . . . the reclamation . . . of any [sic] carry out the reclamation project
conformably with Republic Act No. 161; and Republic Act No. 1132 authorizing Bacolod City to
contract indebtedness or to issue bonds in the amount not exceeding six million pesos to
finance the reclamation of land in said city.
Republic Act No. 161 did not in itself specify the precise space therein referred to as
"foreshore" lands, but it provided that docking and harbor facilities should be erected on the
reclaimed portions thereof, while not conclusive would indicate that Congress used the word
"foreshore" in its broadest sense. Significantly, the plan of reclamation of foreshore drawn up
by the Bureau of Public Works maps out an area of approximately 1,600,000 square meters,
the boundaries of which clearly extend way beyond Webster's limited concept of the term
"foreshore". As a contemporaneous construction by that branch of the Government
empowered to oversee at least, the conduct of the work, such an interpretation deserves great
weight. Finally, Congress in enacting Republic Act No. 1132 (supplement to RA 161), tacitly
confirmed and approved the Bureau's interpretation of the term 'foreshore' when instead of
taking the occasion to correct the Bureau of over extending its plan, it authorized the city of
Bacolod to raise the full estimated cost of reclaiming the total area covered by the plan. The
explanatory note to House Bill No. 1249 which became Republic Act No. 1132 states among
the things:

The Bureau of Public Works already prepared a plan for the reclamation of about 1,600,000
square meters of land at an estimated costs of about P6,000,000.00. The project is selfsupporting because the proceeds from the sales or leases of lands so reclaimed will be more
than sufficient to cover the cost of the project.
Consequently, when Congress passed Republic Act No. 1899 in order to facilitate the
reclamation by local governments of foreshore lands on the basis of the Bacolod City pattern
and in order to obviate the passage of individual pieces of legislation for every chartered city
and provinces requesting authority to undertake such projects, the lawmaking body could not
have had in mind the limited area described by Webster as "foreshore" lands. . . . .
If it was really the intention of Congress to limit the area to the strict literal meaning of
"foreshore" lands which may be reclaimed by chartered cities and municipalities, Congress
would have excluded the cities of Manila, Iloilo, Cebu, Zamboanga and Davao from the
operation of RA 1899 as suggested by Senator Cuenco during the deliberation of the bill
considering that these cities do not have 'foreshore' lands in the strict meaning of the term.
Yet, Congress did not approve the proposed amendment of Senator Cuenco, implying
therefore, that Congress intended not to limit the area that may be reclaimed to the strict
definition of "foreshore" lands.
The opinion of the then Secretary of Justice Mabanag, who was at that time the chief law
officer and legal adviser of the government and whose office is required by law to issue
opinions for the guidance of the various departments of the government, there being then no
judicial interpretation to the contrary, is entitled to respect (see Bengzon vs. Secretary of Justice
and Insular Auditor, 68 Phil. 912).
We are not unmindful of the Supreme Court Resolution dated February 3, 1965 inPonce vs.
Gomez (L-21870) and Ponce vs. City of Cebu (L-2266), by a unanimous vote of six (6) justices
(the other five (5) members deemed it unnecessary to express their view because in their
opinion the questions raised were not properly brought before the court), which in essence
applied the strict dictionary meaning of "foreshore lands" as used in RA 1899 in the case of the
city of Cebu. But this was promulgated long after the then Secretary of Justice Mabanag
rendered the above opinion on November 16, 1959 and long after RREC has started the
subject reclamation project.
Furthermore, as held by the lower court, Congress, after the Supreme Court issued the
aforementioned Resolution, enacted RA 5187. In Sec. 3 (m) of said law, Congress appropriated
money "for the construction of the seawall and limited access highway from the South
boundary of the city of Manila to Cavite City, to the South, and from the North boundary of
the city of Manila to the municipality of Mariveles, province of Bataan, to the North (including
the reclamation of foreshore and submerged areas . . . provided . . . that . . . existing projects
and/or contracts of city or municipal governments for the reclamation of foreshore and
submerged lands shall be respected . . ." This is a clear manifestation that Congress in enacting
RA 1899, did not intend to limit the interpretation of the term "foreshore land" to its
dictionary meaning.
It is presumed that the legislature was acquainted with and had in mind the judicial
construction given to a former statute on the subject, and that the statute on the subject, and
that the statute was enacted having in mind the judicial construction that the prior enactment
had received, or in the light of such existing judicial decisions as have direct bearing upon it
(see 50 Am. Jur., Sec. 321, pp. 312-313). But notwithstanding said interpretation by the
Supreme Court of RA 1899 in the Ponce cases, Congress enacted a law covering the same areas
previously embraced in a RA 1899 (as mentioned earlier, cities without foreshore lands which
were sought to be excluded from the operation of RA 1899 were not excluded), providing that
respect be given the reclamation of not only foreshore lands but also of submerged lands
signifying its non-conformity to the judicial construction given to RA 1899. If Congress was in

accord with the interpretation and construction made by the Supreme Court on RA 1899, it
would have mentioned reclamation of "foreshore lands" only in RA 5187, but Congress
included "submerged lands" in order to clarify the intention on the grant of authority to cities
and municipalities in the reclamation of lands bordering them as provided in RA 1899. It is,
therefore, our opinion that it is actually the intention of Congress in RA 1899 not to limit the
authority granted to cities and municipalities to reclaim foreshore lands in its strict dictionary
meaning but rather in its wider scope as to include submerged lands.
The Petition is impressed with merit.
To begin with, erroneous and unsustainable is the opinion of respondent court that under RA 1899, the term
"foreshore lands" includes submerged areas. As can be gleaned from its disquisition and rationalization aforequoted,
the respondent court unduly stretched and broadened the meaning of "foreshore lands", beyond the intentment of
the law, and against the recognized legal connotation of "foreshore lands". Well entrenched, to the point of being
elementary, is the rule that when the law speaks in clear and categorical language, there is no reason for
interpretation or construction, but only for application. 16 So also, resort to extrinsic aids, like the records of the
constitutional convention, is unwarranted, the language of the law being plain and unambiguous. 17 Then, too,
opinions of the Secretary of Justice are unavailing to supplant or rectify any mistake or omission in the law. 18 To
repeat, the term "foreshore lands" refers to:
The strip of land that lies between the high and low water marks and that is alternately wet and
dry according to the flow of the tide. (Words and Phrases, "Foreshore")
A strip of land margining a body of water (as a lake or stream); the part of a seashore between
the low-water line usually at the seaward margin of a low-tide terrace and the upper limit of
wave wash at high tide usually marked by a beach scarp or berm. (Webster's Third New
International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its meaning, much
less widen the coverage thereof. If the intention of Congress were to include submerged areas, it should
haveprovided expressly. That Congress did not so provide could only signify the exclusion of submerged areas from
the term "foreshore lands".
Neither is there any valid ground to disregard the Resolution of this Court dated February 3, 1965 in Ponce v.
Gomez (L-21870) and Ponce v. City of Cebu (L-22669) despite the enactment of Republic Act No. 5187 ("RA 5187"),
the relevant portion of which, reads:
Sec. 3. Miscellaneous Projects
xxx xxx xxx
m. For the construction of seawall and limited access highway from the south boundary of the
City of Manila to Cavite City, to the south, and from the north boundary of the City of Manila
to the municipality of Mariveles, province of Bataan, to the north, including the reclamation of
the foreshore and submerged areas: Provided, That priority in the construction of such
seawalls, highway and attendant reclamation works shell be given to any corporation and/or
corporations that may offer to undertake at its own expense such projects, in which case the
President of the Philippines may, after competitive bidding, award contracts for the
construction of such projects, with the winning bidder shouldering all costs thereof, the same
to be paid in terms of percentage fee of the contractor which shall not exceed fifty percent of
the area reclaimed by the contractor and shall represent full compensation for the purpose,
the provisions of the Public Land Law concerning disposition of reclaimed and foreshore lands
to the contrary notwithstanding: Provided, finally, that the foregoing provisions and those of
other laws, executive orders, rules and regulations to the contrary notwithstanding, existing
rights, projects and/or contracts of city or municipal governments for the reclamation of
foreshore and submerged lands shall be respected. . . . .

There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden the scope of "foreshore
lands." The said law is not amendatory to RA 1899. It is an Appropriations Act, entitled "AN ACT APPROPRIATING
FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE SAME WITH PREVIOUS PUBLIC WORKS APPROPRIATIONS."
All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-21870) and Ponce v. City of
Cebu (L-22669) that the term "foreshore" refers to "that part of the land adjacent to the sea which is alternately
covered and left dry by the ordinary flow of the tides." As opined by this Court in said cases:
WHEREAS, six (6) members of the Court (Justices Bautista Angelo, Concepcion, Reyes, Barrera,
Dizon and Jose P. Bengzon) opine that said city ordinance and contracts areultra vires and
hence, null and void, insofar as the remaining 60% of the area aforementioned, because the
term "foreshore lands" as used in Republic Act No. 1899 should be understood in the sense
attached thereto by common parlance; (emphasis ours)
The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his opinion dated December 22,
1966, in a case with analogous facts as the present one, to wit:
December 22, 1966
The Secretary of Agriculture
and Natural Resources
Diliman, Quezon City
Sir:
xxx xxx xxx
I. Facts
1. On January 19, 1961, pursuant to the provisions of Republic Act No. 1899, the
Municipality of Navotas enacted Ordinance No. 1 authorizing the Municipal
Mayor to
enter into a reclamation contract with Mr. Chuanico.
2. On March 15, 1961, a reclamation contract was concluded between the Municipality of
Navotas, represented by the Municipal Mayor, and Mr. Chuanico in accordance with the
above ordinance. Thereunder, Mr. Chuanico shall be the attorney-in-fact of the Municipality
in prosecuting the reclamation project and shall advance the money needed therefor; that
the actual expenses incurred shall be deemed a loan to the Municipality; that Mr. Chuanico
shall have the irrevocable option to buy 70% of the reclaimed area at P7.00 per square
meter; that he shall have the full and irrevocable powers to do any and all things necessary
and proper in and about the premises," including the power to hire necessary personnel for
the prosecution of the work, purchase materials and supplies, and purchase or lease
construction machineries and equipment, but any and all contracts to be concluded by him
in behalf of the Municipality shall be submitted to public bidding.
xxx xxx xxx
3. On March 16, 1961, the Municipal Council of Navotas passed Resolution No. 22 approving
and ratifying the contract.
xxx xxx xxx
III. Comments

1. The above reclamation contract was concluded on the basis of Navotas Ordinance No. 1
which, in turn, had been enacted avowedly pursuant to Republic Act No. 1899. This being so,
the contract, in order to be valid, must conform to the provisions of the said law.
By authorizing local governments "to execute by administration any reclamation work,"
(Republic Act No. 1899 impliedly forbids the execution of said project by contract. Thus, in
the case or Ponce et al. vs. Gomez (February 3, 1966), five justices of the Supreme Court
voted to annul the contract between Cebu Development Corporation and Cebu City for the
reclamation of foreshore lands because "the provisions of said . . . contract are not . . . in
accordance with the provisions of Republic Act No. 1899," as against one Justice who
opined that the contract substantially complied with the provisions of the said law. (Five
Justices expressed no opinion on this point.)
Inasmuch as the Navotas reclamation contract is substantially similar to the Cebu
reclamation contract, it is believed that the former is likewise fatally defective.
2. The Navotas reclamation project envisages the construction of a channel along the Manila
Bay periphery of that town and the reclamation of approximately 650 hectares of land from
said channel to a seaward distance of one kilometer. In the basic letter it is stated that
"practically, all the 650 hectares of lands proposed to be reclaimed under the agreement" do
not constitute foreshore lands and that "the greater portion of the area . . . is in fact navigable
and presently being used as a fishing harbor by deep-sea fishing operators as well as a fishing
ground of sustenance fisherman. Assuming the correctness of these averments, the Navotas
reclamation contract evidently transcends the authority granted under Republic Act No.
1899, which empowers the local governments to reclaim nothing more than "foreshore
lands, i.e., "that part of the land adjacent to the see which is alternately covered and left dry
by the ordinary flow of the tides." (26 C.J. 890.) It was for this reason that in the cited
case Ponce case, the Supreme Court, by a vote of 6-0 with five Justices abstaining, declared
ultra vires and void the contractual stipulation for the reclamation of submerged lands off
Cebu City, and permanently enjoined its execution under Republic Act No. 1899.
xxx xxx xxx
In accordance with the foregoing, I have the honor to submit the view that the
Navotas reclamation contract is not binding and should be disregarded for noncompliance with law.
Very truly yours,
(SGD) CLAUDIO TEEHANKEE
Secretary of Justice
The said opinion of Justice Secretary Teehankee who became Associate Justice, and later Chief Justice, of this Court,
did, in our considered view, supersede the earlier opinion of former justice Secretary Alejo Mabanag, aforestated, as
the cases, in connection with which subject opinions were sought, were with similar facts. The said Teehankee
opinion accords with RA 1899.
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by Ordinance No. 158, and
the Agreement under attack, have been found to be outside the intendment and scope of RA 1899, and
therefore ultra vires and null and void.
What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.
Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed 55 hectares. The letter of
Minister Baltazar Aquino relied upon by RREC is no proof at all that RREC had reclaimed 55 hectares. Said letter was
just referring to a tentative schedule of work to be done by RREC, even as it required RREC to submit the pertinent
papers to show its supposed accomplishment, to secure approval by the Ministry of Public Works and Highways to

the reclamation plan, and to submit to a public bidding all contracts and sub-contracts for subject reclamation
project but RREC never complied with such requirements and conditions sine qua non.
No contracts or sub-contracts or agreements, plans, designs, and/or specifications of the reclamation project were
presented to reflect any accomplishment. Not even any statement or itemization of works accomplished by
contractors or subcontractors or vouchers and other relevant papers were introduced to describe the extent of
RREC's accomplishment. Neither was the requisite certification from the City Engineer concerned that "portions of
the reclamation project not less than 50 hectares in area shall have been accomplished or completed" obtained and
presented by RREC.
As a matter of fact, no witness ever testified on any reclamation work done by RREC, and extent thereof, as of April
26, 1962. Not a single contractor, sub-contractor, engineer, surveyor, or any other witness involved in the alleged
reclamation work of RREC testified on the 55 hectares supposedly reclaimed by RREC. What work was done, who did
the work, where was it commenced, and when was it completed, was never brought to light by any witness before
the court. Certainly, onus probandi was on RREC and Pasay City to show and point out the as yet unidentified 55
hectares they allegedly reclaimed. But this burden of proof RREC and Pasay City miserably failed to discharge.
So also, in the decision of the Pasay Court of First Instance dismissing the complaint of plaintiff-appellant, now
petitioner Republic of the Philippines, the lifting of the writ of Preliminary Injunction issued on April 26, 1962 would
become effective only "as soon as Defendant Republic Real Estate Corporation and Defendant Pasay City shall have
submitted the corresponding plans and specifications to the Director of Public Work, and shall have obtained
approval thereof, and as soon as corresponding public bidding for the award to the contractor and sub-contractor
that will undertake the reclamation project shall have been effected." (Rollo, pp. 127-129, G.R. No. 103882)
From the records on hand, it is abundantly clear that RREC and Pasay City never complied with such prerequisites for
the lifting of the writ of Preliminary Injunction. Consequently, RREC had no authority to resume its reclamation work
which was stopped by said writ of preliminary injunction issued on April 26, 1962.
From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit "21-A" for RREC before the lower
court, and Exhibit "EE" for CCP before the Court of Appeals, it can be deduced that only on November 26, 1960 did
RREC contract out the dredging work to C and A Construction Company, Inc., for the reclamation of the 55 hectares
initially programmed to be reclaimed by it. But, as stated by RREC itself in the position paper filed with this Court on
July 15, 1997, with reference to CDCP's reclamation work, mobilization of the reclamation team would take one year
before a reclamation work could actually begin. Therefore, the reclamation work undertaker by RREC could not have
started before November 26, 1961.
Considering that on April 26, 1962 RREC was enjoined from proceeding any further with its reclamation work, it had
barely five (5) months, from November, 1961 to April, 1962, to work on subject reclamation project. It was thus
physically impossible for RREC to reclaim 55 hectares, with the stipulated specifications and elevation, in such a brief
span of time. In the report of RREC (Exhibit "DD" for CCP), it was conceded that due to the writ of preliminary
injunction issued on April 26, 1962, C and A Construction Co., Inc. had suspended its dredging operation since May,
1962.
The "graphical report" on the Pasay Reclamation project, as of April 30, 1962, attached to the Progress Report
marked Exhibit "DD", is a schematic representation of the work accomplishment referred to in such Progress Report,
indicating the various elevations of the land surface it embraced, ranging from 0.00 meters to the highest elevation
of 2.5 meters above MLLW. Such portrayal of work accomplished is crucial in our determination of whether or not
RREC had actually "reclaimed" any land as under its Contract for Dredging Work with C and A Construction Company
(Exhibit "EE", the required final elevation for a completely reclaimed land was 3.5 meters above MLLW, as explicitly
provided in said Contract for Dredging Work. So, the irresistible conclusion is when the work on subject RRECPasay City reclamation project stopped in April, 1962 in compliance with the writ of preliminary injunction issued by
the trial court of origin, no portion of the reclamation project worked on by RREC had reached the stipulated
elevation of 3.5 meters above MLLW. The entire area it worked on was only at sea level or 0.00 meter above MLLW. In
short, RREC had not yet reclaimed any area when the writ of preliminary injunction issued in April 1962.

On this point, the testimonies of Architect Ruben M. Protacio, Architect and Managing partner of Leandro V. Locsin
and partners, Architect and City Planner Manuel T. Maoza, Jr. of Planning Resources and Operation System, Inc.,
Rose D. Cruz, Executive Assistant, Office of the President, from 1966 to 1970, and Dr. Lucrecia Kasilag, National Artist
and member of CCP Advisory Committee, come to the fore. These credible, impartial and knowledgeable witnesses
recounted on the witness stand that when the construction of the Main Building of the Cultural Center of the
Philippines (CCP) began in 1966, the only surface land available was the site for the said building (TSN, Sept. 29, 1997,
pages 8, 14 and 50), what could be seen in front of and behind it was all water (TSN, Sept. 29, 1997 pages 127-128).
When the CCP Main Building was being constructed, from 1968 to 1969, the land above sea level thereat was only
where the CCP Main Building was erected and the rest of the surroundings were all under water, particularly the back
portion fronting the bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr. Lucrecia R. Kasilag stressed that on
April 16, 1966, during the ground breaking for the CCP Main Building, it was water all around (TSN, Sept. 30, 1997,
pp. 320, 324, 325).
There was indeed no legal and factual basis for the Court of Appeals to order and declare that "the requirement by
the trial court on public bidding and the submission of RREC's plans and specification to the Department of Public
Works and Highways in order that RREC may continue the implementation of the reclamation work is deleted for
being moot and academic." Said requirement has never become moot and academic. It has remained indispensable,
as ever, and non-compliance therewith restrained RREC from lawfully resuming the reclamation work under
controversy, notwithstanding the rendition below of the decision in its favor.
Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with the prescribed elevation
of 3.5 meters above MLLW, so much so that in 1978, it (RREC) opted to file with the former Ministry of Public
Highways, a claim for compensation of P30,396,878.20, for reclamation work allegedly done before the CDCP started
working on the reclamation of the CCP grounds. On September 7, 1979, RREC asked the Solicitor General to settle its
subject claim for compensation at the same amount of P30,396,878.20. But on June 10, 1981, guided by the cost
data, work volume accomplished and other relevant information gathered by the former Ministry of Public Highways,
the Solicitor General informed RREC that the value of what it had accomplished, based on 1962 price levels, was only
P8,344,741.29, and the expenses for mobilization of equipment amounted to P2,581,330.00. The aforesaid
evaluation made by the government, through the then Minister of Public Highways, is factual and realistic, so much
so that on June 25, 1981, RREC, in its reply letter to the Solicitor General, stated:
We regret that we are not agreeable to the amount of P10,926,071.29, based on 1962 cost
data, etc., as compensation based on quantum meruit. The least we would consider is the
amount of P10,926,071.29 plus interest at the rate of 6% per annum from 1962 to the time of
payment. We feel that 6% is very much less than the accepted rate of inflation that has
supervened since 1962 to the present, and even less than the present legal rate of 12% per
annum. 19
Undoubtedly, what RREC claimed for was compensation for what it had done, and for the dredge fill of 1,558,395
cubic meters it used, on subject reclamation project.
Respondent Court likewise erred in ordering the turn-over to Pasay City of the following titled lots, to wit:
LOT NO. BUILDING AREA OCT/TCT
42 Gloria Maris 9,516 sq.m. OCT 159 in the
Restaurant name of GSIS
3 Asean Garden 76,299 sq.m. OCT 10251 in the
name of CCP
12 Folk Arts Theater 1.7503 hec. TCT 18627 in the
and PICC parking name of CCP
space
22 landscaped with 132,924 sq.m. TCT 75676 in the
sculpture of Asean name of CCP
Artists-site of
Boom na Boom

23 open space, back 34,346 sq.m. TCT 75677 in the


of Philcite name of CCP
24 Parking space for 10,352 sq.m. TCT 75678 in the
Star City, CCP, name of CCP
Philcite
25 open space 11,323 sq.m. TCT 75679 in the
occupied by Star name of CCP
City
28 open space, 27,689 sq.m. TCT 75684 in the
beside PICC name of CCP
29 open space, 106,067 sq.m. TCT 75681 in the
leased by El name of CCP
Shaddai
We discern no factual basis nor any legal justification therefor. In the first place, in their answer to the
Complaint and Amended Complaint below, RREC and Pasay City never prayed for the transfer to Pasay City of
subject lots, title to which had long become indefeasible in favor of the rightful title holders, CCP and GSIS,
respectively.
The annotation of a notice of lis pendens on the certificates of title covering the said lots is of no moment. It did not
vest in Pasay City and RREC any real right superior to the absolute ownership thereover of CCP and GSIS. Besides, the
nature of the action did not really warrant the issuance of a notice of lis pendens.
Sec. 14 of Rule 13, Revised Rules of Civil Procedure, reads:
Sec. 14. Notice of lis pendens. In an action affecting the title or the right of possession of real
properly, the plaintiff and the defendant, when affirmative relief is claimed in his answer, may
record in the office of the registry of deeds of the province in which the property is situated a
notice of the pendency of the action. Said notice shall contain the names of the parties and the
object of the action or defense, and a description of the property in that province affected
thereby. Only from the time of filing such notice for record shall a purchaser, or encumbrancer of
the property affected thereby, be deemed to have constructive notice of the pendency of the
action, and only of its pendency against the parties designated by their real names.
The notice of lis pendens herein above mentioned may be cancelled only upon order of the court,
after proper showing that the notice is for the purpose of molesting the adverse party, or that it is
not necessary to protect the rights of the party who caused it to be recorded.
Under the aforecited provision of law in point, a notice of lis pendens is necessary when the action is for recovery of
possession or ownership of a parcel of land. In the present litigation, RREC and Pasay City, as defendants in the main
case, did not counterclaim for the turnover to Pasay City of the titled lots aforementioned.
What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens title, whether
fraudulently issued or not, may be posed only in an action brought to impugn or annul it. (Halili vs. National Labor
Relations Commission, 257 SCRA 174, Cimafranca vs. Intermediate Appellate Court, 147 SCRA 611.) Unmistakable,
and cannot be ignored, is the germane provision of Section 48 of P.D. 1529, that a certificate of title can never be the
subject of a collateral attack. It cannot be altered, modified, or cancelled except in a direct proceeding instituted in
accordance with law.
Although Pasay City and RREC did not succeed in their undertaking to reclaim any area within subject reclamation
project, it appearing that something compensable was accomplished by them, following the applicable provision of
law and hearkening to the dictates of equity, that no one, not even the government, shall unjustly enrich
oneself/itself at the expense of another 20, we believe; and so hold, that Pasay City and RREC should be paid for the
said actual work done and dredge-fill poured in, worth P10,926,071.29, as verified by the former Ministry of Public
Highways, and as claimed by RREC itself in its aforequoted letter dated June 25, 1981.

It is fervently hoped that long after the end of our sojourn in this valley of tears, the court, for its herein historic
disposition, will be exalted by the future generations of Filipinos, for the preservation of the national patrimony and
promotion of our cultural heritage. As writer Channing rightly puts it: "Whatever expands the affections, or enlarges
the sphere of our sympathies Whatever makes us feel our relation to the universe and all that it inherits in time
and in eternity, and to the great and beneficent cause of all, must unquestionably refine our nature, and elevate us in
the scale of being."
WHEREFORE:
In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January 28, 1992, and Amended Decision, dated
April 28, 1992, of the Court of Appeals, are both SET ASIDE; and Pasay City Ordinance No. 121, dated May 6, 1958,
and Ordinance No. 158, dated April 21, 1959, as well as the Reclamation Agreements entered into by Pasay City and
Republic Real Estate Corporation (RREC) as authorized by said city ordinances, are declared NULL and VOID for
being ultra vires, and contrary to Rep. Act 1899.
The writ of preliminary injunction issued on April 26, 1962 by the trial court a quo in Civil Case No. 2229-P is made
permanent and the notice of lis pendens issued by the Court of Appeals in CA G.R. CV No. 51349 ordered
CANCELLED. The Register of Deeds of Pasay City is directed to take note of and annotate on the certificates of title
involved, the cancellation of subject notice of lis pendens.
The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay City and Republic Real Estate Corporation
the sum of TEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND SEVENTY-ONE AND TWENTY-NINE CENTAVOS
(P10,926,071.29) PESOS, plus interest thereon of six (6%) percent per annum from May 1, 1962 until full payment,
which amount shall be divided by Pasay City and RREC, share and share alike.
In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.
No pronouncement as to costs.
SO ORDERED.

Separate Opinions

ROMERO, J., separate opinion;


Culture doesn't save anything or any-one, it doesn't justify. But it's a product of man: he projects himself into it, he
recognizes himself in it; that critical mirror alone offers him his image." So said Jean Paul Sartre, one of the greatest
philosophical thinkers of our time. Matthew Arnold referred to it as the "pursuit of our total perfection" or the "study
of perfection." The English mathematican and philosopher Alfred North Whitehead, placing premium on human
subjectivity, declared, "Culture is activity of thought, and receptiveness to beauty and humane feeling.
Image, perfection, beauty, and feeling. These are elements which are also associated with art and creation. Yet, art in
itself is a multi-faceted concept. The revered and, at times, controversial President John Fitzgerald Kennedy, in one of
his numerous speeches, elevated art to the level of a pyscho-social necessity of man when he said, ". . . (A)rt
establishes the basic human truths which ust serve as the touchstone of our judgment." Indeed, there is no question
that art satisfies one of the deepest spiritual needs of man.
Of course, when one speaks of art and culture, he in fact speaks of it in two ways: the abstract and the concrete.
What is abstract is conditioned by time; that which is and the concrete is ravaged by it. While the concept of "culture
and art" endures man's folies, amassing innumerable, priceless enhancements as it effortlessly slides through
generations of human progress, its tangible counterpart, that which is preserved for our children's appreciation, is
unfortunately fragile. Art works, music, architecture, literature, and other cultural embellishments which exhibit

extraordinary longevity are proclaimed as national treasures, and rightly so, for they are lasting testiminials of man's
boundless imagination and creativity, that single trait that places the human species above all other creatures of the
Almighty.
Most evidence of a culture's richness are lost, not in the tide of nature's frivolity, but through man's foolishness and
capriciousness. Wars used to be the main culprit in the virtual obliteration of the works of ancient scholars. We are
now, and for the past century or so, faced with a greater foe: progress. Progress and development are the hallmarks
of successful governance. Our leaders, and there are so many of them now, decide "what is best" for the public.
Inopportunely, what is perceived to be in the "best interest" of the majority in the name of "progress" may
sometimes, and in the long run, the calamitous to the entire people in terms of cultural atrophy. This is the quandary
in which this Court finds itself as it attempts to weigh once more private rights against sovereignty and the general
welfare.
Background Facts
In a nutshell, the undisputed facts in these consolidated petitions follow.
Pursuant to Republic Act No. 1899, which authorized chartered cities and municipalities to reclaim adjoining
foreshore lands, the City Council of Pasay resolved to reclaim a portion of the Manila Bay covering the Manila-PasayParaaque bounderies and, for this purpose, enacted Ordinance No. 121 on May 6, 1958. Two days later, on the
strength of said ordinance, Pasay City Mayor Pablo Cuneta contracted with Republic Real Estate Corporation (RREC)
for the reclamation of portions of the Manila Bay. On April 21, 1959, the City Council of Pasay amended Ordinance
No. 121 by enacting Ordinance No. 158. A new agreement between the parties (the Reclamation Agreement) was
executed three days thereafter, whcih, among other things, granted the reclamation project to RREC and gave it an
irrevocable option to purchase a maximum of 60% of the area reclaimed at P10.00 per square meter, the amount of
which could be set off against any outstanding obligation of the City to RREC. Such an option could only be effected
within a year from the time the City Engineer certified that 50 hectares had been reclaimed. The reclamation itself
was made by the RREC through third parties who were awarded contracts on the various phases of the project
through public bidding. To raise more funds, RREC entered into contracts to sell the reclaimed areas which it could
purchase from Pasay City by exercising its option under the Reclamation Agreement.
Proceedings before the trial court
On December 19, 1961, the Republic of the Philippines filed a complaint (amended on March 5, 1962) against Pasay
City and RREC for "Recovery of Possession and Damages with Writ of Preliminary Preventive Injunction and
Mandatory Injunction" before Branch 7 of the then Court of First Instance of Rizal, Pasay City, praying for the
declaration of nullity of Ordinance Nos. 121 and 158, the Reclamation Agreement, and the Contracts to Sell between
RREC and the buyers of the reclaimed land. Among other things, the following matters were alleged: (a) the area
reclaimed was already reserved as a national park under Proclamation No. 41, dated July 5, 1954 and Act No. 3915,
hence, the subject of the Reclamation Agreement was beyond man's commerce; (b) Ordinance Nos. 121 and 158
were ultra vires and void ab initio for being violative of R.A. No. 1899, because they involved the reclamation of
"submerged areas" and not "foreshore lands" as allowed by said law; and (c) the Reclamation Agreement was illegal,
contrary to morals and public policy because it was executed with neither authority from the National Government
nor any public bidding.
In their separate answer, Pasay City and RREC set forth the following negative defenses: (a) Pasay City was
empowered by R.A. No. 1899 to reclaim any portion of the Manila Bay; (b) the area reclaimed was not a portion of
the Manila Bay Resort, which was the area reserved as a national park under Proclamation No. 41 and Act No. 3915;
(c) under R.A. No. 1899, the term "foreshore lands" meant much more than its technical definition and extended to
submerged areas beyond the water marks of the shore; and (d) all the actuations of the City RREC regarding the
reclamation project were in accordance with R.A. No. 1899 and related laws.
On April 26, 1962, the trial court issued a writ of preliminary injunction ordering Pasay City and RREC to refrain from
their activities at the Manila Bay. On January 10, 1968, however, RREC filed a "Motion to Dismiss" the complaint on
the ground that the passage of Republic Act No. 5187 (otherwise known as the Public Works Act) on September 16,
1967, rendered the issues raised by the Republic of the Philippines moot and academic. Specifically, RREC relied on

Section 3 (m) thereof which stated that all "contracts of city or municipal governments for the reclamation of
foreshore and submerged lands shall be respected" during the construction by the national government of a sea wall
and limited access highway passing through the projected area of the reclamation. In the meantime, the trial court
allowed Jose Bautista and others who allegedly bought in good faith and for value from RREC some portions of the
reclaimed land, to intervene in the action and join cause with Pasay City and RREC. On the other hand, the Pasay Law
and Conscience Union, Inc. (PLCUI), a civic organization, joined with the Republic of the Philippines and filed a
complaint in intervention.
On May 24, 1972, the court a quo rendered a judgment on the pleadings, upholding the validity of Ordinance Nos.
121 and 158 of the Reclamation Agreement; dismissing the complaint as well as PLCUI's complaint in intervention;
enjoining RREC and Pasay City "to have all the plans and specifications in the reclamation approved by the Director of
Public Works, and to have all the contracts and subcontracts for said reclamation awarded by means of, and only
after, public bidding"; and lifting the preliminary injunction, dated April 26, 1962, as soon as said conditions shall
have been met by RREC and Pasay City.
Proceedings before the Court of Appeals
During the pendency of the State's appeal with the Court of Appeals, President Marcos issued on January 11, 1973,
Pressidential Decree No. 3-A, providing, inter alia, that "the reclamation of areas under water, whether foreshore or
inland, shall be limited to the National Government or any person aurhorized by it under a proper contract," and that
it shall take over any validly existing reclamation contract on the basis of quantum meruit. On the strength of P.D. No.
3-A, the Commission of Public Highways and the Construction Development Corporation of the Philippines (CDCP)
took over the reclamation contract between Pasay City and RREC for the construction of the Manila-Cavite City
Coastal Road. CDCP development the area already reclaimed by RREC and continued reclaiming where the latter left
off. These areas, which came to be known as the Cultural Center Complex and the Financial Center Complex, were
registered in the name of the CCP.
On February 4, 1977, the Public Estates Authority (PEA) was created by virtue of Presidential Decree No. 1084. It was
designated as the agency primarily responsible for all the reclaation projects of the national government. The PEA
then took over the Manila Bay reclamation contract between the Republic of the Philippines and CDCP.
In 1978, RREC filed a claim for P30,396,878.20 with the ten Ministry of Public Highways (MPH) for its actual
reclamation in the CCP Complex before CDCP assumed authority over the project. The MPH, on the other hand,
determined the amount of reclamation by RREC to be only P10,926,071.29. Later, RREC offered to settle the case
with the Office of the Solicitor General for the original amount of its claim. The OSG would, however, settle only for
the lesser amount assessed by the MPH. This was acceptable to RREC only with an additional 6% interest per annum
from 1962 up to the time of payment. Within the decade that followed, RREC's proposals for settling the case
ballooned from a P35,455,011.31 cash settlement or a property settlement of 3.5 hectares in the CCP Complex
covered by TCT No. 75676, to a cash settlement of P175 million, then later, P245 million. The Office of the President,
to which the proposals were referred, rejected the same. In other words, no amicable settlement was reached.
The first decision
On January 28, 1992, the Court of Appeals rendered a decision, affirming the trial court's judgment with the
following modifications: (a) the requirement on public bidding and submission of plans and specifications to the
DPWH by RREC was deleted; (b) the Republic of the Philippines was ordered to turn over to Pasay City the ownership
and possession of the 21 hectares already reclaimed by RREC; and (c) RREC's irrevocable option to purchase 60% of
the 21 hectares it had already reclaimed was sustained.
The amended decision
On April 28, 1992, the appellate court rendered an amended decision. It agreed with the position of Pasay City and
RREC in their motion for reconsideration that the actual the reclaimed was 55, not 21, hectares. Considering,
however, that latter were willing to accept 35 hectares of open land in the CCP Complex, the court ordered the
Republic of the Philippines to reconvey to Pasay City and RREC said parcels of land comprising nine lots registered in
the name of CCP. This is the decision being assailed by both parties in the instant consolidated petitions.

Issues raised
In G.R. No. 103882
Are Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and RREC, valid and
bindings as against the National Government and the Cultural Center of the Philippines?
The Republic of the Philippines claims that the Court of Appeals erred in sustaining the validity of Ordinance Nos. 121
and 158 and the Reclamation Agreement executed pursuant thereto, and in ordering the reconveyance of the nine
lots titled in the name of CCP to the City of Pasay and RREC. It stresses that the reclamation project undertaken by
Pasay City and RREC violated R.A. No. 1899, especially since the subject areas were "submerged lands", not
"foreshore lands" which are the only lands that may be reclaimed by local governments under said law.
The CCP, as intervenor in G.R. No. 103882, alleges that the appellate court's amended decision was not binding upon
it because it was never made a party to the action and that it was compelled to intervene in the instant petitions to
protect its proprietary interests. It claims that the Court of Appeals erred in findings that the actual area reclaimed by
RREC was 55 hectares, and in ordering it to turn over to RREC and Pasay City the nine lots registered in its name.
In G.R. No. 105276
Is P.D. 3-A constitutional?
The City of Pasay and RREC claim it is not and that the Court of Apealls erred in not ruling upon its constitutionality,
considering that said decree deprived them of their property and rights of ownership without due process of law and
without payment of just compensation, and that it violated the non-impairment clause of the Constitution; and in
not awarding them damages for the alleged illegal takeover of the reclamation contract and the reclaimed area.
Thus, they pray for the modification of the assailed amended decision by awarding them damages and conveying to
them, not merely 35, but 55 hectares of the land allegedly reclaimed.
The Commissioner's Report
On September 10, 1997, the Court's Second Division issued a Resolution remanding the case to the Court of Appeals
to receive further evidence and determine the actual area reclaimed by RREC and the arreas of the CCP Complex
which are "open spaces." In its Commissioner's Report dated November 25, 1997, the appellate court conclude that
the CCP and the Solicitor General failed to refute its earleir finding that RREC and Pasay City were able to reclaim 55
hectares of the Manila Bay.
Discussion of Issues
1. Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and RREC, are null
and void for violating the clear and unambiguous provisions of R.A. No. 1899.
In 1984, the term "foreshore lands" was defined by this Court in the case of Republic v. Court of Appeals. 1Although
the subject of this case was part of the Laguna de Bay, the Court nevertheless applied Bouvier's definition of
"foreshore lands," viz: "that part of the land immediately in front of the shore; the part which is between high and
low water marks, and alternately covered with water and left dry by the flux and reflux of the tides. It is indicated by
a middle line between the highest and lowest tides."
This judicial interpretation did not escape the attention of the legislature in the enactment of later related laws. In
R.A. No. 5187, for example, Congress specified the areas that may be reclaimed in the construction of the ManilaCavite City Coastal Road to include both "foreshore and submerged areas." The Chief Executive also recognized the
disparity between the two terms when he signed into law P.D. No. 3-A, authorizing the reclamation of "areas under
water, whether foreshore or inland." Similarly, P.D. No. 1094, creating the Public Estates authority to "reclaim land,
including foreshore and submerged areas."

Initially, legislative intent and later jurisprudential usage clearly delimited the term "foreshore lands" to that part of
the land where the tides literally converge, thus excluding submerged lands. This restricted explication was
unquestionably ackonwledged by the other branches of government when, in passing subsequent related statutes,
they added the terms "submerged areas" or "areas under water" to foreshore lands." Under the principles of legal
construction, since R.A No. 1899 partakes of the nature of a legislative grant of a sovereign right to municipalities and
chartered cities, that is, the right "to reclaim," it must be strictly construed against the latter.
R.A. No. 1899 was, therefore, enacted to apply strictly to "foreshore lands." Thus, when RREC was permitted by the
City of Pasay, through Ordinance Nos. 121 and 158 and the ensuing Reclamation Agreement, to reclaim up to a onekilometer stretch into the Manila Bay, more than just "foreshore lands" was obviously contemplated and involved.
Furthermore, R.A. No. 1899 mandates that any reclamation must be carried out by the municipality or chartered city
concerned 2 with the aid of funds which it may borrow from third persons or lending institution. 3 The reclamation of
Manila Bay was undertaken, not by Pasay City, but by RREC itself under a special power of attorney from Pasay City
using funds exclusively borrowed by the latter from RREC. To compound the anomaly of it all, the reclamation project
itself was awarded by Pasay City to RREC without any public bidding. Finally, to complete Pasay City's absolute
abdication of its duty to champion public over private interest, RREC was granted an irrevocable option to purchase
the land reclaimed in lieu of simply paying for it using a determinable and liquadated amount "in Philippine currency
or in the currency in which the principal has been originally received," 4 as required by R.A. No. 1899. In fact, RREC
began disposing of the land by entering into contracts to sell with various third persons while the reclamation project
was still in progress and long before it acquired any right of dominion over the lands yet to be reclaimed. These are
all blatant violations of R.A. No. 1899. Hence, Ordinance Nos. 121 and 158, no less than the Reclamation Agreement
and the Contracts to Sell it has spawned, should all be deemed null and void, the reclamation itself being ultra vires.
2. P.D. No. 3-A is constitutional and valid
Applying the regalian doctrine, the State owns all waters and lands of the public domain, including those physically
reclaimed. As a general rule, therefore, only the National Government can reclaim foreshore lands and other
submerged areas. At times, though, the State, to effectuate an expressed public, policy, delagates some of its
sovereign powers either to the legislature or to some of its alter egos. One such instance was R.A. No. 1899 which
was intended to increase the autonomy of local governments, an innovation introduced by the Marcos
administration. There is no doubt, however, that R.A. No. 1899 was a mere public grant, a privilege which may be
withdrawn by the granting authority, the sovereign, in the exercise of police power. This is precisely what President
Marcos did when he issued P.D. No. 3-A, a valid and effective means of regaining the State's right to reclaim. It must
be noted that this decree was not revoked by President Aquino when she assumed the presidency.
P.D. No. 3-A does not violate the equal protection clause, as claimed by Pasay City and RREC, because, far from
singling out the latter, its terminology is simple and extensive enough to cover just about any municipality or city. The
decree was signed by President Marcos under his emergency powers when martial law was in effect throughout the
country. Thus, it is not an undue delegation or usurpation of legislation power. Neither does it authorize the taking of
property without just compensation, for it specifically allows such payment, albeit based onquantum meruit.
Incidentally, while RREC attacks the constitutionality of P.D. No. 3-A, and only at this late stage in the proceedings, it
relied on this "quantum meruit compensation" clause in the same decree when it filed a claim before the then
Ministry of Public Works way back in 1978 and again in 1983. This is an oddity which this Court takes notice of in
disallowing RREC from taking contrary positions regarding the validity of a statute in this action. It cannot take
advantage of a provision of law even as it attacks the same.
Finally, the Court notes that the amended decision of the Court of Appeals dated April 28, 1992, is based on
inadequate evidence. Its conclusion that RREC was able to reclaim 35 hectares is totally unsupported by the dubious
proof presented by Pasay City and RREC.
In ruling in favor of Pasay City and RREC, the appellate court relied mostly on three documents issued by the
government to the RREC, namely, the "Cost of Data for Items of Work Covered by the Republic Real Estate
Corporation for Work Performed in the Manila Bay" issued by the Ministry of Public Highways, and two letters both
addressed to RREC Executive Vice President Vicente Asuncion, Jr., one dated June 6, 1979, from then Minister of
Public Highways Baltazar Aquino, and another, dated June 10, 1981; from then Solicitor General Estelito Mendoza.
These documents, however, never proved that RREC was able to reclaim 35 hectares. In fact, the letter of Aquino,

finding that RREC had reclaimed 55 hectares, was in its own words, merely "tentative, pending the submittal of
corroborative documents"; hence, it does not amount to the "certification" contemplated in R.A. No. 1899.
Mendoza's letter, on the other hand, far from supporting RREC's position, rejected RREC's proposal in the latter's
attempt at settlement. It is puzzling why the appellate court even considered this letter in favor of RREC and Pasay
City .
On the other hand, there is aimple proof that RREC was not able to reclaim the 55 hectares which it claims it did, or
even 35 hectares, as found by the Court of Appeals as follows: aerial photographs of the Manila Bay area in 1966 and
1968; photographs of the CCP taken 1967 and 1968 during construction of the main building; and the testimonies of
the persons familiar with the circumstances under which said photographs were taken, as well as the other witnesses
who were, one way or another, connected with the construction of the CCP main building, including a member of the
Board of Directors of RREC.
3. RREC is entitled to some monetary award
While the extent of reclamation actually done by RREC is debatable, there is no dispute that it did reclaim some
portion of the Manila Bay. In the preceding discussion, we declared the nullity of Ordinace Nos. 121 and 158 and the
Reclamation Agreement, which are the wellsprings of RREC's right to be compensated. Its reclamation efforts were
also found to be ultra vires. Equity and fairness, however, dictate that it be compensated for the work actually
performed by it. After all, the State cannot deny that it did benefit from such reclamation. RREC was initially willing to
settle the case for P30,396,878.20. In view of the foregoing premises, we believe that RREC should only be given the
amount which the State was willing to pay, that is P10,929,071.29, without legal interest. It is axiomatic that legal
interest is given either for the use of the money (a loan or forbearance of money) or as a penalty for beach of an
obligation (damages). In the case of Eastern Shipping Lines, Inc. v. Court of Appeals, 5 the Court had occassion to set
the guidelines by which litigants may claim or be awarded interest as or by way of actual or compensatory damages.
Thus,
II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded.
In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from
default,i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.
2. When an obligation not consisting of a loan or forbearance of money, is breached, an interest on
the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated claims or damages can be
established with reasonable certainty. Accordingly, were the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially
(Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date the judgment of the court is
made (at which time the quantification damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the
amount finally adjudged. . . . (Citations omitted)
These are the only circumstances under which interest in the concept of actual or compensatory damages, liquidated
or otherwise, may be justified. In the case at bar, no loan or forbearance of money is involved; neither is there any
breach of obligation. Consequently, the lone commitment of the State would be the payment for services allegedly
rendered, services for which RREC would have the National Government cede to it its property, the value of which
has been inflated to unimaginable proportions since the inception of the reclamation project. This is manifestly
cupidity at its worst. Neither should the state be penalized for something for which it is entirely blameless. The
circumstances which led to the filing of these twin actions have long been overtaken by supervening events,

rendering the issues incipiently raised moot and academic. Thus, RREC and Pasay City are, as they should be, only
entilled to P10,926,071.29. No more, no less.
Conclusion
For almost three decades, the Cultural Center of the Philippines has been the principal, if not the sole, purveyor of
the arts in this country. It has weathered criticism, civil unrest, and "internecine" politics. It relies on the occasional
beneficence of loyal patrons, the so-called "cultured" class scorned and spurned by the "masa." Otherwise, it subsists
on the rental income it receives from private entities leasing portions of the CCP Complex. With the trial and
appellate courts upholding their claims, Pasay City and RREC wish to dismember this bastion of cultural heritage and
stunt its growth by claiming ownership over a substantial portion of its property, that which literally serves as its
bloodline. This must not be countenanced. The CCP is certainly not about to draw its curtains and take a final bow. As
Matthew Arnold said more than a century ago, "I am a Liberal, yet I am a Liberal tempered by experience, reflection,
and renouncement, and I am, above all, a believer in culture.
I vote to grant the State's petition, with the qualification adverted to above.

PANGANIBAN, J., separate opinion;


I concur with the persuasive ponencia of Mr. Justice Fidel P. Purisima, as fortified by the Separate Opinion of Mr.
Justice Reynato S. Puno, insofar as it (1) nullifies (a) the Reclamation Agreement between Pasay City and the Republic
Real Estate Corporation (RREC) and (b) Pasay City Ordinance Nos. 121 and 158, and (2) retains ownership of the
reclaimed land in favor of the Cultural Center of the Philippines. With due respect, I submit, however, that the
majority has no factual basis for its determination of the compensation awarded to RREC and Pasay City.
(1) Nullity of Reclamation Agreement and Ordinance Nos. 121 and 158.
Pasay City justifies its execution of the Reclamation Agreement with RREC and the passage of Ordinance Nos. 121
and 158 on the basis of Republic Act No. 1899 (RA 1899), the law authorizing chartered cities and municipalities to
undertake the undertake the reclamation of foreshore lands. The questioned Agreement and Ordinance, however,
cover submerged areas of the Manila Bay. As explained in the ponencia, with which I agree, the legal and common
definition of foreshore land does not include areas that are fully submerged by the sea.
The Manila Bay area is, therefore, definitely outside the scope of RA 1899. It remains part of the public domain and
is, as such, outside the commerce of man. It could not be the object of ordinary contracts or ordinances. The
questioned Agreement and Ordinances, the objects of which involve such public property, are thus null and void.
(2) Reclained Area
Belongs to CCP
As a consequence, the Cultural Center of the Philippines (CCP), to which PD Nos. 15 and 774 have conveyed
ownership of the reclaimed land, remains the lawful owner of the subject land. Title to the nine (9) lots, which
Respondent Court wrongfully ordered to be turned over to Pasay City, had long been issued in favor of CCP (One
subsequently to the GSIS as a successor-in-interest). Such titles are unaffected by the claims of RREC and cannot be
collaterally attacked 1 in this litigation.
(3) No Factual Basis for
Determination of Compensation
Even if the Agreement and Ordinances were null and void, it cannot be denied that RREC and the city government of
Pasay spent time, money and effort which undoubtedly inured to the benefit of the government. It is a time-honored

principle that no one, not even the government, may be enriched at the expenses of another, 2particularly one who,
like RREC and Pasay City, acted on good faith.
While RREC and Pasay City should be compensated for their work on the reclamation project, I respectfully submit
that the amount of such compensation must be supported by substantial and material proof of the reasonable
expenses they incurred. But, the records of the case are bereft of any such factual evidence.
However, the records do indicate some attempts of the parties to reach an amicable settlement as a consequence of
the promulgation of PD 3-A by former President Ferdinand Marcos. Thus, in 1978, RREC sought the amount of
P30,396.878.20 representing the supposed monetory value of the reclamation work that it had undertaken so far.
The then Ministry of Public Highways (MPH) (and later the solicitor general also) rejected this offer in 1981 and,
instead, counteroffered P10,926,071.29 as the reasonable value of such work. RREC replied that it would be consider
such amount only if it would bear six (6) percent interest per annum from 1962 up to the time of payment. It
submitted other proposals, but all were rejected by the government. No final extrajudicial settlement was ever
reached.
Obviously, the offers and counteroffer were made by the parties with a view to arriving at compromise agreement. At
that point, they were not submitted as evidence, but only as a means of arriving at a peaceful settlemet prior to
judgment. By then, the case, which had commenced in December 1961 and was still on appeal with the Court of
Appeals, was already dragging on for the two decades.
Nature of Compromise
A compromise is an agreement between two or more parties whereby their differences are adjusted in a manner
which they mutually agree on, and which they prefer to "hope of gaining, balanced by the danger of losing. 3 The
parties usually make reciprocal concessions in order to avoid litigation or terminate a pending one. 4
However, basic is the rule on evidence that in civil cases, an offer of compromise cannot be taken as an admission of
liability; nor can it be admissable as an evidence against the offeror. 5 The offer to compromise a claim or a cause of
action is not an admission that the claim is valid, but merely admits that there is a dispute and that an amount is to
be paid to avoid or end the controversy. 6 I submit that an unaccepted offer or counteroffer of compromise cannot be
the basis of the sum to be adjudged in favor of or against a party, more so if such sum is unsuported by competent
evidence. In such case, the court itself insofar as it adopts the amount either offered or conteroffered would be
bereft of factual basis for its decision. Where the proposed compromise is not accepted, the parties to the litigation
would be back to square one; they have to present before the court sufficient and credible evidence to prove their
respective claims.
As a rule, an offer or a counteroffer given in an effort to reach a compromise should not be accorded evidentiary
value on its face, because by its very nature, a compromise is concessionary. And if one of the parties does not
concur, the court cannot impose an amount based on the unaccepted offer, even if culpability of a party has been
duly established. The amount of any such liability must be independently ascertained with competent evidence.
Otherwise, this Court would be setting a dangerous precedent. Hence, parties, would not submit offers to
compromise for fear that such offers, if not accepted, would be used by the Court against them. Upon the other
hand, parties may offer bloated amounts in the hope that siad sums could influence the court to eventually grant
them a relief more than they deserve. In any, event, the rationale for the policy encouraging compromise would be
defeated.
In the case at bar, we should bear in mind that when RREC conceded in 1981 to the solicitor general's counteroffer of
P10,926,071.29, provided the amount would bear 6 percent interest per annum, it was with the caveat that such
interest rate was already "very much less that the accepted rate of inflation that has supervened since 1962 . . . ."
Indeed, if we are to compare current prices with those of three and a half decades ago, or even seventheen years
ago, such interest rate on the principal may no longer compensate the 1962 expense. In other words, what may have
been a "fair and reasonable" compromise in 1981 may no longer be acceptable at this time. In any event, the solicitor
general's counteroffer, not being supported with factual evidence, still cannot be the basis of a judicial award.
Need to Receive Evidence of

Value of RREC Accomplishment


In the instant case, there appears no dispute that RREC has undertaken partil work for the Manila Bay reclamation
project to the extent of 1,558,395 cubic meteres of dredge-fill work. In the words of the ponencia:
Undoubtedly, what RREC claimed for was the payment for what it had done on, and for dredge-fill of
1,558.395 cubic meters used for the reclamation project worked on.
This case must therefore be remanded for the purpose of receiving evidence of the peso value of the 1,558,395 cubic
meters of dredge-fill work undisputedly done by RREC.
WHEREFORE, I vote for the following:
1. The RECLARATION of the nullity of (a) the Reclamation Agreement Between Pasay City and RREC and (b) Ordinance
Nos. 121 and 158 of Pasay City.
2. The RETENTION of ownership of the reclaimed land in favor of the Cultural Center of the Philippines.
3. The REMAND of the case to the Commission composed of the former Thirteenth Division of the Court of Appeals
(consisting of Associate Justices Arturo B. Buena, chairman; Minerva P. Gonzaga-Reyes and Quirino D. Abad Santos Jr.)
for the sole purpose of receiving evidence of the peso value of the work accomplished by RREC and Pasay City for
which they shall be paid by the national government.
Separate Opinions
ROMERO, J., separate opinion;
Culture doesn't save anything or any-one, it doesn't justify. But it's a product of man: he projects himself into it, he
recognizes himself in it; that critical mirror alone offers him his image." So said Jean Paul Sartre, one of the greatest
philosophical thinkers of our time. Matthew Arnold referred to it as the "pursuit of our total perfection" or the "study
of perfection." The English mathematican and philosopher Alfred North Whitehead, placing premium on human
subjectivity, declared, "Culture is activity of thought, and receptiveness to beauty and humane feeling.
Image, perfection, beauty, and feeling. These are elements which are also associated with art and creation. Yet, art in
itself is a multi-faceted concept. The revered and, at times, controversial President John Fitzgerald Kennedy, in one of
his numerous speeches, elevated art to the level of a pyscho-social necessity of man when he said, ". . . (A)rt
establishes the basic human truths which ust serve as the touchstone of our judgment." Indeed, there is no question
that art satisfies one of the deepest spiritual needs of man.
Of course, when one speaks of art and culture, he in fact speaks of it in two ways: the abstract and the concrete.
What is abstract is conditioned by time; that which is and the concrete is ravaged by it. While the concept of "culture
and art" endures man's folies, amassing innumerable, priceless enhancements as it effortlessly slides through
generations of human progress, its tangible counterpart, that which is preserved for our children's appreciation, is
unfortunately fragile. Art works, music, architecture, literature, and other cultural embellishments which exhibit
extraordinary longevity are proclaimed as national treasures, and rightly so, for they are lasting testiminials of man's
boundless imagination and creativity, that single trait that places the human species above all other creatures of the
Almighty.
Most evidence of a culture's richness are lost, not in the tide of nature's frivolity, but through man's foolishness and
capriciousness. Wars used to be the main culprit in the virtual obliteration of the works of ancient scholars. We are
now, and for the past century or so, faced with a greater foe: progress. Progress and development are the hallmarks
of successful governance. Our leaders, and there are so many of them now, decide "what is best" for the public.
Inopportunely, what is perceived to be in the "best interest" of the majority in the name of "progress" may
sometimes, and in the long run, the calamitous to the entire people in terms of cultural atrophy. This is the quandary
in which this Court finds itself as it attempts to weigh once more private rights against sovereignty and the general
welfare.

Background Facts
In a nutshell, the undisputed facts in these consolidated petitions follow.
Pursuant to Republic Act No. 1899, which authorized chartered cities and municipalities to reclaim adjoining
foreshore lands, the City Council of Pasay resolved to reclaim a portion of the Manila Bay covering the Manila-PasayParaaque bounderies and, for this purpose, enacted Ordinance No. 121 on May 6, 1958. Two days later, on the
strength of said ordinance, Pasay City Mayor Pablo Cuneta contracted with Republic Real Estate Corporation (RREC)
for the reclamation of portions of the Manila Bay. On April 21, 1959, the City Council of Pasay amended Ordinance
No. 121 by enacting Ordinance No. 158. A new agreement between the parties (the Reclamation Agreement) was
executed three days thereafter, whcih, among other things, granted the reclamation project to RREC and gave it an
irrevocable option to purchase a maximum of 60% of the area reclaimed at P10.00 per square meter, the amount of
which could be set off against any outstanding obligation of the City to RREC. Such an option could only be effected
within a year from the time the City Engineer certified that 50 hectares had been reclaimed. The reclamation itself
was made by the RREC through third parties who were awarded contracts on the various phases of the project
through public bidding. To raise more funds, RREC entered into contracts to sell the reclaimed areas which it could
purchase from Pasay City by exercising its option under the Reclamation Agreement.
Proceedings before the trial court
On December 19, 1961, the Republic of the Philippines filed a complaint (amended on March 5, 1962) against Pasay
City and RREC for "Recovery of Possession and Damages with Writ of Preliminary Preventive Injunction and
Mandatory Injunction" before Branch 7 of the then Court of First Instance of Rizal, Pasay City, praying for the
declaration of nullity of Ordinance Nos. 121 and 158, the Reclamation Agreement, and the Contracts to Sell between
RREC and the buyers of the reclaimed land. Among other things, the following matters were alleged: (a) the area
reclaimed was already reserved as a national park under Proclamation No. 41, dated July 5, 1954 and Act No. 3915,
hence, the subject of the Reclamation Agreement was beyond man's commerce; (b) Ordinance Nos. 121 and 158
were ultra vires and void ab initio for being violative of R.A. No. 1899, because they involved the reclamation of
"submerged areas" and not "foreshore lands" as allowed by said law; and (c) the Reclamation Agreement was illegal,
contrary to morals and public policy because it was executed with neither authority from the National Government
nor any public bidding.
In their separate answer, Pasay City and RREC set forth the following negative defenses: (a) Pasay City was
empowered by R.A. No. 1899 to reclaim any portion of the Manila Bay; (b) the area reclaimed was not a portion of
the Manila Bay Resort, which was the area reserved as a national park under Proclamation No. 41 and Act No. 3915;
(c) under R.A. No. 1899, the term "foreshore lands" meant much more than its technical definition and extended to
submerged areas beyond the water marks of the shore; and (d) all the actuations of the City RREC regarding the
reclamation project were in accordance with R.A. No. 1899 and related laws.
On April 26, 1962, the trial court issued a writ of preliminary injunction ordering Pasay City and RREC to refrain from
their activities at the Manila Bay. On January 10, 1968, however, RREC filed a "Motion to Dismiss" the complaint on
the ground that the passage of Republic Act No. 5187 (otherwise known as the Public Works Act) on September 16,
1967, rendered the issues raised by the Republic of the Philippines moot and academic. Specifically, RREC relied on
Section 3 (m) thereof which stated that all "contracts of city or municipal governments for the reclamation of
foreshore and submerged lands shall be respected" during the construction by the national government of a sea wall
and limited access highway passing through the projected area of the reclamation. In the meantime, the trial court
allowed Jose Bautista and others who allegedly bought in good faith and for value from RREC some portions of the
reclaimed land, to intervene in the action and join cause with Pasay City and RREC. On the other hand, the Pasay Law
and Conscience Union, Inc. (PLCUI), a civic organization, joined with the Republic of the Philippines and filed a
complaint in intervention.
On May 24, 1972, the court a quo rendered a judgment on the pleadings, upholding the validity of Ordinance Nos.
121 and 158 of the Reclamation Agreement; dismissing the complaint as well as PLCUI's complaint in intervention;
enjoining RREC and Pasay City "to have all the plans and specifications in the reclamation approved by the Director of
Public Works, and to have all the contracts and subcontracts for said reclamation awarded by means of, and only

after, public bidding"; and lifting the preliminary injunction, dated April 26, 1962, as soon as said conditions shall
have been met by RREC and Pasay City.
Proceedings before the Court of Appeals
During the pendency of the State's appeal with the Court of Appeals, President Marcos issued on January 11, 1973,
Pressidential Decree No. 3-A, providing, inter alia, that "the reclamation of areas under water, whether foreshore or
inland, shall be limited to the National Government or any person aurhorized by it under a proper contract," and that
it shall take over any validly existing reclamation contract on the basis of quantum meruit. On the strength of P.D. No.
3-A, the Commission of Public Highways and the Construction Development Corporation of the Philippines (CDCP)
took over the reclamation contract between Pasay City and RREC for the construction of the Manila-Cavite City
Coastal Road. CDCP development the area already reclaimed by RREC and continued reclaiming where the latter left
off. These areas, which came to be known as the Cultural Center Complex and the Financial Center Complex, were
registered in the name of the CCP.
On February 4, 1977, the Public Estates Authority (PEA) was created by virtue of Presidential Decree No. 1084. It was
designated as the agency primarily responsible for all the reclaation projects of the national government. The PEA
then took over the Manila Bay reclamation contract between the Republic of the Philippines and CDCP.
In 1978, RREC filed a claim for P30,396,878.20 with the ten Ministry of Public Highways (MPH) for its actual
reclamation in the CCP Complex before CDCP assumed authority over the project. The MPH, on the other hand,
determined the amount of reclamation by RREC to be only P10,926,071.29. Later, RREC offered to settle the case
with the Office of the Solicitor General for the original amount of its claim. The OSG would, however, settle only for
the lesser amount assessed by the MPH. This was acceptable to RREC only with an additional 6% interest per annum
from 1962 up to the time of payment. Within the decade that followed, RREC's proposals for settling the case
ballooned from a P35,455,011.31 cash settlement or a property settlement of 3.5 hectares in the CCP Complex
covered by TCT No. 75676, to a cash settlement of P175 million, then later, P245 million. The Office of the President,
to which the proposals were referred, rejected the same. In other words, no amicable settlement was reached.
The first decision
On January 28, 1992, the Court of Appeals rendered a decision, affirming the trial court's judgment with the
following modifications: (a) the requirement on public bidding and submission of plans and specifications to the
DPWH by RREC was deleted; (b) the Republic of the Philippines was ordered to turn over to Pasay City the ownership
and possession of the 21 hectares already reclaimed by RREC; and (c) RREC's irrevocable option to purchase 60% of
the 21 hectares it had already reclaimed was sustained.
The amended decision
On April 28, 1992, the appellate court rendered an amended decision. It agreed with the position of Pasay City and
RREC in their motion for reconsideration that the actual the reclaimed was 55, not 21, hectares. Considering,
however, that latter were willing to accept 35 hectares of open land in the CCP Complex, the court ordered the
Republic of the Philippines to reconvey to Pasay City and RREC said parcels of land comprising nine lots registered in
the name of CCP. This is the decision being assailed by both parties in the instant consolidated petitions.
Issues raised
In G.R. No. 103882
Are Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and RREC, valid and
bindings as against the National Government and the Cultural Center of the Philippines?
The Republic of the Philippines claims that the Court of Appeals erred in sustaining the validity of Ordinance Nos. 121
and 158 and the Reclamation Agreement executed pursuant thereto, and in ordering the reconveyance of the nine
lots titled in the name of CCP to the City of Pasay and RREC. It stresses that the reclamation project undertaken by

Pasay City and RREC violated R.A. No. 1899, especially since the subject areas were "submerged lands", not
"foreshore lands" which are the only lands that may be reclaimed by local governments under said law.
The CCP, as intervenor in G.R. No. 103882, alleges that the appellate court's amended decision was not binding upon
it because it was never made a party to the action and that it was compelled to intervene in the instant petitions to
protect its proprietary interests. It claims that the Court of Appeals erred in findings that the actual area reclaimed by
RREC was 55 hectares, and in ordering it to turn over to RREC and Pasay City the nine lots registered in its name.
In G.R. No. 105276
Is P.D. 3-A constitutional?
The City of Pasay and RREC claim it is not and that the Court of Apealls erred in not ruling upon its constitutionality,
considering that said decree deprived them of their property and rights of ownership without due process of law and
without payment of just compensation, and that it violated the non-impairment clause of the Constitution; and in
not awarding them damages for the alleged illegal takeover of the reclamation contract and the reclaimed area.
Thus, they pray for the modification of the assailed amended decision by awarding them damages and conveying to
them, not merely 35, but 55 hectares of the land allegedly reclaimed.
The Commissioner's Report
On September 10, 1997, the Court's Second Division issued a Resolution remanding the case to the Court of Appeals
to receive further evidence and determine the actual area reclaimed by RREC and the arreas of the CCP Complex
which are "open spaces." In its Commissioner's Report dated November 25, 1997, the appellate court conclude that
the CCP and the Solicitor General failed to refute its earleir finding that RREC and Pasay City were able to reclaim 55
hectares of the Manila Bay.
Discussion of Issues
1. Ordinance Nos. 121 and 158, as well as the Reclamation Agreement between Pasay City and RREC, are null
and void for violating the clear and unambiguous provisions of R.A. No. 1899.
In 1984, the term "foreshore lands" was defined by this Court in the case of Republic v. Court of Appeals. 1Although
the subject of this case was part of the Laguna de Bay, the Court nevertheless applied Bouvier's definition of
"foreshore lands," viz: "that part of the land immediately in front of the shore; the part which is between high and
low water marks, and alternately covered with water and left dry by the flux and reflux of the tides. It is indicated by
a middle line between the highest and lowest tides."
This judicial interpretation did not escape the attention of the legislature in the enactment of later related laws. In
R.A. No. 5187, for example, Congress specified the areas that may be reclaimed in the construction of the ManilaCavite City Coastal Road to include both "foreshore and submerged areas." The Chief Executive also recognized the
disparity between the two terms when he signed into law P.D. No. 3-A, authorizing the reclamation of "areas under
water, whether foreshore or inland." Similarly, P.D. No. 1094, creating the Public Estates authority to "reclaim land,
including foreshore and submerged areas."
Initially, legislative intent and later jurisprudential usage clearly delimited the term "foreshore lands" to that part of
the land where the tides literally converge, thus excluding submerged lands. This restricted explication was
unquestionably ackonwledged by the other branches of government when, in passing subsequent related statutes,
they added the terms "submerged areas" or "areas under water" to foreshore lands." Under the principles of legal
construction, since R.A No. 1899 partakes of the nature of a legislative grant of a sovereign right to municipalities and
chartered cities, that is, the right "to reclaim," it must be strictly construed against the latter.
R.A. No. 1899 was, therefore, enacted to apply strictly to "foreshore lands." Thus, when RREC was permitted by the
City of Pasay, through Ordinance Nos. 121 and 158 and the ensuing Reclamation Agreement, to reclaim up to a onekilometer stretch into the Manila Bay, more than just "foreshore lands" was obviously contemplated and involved.
Furthermore, R.A. No. 1899 mandates that any reclamation must be carried out by the municipality or chartered city

concerned 2 with the aid of funds which it may borrow from third persons or lending institution. 3 The reclamation of
Manila Bay was undertaken, not by Pasay City, but by RREC itself under a special power of attorney from Pasay City
using funds exclusively borrowed by the latter from RREC. To compound the anomaly of it all, the reclamation project
itself was awarded by Pasay City to RREC without any public bidding. Finally, to complete Pasay City's absolute
abdication of its duty to champion public over private interest, RREC was granted an irrevocable option to purchase
the land reclaimed in lieu of simply paying for it using a determinable and liquadated amount "in Philippine currency
or in the currency in which the principal has been originally received," 4 as required by R.A. No. 1899. In fact, RREC
began disposing of the land by entering into contracts to sell with various third persons while the reclamation project
was still in progress and long before it acquired any right of dominion over the lands yet to be reclaimed. These are
all blatant violations of R.A. No. 1899. Hence, Ordinance Nos. 121 and 158, no less than the Reclamation Agreement
and the Contracts to Sell it has spawned, should all be deemed null and void, the reclamation itself being ultra vires.
2. P.D. No. 3-A is constitutional and valid
Applying the regalian doctrine, the State owns all waters and lands of the public domain, including those physically
reclaimed. As a general rule, therefore, only the National Government can reclaim foreshore lands and other
submerged areas. At times, though, the State, to effectuate an expressed public, policy, delagates some of its
sovereign powers either to the legislature or to some of its alter egos. One such instance was R.A. No. 1899 which
was intended to increase the autonomy of local governments, an innovation introduced by the Marcos
administration. There is no doubt, however, that R.A. No. 1899 was a mere public grant, a privilege which may be
withdrawn by the granting authority, the sovereign, in the exercise of police power. This is precisely what President
Marcos did when he issued P.D. No. 3-A, a valid and effective means of regaining the State's right to reclaim. It must
be noted that this decree was not revoked by President Aquino when she assumed the presidency.
P.D. No. 3-A does not violate the equal protection clause, as claimed by Pasay City and RREC, because, far from
singling out the latter, its terminology is simple and extensive enough to cover just about any municipality or city. The
decree was signed by President Marcos under his emergency powers when martial law was in effect throughout the
country. Thus, it is not an undue delegation or usurpation of legislation power. Neither does it authorize the taking of
property without just compensation, for it specifically allows such payment, albeit based onquantum meruit.
Incidentally, while RREC attacks the constitutionality of P.D. No. 3-A, and only at this late stage in the proceedings, it
relied on this "quantum meruit compensation" clause in the same decree when it filed a claim before the then
Ministry of Public Works way back in 1978 and again in 1983. This is an oddity which this Court takes notice of in
disallowing RREC from taking contrary positions regarding the validity of a statute in this action. It cannot take
advantage of a provision of law even as it attacks the same.
Finally, the Court notes that the amended decision of the Court of Appeals dated April 28, 1992, is based on
inadequate evidence. Its conclusion that RREC was able to reclaim 35 hectares is totally unsupported by the dubious
proof presented by Pasay City and RREC.
In ruling in favor of Pasay City and RREC, the appellate court relied mostly on three documents issued by the
government to the RREC, namely, the "Cost of Data for Items of Work Covered by the Republic Real Estate
Corporation for Work Performed in the Manila Bay" issued by the Ministry of Public Highways, and two letters both
addressed to RREC Executive Vice President Vicente Asuncion, Jr., one dated June 6, 1979, from then Minister of
Public Highways Baltazar Aquino, and another, dated June 10, 1981; from then Solicitor General Estelito Mendoza.
These documents, however, never proved that RREC was able to reclaim 35 hectares. In fact, the letter of Aquino,
finding that RREC had reclaimed 55 hectares, was in its own words, merely "tentative, pending the submittal of
corroborative documents"; hence, it does not amount to the "certification" contemplated in R.A. No. 1899.
Mendoza's letter, on the other hand, far from supporting RREC's position, rejected RREC's proposal in the latter's
attempt at settlement. It is puzzling why the appellate court even considered this letter in favor of RREC and Pasay
City .
On the other hand, there is aimple proof that RREC was not able to reclaim the 55 hectares which it claims it did, or
even 35 hectares, as found by the Court of Appeals as follows: aerial photographs of the Manila Bay area in 1966 and
1968; photographs of the CCP taken 1967 and 1968 during construction of the main building; and the testimonies of
the persons familiar with the circumstances under which said photographs were taken, as well as the other witnesses

who were, one way or another, connected with the construction of the CCP main building, including a member of the
Board of Directors of RREC.
3. RREC is entitled to some monetary award
While the extent of reclamation actually done by RREC is debatable, there is no dispute that it did reclaim some
portion of the Manila Bay. In the preceding discussion, we declared the nullity of Ordinace Nos. 121 and 158 and the
Reclamation Agreement, which are the wellsprings of RREC's right to be compensated. Its reclamation efforts were
also found to be ultra vires. Equity and fairness, however, dictate that it be compensated for the work actually
performed by it. After all, the State cannot deny that it did benefit from such reclamation. RREC was initially willing to
settle the case for P30,396,878.20. In view of the foregoing premises, we believe that RREC should only be given the
amount which the State was willing to pay, that is P10,929,071.29, without legal interest. It is axiomatic that legal
interest is given either for the use of the money (a loan or forbearance of money) or as a penalty for beach of an
obligation (damages). In the case of Eastern Shipping Lines, Inc. v. Court of Appeals, 5 the Court had occassion to set
the guidelines by which litigants may claim or be awarded interest as or by way of actual or compensatory damages.
Thus,
II. With regard particularly to an award of interest in the concept of actual and compensatory
damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded.
In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from
default,i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.
2. When an obligation not consisting of a loan or forbearance of money, is breached, an interest on
the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per
annum. No interest, however, shall be adjudged on unliquidated claims or damages can be
established with reasonable certainty. Accordingly, were the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially
(Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the
demand is made, the interest shall begin to run only from the date the judgment of the court is
made (at which time the quantification damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the
amount finally adjudged. . . . (Citations omitted)
These are the only circumstances under which interest in the concept of actual or compensatory damages, liquidated
or otherwise, may be justified. In the case at bar, no loan or forbearance of money is involved; neither is there any
breach of obligation. Consequently, the lone commitment of the State would be the payment for services allegedly
rendered, services for which RREC would have the National Government cede to it its property, the value of which
has been inflated to unimaginable proportions since the inception of the reclamation project. This is manifestly
cupidity at its worst. Neither should the state be penalized for something for which it is entirely blameless. The
circumstances which led to the filing of these twin actions have long been overtaken by supervening events,
rendering the issues incipiently raised moot and academic. Thus, RREC and Pasay City are, as they should be, only
entilled to P10,926,071.29. No more, no less.
Conclusion
For almost three decades, the Cultural Center of the Philippines has been the principal, if not the sole, purveyor of
the arts in this country. It has weathered criticism, civil unrest, and "internecine" politics. It relies on the occasional
beneficence of loyal patrons, the so-called "cultured" class scorned and spurned by the "masa." Otherwise, it subsists
on the rental income it receives from private entities leasing portions of the CCP Complex. With the trial and
appellate courts upholding their claims, Pasay City and RREC wish to dismember this bastion of cultural heritage and
stunt its growth by claiming ownership over a substantial portion of its property, that which literally serves as its

bloodline. This must not be countenanced. The CCP is certainly not about to draw its curtains and take a final bow. As
Matthew Arnold said more than a century ago, "I am a Liberal, yet I am a Liberal tempered by experience, reflection,
and renouncement, and I am, above all, a believer in culture.
I vote to grant the State's petition, with the qualification adverted to above.

PANGANIBAN, J., separate opinion;


I concur with the persuasive ponencia of Mr. Justice Fidel P. Purisima, as fortified by the Separate Opinion of Mr.
Justice Reynato S. Puno, insofar as it (1) nullifies (a) the Reclamation Agreement between Pasay City and the Republic
Real Estate Corporation (RREC) and (b) Pasay City Ordinance Nos. 121 and 158, and (2) retains ownership of the
reclaimed land in favor of the Cultural Center of the Philippines. With due respect, I submit, however, that the
majority has no factual basis for its determination of the compensation awarded to RREC and Pasay City.
(1) Nullity of Reclamation Agreement and Ordinance Nos. 121 and 158.
Pasay City justifies its execution of the Reclamation Agreement with RREC and the passage of Ordinance Nos. 121
and 158 on the basis of Republic Act No. 1899 (RA 1899), the law authorizing chartered cities and municipalities to
undertake the undertake the reclamation of foreshore lands. The questioned Agreement and Ordinance, however,
cover submerged areas of the Manila Bay. As explained in the ponencia, with which I agree, the legal and common
definition of foreshore land does not include areas that are fully submerged by the sea.
The Manila Bay area is, therefore, definitely outside the scope of RA 1899. It remains part of the public domain and
is, as such, outside the commerce of man. It could not be the object of ordinary contracts or ordinances. The
questioned Agreement and Ordinances, the objects of which involve such public property, are thus null and void.
(2) Reclained Area
Belongs to CCP
As a consequence, the Cultural Center of the Philippines (CCP), to which PD Nos. 15 and 774 have conveyed
ownership of the reclaimed land, remains the lawful owner of the subject land. Title to the nine (9) lots, which
Respondent Court wrongfully ordered to be turned over to Pasay City, had long been issued in favor of CCP (One
subsequently to the GSIS as a successor-in-interest). Such titles are unaffected by the claims of RREC and cannot be
collaterally attacked 1 in this litigation.
(3) No Factual Basis for
Determination of Compensation
Even if the Agreement and Ordinances were null and void, it cannot be denied that RREC and the city government of
Pasay spent time, money and effort which undoubtedly inured to the benefit of the government. It is a time-honored
principle that no one, not even the government, may be enriched at the expenses of another, 2particularly one who,
like RREC and Pasay City, acted on good faith.
While RREC and Pasay City should be compensated for their work on the reclamation project, I respectfully submit
that the amount of such compensation must be supported by substantial and material proof of the reasonable
expenses they incurred. But, the records of the case are bereft of any such factual evidence.
However, the records do indicate some attempts of the parties to reach an amicable settlement as a consequence of
the promulgation of PD 3-A by former President Ferdinand Marcos. Thus, in 1978, RREC sought the amount of
P30,396.878.20 representing the supposed monetory value of the reclamation work that it had undertaken so far.
The then Ministry of Public Highways (MPH) (and later the solicitor general also) rejected this offer in 1981 and,
instead, counteroffered P10,926,071.29 as the reasonable value of such work. RREC replied that it would be consider

such amount only if it would bear six (6) percent interest per annum from 1962 up to the time of payment. It
submitted other proposals, but all were rejected by the government. No final extrajudicial settlement was ever
reached.
Obviously, the offers and counteroffer were made by the parties with a view to arriving at compromise agreement. At
that point, they were not submitted as evidence, but only as a means of arriving at a peaceful settlemet prior to
judgment. By then, the case, which had commenced in December 1961 and was still on appeal with the Court of
Appeals, was already dragging on for the two decades.
Nature of Compromise
A compromise is an agreement between two or more parties whereby their differences are adjusted in a manner
which they mutually agree on, and which they prefer to "hope of gaining, balanced by the danger of losing. 3 The
parties usually make reciprocal concessions in order to avoid litigation or terminate a pending one. 4
However, basic is the rule on evidence that in civil cases, an offer of compromise cannot be taken as an admission of
liability; nor can it be admissable as an evidence against the offeror. 5 The offer to compromise a claim or a cause of
action is not an admission that the claim is valid, but merely admits that there is a dispute and that an amount is to
be paid to avoid or end the controversy. 6 I submit that an unaccepted offer or counteroffer of compromise cannot be
the basis of the sum to be adjudged in favor of or against a party, more so if such sum is unsuported by competent
evidence. In such case, the court itself insofar as it adopts the amount either offered or conteroffered would be
bereft of factual basis for its decision. Where the proposed compromise is not accepted, the parties to the litigation
would be back to square one; they have to present before the court sufficient and credible evidence to prove their
respective claims.
As a rule, an offer or a counteroffer given in an effort to reach a compromise should not be accorded evidentiary
value on its face, because by its very nature, a compromise is concessionary. And if one of the parties does not
concur, the court cannot impose an amount based on the unaccepted offer, even if culpability of a party has been
duly established. The amount of any such liability must be independently ascertained with competent evidence.
Otherwise, this Court would be setting a dangerous precedent. Hence, parties, would not submit offers to
compromise for fear that such offers, if not accepted, would be used by the Court against them. Upon the other
hand, parties may offer bloated amounts in the hope that siad sums could influence the court to eventually grant
them a relief more than they deserve. In any, event, the rationale for the policy encouraging compromise would be
defeated.
In the case at bar, we should bear in mind that when RREC conceded in 1981 to the solicitor general's counteroffer of
P10,926,071.29, provided the amount would bear 6 percent interest per annum, it was with the caveat that such
interest rate was already "very much less that the accepted rate of inflation that has supervened since 1962 . . . ."
Indeed, if we are to compare current prices with those of three and a half decades ago, or even seventheen years
ago, such interest rate on the principal may no longer compensate the 1962 expense. In other words, what may have
been a "fair and reasonable" compromise in 1981 may no longer be acceptable at this time. In any event, the solicitor
general's counteroffer, not being supported with factual evidence, still cannot be the basis of a judicial award.
Need to Receive Evidence of
Value of RREC Accomplishment
In the instant case, there appears no dispute that RREC has undertaken partil work for the Manila Bay reclamation
project to the extent of 1,558,395 cubic meteres of dredge-fill work. In the words of the ponencia:
Undoubtedly, what RREC claimed for was the payment for what it had done on, and for dredge-fill of
1,558.395 cubic meters used for the reclamation project worked on.
This case must therefore be remanded for the purpose of receiving evidence of the peso value of the 1,558,395 cubic
meters of dredge-fill work undisputedly done by RREC.

WHEREFORE, I vote for the following:


1. The RECLARATION of the nullity of (a) the Reclamation Agreement Between Pasay City and RREC and (b) Ordinance
Nos. 121 and 158 of Pasay City.
2. The RETENTION of ownership of the reclaimed land in favor of the Cultural Center of the Philippines.
3. The REMAND of the case to the Commission composed of the former Thirteenth Division of the Court of Appeals
(consisting of Associate Justices Arturo B. Buena, chairman; Minerva P. Gonzaga-Reyes and Quirino D. Abad Santos Jr.)
for the sole purpose of receiving evidence of the peso value of the work accomplished by RREC and Pasay City for
which they shall be paid by the national government.
IX
G.R. Nos. 175806 and 175810
October 20, 2010
MANUEL ALMAGRO joined by his spouse, ELIZABETH ALMAGRO, Petitioners,
vs.
SALVACION C. KWAN, WILLIAM C. KWAN, VICTORIA C. KWAN, assisted by her husband, JOSE A. ARBAS, and CECILIA
C. KWAN, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 175849
Petitioners,
vs.
WILLIAM C. KWAN, SALVACION C. KWAN, VICTORIA C. KWAN, assisted by her husband, JOSE A. ARBAS, and CECILIA
C. KWAN, Respondents.
MARGARITA PACHORO, DRONICA ORLINA, PIO TUBAT, JR., ANDRES TUBAT, EDUVIGIS KISKIS, ELSA BIALBER,
NOELA TUBAT, ELSA TUBAT, and ROGELIO DURAN,
DECISION
CARPIO, J.:
This is a consolidation of two separate petitions for review, 1 assailing the 4 April 2006 Decision2 and the 31 October
2006 Resolution3 of the Court of Appeals in CA-G.R. SP Nos. 71237 and 71437.
This case involves Lot No. 6278-M, a 17,181 square meter parcel of land covered by TCT No. T-11397. Lot No. 6278-M
is located at Maslog, Sibulan, Negros Oriental and is registered in the name of spouses Kwan Chin and Zosima Sarana.
Respondents are the legitimate children of spouses Kwan Chin and Zosima Sarana, who both died intestate on 2
November 1986 and 23 January 1976, respectively, in Dumaguete City. Upon the death of their parents, respondents
inherited Lot No. 6278-M through hereditary succession.
On 18 September 1996, respondents filed with the Municipal Trial Court (MTC) an action for recovery of possession
and damages against spouses Rogelio and Lourdes Duran, spouses Romulo Vinalver and Elsa Vinalver, 4 spouses
Marte5 Bati-on and Liz E. Bati-on, spouses Pablo Deciar and Marlyn Deciar, spouses Salvador Palongpalong and
Bienvenida Palongpalong, spouses Sabas Kiskis and Eduvigis Kiskis, spouses Pio Tubat, Jr. and Encarnita Tubat,
spouses Andres Tubat and Leonides Tubat, spouses George Tubat and Noela Tubat, spouses Dodong Go and Alice Go,
spouses Delano Bangay and Maria Bangay,6 spouses Simeon Pachoro and Margarita Pachoro, spouses
Cepriano7 Tubat and Elsa Tubat, spouses Jovito Remolano and Editha Orlina Remolano, spouses Nelson Miravalles
and Erlene Miravalles, Dronica Orlina,8 Clarita Barot Lara, Conchita Orlina, Antonia Malahay and the Philippine
National Police (PNP),9 Agan-an, Sibulan, Negros Oriental. Subsequently, spouses Manuel Almagro and Elizabeth
Almagro intervened as successors-in-interest of spouses Delano Bangay and Maria Bangay.
During pre-trial, the parties agreed to refer the case to the Chief of the Land Management Services Division, PENRODENR, Dumaguete City, to conduct a verification survey of Lot No. 6278-M. When the PENRO personnel failed to
conduct the verification survey, the court and the parties designated Geodetic Engineer Jorge Suasin, Sr. (Engr.

Suasin) as joint commissioner to do the task. Engr. Suasin conducted the verification and relocation survey of Lot No.
6278-M on 12-13 September 2000 in the presence of the parties, some of their lawyers, and the MTC Clerk of Court.
Thereafter, Engr. Suasin submitted a written report with the following findings:
WRITTEN REPORT
Comes now, the undersigned Geodetic Engineer Jorge S. Suasin, Sr., to this Honorable Court, most respectfully submit
the following written report of the verification and relocation survey of the lot 6278-M located at Maslog, Sibulan,
Negros Oriental with T.C.T. No. T-11397 owned by Salvacion G. Kwan, et al.
A. That a big portion of the lot is submerged under the sea and only a small portion remain as dry
land.
B. That some of the defendants have constructed their buildings or houses inside the dry land while
others have constructed outside or only a small portion of their buildings or houses are on the said
dry land.
The defendants and their buildings or houses are as follows:
1. Sps. Rogelio
Duran . . . . . . . . . . . . . . . . . .

inside

2. Sps. Romulo
Vinalver. . . . . . . . . . . . . . . .

inside

3. Sps. Marto Bation . . . . . . . . . . . . . . . . . .

inside

4. Sps. Salvador
Palongpalong . . . . . . . . . . .

inside

5. Sps. Pablo Deciar . . . . . . . . . . . . . . . . . inside


..
6. Sps. Sabas
Kiskis . . . . . . . . . . . . . . . . . .

inside

7. Sps. Pio Tubat, Jr. . . . . . . . . . . . . . . . . . 2 houses, the first house a portion, and the second one
.
- inside
8. Sps. Andres
Tubat . . . . . . . . . . . . . . . . . .

inside

9. Sps. George Tubat . . . . . . . . . . . . . . . . portion


..
10. Sps. Dodong Go . . . . . . . . . . . . . . . . . inside
..
11. Sps. Delano Bangay-Almagro . . . . . . portion
...
12. Sps. Simeon
Pachoro . . . . . . . . . . . . . . .

inside

13. Sps. Cipriano Tubat . . . . . . . . . . . . . . inside


..
14. Sps. Jovito Remolano . .. . . . . . . . . . . inside
..
15. Sps. Nelson

cottage and house - outside

Miravalles . . . . . . . . . . . . . .
16. Monica
Orlina . . . . . . . . . . . . . . . . . . .

cottage inside and house - portion

17. Clarita
Barot . . . . . . . . . . . . . . . . . . . . . .

outside

18. Conchita Orlina . . . . . . . . . . . . . . . . . outside


...
19. Antonia Malahay . . . . . . . . . . . . . . . . outside
...
The verification and relocation survey was executed last September 12-13, 2000 with the presence of both parties
and of the Clerk of Court. The cost of the survey was FIFTEEN THOUSAND PESOS(P15,000) shouldered by the
plaintiffs and the defendants equally.
Enclosed are a blue print of the sketch plan and a xerox copy of the land title of the said lot.
Respectfully submitted by:
(Sgd) JORGE SUASIN, SR.
Geodetic Engineer10
After the court admitted Engr. Suasin's report and the pleadings of the parties, respondents filed a motion for
judgment on the pleadings, which the MTC granted.
In its Judgment dated 11 May 2001, the MTC dismissed the complaint on the ground that the remaining dry portion
of Lot No. 6278-M has become foreshore land and should be returned to the public domain. The MTC explained:
The term "foreshore" refers to that part of the land adjacent to the sea which is alternately covered and left dry by
the ordinary flow of the tides. "Foreshore lands" refers to the strip of land that lies between the high and low water
marks and that is alternately wet and dry according to the flow of the tide. The term "foreshore land" clearly does
not include submerged lands.
From these definitions, it is safe to conclude that the remaining dry portion of Lot No. 6278-M is now "foreshore
land." A big portion of the said lot is presently underwater or submerged under the sea. When the sea moves
towards the estate and the tide invades it, the invaded property becomes foreshore land and passes to the realm of
public domain. The subject land, being foreshore land, should therefore be returned to the public domain. Besides,
Article 420 of the Civil Code provides:
"Art. 420. The following thin[g]s 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;
Plaintiff cannot use the doctrine of indefeasibility of their Torrens title, as property in question is clearly foreshore
land. At the time of its registration, property was along the shores. In fact, it is bounded by the Taon Strait on the
NW along lines 2-3-4. The property was of public dominion and should not have been subject of registration. The
survey showed that the sea had advanced and the waves permanently invaded a big portion of the property making
the land part of the shore or the beach. The remaining dry land is foreshore and therefore should be returned to the
public domain.11
Respondents appealed to the Regional Trial Court (RTC). The RTC conducted ocular inspections of Lot No. 6278-M on
two separate dates: on 5 October 2001 during low tide and on 15 October 2001 when the high tide registered 1.5
meters. All the parties and their lawyers were notified before the two ocular inspections were conducted. During the

ocular inspections, in which some parties and their lawyers were present, the RTC observed that the small portion
referred to by Engr. Suasin as dry land in his report actually remained dry even during high tide. 12 Thus, the RTC
concluded that the disputed remaining portion of Lot No. 6278-M is not foreshore land. The RTC stated:
It is the Court's considered view that the small portion of plaintiff's property which remains as dry land is not within
the scope of the well-settled definition of foreshore and foreshore land as mentioned above. For one thing, the small
dry portion is not adjacent to the sea as the term adjacent as defined in Webster's Dictionary means "contiguous or
touching one another or lying next to." Secondly, the small dry portion is not alternately wet and dry by the ordinary
flow of the tides as it is dry land. Granting, as posited by defendants, that at certain times of the year, said dry
portion is reached by the waves, then that is not anymore caused by the ordinary flow of the tide as contemplated in
the above definition. The Court then finds that the testimony of Engr. Suasin dovetails with the import and meaning
of foreshore and foreshore land as defined above.1avvphil
Anent the case of Republic vs. Court of Appeals, 281 SCRA 639, also cited in the appealed judgment, the same has a
different factual milieu. Said case involves a holder of a free patent on a parcel of land situated at Pinagtalleran,
Caluag, Quezon who mortgaged and leased portions thereof within the prescribed five-year period from the date of
issuance of the patent. It was established in said case that the land subject of the free patent is five (5) to six (6) feet
deep under water during high tide and two (2) feet deep at low tide. Such is not the situation of the "remaining small
dry portion" which plaintiffs seek to recover in the case at bar. 13
On 8 January 2002, the RTC rendered its Decision, 14 the dispositive portion of which reads:
WHEREFORE, all told and circumspectly considered, the appealed judgment is hereby reversed and set aside insofar
as it states that plaintiffs are not entitled to recover possession of the property in question.
Plaintiffs-appellants have the right to recover possession of the remaining small dry portion of the subject property in
question. It is further ordered to remand this case to the court of origin for the reception of further evidence to
determine who among the defendants-appellees are builders or possessors in good faith and who are not and once
determined, to apply accordingly the pertinent laws and jurisprudence on the matter.
SO ORDERED.15
Petitioners moved for reconsideration, which the RTC denied in its Order 16 dated 6 May 2002.
Petitioners filed separate petitions for review with the Court of Appeals, alleging that the disputed portion of Lot No.
6278-M is no longer private land but has become foreshore land and is now part of the public domain.
The Ruling of the Court of Appeals
On 4 April 2006, the Court of Appeals promulgated its decision, affirming with modification the RTC Decision. The
dispositive portion of the Court of Appeals Decision 17 reads:
WHEREFORE, the instant petitions for review are DENIED. And the Decision dated January 8, 2002 of Branch 38 of
the Regional Trial Court of Dumaguete City is hereby AFFIRMED with MODIFICATION as regards the dispositive
portion only. Based on the written report of Geodetic Engr. Suasin categorically indentifying who among herein
petitioners are illegally occupying a portion of Lot No. 6278-M, the following petitioners are ordered to vacate the
premises and/or remove the houses and/or cottages constructed on Lot No. 6278-M within thirty (30) days from
finality of judgment, namely: 1)Sps. Rogelio Duran, 2) Sps. Romulo Vinalver, 3) Sps. Marto Bati-on, 4) Sps. Salvador
Palongpalong, 5) Sps. Pablo Deciar, 6) Sps. Sabas Kiskis, 7) Sps. Pio Tubat, Jr. (first house portion, second house
inside), 8) Sps. Andres Tubat, 9) George Tubat (portion), 10) Sps. Dodong Go, 11) Sps. Delano Bangay-Almagro
(portion), 12) Sps. Simeon Pachoro, 13) Sps. Cipriano Tubat, 14) Sps. Jovito Remolano and 15) Monica Orlina
(cottageinside and house portion).
Costs against petitioners.
SO ORDERED.18

In modifying the RTC Decision, the Court of Appeals explained:


Lastly, the argument that the RTC decision was "vague and indefinite" is utterly bereft of merit. We have found no
reversible error in the appreciation of the facts and in the application of the law by the RTC which will warrant the
reversal of the questioned decision. However, litigation must end and terminate sometime and somewhere, and it is
essential to the administration of justice that the issues or causes therein should be laid to rest. Hence, in keeping
with this principle, We modify the assailed decision insofar as the dispositive portion is concerned. It is our
considered view that there is no longer a need to determine who among the petitioners are builders in good faith or
not considering that it has been established in the MTC that they knew all along that the subject lot is a titled
property. As such, petitioners should vacate and/or demolish the houses and/or cottages they constructed on Lot No.
6278-M as stated in the written report of Geodetic Engineer Jorge S. Suasin, Sr. Remanding this case to the court of
origin would not only unduly prolong the resolution of the issues of this case, but would also subject the parties to
unnecessary expenses.19
Hence, these consolidated petitions.
The Issue
The primary issue in this case is whether the disputed portion of Lot No. 6278-M is still private land or has become
foreshore land which forms part of the public domain.
The Ruling of the Court
We find the petitions without merit.
Petitioners contend that the disputed portion of Lot No. 6278-M is already foreshore land. In fact, most of them
allegedly have foreshore lease permits from the Department of Environment and Natural Resources (DENR) on the
said foreshore land.
However, petitioners failed to present evidence to prove their claim that they are holders of foreshore lease permits
from the DENR. Thus, the RTC Order dated 6 May 2002 stated:
Defendants-appellees have been harping that they have been granted foreshore leases by DENR. However, this is
merely lip service and not supported at all by concrete evidence. Not even an iota of evidence was submitted to the
lower court to show that defendants-appellees herein have been granted foreshore leases. 20
Although the MTC concluded that the subject land is foreshore land, we find such conclusion contrary to the
evidence on record.
It is undisputed that the subject land is part of Lot No. 6278-M, which is covered by TCT No. T-11397, registered in
the name of respondents' parents, Kwan Chin and Zosimo Sarana. In fact, as found by the Court of Appeals, even the
Provincial Environment and Natural Resources Officer (PENRO) declared in May 1996 that Lot No. 6278-M is a private
property covered by a Torrens Title and that petitioners should vacate the disputed property or make other
arrangements with respondents.21
Furthermore, from the report of Engr. Suasin, the geodetic engineer designated by the court and the parties as joint
commissioner to conduct the survey, it can be clearly gleaned that the contested land is the small portion of dry
land of Lot No. 6278-M. Even in his testimony, Engr. Suasin was adamant in stating that the remaining portion of Lot
No. 6278-M is not foreshore because "it is already dry land" and is "away from the shoreline." 22Because of this
apparent contradiction between the evidence and the conclusion of the MTC, the RTC conducted ocular inspection
twice, during low tide and high tide, and observed that the disputed portion of Lot No. 6278-M actually remained dry
land even during high tide. Thus, the RTC concluded that the said land is not foreshore land. On appeal, the Court of
Appeals adopted the findings and conclusion of the RTC that the disputed land is not foreshore land and that it
remains as private land owned by respondents.

We are in accord with the conclusion of the Court of Appeals and the RTC that the disputed land is not foreshore
land. To qualify as foreshore land, it must be shown that the land lies between the high and low water marks and is
alternately wet and dry according to the flow of the tide. 23 The land's proximity to the waters alone does not
automatically make it a foreshore land. 24
Thus, in Republic of the Philippines v. Lensico,25 the Court held that although the two corners of the subject lot adjoins
the sea, the lot cannot be considered as foreshore land since it has not been proven that the lot was covered by
water during high tide.
Similarly in this case, it was clearly proven that the disputed land remained dry even during high tide. Indeed, all the
evidence supports the conclusion that the disputed portion of Lot No. 6278-M is not foreshore land but remains
private land owned by respondents.
WHEREFORE, we DENY the petitions. We AFFIRM the 4 April 2006 Decision and the 31 October 2006 Resolution of
the Court of Appeals in CA-G.R. SP Nos. 71237 and 71437.
SO ORDERED.
X
G.R. No. L-66807 January 26, 1989
REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, petitioner,
vs.
MELITONA ALAGAD, SPOUSES CARMEN ALAGAD AND ESPIRIDION KOLIMLIM, JUSTO ALAGAD, CARLOS ALAGAD,
SPOUSES LIBRADA ALAGAD AND EMERSON ABANO, DEMETRIO ALAGAD, ANTONIO ALAGAD, REGISTER OF DEEDS
OF LAGUNA, and the INTERMEDIATE APPELLATE COURT (Fourth Civil Cases Division), respondents.
The Solicitor General for petitioner.
Alberto, Salazar & Associates for private respondents.
SARMIENTO, J.:
The Republic appeals from the decision of the Court of Appeals 1 affirming two orders of the defunct Court of First
Instance of Laguna 2 dismissing its petition for "annulment of title and reversion. 3 The facts appear in the decision
appealed from:
On or about October 11, 1951, defendants filed an application for registration of their title over a
parcel of land situated at Linga, Pila, Laguna, with an area of 8.1263 hectares, reflected in survey plan
Psu-116971, which was amended after the land was divided into two parcels, namely, Lot 1 with an
area of 5.2476 hectares and Lot 2 with an area of 2.8421 hectares, reflected in survey plan Psu226971, amd. 2.
The Republic opposed the application on the stereo-typed ground that applicants and their
predecessors have not been in possession of the land openly, continuously, publicly and adversely
under a bona fide claim of ownership since July 26, 1894 and the land has not ceased to be a part of
the public domain. It appears that barrio folk also opposed the application. (LRC Case No. 189.
G.L.R.O. Rec. No. 4922 of the Court of First Instance of Laguna).
By virtue of a final judgment in said case, promulgated January 16, 1956, supplemented by orders
issued on March 21, 1956 and August 13, 1956, defendants were declared owners of Lot 1 and the
remaining portion, or Lot 2, was declared public land. Decree No. N-51479 was entered and Original
Certificate of Title No. 0- 40 1, dated October 18, 1956, was issued in the names of defendants.

In August, 1966, Civil Case No. 52 of the Municipal Court of Pila, Laguna, was filed by defendants to
evict the barrio folk occupying portions of Lot 1. On August 8, 1968, judgment was rendered in the
eviction case ordering the defendants therein to return possession of the premises to herein
defendants, as plaintiffs therein. The defendants therein did not appeal.
The foregoing anterior proceedings triggered the filing of the instant case. On October 6, 1970, as
prayed for in the complaint, a writ of preliminary injunction was issued enjoining the Provincial
Sheriff of Laguna or his deputies from enforcing the writ of execution issued in Civil Case No. 52, and
the defendants from selling, mortgaging, disposing or otherwise entering into any transaction
affecting the area.
This case was set for pre-trial on July 6, 1971. Despite notice of the pre-trial, Atty. Alejandro A. Ponferada, Special
Attorney, Bureau of Lands, representing plaintiff Republic, did not appear. On July 16, 1971, the court a quodismissed
the complaint. The Republic filed a motion for reconsideration, was set for hearing, and finally denied by the court a
quo, hence, this appeal.
Plaintiff filed its record on appeal on March 13, 1972. It appears that the appeal was dismissed by this Court for
failure to show in the record on appeal that the appeal was perfected on time. Plaintiff went to the Supreme Court
on a petition for review on the action of this Court. On November 19, 1982, the Supreme Court set aside the
dismissal resolution of this Court and ordered Us to reinstate and give due course to plaintiffs appeal. 4
In commencing proceedings below, the Republic claims that the decree and title [rendered and issued in LRC Case
No. 189, G.L.R.O. Rec. No. L-4922] insofar as the 1.42 hectare northwestern portion on end of Lot 1, Psu-116971,
Amd. 2, is concerned, are void ab initio, 5 for the following reasons:
(a) That said l.42 hectare northwestern portion or end of Lot l, Psu-116971, Amd. 2, like the adjoining
Lot 2 of the same survey plan containing 2.8421 hectares, had since time immemorial, been
foreshore land reached and covered by the waters of the Laguna de Bay (Republic vs. Ayala y Cia, L20950, May 31, 1965; Antonio Dizon, et al., vs. Juan de G. Rodriguez, et al., L-20355- 56, April 30,
1965);
(b) That moreover said 1.42 hectare portion is actually now the site of Barrio Aplaya, formerly a sitio
of Linga, Pila, Laguna, having been occupied by the barrio people since the American occupation of
the country in the early 1900's where they established their houses;
(c) That the barrio people of Aplaya thru the years since the early 1900's have filled up and elevated
the land to its present condition of being some feet above the level of the adjoining Lot 2 of plan
Psu-116971 and the rest of Lot 1 of the same survey plan so much so that this barrio site of Aplaya
where there are now sixty-eight (68) houses occupied by more than one hundred (100) families is no
longer reached and covered by the waters of the Laguna de Bay; and
(d) That were it not for the fillings made by the barrio people, the land in question would not have
been fit for human habitation, so much so that defendants and their predecessors-in-interest could
not have acquired an imperfect title to the property which could be judicially confirmed in a
registration case, as in fact said defendants and their predecessors-in-interest have never been in
actual possession of the land in question, the actual occupants thereof being the barrio people of
Aplaya; 6
In sustaining the trial court, the Court of Appeals held that under Section 20, of Rule 20, of the Rules of Court,
dismissal was proper upon failure of the Republic to appear for pre-trial. It likewise ruled that the judgment, dated
January 16, 1956, in the said LRC No. 189 has long become final, titles to the properties had been issued (in favor of
the private respondents), and that res judicata, consequently, was a bar.
In its petition, the Republic assails the decision insofar as it sustained the lower court: (1) in dismissing the petition
for failure of the Republic to appear for pre-trial; and (2) in holding that res judicata is an obstacle to the suit.

I.
With respect to the first question, we hold that the Court of Appeals has been guilty of grave abuse of discretion. It is
well-established that the State cannot be bound by, or estopped from, the mistakes or negligent acts of its official or
agents, 7 much more, non-suited as a result thereof.
This is so because:
... [T]he state as a persona in law is the judicial entity, which is the source of any asserted right to
ownership in land under the basic doctrine embodied in the 1935 Constitution as well as the present
charter. It is charged moreover with the conservation of such patrimony. There is need therefore of
the most rigorous scrutiny before private claims to portions thereof are judicially accorded
recognition, especially so where the matter is sought to be raked up anew after almost fifty years.
Such primordial consideration, not the apparent carelessness, much less the acquiescense of public
officials, is the controlling norm . . . 8
The cases of Ramos v. Centra l Bank of the Philippines 9 and Nilo v. Romero, 10 cited by the Court of Appeals in support
of its decision, are not applicable. In Ramos, we applied estoppel upon finding of bad faith on the part of the State
(the Central Bank) in deliberately reneging on its promises. In Nilo, we denied efforts to impugn the jurisdiction of the
court on the ground that the defendant had been "erroneously' represented in the complaint by the City Attorney
when it should have been the City Mayor, on a holding that the City Attorney, in any event, could have ably defended
the City (Davao City). In both cases, it is seen that the acts that gave rise to estoppel were voluntary and intentional
in character, in which cases, it could not be said that the Government had been prejudiced by some negligent act or
omission.
There is no merit either, in claims that res judicata is an impediment to reversion of property. In Republic v. Court of
Appeals, 11 this Court stated:
... [a] certificate of title may be ordered cancelled (Republic v 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)... 12
In the case at bar, if the parcel registered in the names of the private respondents were foreshore land, the land
registration court could not have validly awarded title thereto. It would have been without the authority to do so.
The fact that the Bureau of Lands had failed to appeal from the decree of registration could not have validated the
court's decision, rendered without jurisdiction.
II.
"Property, according to the Civil Code, is either of public dominion or of private ownership ."
dominion if it is:

13

Property is of public

(1) ... intended for public use, such as roads, canals, rivers, torrents, ports and bridges constructed by
the State, banks, shores, roadsteads and others of similar character; 14 or if it:
(2) . . . belong[s] to the State, without being for public use, and are intended for some public service
or for the development of the national wealth. 15

All other property of the State, it is provided further, which is not of the character mentioned in ...
article [4201, is patrimonial property, 16 meaning to say, property 'open to disposition 17 by the
Government, or otherwise, property pertaining to the national domain, or public lands. 18 Property of
the public dominion, on the other hand, refers to things held by the State by regalian right. They are
things res publicae in nature and hence, incapable of private appropriation. Thus, under the present
Constitution, [w]ith the exception of agricultural lands, all other natural resources shall not be
alienated.' 19
Specifically:
ART. 502. The following are of public dominion:
(1) Rivers and their natural beds;
(2) Continuous or intermittent waters of springs and brooks running in their natural
beds and the beds themselves;
(3) Waters rising continuously or intermittently on lands of public dominion;
(4) Lakes and lagoons formed by Nature on public lands, and their beds;
(5) Rain waters running through ravines or sand beds, which are also of public
dominion;
(6) Subterranean waters on public lands;
(7) Waters found within the zone of operation of public works, even if constructed by
a contractor;
(8) Waters rising continuously or intermittently on lands belonging to private
persons, to the State, to a province, or to a city or municipality from the moment
they leave such lands;
(9) The waste waters of fountains, sewers and public establishments. 20
So also is it ordained by the Spanish Law of Waters of August 3, 1866:
Art. 44. Natural ponds and lakes existing upon public lands and fed by public waters, belong to the
public domain.
Lakes, ponds, and pools existing upon the lands of private individuals, or the State or provinces, belong to the
respective owners of such lands, and those situated upon lands of communal use belong to their respective
pueblos.21
Assuming, therefore, for purposes of this petition, that the lands subject of the Republic's reversion efforts are
foreshore in nature, the Republic has legitimate reason to demand reconveyance. In that case, res judicata or
estoppel is no defense. 22
Of course, whether or not the properties in question are, indeed, foreshore lands is the core of controversy.
According to the trial court, the aforementioned parcel of land is a portion of the public domain belonging to the
Republic of the Philippines, 23 and hence, available disposition and registration. As we have pointed out, the
Government holds otherwise, and that as foreshore laud, it is not registerable.
The question, so it follows, is one of fact: Is the parcel foreshore or is it part and parcel of the public domain?
Laguna de Bay has long been recognized as a lake . 24 Thus:
Laguna de Bay is a body of water formed in depressions of the earth; it contains fresh water coming from rivers and
brooks or springs, and is connected with Manila Bay by the Pasig River. According to the definition just quoted,
Laguna de Bay is a lake. 25
And, "[i]nasmuch as Laguna de Bay is a lake, so Colegio de San Jose further tells us, "we must resort to the legal
provisions governing the ownership and use of lakes and their beds and shores, in order to determine the character

and ownership of the parcels of land in question. 26 The recourse to legal provisions is necessary, for under Article 74
of the Law of Waters, [T]he natural bed or basin of lakes ... is the ground covered by their waters when at their
highest ordinary depth. 27 and in which case, it forms part of the national dominion. When Laguna de Bay's waters
are at their highest ordinary depth has been defined as:
... the highest depth of the waters of Laguna de Bay during the dry season, such depth being the
regular, common, natural, which occurs always or most of the time during the year . . . 28
Otherwise, where the rise in water level is due to the extraordinary action of nature, rainfall for instance, the
portions inundated thereby are not considered part of the bed or basin of the body of water in question. It cannot
therefore be said to be foreshore land but land outside of the public dominion, and land capable of registration as
private property.
A foreshore land, on the other hand, has been defined as follows:
. . . that part of (the land) which is between high and low water and left dry by the flux and reflux of
the tides... 29
The strip of land that lies between the high and low water marks and that is alternatively wet and dry
according to the flow of the tide. 30
If the submergence, however, of the land is due to precipitation, it does not become foreshore, despite its proximity
to the waters.
The case, then, has to be decided alongside these principles and regretfully, the Court cannot make a ruling, in the
first place, because it is not a trier of facts, and in the second, it is in possession of no evidence to assist it in arriving
at a conclusive disposition 31 We therefore remand the case to the court a quo to determine whether or not the
property subject of controversy is foreshore. We, consequently, reverse both the Court of Appeals and the trial court
and reinstate the Republic's complaint.
WHEREFORE, this case is hereby REMANDED to the trial court for further proceedings.
Melencio-Herrera (Chairperson), Paras, Padilla and Regalado, JJ., concur.
XI
G.R. No. L-40912 September 30, 1976
REPUBLIC OF THE PHILIPPINES, represented by the MINDANAO MEDICAL CENTER, petioner,
vs.
HON. COURT OF APPEALS and ALEJANDRO Y DE JESUS, respondents.
Office of the Solicitor for petitioner.
Ananias C. Ona for private respondent.
MARTIN, J.:t.hqw
This is an appeal by certiorari from the decision of the Court of Apiwals in its CA-G.R. No. 39577-R, raising the
question of whether or not petitioner Mindanao Medical Center has registerable title over a full 12.8081-hectare
land by virtue of an executive proclamation in 1956 reserving the area for medical center site purposes.
On January 22, 1921, Eugenio de Jesus, the father of respondent Alejandro de Jesus, applied with the Bureau of
Lands for Sales Patent (Sales Application No. 5436) of a 33-hectare situated in barrio Libaron, Municipality of Davao
(now Davao City). 1 The property applied for was a portion of what was then known as Lot 522 of the Davao Cadastre.

On January 23, 1934, the Bureau of Lands, through its Davao District Land Officer, accepted sealed bids for the
purchase of the subject land. One Irineo Jose bidded for P20.00 per hectare, while a certain Dr. Josc Ebro submitted a
bid of P100.50 per hectare The Director of Lands, however, annulled the auction sale for the reason that the sales
applicant, Eugenio de Jesus, failed to participate in the bidding for non-service of notice on him of the scheduled
bidding.
In lieu of that sale, another bidding was held on October 4, 1934. Sales applicant Eugenio de Jesus was the lone
bidder. He equalled the bid previously submitted by Dr. Jose Ebro and made a deposit of P221.00 representing 10% of
the price of the land at P100.50 per hectare.
On November 23, 1934, the Director of Lands issued to Eugenio de Jesus an Order of Award, the dispositive portion
of which reads: 2+.wph!1
In view of the foregoing, and it appearing that the proceedings had in connection with the Sales
Application No. 5436 were in accordance with law and existing regulations, the land covered thereby
is herebyawarded to the said applicant, Eugenio de jesus, at P100.50 per hectare or P2,211.00 for
the whole tract.
This application should be entered in the records of this office as Sales Application No. 3231,covering
the tract herein awarded, which is more particularly described as follows:
Location: Central, Davao,+.wph!1
Davao
Area: 22 hectares
Boundaries:+.wph!1
NMaria Villa Abrille and Arenio Suazo;
SEProvincial Road and Mary Gohn;
SWPublic Land;
WMunicipal Road;
Because the area conveyed had not been actually surveyed at the time Eugenio de Jesus filed his Sales Application,
the Bureau of Lands conducted a survey under Plan Bsd-1514. On July 29, 1936, the plan was approved and the land
awarded to Eugenio de Jesus was designated as Lot Nos. 1176-A, 1176-B-1-A and 1176-B-1-B with an aggregate area
of 20.6400 hectares, Bsd-10153, City of Davao.
On August 28, 1936, the Director of Lands ordered an amendment of the Sales Application of Eugenio de Jesus
stating that "a portion of the land covered by Sales Application No. 5436 (E-3231) of Eugenio de Jesus is needed by
the Philippine Army for military camp site purposes, the said application is amended so as to exclude therefrom
portion "A" as shown in the sketch on the back thereof, and as thus amended, it will continue to be given due
course." The area excluded was Identified as Lot 1176-B-2, the very land in question, consisting of 12.8081 hectares.
On September 7, 1936, President Manuel L. Quezon issued Proclaimation No. 85 withdrawing Lot No. 1176-B-2 from
sale and settlement and reserving the same for military purposes, under the administration of the Chief of Staff,
Philippine Army.
On November 29, 1939, Eugenio de Jesus paid P660.45 covering the 8th and 10th installment for 20.6400 hectares,
the remaining area after his Sales Application was amended. This payment did not include the military camp site (Lot
No. 1176-B-2) as the same had already been excluded from the Sales Application at the time the payment was
made. 3 Thereafter, or on May 15, 1948, then Director of Lands Jose P. Dans ordered the issuance of patent to
Eugenio de Jesus, pursuant to his Sales Application for "a tract of land having an area of 20.6400 hectares, situated in
the barrio of Poblacion, City of Davao. 4 On the same date, then Secretary of Agriculture and Natural Resources

Mariano Garchitorena granted a Sales Patent to Eugenio de Jesus for "a tract of agricultural public land situated in
the City of Davao, Island of Mindanao, Philippines, containing an area of 20 hectares, 64 ares, and 00 centares. 5
On August 11, 1956, President Ramon Magsaysay revoked Proclamation No. 85 and declared the disputed Lot 1176B-2 open to disposition under the provisions of the Public land Act for resettlement of the squatters in the Piapi
Beach, Davao City. 6 In the following October 9, President Magsaysay revoked this Proclamation No. 328 and reserved
the same Lot No. 1176-B-2 for medical center site purposes under the administration of the Director of Hospital. 7
Whereupon, on December 6, 1969, petitioner Mindanao Medical Center applied for the Torrens registration of the
12.8081-hectare Lot 1176-B-2 with the Court of First Instance of Davao. The Medical Center claimed "fee simple" title
to the land on the strength of proclamation No. 350 reserving the area for medical center site purposes.
Respondent Alejandro de Jesus, the son and successor-in-interest of sale applicant Eugenio de Jesus, opposed the
registration oil the ground that his father, Eugenio de Jesus, had aquired a vested right on the subject lot by virtue of
the Order of Award issued to him by the Director of Lands.
A certain Arsenio Suazo likewise filed his opposition to the registration on the claim that the 2-hectare portion on the
northeastern part of Lot 1176-B-2 belongs to him.
After due hearing, the Court of First Instance of Davao rendered judgment on September 2, 1966, directing "the
registration of the title to Lot No. 1176-B-2 of Subdivision Plan Bsd-5134, shown on Plan Ap-6512, situated in the
Barrio of Central, City of Davao, and containing an area of 128,081 square meters in the name of the Mindanao
Medical Center, Bureau of Medical Services, Department of Health.
The two oppositors, Alejandro de Jesus and Arsenio Suazo, excepted from this judgment of the trial court and
appealed the case to the respondent Court of Appeals.
On July 2, 1974, the Appellate Court held: +.wph!1
WHEREFORE, the appealed judgment is hereby modified insofar as it denies the claim of appellant
Arsenio Suazo, the same is hereby affirmed, in regard the appeal of appellant Alejandro Y. de Jesus,
registration Lot 1176-B-2, situated in Barrio Central, Davao City, and containing an area of 12.8081
square meters, is hereby decreed in the name of said appellants, but said appellant is hereby
ordered to relinquish to the appellee that portion of Lot 1176-B-2 which is occupied by the medical
center and nervous disease pavilion and their reasonable appartenances, no costs.
On July 5, 1974, petitioner Mindanao Medical Center moved for reconsideration, maintaining ownership over the
entire area of 12.8081 hectares, but the Appellate Court in a Special Division of Five denied the motion on June 17,
1975. 8
Forthwith, petitioner Mindanao Medical Center elevated the matter to Us thru the present appeal.
We find petitioner's appeal to b meritorious.
1. Petitioner Mindanao Medical Center has registerable title over the whole contested area of 12.8081 hectares,
designated Lot No. 1176-B-2, and not only on a portion thereof occupied by the Medical Center, its nervous disease
pavilion and their reasonable appurtenances. 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, validity sufficient for initial registration under the Land Registration Act. Such land grant is constitutive
of a "fee simple" tile 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 Philippines arealienated, 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." 9 It would be completely absurd to rule that, on the
basis of Proclamation No. 350, the Medical Center has registerable title on the portion occupied by it, its nervous

disease pavilion and the reasonable appurtenances, and not on the full extent of the reservation, when the
proclamation explicitly reserved the entire Lot 1176-B-2 of 12.8081 hectares to the Center.
Certainly, proclamation no. 350 is free of any legal infirmity. It proceeds from the recognized competence of the
president to reserve by executive proclamation alienable lands of the public domain for a specific public use or
service. 10 section 64 (e) of the Revised Administrative Code empowers the president "(t)o reserve from sale oe other
disposition and for specific public uses for service, any land belonging to the private domain of the Government of
the Philippines, the use of which is not otherwise directed by law. the land reserved "shall be used for the specific
purposes directed by such executive order until otherwise provided by law." Similarly, Section 83 of the Public Land
Act (CA 141) authorizes the President to "designate by proclamation any tract or tracts of land of the public domain
as reservations for the use ofthe commonwealth of the Philippines or of any of its branches, or of the inhabitants
thereof, ... or for quasi-public uses or purposes when the public interest requires it, including reservations for ...
other improvements for the public benefit.
2. Respondent Appellate Court erroneously ruled that Alejabdro's father, Eugenio de jesus, had acquired ownership
over the whole 12.8081-hectare Lot 1176-B-2 because the Sales Award issued to him on November 23, 1934 by then
Director of Lands Simeon Ramos covered the 33 hectares applied for, including the 12.8081 hectares. We fail to see
any reasonable basis on record for the Appellate Court to draw such conclusion. On the contrary, the very Sales
Award describes the tract awarded as located in Central, Davao, Davao, with an area of22 hectares, and bounded on
the north by Maria Villa Abrille and Arsenio Suazo; on the southeast by a provincial road and Mary Gohn; on the
southwest by a public land; and on the west by a municipal road. 11 This area of 22 hectares was even reduced to
20.6400 hectares upon actual survey made by the Bureau of Lands. The same area was reckoned with by then Lands
Director Jose P. Dans when he directed the issuance of a patent to Eugenio de Jesus on May 15, 1948 for his
application filed on January 22, 1921 covering "a tract of land having an area of 20.6400 hectares, situated in the
barrio of Poblacion, City of Davao." 12 In like manner, the Sales Patent issued to Eugenio de Jesus on the same date,
May 15, 1948, by then Secretary of Agriculture and Natural Resources Mariano Garchitorena indicated therein the
sale to Eugenio de Jesus of "a tract of agricultural public land situated in the City of Davao, Island of Mindanao,
Philippines,containing an area of 20 hectares 64, ares 00 centares." Seen in the light of Patent, and Sales Order for
Issuance of Patent, and Sales Patent, invariably bearing the area awarded to sales applicant Eugenio de
Jesusas 20.6400 hectares, it becomes imperative to conclude that what was really awarded to Eugenio de jesus was
only 20.6400 hectares and not 33 hectares as applied for by him.
However, We observe that in the public bidding of october 4, 1934, the succesful bidder, submitted a bid of 100.50
per hectare and made a cash deposit of only P221.00, which amount represents 10% of the purchase price of the
land. 13 At P100.50 per hectare, the purchase would be P2,221.00 for 22 hectares, 10% deposit of which amounts to
P221.00. For 33 hectares, the total purchase price would be P3,316.50 at P100.50 per hectare and the 10% deposit
would be P331.65, not P221.00, as what was actually deposited by sales applicant Eugenio de Jesus. Withal, if
Eugenio de Jesus was really awarded 33 hectares in that public bidding, he should have made the required 10%
deposit of P331.65. That he merely deposited P221.00 strongly suggests that what was bidden for and awarded to
him was only 22 hectares and not 33 hectares as applied for. As a matter of fact, his last payment of P660.45 on
November 29, 1939 for the 8th te 10th installment intended only to cover 20.6400 hectares, the remaining area after
the amendment of the Sales Application on August 28, 1936, excluding "the military camp site [Lot 1176B-2 of
12.8081 hectares] for the reason that the said site, at the time of last installment was already excluded from Sale
Application SA-5436 of Eugenio de Jesus, as ordered ... by the Director of Lands." 14
But, respondent Appellate Court reasons out that if the area bidden for and awarded in 1934 ws only 22 hectares and
since two years thereafter the Director of Lands ordered an amendment excluding the military camp site of 12.8081
hectares, then only 10 hectares, then would have been left to applicant Eugenio de Jesus and not 20.6400 hectares
would have been left in the Sales Patent. The Appellate Court's reasoning is premised on wrong assumption. What
was ordered amended was the Sales Application for 33 hectares and not the Order of 22 hectares or 20.6400
hectares. The Order states: "Order: Amendment of Application." Necessarily so, because the amendment was
already reflected in the Order of Award, since only an area of 22 hectares was awarded.
3. The phrase "whole tract" in the Sales Award 15 cannot be licitly seized upon as basis for the conclusion that the
area awarded to applicant Eugenio de Jesus was the applied area of 33 hectares. Such general description of "whole
tract" cannot prevail over the specific description delineating the area in quantity and in boundaries. Thus, the Sales
Award specifies the area awarded as 22 hectares, located at Central, Davao, Davao, and bounded on the north by the

property of Maria Villa Abrille and Arsenio Suazo; on the southwest by a provincial road and the property by Mary
Gohn on the southwest by a public land; and on the west by a municipal road. 16 Specific description is ordinarily
preferred to general description, or that which is more certain to what which is less certain. 17 More so, when it is
considered that the series of executive proclamations (Proclamation Nos. 85, 328, 350) continuously maintained the
intent of the Government to reserve the subject land for a specific purpose or service.
Besides, patents and land grants are construed favorably to the Governement, and most strongly against the
grantee. 18 Any doubt as to the intention or extent of the grant, or the intention of the Government, is to be resolved
in its favor. 19 In general, the quantity of the land granted must be ascertained from the description in the patent is
exclusive evidence of the land conveyed. 20 And courts do not usually go beyond a description of a tract in a patent
and determine the tract and quantity of land apart from the patent itself. 21
4. We cannot share the view of respondent Appellate Court that eugenio de jesus's alleged occupation, cultivation
and improvement of the 33-hectare land (including the 12-hectare camp site) since 1916 vested in him a right of
preference or pre-empive right in the acquisition of the land, which right was controverted into "a special propriety
right" when the Sales Award was issued to him in 1934. Not only for the earlier reasons that the Sales Award was
only for 22 hectares (later found to be 20,6400 fectares upon actual survey) and not for 33 hectares, the privilege of
occupying public lands a view to preemption confers np contractual or vested right in the lands occupied and the
authority of the President to withdraw suchlands for sale or acquisition by the public, or to reserve them for public
use, prior to the divesting by the government of title threof stands, even though this may defeat the imperfect right
of a settler. 22 Lands covered by reservation are not subject to entry, and no lawful settlement on them can be
acquired. 23 The claims o0f persons who have settled on occupied, and improved a parcel of public land which is later
included in a reservation are considered worthy of protection and are usually respected, but where the President, as
authorized by law, issuesa proclamation reserving certain lands and warning all persons to depart therefrom, this
terminates any rights previously avquired in such lands by a person who was settled thereon in order to obtain a
preferential right of purchase. 24 And patents for lands which have been previously granted, reserved from sale, or
appropriate, are void. 25
It is true that Proclamation No. 350 states that the same is subject to "privilege rights, if any there be," but Eugenio
de Jesus or his son Alejandro de Jesus failed to prove any private rights over the property reserved. Wee-settled is
the rule that unless the applicant has shown by clear and convincing evidence that a certain portion of the public
domain was acquired by him or his ancestors either by composition title from the Spanish Government or by
possessory information title, or any other means for the acquisition of public lands, such as grants or patents, the
property must be held to be part of the public domain. 26 Nor could respondent Alejandro de Jesus legetimately claim
to have obtained title by prescription over the disputed 12.8081 hectares, inasmuch as by applying for the sale
thereof (assuming hypothetically that the 12.8081-hectare lot was included in the original sales application for 33
hectares), his father, Eugenio de Jesus, necessarily admits that the portions applied for are part of the public domain,
against which no acquisitive prescription may lie 27 except as provided in Section 48(b) of C.A. 141, as amended.
5. Respondent Appellate Court mistakenly sustained Eugenio de Jesus's pretense that the military "camp site" (Lot
176-B-2) had been donated by him to the Philippine Army, thru Secretary Serafin Marabut of the Department of
National Defense, sometime in 1936 subject to the condition that it would be returned to him when the Philippine
Army would no longer need it. As found by the trial court in 1936, the Department of National Defense was not yet in
existence, so that no Defense Secretary by the name of Serafin Marabut could have entered into a deed of donation
with Eugenio de Jesus over Lot 1176-B-2 consisting of 12.8081 hectares. The Department of National Defense was
only organized in 1939. Nonetheless, respondent Alejandro de Jesus, would prove by secondary evidence the
existence of such donation thru the testimony of persons who supposedly saw it. In this regard, the Rules provides
that before the terms of a transaction in realty may be established by secondary evidence, it is n that the due
execution and subsequent loss of the original instrument evidencing the transaction be proved. For it is the due
execution of the document and its subsequent loss that would constitute the foundation for the introduction of
secondary evidence to prove the contents of such document. And the due of the execution of the document would
be proved through the testimony of (1) the person or persons who executed it; (2) the person before whom its
execution was acknowledged, or (3) any who was present and saw it executed and delivered, or who, after its
execution and delivery, saw it and recognized the signatures, or by a person to whom the parties to the instrument
had previously confessed the execution thereof. 28 None of these modes of proof was ever followed by respondent
Alejandro de Jesus. His predecessor- in-interest, Eugenio de Jesus, merely made a broad statement that he executed
a deed f donation in 1936 with Defense Secretary Marabut when at hat time the Defense Department was not yet in

existence. The notary public who presumptively acknowledged the donation or the witnesses to the instrument were
never presented. It has been ruled that the failure of the party to present the notary Public and thore s who must
have seen the signing of the document as witnesses to testify on its execution interdicts the admission of a
secondary evidence of the terms of the deed. 29 This is especially true in realty donations where Art. 748 of the new
Civil Code requires the accomplishment thereof in a public document in order to be valid. The testimony of Marcelo
Belendres that Sesinando de jesus, brother of Eugenio de Jesus showed him a copy of the "paper" signed by
Secretary Marabut and Eugenio de Jesus; of Jose Tinio, Acting Register of Deeds of Davao, that in May or June 1937,
Col. Simeon de jesus went to his office to register a document" executed by Eugenio de Jesus and Secretary Marabut;
of former Secretary Brigido Valencia that Col. Simeon de Jesus showed him a deed of donation signed by Eugenio de
Jesus and Serafin Marabut. hardly suffer to satisfy the requisites of the Rules, as to which very strict compliance is
imposed because of the importance of the document involved. 30 First none of these persons was a witness to the
instrument, nor any of them saw the document after its execution and delivery ind recognized the signatures of the
parties nor to whom the parties to the instrument had previously confessed the execution; second, the reference to
a "paper" or "document" ambigous as to be synonymous with a "deed of donation;" and third, the persons who
showed the deed, Sesinando de Jesus and Col. Simeon de Jesus were not parties to the instrument. Respondent
Alejandro de Jesus's narration of the existence and loss of the document equally deserves no credence. As found by
the trial court, he testified that the copy of the deed which his father kept was sent to him in Manila thru his uncle,
Sesinando de Jesus in July 1942, while his father himself, Eugenio de Jesus, declared that his copy of the deed was
burned in Davao during the Japanese occupation. The replies of the Undersecretary of Agriculture and Natural
Resources and the Acting Executive Secretary that the property was "still needed for military purposes" and may not
therefore be released from the reservation cannot substitute the proof so required. These replies are not
confirmatory of the existence of such donation much less official admissions thereof.
Even on the gratuitous assumption that a donation of the military "camp site" was executed between Eugenior de
jesus and Serafin Marabut, such donation would anyway be void, because Eugenior de jesus held no dominical rights
over the site when it was allegedly donated by him in 1936. In that year, proclamation No. 85 of President Quezon
already withrew the area from sale or settlement and reserved it for military purposes. Respondent Appellate Court,
however, rationalizes that the subject of the donation was not the land itself but "the possessory and special
proprietary rights" of Eugenio de jesus over it. We disagree. It is true that the gratiuitous disposal in donation may
consist of a thing or right. 31 But the term "right" must be understood in a "propriety" sense, over which the
processor has the jus disponendi. 32 This is because, in true donations, there results a consequent impoverishment of
the donor or diminution of his assets. 33 Eugenio de Jesus cannot be said to be possessed of that "proprietary " right
over the whole 33 hectares in 1936 including the disputed 12.8081 hectares for at that time this 12.8081-hectare lot
had already been severed from the mass of disposable public lands by Proclamation No. 85 and excluded in the Sales
Award. Impoverishment of Eugenio's assets as a consequence of such donation is therefore farfetehed. In fact, even
if We were to assume in gratia argumenti that the 12.8081-hectare lot was included in the Sales Award, still the same
may not be the subject of donation. In Sales Award, what is conferred on the applicant is merely the right "to take
possession of the land so that he could comply with the requirements prescribed by law." 34 In other words, the right
granted to the sales awardee is only "possessory right" as distinguished from "proprietary right," for the fundamental
reason that prior to the issuance of the sales patent and registration thereof, title to the land is retained by the
State. 35 Admittedly, the land applied for may be considered "disposed of by the Government" upon the issuance of
the Sales Award, but this has the singular effect of withdrawing the land from the public domian that is "disposable"
by the Director of Lands under the Public Land Act. Moreover, the dsiposition is merely provisional because the
applicant has still to comply with the requirements of the law before any patent is issued. It is only after compliance
with such requirements to the satisfaction of the Director of Lands, that the patent is issued and the land applied for
considered "permanently disposed of by the Government." This again is a circumstance that demeans the irrevocable
nature donation, because the mere desistance of the sales applicant to pursue the requirements called for would
cause the virtual revocation of the donation.
ACCORDINGLY, the appealed judgement of the Court of Appeals, promulgated on July 2, 1974, and its resolution of
Jane 17, 1975, denying petitioner's motion for reconsiderations, are hereby reversed and set aside. The disputed Lot
1176-B-2, Plan Bsd-1514 of Davao Cadastre and containing an area of 12.8081 hectares, is hereby adjudicated in
favor of petitioner Mindanao Medical Center. The urgent motion of the petitioner for leave to construct essential
hospitawl buildings, namely: (a) communicable and contagious diseas pavilion; (b) hospital motorpool; and (c)
physician's quarters, is hereby granted. With costs against private respondent.
SO ORDERED.